[Senate Hearing 114-]
[From the U.S. Government Publishing Office]



 
  DEPARTMENT OF LABOR, HEALTH AND HUMAN SERVICES, AND EDUCATION, AND 
          RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2016

                              ----------                              


                        THURSDAY, MARCH 26, 2015

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:03 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Roy Blunt (chairman) presiding.
    Present: Senators Blunt, Cochran, Alexander, Cassidy, 
Capito, Lankford, Murray, Mikulski, Shaheen, Merkley, and 
Schatz.

                          DEPARTMENT OF LABOR

                          Office of Secretary

STATEMENT OF THE HON. THOMAS PEREZ, SECRETARY


                 opening statement of senator roy blunt


    Senator Blunt. The Appropriations Subcommittee on Labor, 
Health and Human Services, and Education, and Related Agencies 
will come to order.
    This is my first opportunity to chair this committee, and I 
certainly look forward to chairing the committee with Senator 
Murray and her knowledge on these issues. Senator Alexander and 
Senator Murray, the chairman and ranking member on the HELP 
(Health, Education, Labor and Pensions) Committee as well, 
creates an incredible resource for this subcommittee, and 
clearly it is a subcommittee that has a broad jurisdiction. I 
think we are going to be able to work together in a good way.
    Secretary Perez, we are glad you are here today. Thanks for 
taking time to appear before the subcommittee.


                  fiscal year 2016 president's budget


    There clearly are a lot of important programs in this bill, 
and programs that help prepare workers, as you and I have 
talked about before for higher skilled jobs that pay better, 
that have more take home pay for families.
    You have programs that help those who have lost their jobs 
get back on their feet, and programs to protect rights and 
benefits, and to support safe and productive workplaces.
    There are some new initiatives requested. I particularly am 
interested in the new program that allows more licensing 
portability. I think that is one that has particular assistance 
to veterans who achieve skills in the military and how they 
more quickly use those skills in the private sector, and the 
spouses of people in the military who just like their military 
spouse wind up moving from place to place. If there is a better 
way to take their skills with them and quickly be able to use 
those skills, I think that is a good thing.
    The budget submission itself is a pretty far stretch, and I 
might even say an over reach in terms of what I believe the 
amount of money that our subcommittee will have to work with 
will be. There will be some theme in my questions today about 
the whole idea of over reach, the Department's budget request, 
I think, ignores the restraints implemented.
    In fact, it definitely ignores the restraints implemented 
in the Budget Control Act, and instead, requests an increase of 
over 10 percent for discretionary spending alone. This increase 
is far greater than the budget I believe the Senate will 
approve today and that the House and Senate will jointly 
approve later.
    Even more concerning, the discretionary request is 
partnered with funding increases of approximately $29 billion 
in new mandatory spending over the next few years. Of course, 
the mandatory spending does not come before this committee at 
all.
    What we do is deal with the discretionary spending and to 
have new mandatory spending, you have to have new mandatory 
programs approved.
    This level of spending concerns me, like much of the rest 
of the President's submitted budget, it just seems to ignore 
the likely realities we deal with, and completely ignores the 
law.
    The budget proposes increasing the Federal bureaucracy with 
815 net new employees. I think we want to talk some, too, about 
the regulatory over reach that some of these employees would be 
part of.


                        proposed fiduciary rule


    Just one example, the new fiduciary rule accepts the same 
premises of a previously rejected attempt to regulate this 
particular area. It will expand the Department's reach into 
other agencies' jurisdiction, in spite of a lot of past 
bipartisan concern that this is not a place where the 
Department of Labor can best do its work.
    In difficult budget times, we have to make tough choices 
and prioritize our spending. There are clearly issues here we 
are going to disagree on, but I think we are going to work hard 
to find the issues we can agree on, and rethink how we prepare 
people for the workplace and keep people in the workplace.
    No job is more domestically important than the job of 
helping create an environment for good private sector jobs and 
the people that are prepared for those jobs. That is an 
incredible responsibility that you bear every day, and we look 
forward to being your partners in that in every way we can, and 
to be constructive in the ways we feel we need to be 
constructive.
    Again, Senator Murray, I am particularly pleased to get to 
work on this committee with you, and look forward to doing our 
best to produce the very best budget we can for the Department 
of Labor, the Department of Education, and the Department of 
Health and Human Services.


                   statement of senator patty murray


    Senator Murray. Thank you very much, Mr. Chairman. This is 
the first hearing for the Appropriations Subcommittee on Labor, 
Health and Human Services, Education, and Related Agencies.
    I want to congratulate and acknowledge our new chairman, 
Senator Blunt. I am looking forward to working with you as well 
on ways to expand economic security to more workers and 
families, and I am eager to get to work on this subcommittee.
    I believe the only way to create sustainable economic 
growth is from the middle out, not the top down, and our 
Government has a role to play in investing in working families, 
making sure they have the opportunity to work hard and succeed, 
and offering a hand up to workers who want to climb the 
economic ladder and provide a better life for themselves and 
their families.
    Those goals really are closely intertwined with the mission 
of the Department of Labor, so it is appropriate that our first 
hearing is with Secretary Tom Perez. Thank you very much, Mr. 
Secretary, for being here today.
    I know some of my colleagues argue that helping workers 
will hurt businesses. I flatly reject that argument. Back in 
Washington State, I have seen clearly that when workers 
succeed, businesses succeed, and the economy succeeds. When 
workers are protected and they are treated fairly, when their 
wages and economic security are increasing, that tide lifts all 
boats. Expanding economic security will require investments in 
this Department's mission.
    Today, I will be talking about the Administration's vision 
for investing in training today's workforce and preparing for 
the jobs of the future, and we will talk about how to best 
protect workers' rights to fair pay and safe working 
conditions.
    I have said many times budgets are about more than numbers 
on a page. They really reflect our values and our priorities 
and what kind of country we are and what kind of country we 
want to be.
    Budgets are about choices. They are about making the tough 
decisions about where we should direct Federal investments, and 
I believe they are about making sure our Government is working 
for all families, not just the wealthiest few.
    I am very proud that in late 2013, Democrats and 
Republicans were able to reach a budget agreement to roll back 
sequestration for fiscal years 2014 and 2015. We need to work 
on ways to build on that agreement, to replace the worst of 
those automatic spending cuts.


                          fiscal year proposal


    The President's budget would do just that by fully 
replacing sequestration on defense and non-defense 
discretionary spending. I was glad to see that the President's 
proposal builds on the improvements in the Workforce Innovation 
and Opportunity Act, which Congress passed last year with 
strong bipartisan support.
    That was a high priority of mine, and I was very proud that 
Senator Isakson and I were able to work together to get that 
bill done, and make sure that our workers have the resources 
and support they need to improve their skills and move into 
21st Century careers.
    The Administration's budget proposal also includes 
investments for new apprenticeship grant programs. Expanding 
access to apprenticeships has been a priority for me because it 
sets our workers on a clear pathway and ladder into the middle 
class, and this is something that I am going to continue to 
push for.
    Your proposal also includes investments in programs that 
provide comprehensive in person support for veterans and 
unemployed workers. Those programs have proven to be effective 
and will help connect workers with good jobs. Strengthening 
economy security for more workers also requires protecting 
employees' rights in the workplace. The Wage and Hour Division 
within the Department of Labor protects workers' paychecks by 
cracking down on Federal minimum wage violations. The Division 
helps make sure workers get the overtime pay they have earned.
    In fact, last year, Wage and Hour investigations found $240 
million in back wages that employers owed their workers. Now 
that money is back in the pockets of more than 270,000 workers 
across the country.
    I was pleased myself to see increased funding requested for 
that very important work because I believe workers should get 
the pay they have earned and that Government should stand up 
for those workers and protect their rights, not simply allow 
big corporations to rig the system. Secretary Perez, I will be 
interested to hear from you on how investments in those 
investigations will help protect workers from wage theft.
    We should all be able to agree that every worker should 
have access to a safe workplace. This is important not just for 
the workplace but for our economy. In 2013, more than 3 million 
workers were injured at work. That included more than 4,000 
fatal work injuries, and that comes at a huge cost. The 
National Safety Council estimates that work injuries cost $198 
billion in 2012.
    Injuries on the job have a devastating effect on workers 
long after they return to work. One study showed that workers 
could lose 15 percent of their earnings over 10 years following 
a work injury. I agree we should increase investments in the 
Occupational Safety and Health Administration, as the 
Administration has proposed.
    I also want to encourage the Department of Labor to use its 
authority to implement important protections for working 
families. Secretary Perez, I have sent letters to the 
Department to make sure we implement strong overtime protection 
for workers to expand basic worker rights to home care workers 
and to implement President Obama's Fair Pay Executive Order 
that would crack down on Federal contractors who violate wage 
laws.
    Secretary Perez, thank you again for being here today to 
share the Administration's vision. I look forward to your 
testimony, and as the ranking member of this subcommittee and 
the HELP Committee with Senator Alexander, I am going to 
continue to be focused on ways we can create jobs and expand 
economic security and generate broad-based gross to help grow 
our middle class.
    I am eager to get to work, Mr. Chairman, and I hope we can 
find ways on this subcommittee to work on a bipartisan basis to 
grow our Nation's middle class.
    Thank you very much.
    Senator Blunt. Thank you, Senator. Secretary Perez, we are 
pleased you are here and look forward to your testimony.


               summary statement of the hon. thomas perez


    Secretary Perez. Thank you, Mr. Chairman. Good morning, Mr. 
Chairman, Ranking Member Murray. Mr. Chairman, Mr. Chairman, 
and former Chairman. It is an honor to be here.
    I am not Ben Affleck. I do not play him on TV. I am not 
across the hall. I will try to be Tom Perez instead of Ben 
Affleck.
    It is really an honor to be here before you. I look forward 
to working with you, Mr. Chairman, with everyone on this 
committee to find common ground on issues of mutual interest, 
and I have no doubt that there are substantial common ground as 
we work together to upscale America and make sure we can create 
good jobs.
    I appear before you today with a great sense of optimism 
about the direction of our economy and about the role that the 
Labor Department can play in sustaining and further 
accelerating that recovery.
    We have experienced now 60 consecutive months of private 
sector job growth, which is the longest such streak on record, 
with 12 million jobs created during that period. As we speak, 
there are more than 5 million job openings right now, the most 
since January 2001.
    During the depths of the great recession, there were 
roughly seven job seekers for every available position. Today, 
the ratio is less than 2 to 1.


                      continuing economic recovery


    We have a lot more work to do undeniably. The challenge is 
to ensure that this wind at our back results in shared 
prosperity to make sure that everyone willing to work hard and 
play by the rules can indeed benefit from this recovery.
    We have a lot more work to do on long term unemployment, 
even though we are moving in the right direction. We have more 
work to do to raise real wages. We have more work to do to 
build a steady pipeline of skilled workers so that our economy 
remains competitive in the 21st Century.
    The proposed budget invests in evidence-based programs that 
support an economy that indeed works for everyone, an economy 
that creates opportunities for workers to upgrade their skills, 
work in safe conditions, support their families, and protect 
their hard-earned retirement savings.
    Each year on average, our network of roughly 2,500 American 
job centers (AJCs) serves roughly 14 million people, including 
a million veterans through our core workforce programs. We are 
serving them well. Fifty-five to 60 percent of those who come 
to AJCs without a job are working within 3 months of leaving 
those programs.


                      training america's workforce


    The outcomes are even better for those who get training 
through the workforce system, about 80 percent of them find 
work within 3 months.
    In 2014, we put approximately $1 billion in job driven 
competitive grant money on the street, all of it designed to 
help people up their skill and move into jobs that are 
available now or will soon be available.
    Just a few weeks ago, the President launched a new 
initiative called TechHire, which will help train for the 
hundreds of thousands of well paying IT jobs currently 
available. These jobs are not simply in the Silicon Valley. 
They are across the economy, health care sector, manufacturing, 
energy, and transportation.
    In all of these sectors' employers are looking for people 
with these skills to fill positions in cybersecurity, systems 
engineering, data analytics, and more. In communities 
nationwide, people are answering this call. It is happening in 
both Kansas City and St. Louis, as I discussed with you, Mr. 
Chairman, earlier today.
    In St. Louis, 150 employers are partnering with a non-
profit called LaunchCode to prepare women and under represented 
minorities with the skills they need to get tech jobs.


                investing in effective training programs


    At the Labor Department, we are now making $100 million in 
grants available to take initiatives like this to scale and 
help more communities launch similar programs and integrate 
these innovative approaches into our workforce systems.
    With our budget, we want to strengthen this kind of work 
with continued investments in proven training strategies that 
will help more people succeed in 21st century jobs.
    For instance, the budget includes $100 million for 
apprenticeships, an effective learn while you earn strategy 
that is a great training program benefitting both workers and 
employers. It is a proven gateway to the middle class.
    I have met graduates of apprenticeship programs earning as 
much as $50,000 a year, and over 90 percent of the people are 
employed within 3 months after completing a program.
    Every dollar spent on apprenticeship has a return of 
roughly $27. That is a very good return on investment. I often 
call apprenticeship the ``other college,'' except without the 
debt.
    We also propose an increase of $400 million for employment 
service State grants, and these are designed to support in 
person services that help unemployed workers access the 
training and other resources they need to find a good job, and 
to help the long-term unemployed, we are proposing more 
investments in the combined re-employment services and re-
employment eligibility assessment program, RES, REA, through 
the UI program.
    We are proposing these investments because we know these 
programs work. They help get people to work faster and reduce 
reliance on unemployment.
    The combined services will be offered to all veterans in 
the Unemployment Compensation for Ex-Service Member program, as 
well as those unemployment insurance claimants who are most 
likely to become long term unemployed.


                workforce innovation and opportunity act


    These programs will work for everyone. Last July, Congress 
under your leadership, Senator Murray, Senator Isakson, and 
Chairman Alexander and so many others, passed the Workforce 
Innovation and Opportunity Act (WIOA).
    I want to thank everybody for their participation in that 
bipartisan bill. That was a game changer. It was a very 
important piece of legislation, further proof that cultivating 
our human capital is not a Democratic idea, it is not a 
Republican idea, it is a good, smart idea that enjoys support 
throughout the country.
    WIOA aligns with everything we are already doing, and it 
provides a clear blueprint moving forward. It helps us to 
continue building what I call the ``skills super highway,'' 
with on ramps and off ramps, where people can pick up 
credentials and certifications on their way to their 
destination, which is a good middle class job.
    With WIOA, we are able to strengthen our job driven 
approach to training, building unprecedented partnerships with 
employers and helping them find the workers they need. I often 
refer to the Department of Labor as ``match.com.'' We connect 
businesses who want to grow with workers who want to punch 
their ticket to the middle class, and very frequently, 
community colleges are that secret sauce that makes the match 
work.
    As someone who has worked in the State and local workforce 
systems, and I would be remiss if I did not thank my home State 
Senator, Senator Mikulski, for her distinguished service over 
many years. The State of Maryland has benefitted so much from 
your leadership, Senator, and I have benefitted from your 
leadership and mentorship.
    I have seen at a local level and at a State level how 
important WIOA works. The proposed rules implementing WIOA are 
at the Federal Register, and I fully expect the proposed rule 
will be out imminently. We did a lot of collaboration during 
the process of putting this together.
    Training and skills development is just one part of our 
mission, and I want to shift briefly to some of our other 
priorities.


                        fiscal year 2016 budget


    Our fiscal year 2016 budget includes $1.9 billion for our 
worker protection agencies, enabling them to meet their 
responsibilities to safeguard the health, safety, wages, 
working conditions, and retirement security of our workers. It 
includes an additional $30 million to hire Wage and Hour 
Division investigators who, as you correctly pointed out, 
Senator Murray, protect vulnerable workers and ensure they 
receive fair wages.
    It includes $990 million for our Mine Safety and Health 
Administration, our Occupational Safety and Health 
Administration, and our State partners, to keep workers safe, 
and to strengthen whistleblower protections, and it also 
includes funding to ensure that our Employee Benefits Security 
Administration can continue protecting the pension and health 
benefits that workers have earned throughout their careers.
    I believe there are a number of opportunities, as I 
mentioned at the outset of my remarks, to find common ground in 
this budget and in other initiatives, and I look forward to 
working with every member of this subcommittee on these issues.
    With that, I look forward to your questions, and I look 
forward, Mr. Chairman, to working with you, and I thank you for 
the leadership and the courtesy that you have shown to me 
throughout.
    [The statement follows:]
            Prepared Statement of Secretary Thomas E. Perez
    Chairman Blunt, Ranking Member Murray, and members of the 
Subcommittee, thank you for the invitation to testify today. I appear 
before you today with a great sense of optimism--about the direction of 
our economy and the role that the Labor Department can play in 
sustaining and further accelerating this recovery. I'm confident we can 
construct a stairway to shared prosperity in which everyone has the 
chance to live their highest and best dreams, and that's what I want to 
discuss with you today.
    The President's fiscal year 2016 budget proposes investments in 
programs that build on what works and support an economy that works for 
everyone. The request for the Labor Department creates opportunities 
for workers to strengthen their skills, support their families, and 
protect their hard-earned retirement savings. The United States has 
experienced 60 consecutive months of net private sector job growth, 
extending the longest streak on record. There are now more than 5 
million job openings, the most since January 2001. At the end of the 
Great Recession, there were nearly 7 jobseekers for every available 
position; today the ratio is less than 2-to-1.
    Under President Obama, the deficit has fallen by about two thirds, 
measured as a share of the economy. The last time the deficit fell this 
quickly was at the end of World War II. Consumer confidence is near a 
7-year high. Workers on manufacturing assembly lines are now averaging 
42 hours per week, and auto sales are at prerecession levels.
    Yet in this recovery, there are many families who are not yet 
experiencing the benefits of this strengthening economy. Their jobs are 
not paying a living wage, forcing parents to work two or three jobs to 
make ends meet or choosing between staying home with a sick child and 
earning a paycheck. If enacted, the President's budget for the 
Department of Labor would help change this reality by supporting 
working families, creating pathways to high-growth jobs, and protecting 
workers' health and safety, wages, and retirement security. This budget 
is an investment in the future of our country and an affirmation of an 
economy we all want--an economy where hard work is rewarded, where 
workers get a fair shake and fair treatment at work, where workers have 
a chance to develop skills that lead them to family-sustaining jobs, 
and where workers have security to return home from work safely to 
their families and build for their future.
                             sequestration
    These investments, and continued economic growth, will only be 
possible if we reverse sequestration, as the President's budget would 
do. At the end of 2013, policymakers came together on a bipartisan 
basis to partially reverse sequestration and to pay for higher 
discretionary funding levels with long-term reforms. We have seen the 
positive consequences of that bipartisan agreement for our ability to 
invest in areas ranging from research and manufacturing to 
strengthening our military. The budget builds on this progress by 
reversing sequestration, paid for with a balanced mix of common-sense 
spending cuts and closing tax loopholes, while also proposing 
additional deficit reduction that would put debt on a downward path as 
a share of the economy.
    Meanwhile, the President has made clear that he will not accept a 
budget that reverses our progress by locking in sequestration going 
forward. Locking in sequestration would bring real defense and non-
defense funding to the lowest levels in a decade. As the Joint Chiefs 
and others have outlined, that would damage our national security, 
ultimately resulting in a military that is too small and equipment that 
is too old to fully implement the defense strategy. It would also 
damage our economy, preventing us from making pro-growth investments in 
areas ranging from basic research to early childhood education to 
severely reducing the number of people who can receive training through 
our workforce training programs. As the President has stated, he will 
not accept a budget that severs the vital link between our national and 
economic security, both of which are important to the Nation's safety, 
international standing, and long-term prosperity.
                 creating pathways to high growth jobs
    Last year both parties came together to pass the bipartisan 
Workforce Innovation and Opportunity Act (WIOA), which provides a vital 
opportunity for reform of our Nation's job training system so workers 
are prepared for 21st Century jobs and employers have the skilled 
workers they need. The budget request supports robust implementation of 
that law and its reforms.
    Successful WIOA implementation means enabling and assisting States 
to develop comprehensive and cross-program State plans to best serve 
individuals and businesses, and to have the infrastructure in place to 
measure outcomes and report on performance as required under the law. 
The Employment and Training Administration (ETA) plans to employ 
flexibilities to allow States to use existing funds to transition to 
the new law. The budget also requests additional staff and technical 
assistance funding, which will allow ETA to be responsive to the needs 
of the workforce system and assist States and localities in the second 
year of WIOA implementation. These staff would be located throughout 
the regions and in the national office, providing guidance and support 
to States in their efforts to fully implement the changes required by 
the law.
    A key goal of the statute is to provide stronger accountability 
for, and transparency of, the outcomes of Federal investments. For that 
reason, the budget includes a significant increase for the Workforce 
Data Quality Initiative, from $4.0 million appropriated for fiscal year 
2015 to $37.0 million requested for fiscal year 2016, to help States 
expand and enhance their information technology infrastructures to 
connect State workforce and education databases and to build the 
public-facing performance reports required by WIOA. $30.0 million of 
this request will help States build integrated or bridged data systems 
to facilitate WIOA implementation. These grants also will support 
building State-based wage data matching infrastructure to enable and/or 
streamline WIOA performance reporting, including eligible training 
provider performance reporting.
    The budget builds on WIOA with investments to expand the capacity 
of the core programs to reach more individuals who need help finding or 
training for a new or better job. The budget includes a $2.7 billion 
discretionary investment (an $85.7 million increase above the 2015 
enacted level) in the Adult, Youth, and Dislocated Worker State grants. 
The WIOA formula programs provide job placement, career counseling, 
skills training, credential attainment, and access to State job boards 
for disadvantaged, low-skilled, and underemployed adult workers; low-
income and out-of-school youth; and dislocated workers. The budget 
maintains the 2015 funding level for the Governors' set aside while 
providing increased funding for direct services at the local level. The 
budget also provides additional dedicated funding for those who need 
training to find a new job. Current resource limitations mean that only 
a small portion of the people who walk through the doors of American 
Job Centers are able to receive training through the workforce system. 
The budget includes $16.0 billion for a 10-year mandatory High-Growth 
Sector Training legislative proposal that would double the number of 
workers who receive training though the workforce development system. 
This training will equip workers with the skills and credentials to get 
jobs in high-growth industries, such as healthcare, energy, advanced 
manufacturing, cybersecurity, and information technology.
    The Department of Labor (DOL) continues to work to meet the 
President's goal of doubling the number of Registered Apprenticeships 
over the next 5 years and to work with bipartisan supporters to promote 
expanding apprenticeship--a proven strategy that allows people to earn 
while they learn. DOL data indicate that people who complete registered 
apprenticeships have median salaries exceeding $50,000, and over 90 
percent of people are employed within 3 months after completion of the 
program. The budget will invest $2.0 billion in grants to States and 
regions to bring more employers to the table in providing high-quality 
apprenticeship and equip States and regions with the expertise to 
assist employers in creating or expanding the apprenticeship model. In 
addition, we propose an annual discretionary request before this 
committee of $100.0 million within the ETA for apprenticeship grants 
for States, industry, and community based organizations to support 
sustainability and build capacity across the national apprenticeship 
system and to meet additional demand by employers and others beyond 
what can be funded under the American Apprenticeship grants we will 
award later this year.
    Industry-recognized credentials help employers, jobseekers, and 
educators by communicating the skills and training that are needed for 
a particular occupation. The budget includes a proposal for mandatory 
funding of $500.0 million for competitive Industry Credentialing and 
Assessment Grants to speed the development and adoption of credentials 
and assessments with real labor market value and more effectively match 
job seekers to employment opportunities. Of this proposal, $300.0 
million would be targeted toward in-demand information technology jobs. 
While industry recognized, portable credentials improve labor mobility, 
a patchwork of State licensing laws can sometimes hinder that mobility. 
Different States often have a wide variety of licensing rules for the 
same occupation, requiring people to participate in unnecessary 
training or pay high licensing fees to obtain work for which they 
already have the skills. Our budget requests $15.0 million for grants 
to States to identify and address areas where occupational licensing 
requirements are creating an unnecessary barrier to labor market entry 
or labor mobility. This will be particularly useful to transitioning 
service members, military spouses, and dislocated workers.
    Despite the progress that has been made in recent years, there are 
still many young people lacking economic opportunities. The 
Department's budget expands programs to reach more of those youth and 
help them find meaningful employment. Now in its 50th year, Job Corps 
has provided education and career technical training for 3 million 
disadvantaged youth in a residential setting, and the Department is 
committed to taking all necessary steps--including closure, as 
appropriate--to reform the program to ensure Job Corps continues to 
effectively serve millions more young people in the future. The budget 
request for Job Corps includes an increase of $17.0 million to 
implement WIOA-related changes, upgrade equipment to meet industry 
standards, and refine training to provide skills that are in high 
demand by employers. A portion of the increase will be used to pilot 
ways to better serve younger students, for whom the traditional Job 
Corps model has been less effective. Our budget also seeks increases to 
strengthen oversight of the Job Corps program, as the Department moves 
toward a more risk-based approach for program oversight.
    In addition to Job Corps enhancements, the Departments of Justice 
and Labor are proposing to pilot a program with $5 million in grants to 
community partnerships that provide youth with the opportunity to 
explore in-demand careers in law enforcement services, which will 
provide at-risk youth with tangible work experience and positive law 
enforcement exposure. Our budget also includes a Connecting for 
Opportunity legislative proposal to create job opportunities for 
disadvantaged youth, which seeks $3.0 billion of mandatory funding over 
4 years. This includes $1.5 billion in formula grants to expand year-
round and summer job opportunities and $1.5 billion to create 
educational and workforce pathways to help youth earn high school 
diplomas, pursue further education, and make connections with the job 
market.
    The Trade Adjustment Assistance Community College and Career 
Training (TAACCCT) grants provided nearly $2.0 billion in mandatory 
funding over 4 years, with the last round of grants awarded in fiscal 
year 2014. This investment brought together education, labor, business, 
and community leaders, ensuring that community colleges were offering 
curricula aligned with industry's needs. To build on the infrastructure 
and lessons learned from the TAACCCT grants and to continue expanding 
the role of community colleges in job training, the Administration is 
proposing a $200.0 million increase for an American Technical Training 
Fund that will be housed in the Career and Technical Education office 
at the Department of Education and jointly administered by the 
Departments of Education and Labor. These grants will support the 
development of new job training programs within current community 
colleges or other innovative, non-traditional training providers and 
will help scale existing models with evidence of effectiveness which 
could include past performance on graduation rates, job placement 
rates, and wages earned by graduates.
    The Veterans' Employment and Training Service (VETS) helps veterans 
and separating servicemembers transition from the service to a 
meaningful career, starting with a robust and revitalized 3 day 
workshop that is required for every separating servicemember. These 
workshops are part of a comprehensive veteran employment support 
program anchored in our American Job Centers across the country. The 
Administration has been focused on improving the effectiveness of VETS, 
including in terms of ensuring that it is integrated with other 
employment and training programs, and its funding has increased 13 
percent since fiscal year 2009. The fiscal year 2016 request maintains 
the funding increase for the largest VETS program--the Jobs for
    Veterans State Grants--which funds specialists who provide veterans 
with the employment services needed to overcome significant barriers to 
work. The fiscal year 2016 budget also maintains funding for the 
Homeless Veterans' Reintegration program. I remain troubled that men 
and women who risk their lives for us struggle when they return to the 
United States, with far too many experiencing homelessness. I share the 
President's commitment to end homelessness among veterans; we will 
continue to work with other Federal agencies to achieve this goal.
    I also urge Congress to reauthorize the Trade Adjustment Assistance 
(TAA) program, as it provides critical training, income support, wage 
subsidies, employment and case management services, and job search and 
relocation allowances to workers whose employment has been adversely 
affected by foreign trade. Last year, TAA provided benefits and 
services to over 62,700 workers seeking new jobs and opportunities. And 
83 percent of those who completed training received a degree or 
industry recognized credential. Nearly 77 percent of those TAA 
participants who exited the program found employment within 6 months, 
and, of those, 90 percent were still employed 6 months later.
    The process known as PERM (Program Electronic Review Management) is 
10-years old. This is what we use to certify that an employer seeking 
to obtain a Green Card for an immigrant worker meets the statutory test 
requiring that there be an insufficient supply of United States workers 
and no adverse effect on wage and working conditions of United States 
workers. We are considering options to modernize the PERM program to be 
more responsive to changes in the national workforce. One of our most 
critical budget proposals would authorize legislation to allow the 
Department of Labor to charge fees for new applications filed under the 
PERM program to improve the speed and quality of certification 
processing. The Department has heard from businesses across the country 
that are in favor of a filing fee. Not being able to charge a fee to 
support more efficient application processing and program 
administration is hurting businesses, workers, and our economy. The 
budget also includes a one-time increase of $13 million and 17 
temporary staff to reduce the escalating backlog of PERM cases.
                      supporting working families
    Despite the improvement in the economy, the number of individuals 
who have been unemployed for 6 months or longer--the long-term 
unemployed--is unacceptably high. People who are out of work for a 
longer period of time have more trouble finding a job. To address and 
prevent long-term unemployment, the budget includes a total of $180.9 
million, an increase of $100.9 million, for the combined Reemployment 
and Eligibility Assessment and Reemployment Services program, a cost 
effective strategy with proven success. The combined services will be 
offered to all veterans who receive unemployment compensation through 
the Unemployment Compensation for Ex-Service Members (UCX) program, as 
well as the top third of unemployment insurance (UI) claimants who are 
most likely to become long-term unemployed. People who receive these 
combined services are less likely to exhaust their UI benefits, have 
shorter UI durations, and return to work more quickly with higher wages 
and job retention rates. This $180.9 million investment will yield an 
estimated $287.0 million in benefits savings in fiscal year 2016. In 
addition, the budget includes a $400.0 million discretionary increase 
in the Employment Service, enabling States to provide cost-effective 
in-person reemployment services to an additional 2 million displaced 
workers, including the long-term unemployed and our veterans, to 
connect them with jobs or the training or services they need to prepare 
for meaningful employment.
    There are also people with full-time jobs who cannot make ends 
meet. They are diligent and resilient. They take responsibility for 
themselves and their families. But no matter how hard they work, they 
fall further and further behind. Many of them need SNAP or other forms 
of public assistance to sustain their families. Often, they are one 
setback away from complete desperation. For you or me, car trouble and 
a trip to the repair shop are inconvenient; for many others, it's a 
financial catastrophe.
    Current public opinion is clearly and convincingly in favor of 
increasing the minimum wage. Grass roots energy and momentum nationwide 
have moved States, counties and local governments to take action where 
Congress so far has not. Over the last 2 years, 17 States plus the 
District of Columbia have raised their own minimum wages. On Election 
Day last November, Nebraska, South Dakota, Alaska and Arkansas passed 
ballot measures, by landslide margins, to increase their State's 
minimum wage. The legislatures in Connecticut, Delaware, Hawaii, 
Maryland, Massachusetts, Michigan, Minnesota, Rhode Island, West 
Virginia and the District of Columbia enacted increases during the 2014 
session. While we applaud progress at the State, local, and employer 
level, we must raise the Federal minimum wage so workers across the 
country can benefit.
    The United States is also the only developed country that does not 
guarantee paid maternity leave to our workers. Because of this, people 
are forced to choose between caring for their families and earning a 
paycheck that they desperately need. To respond to this, the 
Department's budget includes two paid leave proposals. The first is a 
mandatory legislative proposal for $2.2 billion to assist up to five 
States that wish to launch paid leave programs, following the example 
of California, New Jersey and Rhode Island. If enacted, grants would 
help States with administrative costs and half of benefits for 3 years. 
The second is a discretionary proposal for $35.0 million that would 
provide technical assistance and support to States that are still 
building the infrastructure they need to launch paid leave programs in 
the future.
           protecting workers, wages, and retirement security
    The notion that we can either rebuild our economy or we can pay 
workers fairly and be vigilant about worker safety is a false choice. 
At the Labor Department, we're being more strategic about cracking down 
on wage violations, working to ensure workplace safety, and protecting 
the retirement savings of your constituents who have worked their whole 
lives to save. Worker protection programs are crucial to protecting of 
American workers. The budget includes $1.9 billion for the Department's 
worker protection agencies, enabling them to meet their 
responsibilities of safeguarding the health, safety, wages, working 
conditions, and retirement security of American workers.
    The Wage and Hour Division (WHD) is responsible for the 
administration and enforcement of a wide range of laws, which 
collectively cover 135 million workers in more than 7.3 million 
establishments through the United States and territories. The request 
for WHD includes an increase of nearly $31.7 million to focus on 
industries that employ vulnerable workers and are most likely to break 
worker protection laws enforced by WHD, including the laws that provide 
for a minimum wage, overtime, and the right of workers to take leave to 
care for their own or their families' medical needs.
    The Occupational Safety and Health and Mine Safety and Health 
Administrations (OSHA and MSHA) work to ensure safe and healthful 
working conditions for working men and women. Across the two agencies, 
the budget includes nearly $990.0 million to bolster OSHA's ability to 
enforce safety and health standards as well as more than 20 
whistleblower laws that protect workers from discrimination and 
retaliation when reporting unsafe and unscrupulous practices. The 
budget will also allow OSHA to enhance safety and security at chemical 
facilities, and provide MSHA with the resources it needs to enforce and 
promote mine safety and health laws while conducting statutorily 
required mine inspections.
    Although the vast majority of employers treat their employees well, 
there are still those who disregard their responsibility to their 
workers. Many of the laws that are enforced by the worker protection 
agencies lack strong civil penalties. The budget proposes to strengthen 
several of the civil monetary penalties collected by the Department. 
This is not intended as an additional penalty against employers who are 
striving to follow the laws and protect their workers. This is intended 
to strengthen the deterrent against those few who flout the law to save 
a few pennies while risking their employees' lives and health.
    About half of the workforce has no retirement plan through their 
work. About 15 percent without work-based plans have a personal 
retirement account. Social Security is an important benefit, but too 
many Americans have nothing else to supplement their Social Security 
benefits. Our Nation needs to help more people save for their golden 
years. The budget includes several proposals to help Americans with 
their retirement planning and savings. The request for the Employee 
Benefits Security Administration (EBSA) includes an increase of $6.5 
million to pilot different approaches to increasing retirement plan 
coverage in States. The budget request for EBSA also includes an 
increase of $7.6 million to advance the agency's investigative tools to 
enhance health and retirement benefits analysis and targeting.
 program reform, improving data-driven decision-making, and increasing 
                          federal productivity
    In recent years, the Department has been striving to increase the 
productivity and efficiency of its workforce. The budget includes a 
number of investments to improve the Department's ability to serve the 
public, increase workers' effectiveness, streamline processes, and 
enhance agencies' ability to target enforcement to those areas where 
violations are most likely to occur.
    The Department's budget includes a large investment in the IT 
infrastructure. Over the past 6 years, the Department has been working 
to streamline the nine separate IT infrastructure components into one 
consolidated system. Within this consolidated system, the Department is 
proposing to implement a Digital Government Integrated Platform, which 
will be used by agencies to support information sharing and improve the 
efficiency and effectiveness of the Department's workforce, thereby 
transforming the way the Department provides services to the American 
public. This will improve compliance with the laws the Department 
administers by focusing strategies and resources through in-depth data 
analysis made possible by managing digital information. It will also 
allow for agencies to better train employers and workers on how to be 
safe in the workplace by enabling the Department to share videos that 
demonstrate safe workplace practices and tailor this information for 
non-English speaking employees. Several of the agency budgets, 
including the Office of Labor-Management Standards (OLMS), the Office 
of Federal Contract Compliance Programs (OFCCP), and the Wage and Hour 
Division (WHD), include proposals to upgrade their case management 
systems. These systems will improve the agencies' ability to target 
enforcement efforts, enabling them to change the types of behaviors 
that drive non-compliance. Within the Office of Workers' Compensation 
Programs (OWCP), there is a proposal to improve the claims processing 
systems. The 20-year old Longshore and Black Lung claims processing 
systems are out of date, and the FECA claims system is approaching the 
end of its life. OWCP is looking to move toward a unified claims-based 
system that would facilitate more effective delivery of benefits to 
claimants across the four programs OWCP administers and also yield 
savings in future years.
    The fiscal year 2015 Omnibus provided additional resources for the 
Adjudicatory Boards to address the backlog of Black Lung cases. The 
budget continues this funding and the Department remains committed to 
eliminating the case backlog.
    The Bureau of Labor Statistics (BLS) is the principal Federal 
statistical agency responsible for measuring labor market activity, 
working conditions, and price changes in the economy. The request for 
BLS is $632.7 million and includes an increase of $6.5 million to 
expand the Job Openings and Labor Turnover Survey (JOLTS). JOLTS 
provides critical information about the health of the labor market by 
tracking the number of job openings, hires, layoffs and quits in the 
economy. This is useful because weaknesses in some of these underlying 
sources, such as openings, are leading indicators of recessions. 
Earlier warning about recessions allows policymakers more time to 
respond. Similarly, increases in some of these underlying sources, such 
as quits, provide important signals as to the growing strength of the 
labor market. The expansion would allow JOLTS data to be released at 
the same time as the monthly unemployment numbers, thereby improving 
the analysis of both pieces of information, and also would add greater 
industry detail and State level information. In addition, the request 
includes an increase of $4.7 million for the International Price 
Program (IPP) export price indexes, which are used in the calculation 
of real Gross Domestic Product. These indexes are used to help 
understand trends in U.S. real trade balances, competitiveness, and 
issues such as the impact of exchange rate movements. In the past few 
years, BLS has taken a series of temporary measures to maintain this 
and other key economic programs, but these measures cannot be sustained 
permanently and the levels in the budget are necessary if programs are 
to be maintained.
    The Department has long been a leader in using data to make 
decisions. I am proposing to increase the Chief Evaluation Office's 
funding while also continuing to transfer resources from the agencies 
to the CEO for evaluation of those programs.
    The budget proposes several reforms for ETA and OWCP programs, and 
the Pension Benefit Guaranty Corporation (PBGC). The reforms to the UI 
program will improve the solvency of State programs, strengthen the 
program's connection to work, and make the UI program more targeted and 
responsive to economic downturns. The budget again proposes reforms to 
the Federal Employees' Compensation Act (FECA) to act on longstanding 
recommendations from the Government Accountability Office, the 
Congressional Budget Office, and the Department's Inspector General to 
update and improve the program. If enacted, these changes will yield 
government-wide savings of more than $360.0 million over 10 years. 
Within PBGC, the budget includes a proposal to raise the premiums that 
plans pay to PBGC, taking into account the risks that different 
sponsors pose. This proposal will save about $19.0 billion over the 
next 10 years.
                               conclusion
    Promoting the welfare of American workers, job-seekers, and 
retirees is the fundamental mission of the Labor Department, and it is 
critical to the Nation's continued economic recovery and long-term 
competitiveness. The budget calls for investments and significant 
reforms to help workers gain new skills in growing sectors, supports a 
middle class economy, and builds upon our previous success.
    These proposals are evidence-based, and our efforts will help get 
Americans onto career pathways that promote opportunity and a hopeful 
future, helps workers support their families, and improves the 
effectiveness of the Federal employees at the Department.
    Mr. Chairman, thank you for inviting me today. I am happy to 
respond to any questions that you may have.

    Senator Blunt. Thank you, Mr. Secretary. I think we will 
have a round of 5 minute questions, and we will do that in the 
order of member appearance today.

                          FIDUCIARY REGULATION

    Mr. Secretary, on the fiduciary or conflict of interest 
regulation, the Department has been directed by the President 
to proceed with rulemaking on the expansion of the definition 
of ``fiduciary'' to address what it believes is inherent 
conflicts in the interest of broker-dealers.
    The Department submitted its proposed rule to OMB for 
review. Since that time, the Securities and Exchange Commission 
(SEC) has had comments about this rule. My view is that the 
Securities and Exchange Commission and the Financial Industry 
Regulatory Authority are in a better place to monitor this part 
of the financial advice community than the Department of Labor.
    Why do you think that needs to come under the Department's 
control?
    Secretary Perez. Mr. Chairman, I agree with what Chairwoman 
White said in a recent proceeding, in which she said that both 
the SEC and the Department of Labor have important but 
different mandates.
    Our mandate is the enforcement of ERISA (Employee 
Retirement Income Security Act). Their mandate is different. We 
have overlap, and that is why we have had a tremendous amount 
of communication and collaboration. I have personally met with 
Chairwoman White on a number of occasions. We outlined all of 
our interactions with the SEC in a letter that we sent to 
Chairman Kline a week or so ago. We continue to collaborate 
with them. We continue to collaborate with Rich Cordray and 
folks at the Consumer Financial Protection Bureau.
    We are doing this because we have had a total structural 
change in how retirement is looked at. Thirty years ago, you 
went to work, you worked for 30 years, you had a defined 
benefit plan. You did not have to think about what you were 
going to do with it. You multiplied your years of service by a 
formula, and you had your retirement.
    Today, in the world of defined contribution and IRA plans, 
people have to be informed. Three of the most important types 
of decisions people make are medical, legal, and financial. As 
a lawyer, and all my siblings are doctors, we all know that 
when you look at your patient and your client, you have to look 
out for their best interests.
    I think you should have the same standard in the financial 
context. I think it will help consumers, and there are already 
so many folks in this business who are holding themselves up to 
a fiduciary standard; I think it can be done.
    We have created a very, very inclusive process. I was at 
the Chamber of Commerce literally yesterday speaking to the 
Chamber about this. I personally participated in probably a 
dozen meetings. That is in the work up to the proposed rule, 
and then we are going to have even more outreach.
    Senator Blunt. Do you think there is a conflict of interest 
in the advice that broker-dealers give?
    Secretary Perez. I think there can be. I think many broker-
dealers and many financial advisors do a very good service. If 
I had cancer, I do not want my doctor telling me what is 
suitable for me. I want my doctor telling me what is best for 
me.
    As the founder of Vanguard said, Jack Bogle, in connection 
with this rule, he said I have been in the business 64 years, 
and I learned early on that when you put your customers first, 
it is great for your customers and it is great for business. He 
built a pretty big business in that area.
    I also spoke to folks that were plan administrators. They 
work for businesses. CIBO, which is the industry group that 
represents them put out a statement in the aftermath of this 
proposal saying we are already fiduciaries, it works for us, 
and we think the hard earned money that our employees have in 
their retirement savings, they ought to have that advice that 
is not conflicted.

             REGULATORY AUTHORITY UNDER FIDUCIARY PROPOSAL

    Senator Blunt. Under this proposal, they would be regulated 
by the Department of Labor, the Securities and Exchange 
Commission, and the financial industry regulatory authority?
    Secretary Perez. Again, we have authority under ERISA to 
regulate. The SEC has regulatory authority. That is why we have 
had a lot of--that is the regulatory regime that Congress set 
up long ago. That is why we are collaborating with the SEC. 
That is why we are collaborating with the Consumer Financial 
Protection Bureau.
    We want to make sure we get the benefit of their advice and 
they get the benefit of ours. It has been a very constructive 
process. They have given us a lot of good ideas, and we will 
continue to reach out to them.
    Senator Blunt. Let's see how many different people you 
would want regulating your cancer doctor if he was dealing with 
you. We will talk about this more.

                   SPENDING ON GOVERNMENT ADVERTISING

    You may want to take this one for the record. I have 
sponsored a bill, the Taxpayer Transparency Act, which would 
require Federal agencies to disclose when taxpayer dollars are 
used to pay for Government advertising. The House has passed 
that bill already.
    Specifically, the bill would require a disclaimer stating 
that Government ad's are paid for by taxpayers on printed 
advertising materials, newspapers, billboards, flyers, as well 
as radio, television, and Internet communications that have to 
be paid for.
    What I would like you to do is provide the committee with a 
3 year summary of advertising costs you had in a specific way, 
the kinds of things this would apply to if in fact the Senate 
passes it and it becomes law.
    Secretary Perez. I look forward to working with you on your 
request, sir.
    [Clerk's Note.--Information is provided in the Questions 
for the Record.]
    Senator Blunt. All right. Senator Murray.

                         APPRENTICESHIP PROGRAM

    Senator Murray. Mr. Secretary, as I said, I am a very 
strong supporter of registered apprenticeship programs. They 
are proven and cost effective pathways for Americans into the 
middle class.
    Your budget includes a $100 million increase to expand the 
apprenticeship grant program to help build the capacity of 
States to set up programs. I heard you mention in your 
testimony that for every dollar we invest in apprenticeships, 
we see a $27 return on investment.
    We have been hearing statistics like that for years, but 
support for these programs have remained really mixed. Can you 
explain why you think that is and what you are doing to make 
the case for apprenticeship programs?
    Secretary Perez. I think as a Nation over the course of 
decades, we have devalued apprenticeship. That is not meant to 
be a partisan observation. Over the course of literally 
decades.
    I grew up in Buffalo, New York. Apprenticeship was a 
pathway to the middle class growing up, especially in the 
skilled trades. I was with Mayor Nutter in Philadelphia when we 
announced the $100 million grant proposal to expand 
apprenticeship not only to the skilled trades but into IT, 
cybersecurity, health care, and logistics.
    That is because it is a proven pathway. The earn while you 
learn model works so remarkably effectively. We had the 
SelectUSA Conference this week where we brought in literally 
thousands of foreign companies. I chaired a panel on 
apprenticeship and skill development.
    It is not a coincidence that the youth unemployment rate in 
Germany is half of what it is in the United States. When you 
are 15 and 16 years old, you have pathways to prosperity that 
have equal statute.
    We need to rethink as we build that skills' super highway I 
was referring to, we need to build that apprenticeship on ramp 
and fortify it, not only with the skilled trades but across the 
board.
    I have been to Germany. I have been to Australia. I have 
been to the U.K. I have seen these work. I have seen them in 
action.
    When parents say no, I do not want to do this, I want my 
kid to go to college, I tell them this is the other college 
because you get a portable and stackable credential, and we are 
working with community colleges through articulation 
agreements, so now roughly 175 community colleges will take 
that apprenticeship certificate that you have, and now you are 
two-thirds of the way to your associate's degree.
    I think this is a great idea, and I think we really need to 
engage in an aggressive marketing campaign, which is why I am 
working with school superintendents and parents, community 
college leaders, Governors and others. I truly believe this is 
a critical pathway to prosperity.
    Senator Murray. I really share that passion. I think too 
often we think of apprenticeship as building trades, which it 
is, but what are some of the other areas that you are seeing 
real successes in?
    Secretary Perez. Again, in Philadelphia, when we announced 
this grant program, there was this remarkable apprenticeship 
pathway in the IT sector, taking kids, mostly poor kids of 
color from the Philadelphia Public Schools System, and 
providing them with this IT apprenticeship.
    One thing I know as a parent of teenagers is they love 
gadgets, and they are good with gadgets, so we take that 
proficiency in gadgets and turn it into a career.
    UPS runs a remarkable apprenticeship program in logistics. 
The health care sector, I have met with many hospitals that are 
running apprenticeship programs in the allied health 
professions. CVS is taking people who are currently on public 
assistance in South Carolina, and using the State tax credit, 
they are putting them into apprenticeship programs that allow 
them to become pharmacy techs.
    The applications run the gambit.
    Senator Murray. We have to throw out what we thought of 
apprenticeship when we were kids and recognize it is a broad 
array of things. Thank you for that. I really appreciate it.

                     WAGE AND HOUR DIVISION BUDGET

    Let me ask you a couple of questions about your proposed 
increase of $50 million for Wage and Hour Division. That is the 
agency I know that oversees overtime and other important wage 
protections. I have heard folks worry about a $50 million 
increase. I disagree with this.
    At this moment, the ratio of staff in the Wage and Hour 
Division to the Nation's workforce is about 100,000 to 1, I 
believe. That budget proposal reduces it to 85,000 to 1. Talk 
to me about what the impact of that would be.

               SUPPORTING EMPLOYERS WHO PLAY BY THE RULES

    Secretary Perez. One of the most frequent advocates I hear 
from in the wage and hour context are employers who play by the 
rules, the restaurateur in Maryland that I spoke to who is 
paying his workers, he pays their taxes, he pays their Workers' 
Comp, and the employer down the road is paying everybody under 
the table. That is not a level playing field, really hard for 
him to compete. We hear that across the country.
    There was an independent study done recently in just two 
States, New York and California, documenting that the loss from 
wage theft just in those two States alone is over $1 billion a 
year, and it disproportionately falls on low income workers who 
are already making a meager wage, and then they are seeing it 
further eroded.
    This is not only about helping workers. This is about 
leveling the playing field for employers who play by the rules.
    Senator Murray. Okay. Thank you very much. Thank you, Mr. 
Chairman.
    Senator Blunt. Senator Alexander.
    Senator Alexander. Thanks, Mr. Chairman. Mr. Secretary, 
welcome. Thank you. I imagine Senator Mikulski will have more 
to say about this. Thank you for your prompt response to the 
request she and I made about H-2B visas. You will let us know, 
I hope, if we can do anything else.
    Secretary Perez. Yes, working 24/7 on that.

                         PATHWAYS TO PROSPERITY

    Senator Alexander. Thanks. On your comment about paths to 
prosperity, some educators are reluctant to say that an 
apprenticeship, which leads to a career, is a separate path to 
prosperity than a high school degree that leads to college.
    Do you think it is legitimate to say--do you agree that our 
objective should be that 100 percent of high school graduates 
should go to college or the problem we have is that our high 
school graduates ought to be prepared either for a path to 
prosperity that comes with a college degree or a path to 
prosperity that comes with an apprenticeship and a career, but 
maybe not a college degree?
    Secretary Perez. I think there are multiple pathways to 
prosperity. I saw that growing up in Buffalo, New York. A good 
buddy of mine's dad worked at Bethlehem Steel for 40 years with 
a high school degree, and that was a remarkable pathway to 
prosperity.
    I was down in North Carolina recently, Mr. Chairman, at a 
place called Buhler, which is a Swiss advanced manufacturing 
company. They have a footprint in North Carolina and Minnesota. 
I met with 17-year-old high school kids who are in their 
apprenticeship program. Whenever they go out with their 
friends, they are the only ones that have any money. They are 
really excited. I told them do not let them make you pay for 
everything. They are really excited about their future.
    By the way, it is not an either/or phenomenon, and that is 
what they are beginning to learn, because they get a 
credential. They can stack it on top of another credential. 
Then the company, if they want, starts paying for their next 
ladder of education, and it works for everyone.
    Senator Alexander. I have 3 minutes and I would like to ask 
three quick questions, maybe get three quick answers.

                      COMPANIONSHIP EXEMPTION RULE

    The Department of Labor's rule to narrow the companionship 
exemption to the Fair Labor Standards Act was vacated by a 
Federal District Judge who said The Department's ``conduct 
bespeaks an arrogance to not only disregard Congress' intent 
but seize unprecedented authority to impose overtime and 
minimum wage obligations in defiance of the plain language'' of 
the statute.
    My own view is that rule threatens in-home care for nearly 
a quarter of a million Tennesseans, increasing costs for 
seniors and individuals with disabilities. After receiving such 
a strong rebuke from the U.S. District Court, why are you 
continuing to use taxpayer dollars to litigate a rule that is 
clearly contrary to congressional intent?
    Secretary Perez. With all due respect, Mr. Chairman, I 
strongly disagree with the Court's Order, and the Court of 
Appeals has agreed to take the matter on an expedited basis. 
Oral argument, if my memory serves me, is early May. We hope to 
have a resolution to that.
    I believe it is really important to build a workforce. I 
met a woman who was in this line of work who quit home health 
work to go to work in the fast food industry.
    Senator Alexander. The other side of that is you have a lot 
of people who cannot afford the higher costs and more 
importantly, in my opinion, the statute does not give you the 
authority.

                        JOINT EMPLOYER STANDARD

    If I could move to another area, are you planning to follow 
the NLRB (National Labor Relations Board) and hold franchisors 
jointly liable for labor law violations committed by 
franchisees?
    Secretary Perez. The NLRB, as you know, is a totally 
separate entity from us.
    Senator Alexander. OSHA (Occupational Safety and Health 
Administration) is under your supervision; right?
    Secretary Perez. The Occupational Safety and Health 
Administration is certainly under our supervision. I am unaware 
of any OSHA action----
    Senator Alexander. Safety and health complaints against 
McDonald's franchisees have prompted questions about whether 
your Department is conducting joint employer investigations.
    My concern is one way for the middle class to prosper in 
this country is through independent franchisees, and if the 
Labor Department or the NLRB insists on combining the 
franchisees and the franchisor (for purposes of labor law) then 
Ruby Tuesday, McDonald's, and other franchisors would just run 
their own stores and hundreds of thousands of Americans who 
like the independence of owning a franchise and moving up the 
economic ladder will not have a chance to do that.
    I hope you will be careful about that joint employer 
standard as this goes forward.
    Secretary Perez. We certainly will. The question in the DOL 
space is whether there is an employment relationship. It is not 
a question of whether someone is a franchisor or franchisee.
    There is a pretty well established test of whether somebody 
who is claiming they had their wages not paid or some other 
violation. The first question we ask is is that person the 
employer. That is what we have done for decades. That is what 
we will continue to do.
    Senator Alexander. Thank you, Mr. Secretary. Thank you, Mr. 
Chairman.
    Senator Blunt. Thank you, Senator. The next Senator in line 
for recognition on the Democratic side, Mr. Schatz.

                     AVOIDING REDUNDANT CREDENTIALS

    Senator Schatz. Thank you, Chairman. Thank you, Mr. 
Secretary. Good morning. If you would not mind talking a little 
bit more about stackable credentials, and the question I have 
is as you are trying to implement a new upscaling model of 
apprenticeship, which goes beyond what Senator Murray referred 
to in terms of our traditional understanding of apprenticeship, 
how do you make sure that the credentials are actually 
stackable as opposed to just redundant?
    How are you through the reauthorization a little more than 
a year ago transforming these kind of existing programs, 
revenue streams, and the existing sort of workforce 
infrastructure to make sure it is not just a bunch of new 
redundant programs but rather reflecting the way you see this?
    I get that there are multiple pathways to success, but this 
thing has to be coherent, and most people--you want to kind of 
convey to workers there are multiple pathways to success but 
not innumerable so that they are too confused to make good 
choices.
    Secretary Perez. I think that is a really important 
question. The key to making sure that credentials are relevant 
and not redundant, the real key is employer engagement. That is 
one of the biggest differences between 20 years ago or 15 years 
ago, when I first started getting in this space and now.
    I was at Front Range Community College out in Colorado a 
while ago. They have a remarkable program that they have put in 
place, and industry is not only engaged in the development of 
the curriculum and the credential, but a number of employers 
are actually teaching the courses.
    The purpose of that is to ensure that what you are learning 
is relevant, that you are developing the requisite core 
competency so you can then go into those jobs.
    The level of employer engagement that we are seeing--WIOA 
has integrated the notion of employer engagement into the DNA 
of the law. That enables us to build what we call ``sector 
strategies.'' In manufacturing, we understand what the job 
needs are. We understand what the core competencies to fill 
those job needs are, and we build those stackable credentials.
    They are relevant because they have been industry driven. 
They are like the Good Housekeeping Seal of Approval. You know 
when you are ASE certified and you want to become a mechanic, 
that means something.

                           SECTOR STRATEGIES

    Senator Schatz. Where are the best opportunities in terms 
of new sectors for these stackable credentials in your efforts 
in apprenticeships? I am wondering whether it is sort of data 
driven in terms of where the needs are, in terms of the labor 
market, or a combination of that and the sectors that are 
basically willing to participate.
    It seems to me it is somewhat of a data question, but it is 
also a question of where you have business leadership, where 
you can get the sector engagement.
    Secretary Perez. It is very data driven and very employer 
driven. The old model of workforce is what I used to call the 
train and pray model. You would train people and you would pray 
that someone is hiring them. That is not a good model. If no 
one is hiring widget makers, do not train widget makers period, 
end of story.
    Now, every month we come out with a report. It is called 
the JOLTS (Job Openings and Labor Turnover Survey) Report, that 
talks about how many job openings there are. It actually 
disaggregates them by sector. Then we do sector strategies that 
are regional. The demand needs in Hawaii may be different from 
the demand needs in Washington State and the demand needs in 
Oklahoma.
    That is why regional sector strategies and regional 
partnerships are so critically important, and that is what the 
Workforce Innovation and Opportunity Act is doing. It is 
catalyzing partnership at scale.
    When you get everyone in the room understanding what the 
demand needs are, and then you have the community colleges and 
other training providers there, they can move to build those 
credentials that you can stack and you can use to really punch 
your ticket to middle class.

                      PURPOSE OF HIGHER EDUCATION

    Senator Schatz. Do you encounter resistance in the 
education community, not so much in the community college 
community, but I am imagining in the 4-year institutions and 
even at the secondary level that there is almost a 
philosophical question about whether education is for the 
purpose of training someone for a job or for other arguably 
higher purposes.
    I am just wondering how you sort out those questions about 
what education is for. I agree with your view, which is people 
need employment and meaning in their lives first, but I am 
aware there are folks in the educational establishment who 
resist this model because they view that education is for--the 
Department of Education is not the Department of Labor (DOL), I 
think is probably the best way to say it.
    Secretary Perez. We have had that conversation a lot. I am 
a big fan of what many people are now calling ``STEAM,'' which 
is STEM plus the Arts. I think it can really be a good pathway.
    There is a leader in Maryland that I talk to with great 
regularity. His name is Freeman Hrabowski. He runs University 
of Maryland, Baltimore County, a 4-year institution. He is 
remarkably entrepreneurial. He has cracked the code on how to 
get kids of color into science and engineering. He is not only 
providing 4 year degrees but he is providing certificate 
programs in cybersecurity.
    Freeman and others, I think, are beginning to tilt this 
conversation in the 4-year higher ed to make sure that other 4-
year institutions move with that similar alacrity.
    Senator Schatz. Thank you very much. My time has expired.
    Senator Blunt. Chairman of the full committee, Senator 
Cochran.
    Secretary Perez. Good morning, Mr. Chairman. Good to see 
you.

                 GULFPORT, MISSISSIPPI JOB CORPS CENTER

    Senator Cochran. Welcome. Thank you very much, Mr. 
Secretary. The Job Corps Center in Gulfport, Mississippi, was 
badly damaged during Hurricane Katrina. It has still not been 
put back into full service. We had money set aside in previous 
years. Somehow or other, it gets left out.
    We have appropriated $14 million specifically to repair the 
Gulfport Center, and I am just curious what your plans might 
be.
    Secretary Perez. I remember the first meeting I had with 
you after I had the privilege of having this job. We talked 
about the Gulfport issue. We continue to be committed working 
with the City of Gulfport which owns the property that we 
lease, as well as with the affected community.
    The issue that I think has delayed this the most is the 
fact that it was a historic building. There has been a lot of 
community engagement about what to do with the historic 
building.
    What we have done, to be specific, is we have procured a 
third party contract to do the environmental and structural 
assessment. I am told that is going to be done in the next 4 to 
6 months, to determine what the most reasonable use for that 
building is.
    We continue to work with your staff and any ideas you have 
on how we can pick up the pace. I recognize this has been a 
challenge throughout, and we want to make sure we fix this.
    Senator Cochran. Your request for fiscal year 2016 included 
almost $7 million in contingency funds for future emergency 
repairs. We know that has been done, and appreciate that 
commitment. We hope there will be some follow through, and if 
there is something that has been left undone here in this 
committee, please advise me.
    Secretary Perez. I will. I appreciate your continued 
assistance. You have been as usual invaluable in this process.
    Senator Cochran. Thank you.
    Senator Blunt. The immediate past chairwoman of the 
committee, Senator from Maryland, Senator Mikulski.
    Senator Mikulski. Thank you, Senator Blunt. I want to 
welcome Secretary Perez. He is a Marylander, and who also in 
the State headed up something called ``The Department of 
Licensing and Regulation,'' which really oversaw much of the 
kind of work at the State level that we are discussing today.
    When I presented him for his confirmation hearing, he had 
robust letters of support from both the Maryland Chamber of 
Commerce and the AFL-CIO. Both said that he brought people 
together to come up with pragmatic solutions. You can 
understand why he brings much assets here today.
    Mr. Perez, I want you to know I support the remarks 
particularly made by Senator Murray. We want to really support 
particularly these educational efforts at the Department of 
Labor, and at a recent meeting on Monday with Governor Hogan, 
he particularly spoke about the need for workforce investment, 
and of course, the Maryland Association of Community Colleges, 
all of these really know the practical implications of getting 
people ready for biotech, cybertech, these fields. We look 
forward to working with you.

                              H-2B RULING

    The area, of course, of great concern and my perpetual 
concern is the H-2B program. I know I join with the gentleman 
from Missouri and others on this. As I understand it, the Court 
ruled that the Department of Labor had limited authority to 
oversee the program. Within 24 hours, you and the Department of 
Homeland Security completely shut the H-2B program down.
    On May 17, the Court granted a temporary stay, only 
temporary. Now we are processing applications. I can tell you 
my H-2B constituents, many are in the hospitality industry, are 
near panicked. Are you going to have an interim rule completed 
by April 30 as promised?
    Secretary Perez. Yes. We are also going to be completing 
the other matter that you and I had discussed regarding the----
    Senator Mikulski. I am going to come back to the other 
matter. First, this is the overall program. Will you really 
stay on your Department to get this done? It has had a history 
of drift when it comes to writing regulations on H-2B.
    Secretary Perez. We committed to having it done by the end 
of April. It would be an interim final rule. It would go into 
effect immediately. It still allows for comment, but it does go 
into effect immediately. I certainly share your concern with 
moving as fast as possible, and that is why we did what we did.

                         PREVAILING WAGE SURVEY

    Senator Mikulski. Let's then go to the other matter, which 
was the prevailing wage survey. When we were doing the omnibus, 
there was a rider from the House that said in the seafood 
industry--it was not my rider--it was the House rider, they had 
to accept the prevailing wage surveys at the State and local 
level.
    The Court decided against that, and in the midst of the 
omnibus, neither Congressman Rogers or I wanted to override a 
Court decision. We looked to you. Our look to you was 
disappointing. Within hours almost, within 2 weeks, you issued 
a regulation essentially eliminating, that you would no longer 
accept the prevailing wage surveys.
    This again caused tremendous problems in our seafood 
community, not only in my State but there is a seafood 
coalition within the Senate of we who are particularly coastal 
Senators or from the Gulf Coast, it is part of our identity as 
well as part of our livelihood.
    I want to know when you are going to have the rule done to 
allow the use of under certain circumstances--so we are not 
writing rulemaking here, and I do not want to jeopardize the 
law and create yet more lawsuits, but are we going to get a 
regulation on this by April 30 or May 1?
    Secretary Perez. Yes. You and I have had a number of 
conversations on this. As you know, the Third Circuit vacated 
the portion of the regulation permitting employers to submit 
private wage surveys. That is why we are moving with great 
alacrity.
    Both of these issues, Senator, we have committed to being 
completed by the end of April.

              FAIR PAY AND SAFE WORKPLACES EXECUTIVE ORDER

    Senator Mikulski. With the indulgence of the chair, just on 
fair pay, switching gears, the President issued an Executive 
Order prohibiting Federal contractors from punishing workers 
for disclosing salary. You were supposed to have a regulation 
out on September 15, 2014. That has not happened. Are we going 
to get our regulation on President Obama's Executive Order?
    Secretary Perez. The regulation, if my memory serves me, is 
at OMB right now. Were you referring to the Fair Pay Executive 
Order or the--there were two.
    Senator Mikulski. I am talking about the Obama Executive 
Order, in which he prohibited Federal contractors, not private 
sector, Federal contractors from punishing workers for 
discussing or disclosing salary.
    Secretary Perez. I am sorry. I misunderstood what you were 
referring to because there was another matter.
    Senator Mikulski. There is another matter, and I am going 
to ask you about the other matter, too.
    Secretary Perez. Yes. We received a fair amount of 
comments, and our OFCCP (Office of Federal Contract Compliance 
Programs) is reviewing those now. Our aim is to put that into 
final.
    Senator Mikulski. It is now a year later. You can come up 
with H-2B regulations in a matter of hours, and yet it has been 
a year on the Obama Executive Order.
    Also, the DOL, just to bring to your attention and then I 
will conclude, non-retaliation, April 14, no regulation. Equal 
pay survey, April 2014, no regulation. Wage data collection 
tools, again, for fair pay and equal pay, no regulation.
    Would you review that? I know you are committed to this.
    Secretary Perez. I would be happy to work with you.
    Senator Mikulski. Thank you.

               WAGE METHODOLOGY AND PRIVATE WAGE SURVEYS

    Senator Blunt. Mr. Secretary, just to follow up on one of 
the points Senator Mikulski made, my understanding is that the 
Third Circuit did not categorically prohibit wage surveys. It 
said you could use them as long as they were employed via 
proper administrative procedures and under appropriate 
circumstances.
    I think there is a way you can do this. The rule that 
Senator Mikulski was talking about, will that rule address the 
issue of wage methodology and private wage surveys, or do you 
feel like the Court has prohibited you in a way that I am told 
they have still left a door open?
    Secretary Perez. The purpose of the rule that I was 
discussing with Senator Mikulski, Mr. Chairman, is to address 
the wage survey issue. It is my understanding that the Third 
Circuit did vacate that portion of the regulation that 
permitted employers to submit private wage surveys.
    We are committed to resolving this matter by the end of 
April through regulation.
    Senator Blunt. The regulation will deal with this issue of 
wage surveys?
    Secretary Perez. Yes.
    Senator Blunt. Thank you. Senator Capito.
    Senator Capito. Thank you, Mr. Chairman.
    Secretary Perez. Good morning, Senator.
    Senator Capito. Thank you. Thank you for being here, Mr. 
Secretary.
    Secretary Perez. It is an honor.

 MINE SAFETY AND HEALTH ADMINISTRATION FISCAL YEAR 2016 BUDGET REQUEST

    Senator Capito. As you know, I am from West Virginia. We 
have a lot of coal mines and coal mine safety is an extremely 
important topic for us, in any State that mines coal, but 
particularly in our State, and that is what I wanted to talk 
about a little bit.
    The President's budget proposes an increase in MSHA (Mine 
Safety and Health Administration). I would like to get an 
understanding from you what you expect from that increase in 
funding in regard to the mission and activities that agency is 
performing.
    Secretary Perez. One of the budget items that I think is 
very important, and I know it has been very important to you, 
is the training grants. I think there is $8.4 million roughly 
in the budget for training grants. I think that has been 
something that has proven very helpful for States in terms of 
compliance.
    Senator Capito. The way I am understanding the budget, are 
you doing away with that? You removed from the bill the 
language that does have that $8.4 million for State training 
grants. Am I understanding that correctly?
    Secretary Perez. Our fiscal 2016 budget request fully funds 
the State grants, $8.441 million. Our goal is to give out the 
entire amount. I know that has been a very important part of 
the regime, and we have spoken to Chairman Rogers on the House 
side about that, because that is a very important issue to him 
as well. We are very committed to that. We are very committed 
to prevention.
    Joe Main, who spends a lot of time out in West Virginia, I 
had the privilege when we did the coal dust rule, we went out 
to West Virginia when we announced it. We really put an 
emphasis on engagement.
    What I find very helpful about the new dust rule is that 
something like 99 percent of the tests that we have conducted 
since we announced that rule have shown they are in compliance 
with the new dust limits.
    Our goal is to prevent people from getting hurt. Our goal 
is to make sure we thread the needle of ensuring that everybody 
that goes to work in the morning is coming home safe at night, 
while allowing businesses to continue to carry out a robust 
business. That is our goal, and that is what the budget is 
designed to do.

                    IMPLEMENTING NEW COAL DUST RULE

    Senator Capito. I share that goal. In terms of the increase 
in MSHA, is there a problem with meeting the statutory 
requirements of all the inspections? Has that been an issue? I 
know we have continually--I am from the part of West Virginia 
where we had the Sago Mine tragedy in 2006. That is when we 
passed that new mine safety bill, and put a lot of resources in 
to try to make sure we had the right inspections and inspectors 
on the ground.
    Has that been an issue? I have been operating under the 
assumption that the demands of that law have been met with 
resources, but if you could just kind of talk about that a 
little bit.
    Secretary Perez. The time we did not meet was the year that 
included the Government shutdown. Because the Government was 
shut down and we were on a skeleton crew that year, we did not 
meet our aim.
    What we are trying to do this year, and the budget request 
reflects this, is we are still in the process of implementing 
the new dust rule. We have made tremendous progress and we have 
had robust industry engagement.
    I just visited a coal mine a month ago. What we are trying 
to do now with this budget is implement the rule and also 
redouble our efforts in what we call ``impact investigations,'' 
because what we have found is when you are smarter in the way 
you go out there and you can target--the overwhelming number of 
coal mines are being run properly.
    Those who are not, we need to better target so we can 
prevent, and that is why our impact inspection program is a 
critical part of our success. The budget request would enable 
us to continue the momentum we have gotten in that, and that 
has really been a win-win solution because those who are 
playing by the rules tell us repeatedly we have to do more to 
make sure the bad actors are held accountable, and that is what 
this is about.
    Senator Capito. Thank you. Thank you for that. I appreciate 
your dedication to the safety of our coal miners.

              CHARLESTON, WEST VIRGINIA, JOB CORPS CENTER

    I am just going to make a quick statement on Job Corps. I 
just want to say we have a great Job Corps Center in 
Charleston, West Virginia. They do great work. I do applaud the 
efforts by the Department to look at some of the management 
practices across the country to make sure that we are actually 
getting the results that Job Corps was intended for.
    I want to help you in that mission. I just want to say the 
Job Corps that we have operating in my local community and our 
State, I think, has done a very, very good job. Thank you.
    Secretary Perez. Thank you.
    Senator Blunt. Thank you, Senator. Since I have already 
skipped Mr. Lankford twice, we will go to Senator Shaheen. Mr. 
Lankford, I hope you are able to stay for your questions. I 
apologize. For some reason I thought we had gotten to you while 
I stepped out a moment ago, and we clearly did not.
    Senator Shaheen. Thank you, Mr. Chairman. Mr. Secretary, 
thank you for being here and for your service.

        MANCHESTER, NEW HAMPSHIRE, JOB CORPS CENTER CONSTRUCTION

    I want to follow up on some of the comments about Job 
Corps. As you point out in your opening statement, Job Corps 
has been in operation for 50 years. New Hampshire is one of two 
States who are still waiting for a Job Corps to open. I have 
been working on trying to get a Job Corps Center in New 
Hampshire since I was first elected Governor in 1997.
    I very much appreciated that you came to New Hampshire for 
the groundbreaking of our Job Corps Center in Manchester that 
we are very close to opening. Construction is essentially 
complete.
    Unfortunately, there have been some issues that have 
emerged around construction of the Job Corps Center that I want 
to raise this morning. You may be aware that because of a FOIA 
(Freedom of Information Act) request, information has come to 
light that a year into construction of that center, the wage 
rates were reclassified, which as I understand, reduced wages 
for many of the workers, and that the contract was backdated to 
reflect that lower rate.
    I wonder is it common practice for DOL to change rate 
classification in the middle of a construction project like 
that, and then to backdate the contract?
    Secretary Perez. Senator, I think David Weil, our Wage and 
Hour Administrator, met with you on this.
    Senator Shaheen. We spoke on the phone, before we had the 
information from the FOIA request.
    Secretary Perez. It is my understanding as soon as we 
became aware of the situation, we worked with the prime 
contractor as well as with our Job Corps Office to make sure we 
got the correct wage determination, and once we did that, we 
were able to recover back wages within a short period of time.
    As a result of the action, at no time were the wages of 
anyone then lowered. We were able to fix the problem. What we 
are trying to do now is make sure the problems do not occur 
again. It is not only fixing this problem, but also learning 
from those experiences and making sure you have systems in 
place to prevent future such problems.
    Senator Shaheen. I appreciate that. My understanding is 
there were a class of workers who did in fact get their wages 
raised. What is not so clear is what the impact was on that 
change and what the other workers on the job should have been 
getting based on the original wage rate at which the project 
was bid.
    I am going to be submitting questions for the record that 
will lay out in greater detail some of these issues as we 
understand them, and look forward to your responses.
    [Clerk's Note.--Information is provided in the Questions 
for the Record.]
    Secretary Perez. I look forward to working with you.

    OPERATING COSTS FOR MANCHESTER, NEW HAMPSHIRE, JOB CORPS CENTER

    Senator Shaheen. The other question I had related to the 
Job Corps Center in New Hampshire, since we have waited such a 
long time, it is not clear to me looking at the budget request, 
where the operating costs for the Manchester Center will be. I 
just want to be reassured that the operating costs to begin 
enrolling students on the target date of this July are in fact 
in the budget, and we will not be waiting further to get the 
Center open.
    Secretary Perez. The budget to make sure it was opened was 
in the fiscal year 2015 budget. I look forward to perhaps a 
ribbon cutting. I am confident it will be this coming summer. 
It has been too long in the making.
    I am excited we also will be opening a Job Corps Center in 
Wyoming. We will be able to say we have a Job Corps Center in 
every State in the country.
    Senator Shaheen. I very much appreciate that and look 
forward to your coming up for the ribbon cutting.
    Secretary Perez. Thank you.

        WORKFORCE INNOVATION AND OPPORTUNITY ACT IMPLEMENTATION

    Senator Shaheen. I also want to ask about an issue that has 
been raised in New Hampshire with respect to the operation of 
our one stop centers, because of the passage of the Workforce 
Innovation and Opportunity Act.
    I understand there are aggressive deadlines for 
implementing the Act that require competitive bidding to 
operate the one stop career centers. It is my understanding we 
are still waiting for guidance from DOL, and that presents a 
real challenge for States like New Hampshire where the State 
actually provides the employees and operates our one stop 
career centers.
    I wonder if you have any sense of when States should expect 
to get guidance so they can begin planning.
    Secretary Perez. The proposed rules implementing WIOA are 
at the Federal Register. They are the product of a tremendous 
amount of outreach, and I want to thank folks on your staff. We 
spoke to congressional staff. We did a road show. We did a 
tremendous amount of outreach.
    There are a lot of pages in the proposed rules because this 
is systems' reform. Because of this process, the whole notion 
of implementation--we have the authority under WIOA to make 
sure we work with States to ensure an orderly implementation of 
the process.
    This is a significant systems' reform. We look forward to 
getting comments on the proposed rules. We got a significant 
amount of input that informed the proposed rule, including 
issues relating to the question you have asked and so many 
others. They are all really important questions. We did our 
best to take that input into account.
    We look forward to getting people's feedback on that, and 
again working in an orderly fashion to implement, recognizing 
that--I know this having worked at the State and local level, 
you cannot just flip a switch and come into compliance day one. 
You need time. You need to have a reasonable amount of time to 
do things. We get that.
    For me, that is an advantage of having worked at the State 
and local level. I understand implementation. I have been on 
the other end of this.
    We are going to make sure that everybody has appropriate 
guidance and appropriate technical assistance. We all want to 
get this right.

                           PROPOSED FIDUCIARY

    Senator Shaheen. Thank you. My time is up. I do want to say 
I know Chairman Blunt has raised the fiduciary rule. I 
certainly hope that whatever DOL does, it will make sure 
investors do not lose access to their investment advice going 
forward.
    Secretary Perez. I look forward to working with you on 
that.
    Senator Shaheen. Thank you. Thank you, Mr. Chairman.
    Senator Blunt. The Senator from Oklahoma, Mr. Lankford.
    Senator Lankford. Thank you, Mr. Chairman.
    Secretary Perez. Good morning, Senator.

           RETROSPECTIVE REVIEW OF DEPARTMENT OF LABOR RULES

    Senator Lankford. Good morning. Last week, I had the 
opportunity to be able to talk to you, and we talked a little 
bit about the retrospective review and the process that you 
have taken on internally as well as trying to get that out in 
the Federal Register.
    In February of this year, you put out the retrospective 
review listing 14 different rules that are going through the 
process. Ten of those 14 were also on last year's report, so 
that is really four new rules that are starting for this year 
of around 700 rules total that DOL has.
    I guess my question is how do you get on that list of 
retrospective review knowing there are only four that have been 
added of the 700 or so the Department of Labor has, how do you 
select those that are going to go in for retrospective review?
    Secretary Perez. We want to make sure when we talk about 
retrospective review, we prioritize those rules where if we are 
able to learn from that, we can make the biggest impacts.
    For instance, we are doing a lot of work in the immigration 
context, processing H applications. One of the requirements 
under current law that we learned about during our outreach was 
you have to advertise in a newspaper, the Sunday newspaper, 
twice in a row. That seems very 1980s to me.
    We are in the process as a result of input we have gotten 
from stakeholders of fixing that. We think that is something 
that would help a lot of people. It would make the process more 
streamlined.
    Senator Lankford. How do you put it on the list. You are 
talking about if it is a major piece of the 700 and so rules 
that are out there, four of them are under new review this 
year. How do you get on that list? Who makes the decision of 
how it rises to that level?
    Secretary Perez. What we try to do, as I mentioned to you 
when we met, we actually put a notice in the Federal Register 
inviting anyone to give us ideas. We then put a notice internal 
to DOL.
    One thing I have learned in the various jobs I have had is 
that people working in the front lines are often the best 
innovators because they have been living with these rules.
    We take all that input that we get. It is a prioritization 
process of understanding which rules we could revise or 
eliminate would have the biggest bang.
    Senator Lankford. Do you have to do the same thing with 
your guidance documents as well, to go back and try to review 
those?
    Secretary Perez. Certainly.
    Senator Lankford. Same type of process it goes through?
    Secretary Perez. Sure. I certainly meet on a fairly regular 
basis, the most recent meeting was roughly within the last two 
weeks on retrospective review. The reason I want to personally 
participate is because I recognize the importance of this.

                    PROPOSED CHANGES TO SILICA RULE

    Senator Lankford. Let me ask about one of the rules, the 
silica sand rule and the changes. That rule has been in 
existence since 1971. The permissible exposure limit of 100 
micrograms per cubic meter of silica sand. By the way, that 
rule has been very, very successful, a 93-percent reduction in 
silicosis deaths.
    That rule was recently proposed for revision to drop it 
from 100 to 50 micrograms per cubic meter, and part of my 
concern and question is what science or what catalyst occurred 
to be able to move it from 100 to 50 when DOL, as they have 
done their regular inspections, my understanding is about 40 
percent of the inspections that are done do not hit the 100 
standard yet, yet it was dropped to 50.
    I am trying to figure out what drove that revision of that 
standard.
    Secretary Perez. What drove that was a very extensive 
examination and review and rulemaking process, that among other 
things included multiple public hearings and review of the 
science.
    The notion that silica kills is a notion that Frances 
Perkins--we have a tape, an audio tape of Frances Perkins 
talking about the dangers of silica. We have known this for 
literally decades.
    The rule that is currently in place has been in place for 
40 years. The science has evolved over that 40 years. That is 
why we had a very extensive and very appropriately slow 
rulemaking process because we wanted to make sure we took 
account of everybody's perspective in this, as I said, 
including holding public hearings after we issued the proposed 
rule and examining the science through NIOSH (National 
Institute for Occupational Safety and Health) and other 
entities.
    That is what the process has been, and now we are in the 
process of reviewing what we received to prepare our final 
rule.
    Senator Lankford. Where has it gone as far as evaluating? 
As I mentioned before, my understanding is about 40 percent of 
the reviews that DOL does right now, they are not meeting the 
100 standard, which would be important obviously to be able to 
hit that standard, but now it is actually dropping. Has that 
changed somewhat? What is the quality of the testing for people 
to be able to evaluate that?
    Secretary Perez. Again, we believe the science has shown 
that the current permissible exposure levels are unsafe. That 
is why we proposed the rule. We think following that science 
will save lives. That is what this is about. People die not 
only from--silica caused silicosis, but it also is the 
principal contributor, or a principal contributor, in a number 
of other deaths, whether it is lung cancer, end stage renal 
disease, COPD (Chronic Obstructive Pulmonary Disease), and 
other things.
    The science has been out there in our judgment for many 
decades. That is what we are trying to do.
    Senator Lankford. Same internal versus shipyards, because I 
know previously it was 100 micrograms per cubic meter for 
anything internal in the country, 250 for shipyards. Will there 
be some variation as well in the new rule?
    Secretary Perez. Right now, we are taking into account all 
of the comments that we have gotten and figuring out what the 
final rule will be. It probably would not be appropriate for me 
to get too specific on what we are going to do. I can say the 
record in this case is as voluminous as any record that I have 
seen.
    Senator Lankford. Just the ongoing conversation is if you 
can do 250 micrograms in a shipyard but you can only do 50 in 
the internal part of the country, yet there is a great threat 
there. That is going to be my concern, how are we evaluating 
that. I yield back.
    Senator Blunt. Thank you, Senator Lankford. The Senator 
from Louisiana, Dr. Cassidy.
    Senator Cassidy. Secretary Perez.
    Secretary Perez. Good morning, good to see you again, 
Senator.
    Senator Cassidy. Thank you for working with some folks in 
my State on that issue we discussed.
    Secretary Perez. We are making real progress.

                AVOIDING DUPLICATIVE GOVERNMENT PROGRAMS

    Senator Cassidy. Thank you for that. In your 2016 budget 
request, you include a new mandatory funded job driven training 
proposal creating pathways for jobs in high growth fields for 
different workers, but the recent GAO (Government 
Accountability Office) report found 47 employment and training 
programs administered by nine different agencies.
    I know there has been a hope, and the President has 
mentioned in the State of the Union we need to consolidate 
duplicative programs. The House and the Senate have been 
interested in consolidating duplicative programs.
    How will this be different from all the others? Number one. 
Number two, how will this mandatory proposal work in 
conjunction with the programs in the Workforce Innovation and 
Opportunity Act implemented this year?
    Frankly, how can the Department guarantee that this program 
will not duplicate, overlap, or fragment from the mission of 
the 47 existing programs, knowing this is a bipartisan concern, 
et cetera?
    Secretary Perez. Senator, thank you for your question. The 
workforce conversation we have had in a bipartisan fashion in 
Congress has included the conversation about reducing programs. 
In fact, the Workforce Innovation and Opportunity Act 
eliminated roughly 15 programs. We had already eliminated a 
number of other programs.
    It is important to define what a ``program'' is. Sometimes 
when I hear the word ``program,'' a program is really a funding 
stream. Let me give you an example. There are roughly six 
different funding streams to help veterans. They have all been 
put in place by, I think, very sensible acts of Congress.
    I would look at a funding stream like you look at an app on 
an IPhone. Some veterans walk in and they are good to go. The 
only app they need is resume help and they are on their way. 
Some veterans walk in and they have a disability, and they need 
help.
    As a result of an investment from Congress, we have 
disability veterans employment people. Some veterans are 
homeless. We have a homeless reintegration project. The list 
goes on.
    Some people would call those six different programs. I call 
those six different apps that help reflect the fact that not 
only----
    Senator Cassidy. I totally get that, but on the other hand, 
there are still a bunch of them, probably over 30 in the way we 
have just spoken. I guess going back to this, is it possible to 
take one of those current funding streams and expand it with a 
different mission of the job driven proposal, that is your 
suggestion?
    My gosh, Government does not need to get bigger. There is a 
lot of overlap and duplication as both the President, we, and 
you just noted.
    What is the rationale for one more program?
    Secretary Perez. Senator, what we are trying to do--one 
thing we have done is we have learned a lot about what works 
and what does not work. As I have pointed out and as you 
pointed out, we have gotten rid of what does not work.
    I think what we ought to do is take what works and take it 
to scale.
    Senator Cassidy. Let me ask, implicit in what you just 
said, one of those programs works, and you have learned that 
something in one of those programs is good enough to take to 
scale, and this is your proposal to take it to scale. I guess 
my question is why do we not just take that existing program, 
because this sounds like a different proposal, as opposed to 
building on a current proposal, which apparently has been found 
to work.
    Secretary Perez. Senator, I would be happy to work with 
you. If the goal is let's come to agreement on what is working 
and let's try to ramp it up, we have a shared interest. There 
are a lot of folks out there that want to upscale.

                      JOB DRIVEN TRAINING PROPOSAL

    Senator Cassidy. I get that. Going back to my first 
question, how does this proposal differ from all the other 
Federal job training programs? As you mentioned, they have 
different slivers they are going after. Is there not one that 
is already trying to create a pathway for jobs in a high growth 
field for unemployed and under employed workers?
    Secretary Perez. A big part of the way we do that right now 
is we are trying to increase the number of people that are 
served. Again, through interventions that we know already work. 
I actually think you and I have a lot of common ground in this 
conversation.
    Senator Cassidy. We absolutely do.
    Secretary Perez. I know apprenticeship works. For every 
dollar you spend on an apprenticeship program, you get a $27 
return on investment.
    Senator Cassidy. I totally get that. Again, we know that, 
so why do we need to create a new program, why not just take 
these apprenticeship programs which we have, which I think are 
referenced in your testimony, and take those to scale. 
Government just continues like the blob. It just continues to 
expand.
    Sooner or later, there is going to be this program 
competing with another program but they are both doing the same 
thing, and a future President will say in her State of the 
Union Address, we need to end duplicative programs. It looks 
like we are setting up a duplicative program.
    Secretary Perez. I would love to work with you on this 
because I think what you will find is that the bulk of our 
request, increased funding in existing programs, is so we can 
dramatically increase the number of people who are served.
    I would love to be able to make the case to you, here is 
the sector strategies program, here is how it has worked, and 
here is our suggestion for scaling it--apprenticeship, the same 
way.
    I would love to work with you on that because we just did a 
panel this week, and we had a Louisiana employer on this panel. 
They are in oil and gas, and they are going gangbusters, and 
using the workforce system to do it, and I want to expand their 
capacity.
    Senator Cassidy. We are out of time, but I would just say I 
am not disputing any of that, it is just that new aspect to the 
program that concerns me. It just seems we have enough of 
current, why do we need a new if we know it works within the 
current.
    Secretary Perez. I would love to sit down with you and 
continue this discussion.
    Senator Cassidy. I yield back. Thank you.

              PRIORITIZING FISCAL YEAR 2016 BUDGET REQUEST

    Senator Blunt. Thank you, Senator. Secretary, we all 
clearly are focused on job preparation, job creation. The 10-
percent increase in the budget is not going to happen. We want 
to work with you to find out how we can fund programs that 
work, expand programs that work, such as licensing across State 
lines, these new things that we all know we need to do, the 
context in which we can do that is really important.
    Frankly, you have the facts and figures to help us figure 
out what we need to focus on here and what would be perhaps 
really fine to do if we had all the money in the world, but we 
do not have.
    I think that today's discussion was a very good indication 
of the kind of places that the committee wants to be able to 
work with you to take advantage of things you know are working, 
but surely there are some things that are not working quite as 
well and other things that it would be fine if we expanded 
them, if we had the money to do that.
    I was a university president for 4 years. I think as I 
recall, I had five different categories of ``no,'' and none of 
them were no, this is a terrible thing to do. I know you grew 
up in an environment where you would clearly understand how 
that might be the case.
    Let me ask a couple more questions. We might alternate 
questions for a while. Do you want to do that, Senator Murray?

                UNEMPLOYMENT INSURANCE IMPROPER PAYMENTS

    My first question is on the unemployment insurance program 
letter that went out recently said you were creating a new 
methodology for reporting improper payments. I think the 
summary of that might be you no longer wanted to report the 
improper payments that went to recipients through no fault of 
their own, they just got a check they should not get.
    Your view was that payments were not recoverable, and I do 
not want to argue whether it would be or not. What I want to 
know is one, what percentage of past improper payments might 
have fallen into that category. This is a big amount. It was 
estimated at $5.6 billion in 2014, and $17 billion over the 
last 5 years. We are not talking about inconsequential amounts 
of money here.
    One, why do you think that would not be reportable, and 
two, is there a way to have that reportable as a separate 
category? Clearly, people who are improperly trying to take 
advantage of the system, that is a number that would be good to 
know, but I think we continue to know how many people get 
checks and what those amounts are that are checks that should 
not have gone to that person that received the check.
    Secretary Perez. First of all, I look forward to working 
with you on this. I spent a lot of time on the UI system when I 
was in State government. A big part of the challenge is 
responding to changing times. In recent years, there have been 
a lot of new requirements put in at the State level, job search 
and other requirements.
    A big part of the increase in improper payments has been 
the result--in no small measure, like IT systems that have not 
kept up with the new requirements. We spent a lot of time 
working with Florida, for instance, because their new system 
had not caught up with the new requirements. People were being 
denied benefits because the system had kind of broken down. We 
worked with them to fix that.
    We are very committed and we have a strategic plan to work 
with the State workforce systems to control the improper 
payments through additional technical assistance, through 
tracking and monitoring, and what we have been calling the 
``integrity center of excellence.''
    What we have seen, as I understand it, is an 83 percent 
reduction in errors relating to failure of claimants to 
register. That was a problem that was something we had not 
tracked enough. We have been able to identify States that are 
high priority, because not all States are created equal. Some 
have very low improper payment rates, some have higher ones.
    We are working to prioritize so that the States that are 
above I think 10 percent, we are moving in there to redouble 
our efforts to figure out what is going on.
    We are going to continue these efforts. If you think there 
is a better way to do it, we look forward to working with you. 
We want to make sure we control fraud. At the same time, we 
recognize and I saw this firsthand down in Florida where folks 
who were eligible to receive unemployment checks were not 
getting them because they were putting in a new system and they 
had an IT breakdown.
    When you lose your job, it is traumatic enough. When you 
are eligible for payments, you need those payments fast because 
you have bills to pay.
    We take a back seat to no one in our commitment to 
combating fraud, but we also want to make sure that eligible 
people are getting their checks in a timely fashion, and a lot 
of these new requirements, the IT systems and the other systems 
just have not often times kept pace. That is the challenge that 
we have.

                     REPORTING ON IMPROPER PAYMENTS

    Senator Blunt. Why would you want to stop reporting the 
number of people who got checks that they were not supposed to 
get? Did I misunderstand your proposal?
    Secretary Perez. I would like to check back with our team 
and get back to you. I am not sure exactly--I do not want to 
characterize your statement as incorrect without checking back 
with folks. If it is okay with you, I would be more than 
willing to get back to you to tell you exactly what we are 
doing in the UI context.
    [Clerk's Note.--Information is provided in the Questions 
for the Record.]
    Senator Blunt. All right. You feel like you are clear on 
the question I am asking here?
    Secretary Perez. Yes, sir.
    Senator Blunt. Are you going to report those or not, and if 
not, maybe you should report those in a separate category.
    The other thing I would like to know is what percentage of 
that $5 billion were people who got checks through no fault of 
their own, they just got a check sent to them beyond the time 
they were supposed to be getting a check. What percentage would 
that be?
    Secretary Perez. Sure.
    Senator Blunt. Senator Murray.

                     ASSISTING UNEMPLOYED VETERANS

    Senator Murray. Thank you very much. Mr. Secretary, your 
budget makes significant investments to help veterans and those 
with barriers to get new jobs. We know research shows us these 
re-employment services reduced the duration of unemployment and 
saved Federal resources actually by helping Americans find jobs 
faster, and by eliminating payments to ineligible individuals.
    I was really excited to hear the Department is releasing 
almost $3 million to extend the Job Training and Career 
Counseling Program for about 900 military personnel who are 
affected by budget cuts at Joint Base Lewis-McChord in my home 
State of Washington.
    I just wanted to ask you how those funds were going to be 
used.
    Secretary Perez. Yes. I have actually been out to Joint 
Base Lewis-McChord. We approved the award and we are helping 
directly out there through the National Emergency Grant 
Program. That funding will provide for the continuation of re-
employment services to the men and women at Joint Base Lewis-
McChord who are separating as a result of the cuts. We have a 
team out there that is working vigilantly.
    As you know, your workforce system in Washington is among 
the best in the country.
    Senator Murray. There is some really exciting work they are 
doing on base before people leave, with employers in my State.
    Secretary Perez. Exactly. This job is an unmitigated 
privilege, and one of the best privileges of this job has been 
working with veterans. My dad worked at the VA Hospital until 
the day he died in 1974. He served as a legal immigrant before 
he got his citizenship. He imparted on me just the strong sense 
that we always take care of our veterans.
    We had over a million veterans that we were able to serve 
last year in our American Job Centers. Our proposals, the RES/
REA, the re-employment and eligibility assessment services, we 
know those programs work. Our budget submission is all about 
taking things that we know work and redoubling our efforts. 
Those help veterans. We have very specific focus on veterans. 
The purpose is to make sure that the duration of unemployment 
is shorter.
    Another thing we are doing is we have worked very closely 
with the Department of Defense and the VA on revamping the 
program that helps veterans before they leave, transition 
assistance program, TAP. We got a lot of feedback from Veterans 
Service Organizations, and we measure what we are doing. We do 
a lot of satisfaction surveys.
    I was out in Germany, I went to a Base out there, met with 
25 Service members who are leaving service. One of the things 
we are trying to do, Mr. Chairman and Senator, is to connect 
them with apprenticeship opportunities, about 5 or 6 months 
before they get out. We are trying to move it upstream. If you 
wait until you are 4 weeks away from separation, that can often 
be too late. We are moving upstream.
    Senator Murray. I am certain you have seen the Rand Report 
that came out last November that recommended some changes to 
TAP. Are you implementing those?
    Secretary Perez. I look at TAP as a continuous quality 
improvement enterprise. TAP today is radically different than 
from TAP a couple of years ago. We have so much evaluation 
going on that we are continuing to learn from, whether it is 
external studies like Rand or the customer satisfaction surveys 
we get from our Service members. I suspect TAP of 2 years from 
now will be different and better.
    That is what it is all about, making sure we provide those 
pathways. I really am excited about the work we have been able 
to do through our veterans' employment and training.
    Senator Murray. Really great. Thanks. I just have one more 
question. Do you want me to go ahead and finish?
    Senator Blunt. Go ahead.

 FISCAL YEAR 2016 BUREAU OF INTERNATIONAL LABOR AFFAIRS BUDGET PROPOSAL

    Senator Murray. I wanted to ask you, as you know, the 
person whose place I took, Senator Harkin, had a particular 
interest in protecting children around the world from 
exploitive labor practices. He created the Bureau of 
International Labor Affairs (ILAB).
    I see that you have a request of an increase for that, to 
strengthen some of the monitoring and enforcing labor 
provisions. As you know, Congress is constantly looking at the 
trade promotion authority. Can you talk about what actions ILAB 
will take should Congress approve that?
    Secretary Perez. Sure. ILAB is a critical part of our trade 
infrastructure as an administration. Recently, when we took 
action in response to a complaint that was filed against 
Honduras, that was a joint venture of ILAB and USTR (United 
States Trade Representative). Similarly, work being done in 
Columbia is ILAB and USTR. We actually have a person who is 
going to be embedded in the U.S. Embassy in Columbia as part of 
that resolution.
    The proposal in the budget in no small measure is to help 
us expand our efforts because as we contemplate TPP, we need to 
make sure we have the enforcement regimens in place.
    Senator Murray. That will be in place to make sure that if 
these trade agreements are passed----
    Secretary Perez. They have to be enforceable. You need 
boots on the ground. You need the trade cops on the street. 
That is what we are doing.
    Senator Murray. Thank you. Thank you, Mr. Chairman.

       UNEMPLOYMENT INSURANCE AND TRANSITION PROGRAM ELIGIBILITY

    Senator Blunt. I have a couple of questions. I will ask one 
of them now. You mentioned the changes in States in the way 
they deal with unemployment and eligibility.
    I am very interested in what we are doing to transition 
people with assistance from unemployment to work, where there 
is some transitional assistance. That may be in fact one of the 
areas where you have some checks issues that are not quite the 
right size check because of that transition.
    Your comments about how that is working, why it is 
important would matter to me, but also the budget alludes to 
the idea that we would reward States for expanding eligibility, 
and I am not sure if that is eligibility for the transitional 
program or unemployment generally.
    My two questions on this topic would be one, talk a little 
bit about how we are working to try to create a bridge helpful 
to employment, and also what you mean by expand rewarding 
States that expand eligibility to unemployment insurance.
    Secretary Perez. I think now that we have climbed out of 
the worse depths of the great recession, this is a good time to 
step back and think about how our system is working and how can 
we improve it.
    One of the things I learned from my travels to Germany, Mr. 
Chairman, was they were able to reduce the duration of 
unemployment by putting in place a scheme where they reduced 
hours, and you got a partial unemployment check. Then when 
things ramp up, they did not have to scurry to find new 
workers. That worked really well.
    Congress has in fact taken that model. As we discuss and 
debate, I really look forward to having this discussion. I 
really think it is a bipartisan issue. We want to reduce the 
duration of unemployment. We want to go to school on the 
lessons of this great recession, one of which is re-employment, 
REA/RES works.
    When you have that face to face, I am a big believer in 
technology can be a big help, but also having worked in a local 
system and a State system, there is no substitute for that face 
to face. There are some workers who are going to need that hand 
to hand assistance moving forward, and that is exactly what the 
REA/RES is doing, it is getting people into programs earlier 
and better.
    We want to reduce the duration of unemployment moving 
forward, and we want to reward States who take measures to do 
precisely that.
    I think there is a lot and I have spoken to Senator Reed 
about this, I have spoken with Senator Heller, who we had 
worked with on some other issues. I think there is some real 
bipartisan space where we could have a conversation about let's 
not wait until the next train is coming right at us, hopefully, 
way down the road, but let's go to school now so that those 
systems can be in place.
    I think there are tools out there that if we had in 2006, 
it might have helped to reduce the duration or reduce some of 
the pain that folks who lost their jobs had.
    Senator Blunt. I have long thought that losing various 
kinds of benefits is an obstacle to getting to work and is one 
of the problems we need to figure out, somebody who wants to go 
to work, and when they go to work, their kids lose medical 
coverage. What do we do to encourage people to get into the 
workforce at whatever level is possible.
    That is what you mean by expanding eligibility?
    Secretary Perez. That is part of what we mean, absolutely.
    Senator Blunt. Mr. Merkley.

            EXECUTIVE ORDER ON FAIR PAY AND SAFE WORKPLACES

    Senator Merkley. Thank you very much, Mr. Chair. Thank you, 
Secretary Perez. Let me jump into a question regarding the 
Executive Order on fair pay and safe workplaces. I believe this 
stems in part from a Health Committee investigation in 2013 
that found a lot of Federal contractors that had a lot of 
violations were still continuing to create a lot of violations, 
even though they were still getting Federal contracts.
    Can you explain where we are on this? Has this been 
implemented? Is it going to make a difference?
    Secretary Perez. I think it will make a big difference. The 
Executive Order is really predicated on the notion that the 
opportunity to contract with the Federal Government is a 
privilege, it is not a right. If you engage in really bad 
behavior, you should forfeit that privilege.
    The vast majority of contractors are very law abiding. What 
this provision will have for them is they literally will have 
to check a box that says no, and that is all they will have to 
do.
    For those who do not, and I am thinking about an incident 
that occurred in Washington State. I think it was 2010. It was 
at a refinery. A horrible explosion, multiple fatalities. In 
the aftermath, there were dozens of violations, egregious 
violations of occupational safety and health laws. You fast 
forward 2 years later, and they get a Federal contract.
    Our current system is not built to make sure that folks who 
have engaged in bad behavior do not get contracts. We have the 
debarment provision but that is the Atom Bomb. My goal is not 
to debar people if I can avoid that, that really is the Atom 
Bomb.
    What we are trying to do here is facilitate compliance. For 
instance, the FAR, that is the entity in the Executive Branch 
that will issue these regulations, and we will be helping with 
guidance. After the final regulations and guidance are in place 
but before they go into effect, there is a period of time so 
that any employer who has a question can come to the agencies 
and work those issues out.
    Our goal is to facilitate voluntary compliance and not to 
have to take steps. This example from 2010 is one of 
regrettably many examples of businesses who did not play by the 
rules.
    I hear as much as anything from businesses who have been 
trying without success to do Federal business, Senator, and 
they say I know I am not getting the contracts because I do not 
cheat and my competitor does, and that is not fair.
    We should not reward bad behavior. We should incentivize 
good behavior, and that is what this is trying to do.

   NON-DISCRIMINATION RULE FOR FEDERAL CONTRACTORS IN LGBT COMMUNITY

    Senator Merkley. Thank you. Speaking of rules that affect 
Federal contractors, the President has applied a non-
discrimination rule to Federal contractors for LGBT community. 
Can you just give me a quick brief on where that is in 
implementation?
    Secretary Perez. Yes, we are moving right along on that. I 
also want to thank you for your leadership on that issue and 
your continuing leadership on ENDA. That was the first bill I 
testified on in a prior life. You were a tireless leader on 
that.
    We believe you should be judged by the quality of your work 
and no other irrelevant factor. OFCCP is working on this issue. 
They are the entity in DOL that is in charge of moving forward 
on this. I am very confident that the work that we are doing is 
going to make a big difference.
    Senator Merkley. When will it actually take effect? Does a 
contractor right now need to certify or say they are no longer 
discriminating?
    Secretary Perez. I think OFCCP published a final rule in 
December. I believe it is effective next month.

                             FIDUCIARY RULE

    Senator Merkley. Next month. Okay. Thank you. Let me switch 
to the fiduciary rule. This is about an effort to make sure 
that Americans getting financial advice on their retirement do 
not suffer from conflicts of interest that steer them into an 
unproductive direction.
    Certainly, anything that enhances retirement of American 
families creates a stronger foundation and is a good thing.
    I believe you have outlined a draft rule? Is that the 
position it is in now?
    Secretary Perez. The position is we have over the last year 
plus--I have been on the job 18 months, I have been doing 
outreach for that period of time. We did a ton of outreach to 
all the stakeholders because we wanted to learn.
    As a result of that, we sent a proposed rule over to OMB. 
It is under review at OMB. We hope to have a proposed rule out 
in the near future. Then we will have another round of 
interaction and feedback. I continue as recently as yesterday, 
as I described to Mr. Chairman and Senator Murray, I was at the 
Chamber of Commerce yesterday, talking with their Capital 
Markets Group about the issue.
    We will continue that outreach. We want to hear from 
everybody and make sure that we can craft a rule that protects 
consumers and also ensures that the advisors who continue to 
play by the rules continue to be rewarded.
    Senator Merkley. Thank you very much.

                  BUDGET REQUEST FOR IT MODERNIZATION

    Senator Blunt. Mr. Secretary, we are going to have to have 
some help on working with you on what I think is a really big 
IT request that goes throughout the system, maybe more than you 
can manage and maybe more than we can afford. Let's figure out 
how to prioritize that.
    One project already underway that would suggest there is 
validity to concerns that you cannot get too many of these 
things going at one time was the IG Report on the financial 
management system last August, with significant criticism that 
that system was not being implemented in the way the Inspector 
General (IG) would have hoped.
    Do you want to comment on that system?
    Secretary Perez. That system, if my memory serves me, we 
had a vendor that oversaw that system that went bankrupt. We 
ended up with a process that took it to another vendor. We 
worked very closely with the IG in this process.
    I think the proof is in the pudding. We were able to 
transition to a new system in a way that had no ill effects 
during that process. We do not expect to contract with vendors 
who are going to go bankrupt. That was certainly a surprise to 
us. As a result, we had to take necessary steps to make sure 
our system was in place.
    We continue to get clean bills of health in our audits, and 
I am very proud of that. We will continue to do that. We 
continue to work very closely and collaboratively with our 
Inspector General, and we appreciate all the input they have, 
whether it is on this or any other issue relating to the 
important work that we do.
    Senator Blunt. On that project, did you lose time when you 
changed vendors? Did you implement the project over a longer 
period of time than you would have hoped for?
    Secretary Perez. No, we were able to transition as a result 
of some very hard work that was done by Michael Kerr and his 
team. Fortunately, they saw the problem coming and they were 
able to come up with some interventions that enabled us to 
transition without any ill effect.
    Senator Blunt. Some help from your team on prioritizing 
some of the information and technology requests would be 
helpful.
    Secretary Perez. I look forward to doing that.
    Senator Blunt. Senator Murray, last question?

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Murray. I do not have any additional questions. I 
just wanted to thank the Secretary for his very thoughtful and 
insightful work, and I look forward to working with you.
    Secretary Perez. Thank you. I look forward to working with 
you.
    Senator Blunt. Thank you, Mr. Secretary. The record will 
stay open for one week for additional questions.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
                Questions Submitted to Hon. Thomas Perez
                Questions Submitted by Senator Roy Blunt
                  regulations for wioa implementation
    Question. Much of the WIOA Act is going into effect this summer.
    When can Congress, the States, participants, and other stakeholders 
expect to see comprehensive regulations for implementation?
    Answer. The Departments of Labor and Education published five 
Workforce Innovation and Opportunity Act (WIOA) Notices of Proposed 
Rulemaking on April 16, 2015. The comment period is open through June 
15, 2015. Once we receive comments, we will provide a thoughtful review 
and analysis of the comments and develop final rules for publication in 
early 2016.
    In addition, the Department of Labor has conducted extensive 
outreach to the workforce development system and other stakeholders to 
support planning and preparation efforts taking place now before WIOA 
provisions begin to effect on July 1, 2015.
    The Department of Labor has already issued guidance to support the 
implementation of WIOA, such as guidance on the implementation of 
governance provisions and youth program transition and operations. 
Between now and July 1, 2015, the Department will issue additional 
guidance on topics including a vision for high-quality One-Stop 
centers, One-Stop comprehensive operations guidance, guidance on 
transitioning participants and funding from WIA to WIOA, and guidance 
on Adult and Dislocated Worker services under WIOA.
    Information on guidance provided by the Department can be found
at: http://www.doleta.gov/wioa/and information on technical assistance 
tools and activities being provided by the Department can be found at: 
https://wioa.workforce3one.org/.
                 effectively assessing wioa performance
    Question. As integration of training programs continues to improve 
through the implementation of WIOA, effective tracking of performance 
and results remains a high priority. The Department's performance and 
results data published in the congressional justification provide a 
picture or a version of return on investment by displaying number of 
participants, retention rates, average earnings once employed, etc. for 
each re-employment program. For example, the Department provides 
Congress the number of participants assisted with Adult formula funds, 
their resulting average wages, and a calculated cost per participant 
within the Adult program. By contrast, however, data from DOL assessing 
performance on an ``actual participant'' basis do not seem to be 
available. A significant number of participants participate in more 
than one training program as the system seeks to improve its ability to 
serve people effectively across program stovepipes. Therefore, there 
doesn't seem to be an effective metric measuring the true, full cost of 
putting one individual through the WIOA system. We know the cost and 
benefit of that individual within one particular funding stream, but 
not cost of the full range of services he or she might receive through 
the WIOA system when compared to his or her resulting benefits. In 
other words, totaling participants from each program produces a higher 
number than the number of actual people who received assistance through 
DOL programs--some would be double and triple counted. Yet key 
parameters such as average wage achieved upon employment would not be 
over counted in the same way. Therefore, the investment cost per person 
may be much higher than the data visible in the Congressional 
Justification.
    Participant longitudinal studies are conducted, but does that 
accomplish the type of assessment asked about here?
    Answer. The Department shares your interest in continuing to 
improve our ability to study and evaluate program performance across 
all of our training programs. Linked longitudinal analysis is certainly 
the best way to determine the mix of services (through one or more 
programs) and results over time. The Department routinely includes such 
analysis in formal program evaluations, using administrative data from 
programs and (sometimes) surveys, with strong data privacy and 
confidentiality protections. DOL also has some ability to link 
participation across some DOL programs. For example, DOL is refining a 
data system that will allow tracking services and outcomes across 
Wagner-Peyser Employment Service and Veterans Services. Having the 
ability to link administrative data across DOL and other Federal 
programs and federally-maintained data sets is crucial to 
systematically conduct these kinds of data analysis. These linkages 
require that DOL have the authority to collect and maintain individual 
identifiers on program participants, access the individual-level data 
held by other programs and federally-held data sets, and that the 
individual identifier be the same across those data sets. The proposed 
WIOA regulations make significant strides in helping States conduct 
these kinds of analyses using state-level data. However, two statutory 
barriers prevent the Federal Government from conducting similar 
analysis at the national level. First, since 1998, WIA has prohibited 
DOL from maintaining a national database of personally identifiable 
information for participants in WIA programs. WIOA continued this 
prohibition. Second, even though DOL administers the Unemployment 
Insurance (UI) system and supports the collection of timely, reliable, 
and accurate quarterly employment and earnings data through that 
system, it does not have access to that data at the national level.
    The President's Budget contains two proposals to overcome these 
statutory barriers and allow DOL to conduct the types of valuable 
analysis described above. First, consistent with bipartisan 
Congressional proposals, the Budget would allow select Federal 
statistical and evaluation units, including DOL, to access the National 
Directory of New Hires--a national database containing UI quarterly 
employment and earnings information--for statistical purposes, subject 
to strong privacy and confidentiality protections. The proposal would 
allow NDNH data to be used to evaluate Federal job training and other 
programs and to construct performance ``scorecards'' for providers of 
WIOA training services to inform consumer choice.
    Second, the Budget proposes to eliminate the WIOA database ban. 
WIOA laid out a vision for a streamlined workforce system that improves 
outcomes through standardized performance requirements, integrated 
service delivery, and stronger accountability and transparency 
requirements. However, it did not include provisions to allow DOL to 
capture the outcome information essential to these goals. Eliminating 
the WIOA database ban, in combination with granting DOL access to UI 
records through NDNH, would greatly simplify ongoing efforts to 
evaluate job training programs and conduct return-on-investment 
analysis, while reducing State burden associated with WIOA performance 
reporting and transparency requirements. These authorities also would 
help improve the accuracy and completeness of performance and 
transparency efforts by simplifying State efforts to capture outcomes 
for WIOA participants who move to another State, making it easier to 
support State efforts to continuously improve WIOA programs.
    Question. Can you share this type of data with the committee if it 
is tracked and available?
    Answer. The Department currently does not receive or track this 
level of data for all WIOA programs, as noted above. If DOL had the 
authorities requested in the President's Budget, it would become 
possible for DOL to share this type of information, as well as other 
valuable performance and outcome information, with both the Committee 
and the consumers of job training services. All data would be available 
only at the aggregate level to protect the privacy and confidentiality 
of program participants.
    Question. Are data of that nature (aggregated and/or anonymized) 
part of what is reported up through States to DOL and tracked through 
either the existing data system, or will it be available after WIOA 
implementation?
    Answer. Outcomes currently are reported by States by performance 
indicator and disaggregated by participant characteristics. 
Consolidated (across funding streams) cost information is not reported 
by the States.
    The Departments of Labor and Education recently published proposed 
regulations for implementing WIOA, including provisions that would 
expand the use of and improve the quality of administrative data for 
managing performance, conducting evaluations, and providing consumers 
with information about outcomes of training programs available in their 
communities. A key concept in the proposed regulations is the 
importance of leveraging administrative data and sharing or exchanging 
data across partner programs.
    The fiscal year 2016 Budget includes a number of proposals for the 
Department to continue to improve the quality of, access to, and use of 
administrative data, and address some of the constraints that currently 
exist in fully leveraging that data at the Labor Department and across 
other Departments.
    In addition, the Budget contains proposals to help States upgrade 
their data systems to facilitate analysis and improve program 
performance. The Budget includes $107 million through the Workforce 
Data Quality Initiative and the State Longitudinal Data Systems grant 
programs (at the Labor and Education Departments, respectively) to help 
States build and use integrated and longitudinal data systems across 
their workforce and education programs. The Budget also includes $60 
million to support State consortia as they modernize their UI tax and 
benefit systems, which will improve both the claimant experience and 
the quality of the UI data. Finally, to help address some of the policy 
and legal interpretations that States grapple with when trying to make 
better use of their own workforce and education data, the Budget 
includes funding for a joint DOL and Education team to serve as the 
central point of contact and technical assistance for States, Federal 
programs, and researchers on issues related to accessing, collecting, 
and using workforce and education data.
              evaluating effectiveness of one-stop centers
    Question. Has the Department, a private entity, a State, or other 
organization to your knowledge ever attempted to ``grade'' or ``rate'' 
or otherwise compare the effectiveness of One-Stop centers on a State, 
region, or national basis?
    Answer. The Department has not attempted to grade or rate (compare) 
local American Job Centers based on effectiveness and is unaware of any 
publicly available information resulting from a State, private entity, 
or other organization undertaking an effort like this. The W.E. Upjohn 
Institute for Employment Research has an interactive map which uses 
public WIASRD data to describe performance for workforce investment 
areas and identifies the ``Top 10 percent'' of workforce investment 
board areas. This information can be viewed here: http://
www.upjohn.org/national-workforce-investment-areas-map.
    There are also requirements in WIOA and the proposed regulations 
that seek to ensure the quality and effectiveness of the One-Stop 
centers. Section 121(g) of WIOA requires States to certify One-Stop 
delivery systems based on factors relating to effectiveness, physical 
and programmatic accessibility, and continuous improvement, as well as 
other criteria. In addition, local boards can have additional 
certification factors to fit their labor market, economic, and 
demographic circumstances. The criteria must assess the effectiveness, 
physical and programmatic accessibility, and continuous improvement of 
one-stop centers and the one-stop delivery systems. This requirement is 
one way to ensure that One-Stops (``American Job Centers'') provide 
high-quality, integrated services that meet the needs of job seekers 
and employers in the local area/region.
    Question. Do you believe this type of competitive analysis could 
yield valuable program management information?
    Answer. The type of analysis in question could be informative, but 
there are challenges and complexities that would need to be addressed. 
The most basic challenge is the need for timely access to more detailed 
high-quality data to control statistically for exogenous factors like 
local area economic conditions and participant characteristics. When 
making comparisons, looking at the performance outcomes alone also does 
not address differences in terms of the number of customers served in 
local Centers.
    We have rank ordered States by the WIA performance measures (these 
are posted on ETA's performance website, www.doleta.gov/performance); 
however, there is substantial variation across States in terms of, for 
example, the characteristics of those being served. For example, New 
York and North Dakota serve a very different number of people with very 
different needs. However, DOL has continued to develop the rank order 
of States by performance measure to provide a basic way to compare 
State outcomes.
    WIOA attempts to address some of these variables by requiring the 
use of a statistical adjustment model that takes into account economic 
conditions and characteristics of participants in applying performance 
measures to States and local areas.
    Question. Would it be constructive to utilize such data to 
influence formulaic resource allocations or supplemental national 
reserve awards?
    Answer. It could be constructive. Again, the complexities mentioned 
above must be addressed. It would be critical to design any such 
approaches in a way that does not create perverse incentives--for 
example, discouraging serving those with the greatest barriers to 
employment, who most need the services.
                   fte needed for wioa implementation
    Question. Ten new FTE are characterized as ``term'' FTE for WIOA 
implementation.
    How long does DOL anticipate maintaining these temporary employees?
    Answer. The Department is still in the early phases of WIOA 
implementation and is preparing to receive feedback on the Notices of 
Proposed Rulemaking (NPRMs). Feedback from our State and local 
partners, as well as responses to the NPRMs, will be crucial to our 
implementation strategy and influence the need and role of these 
positions in the upcoming years.
    Question. Should we expect to see this request repeated next year?
    Answer. The Department will be evaluating the need for these 
positions and updating the implementation timeline as it formulates its 
fiscal year 2017 Budget.
    Question. And the following year?
    Answer. The Department is still determining the length of time for 
which these term employees would be needed. Ideally, these staff would 
be available to finalize WIOA regulation and support the workforce 
system to fully implement the bill.
    Question. Could some of these roles be fulfilled via service 
contracts rather than taking on short-term employees who must soon be 
terminated?
    Answer. Possibly, but regardless of whether contract or term staff 
are deemed the best approach, the Employment and Training 
Administration will need additional funding to support them. In 
considering which approach to use, ETA will consider timing, 
availability of needed expertise and skills, and relative cost.
    The use of term employees was very successful in administering the 
Recovery Act. In addition to allowing the Department to meet its 
responsibilities under the Act, this also provided a source of 
recruitment for regular positions vacated by attrition.
                    worker misclassification program
    Question. For the second consecutive year, $10 million was 
appropriated in fiscal year 2015 for the Unemployment Insurance Worker 
Misclassification Prevention and Detection Program.
    When does the Employment and Training Administration (ETA) plan on 
announcing the Request for Proposal (RFP)?
    Answer. The Department is currently developing guidance on the 
opportunity for States to apply for funds to support Worker 
Misclassification activities and expects to issue that guidance in late 
spring of 2015.
                          eta ui grant awards
    Question. Does the ETA anticipate including a ``high performance 
bonus'' program in the fiscal year 2015 grant awards?
    Answer. Yes, but ETA is reconsidering how to provide incentives to 
States for high performance using the fiscal year 2015 Worker 
Misclassification funds and may change its approach to doing so based 
on its experience in fiscal year 2014. While the fiscal year 2014 high 
performance bonus grants were modeled on the successful Supplemental 
Nutrition Assistance Program performance bonuses to encourage 
improvement and reward the best performers, the timing of the grants 
made it challenging for grants to actually serve as an incentive for 
improved performance.
    Question. The ETA capped the awards at a maximum of $500,000 for 
the fiscal year 2014 grant awards. Will a cap be included in the fiscal 
year 2015 awards?
    Answer. Yes, a maximum award amount will be announced in the fiscal 
year 2015 Worker Misclassification guidance.
    Question. Why did ETA create a ``high performance bonus'' award in 
fiscal year 2014?
    Answer. As proposed in the President's fiscal year 2014 Budget, the 
high performance bonus grants were modeled on the successful 
Supplemental Nutrition Assistance Program and were awarded to the best 
performers using the UI Effective Audit Measure. High performance 
awards were intended to: (1) encourage and incentivize improved State 
operations, (2) recognize high performance States to be used as 
examples for other States for desired levels of achievement, and (3) 
provide additional resources to States that have proven suitable for 
further enhancements to their operations, which could be shared with 
other States. Four States received the high performance awards.
    Question. Why were those bonuses awarded prior to the deadline for 
submitting applications for the standard grants?
    Answer. The high performance grants were awarded at the same time 
as the competitive grants. The high performing States were known in 
advance of the award date as a result of data used to identify high 
performers.
                tracking ui grant money and performance
    Question. Is ETA tracking how States are using the grant money, and 
will that information be made available to the Subcommittee?
    Answer. On a quarterly basis, ETA receives reports from States on 
the amount of grant dollars expended. Currently, as part of the grant 
monitoring process, ETA staff track the progress in implementing the 
projects identified in each State's grant. ETA is in the process of 
implementing a more formal reporting process to collect information 
from States regarding status of projects funded through these grant 
awards. This information will include the project timeline and 
milestones and a narrative description of the project implementation 
status.
    Question. Are performance results available from the fiscal year 
2014 round of grants?
    Answer. ETA routinely publishes on its public website (doleta.gov) 
the performance results on the States' worker misclassification 
program. Please see the link below for Calendar Year (CY) 2013 results. 
The CY 2014 performance results are being compiled and will be 
available in mid May 2015. http://www.oui.doleta.gov/unemploy/pdf/
UI_taxinfo/2013/MisclassifiedEmployees.pdf.
                          ui improper payments
    Question. What percentage of past improper payments might have 
fallen into that category (the ``through no fault of their own'' 
category)? Why does DOL think that payments to those individuals 
(through no action or fault of their own) should not be reportable? Is 
there a way to have that reportable as a separate category?
    Answer. The Department of Labor does not have an estimate of 
improper payments made to individuals ``through no fault of their 
own.'' We believe the question is actually referring to ``technically 
proper'' payments rather than ``through no fault of their own.'' 
Unemployment Insurance Program Letter (UIPL) No. 9-13, Change 1 (issued 
on January 27, 2015) announced to the UI system a new methodology for 
computing the UI improper payment rate that excludes improper payments 
that are determined to be ``technically proper'' under state UI law. 
This methodology was approved by the Office of Management and Budget 
for use in the fiscal year 2014 reporting period.
    The payments that are deemed to be ``technically proper'' by 
states' audit investigators are those which meet state statutory 
requirements and the determination to issue payment holds regardless of 
a finding that the payment might otherwise be considered improper. In 
other words, it renders the issue of whether the payment is improper to 
be moot. The new methodology for computing the UI improper payment rate 
excludes these ``technically proper'' payments. This guidance does not 
relieve payments made to a claimant ``through no fault of their own'' 
from being reported as improper payments.
    Reasons that certain improper payments are determined to be 
``technically proper'' under state UI law may include:

  --Finality Reasons.--This category would apply to payments that were 
        improper but the time limit for recovering any overpayment has 
        elapsed.
  --Other Reasons.--This category includes payments with an eligibility 
        issue(s), but the state does not take official action to 
        recover the overpayment because the claimant is without fault 
        for the error creating the improper payment, and recovery would 
        be against the state's standard of ``equity and good 
        conscience.''

    The following table provides a breakdown for the ``technically 
proper'' categories established by UIPL No. 9-13, Change 1:

----------------------------------------------------------------------------------------------------------------
                                                                    Technically     Technically        Total
                                                                   Proper Due to   Proper Due to    Technically
                           Report Year                             Determination   Other Reasons      Proper
                                                                   Finality (%)         (%)        Payments (%)
----------------------------------------------------------------------------------------------------------------
2014 *..........................................................            0.66            0.54            1.2
2013............................................................            0.59            0.56            1.15
2012............................................................            1.1             1.3             2.4
----------------------------------------------------------------------------------------------------------------
* Fiscal year 2014 was the first year that the improper payment rate excluded technically proper payments.

    The reasons for excluding ``technically proper'' payments from the 
improper payment rate reported under the Improper Payments Information 
Act include the following:

  --In response to the United States Supreme Court decision in 
        California Department of Human Resources Development v. Java in 
        1971, many states implemented provisions which prohibit 
        changing unemployment insurance decisions to pay or deny 
        benefits until a determination is made after both parties have 
        been provided an opportunity to be heard. In other words, there 
        is a presumption of continued eligibility until a subsequent 
        determination of ineligibility is made.
  --Under OMB guidance, an improper payment is any payment that should 
        not have been made or that was made in an incorrect amount 
        under statutory, contractual, administrative, or other legally 
        applicable requirements. Technically proper payments fall in 
        the category of payments that were legally required to be made 
        (so not incorrect under state statutory requirements) and, 
        therefore, are not considered to be improper and are excluded 
        in the new methodology.

    Although DOL does not include these ``technically proper'' payments 
in the computation of the UI improper payment rate, it tracks and 
reports these payments in the Benefit Accuracy Measurement (BAM) annual 
report. These payments are 
depicted on Page 4 of the annual report which is posted on the 
Department's web site at: http://oui.doleta.gov/unemploy/bam/2014/
IPIA_2014_Benefit_Accuracy_
Measurement_Annua_Report.pdf.
                            ui modernization
    Question. The President's budget submission includes increased UI 
modernization funding which focuses on two main areas. One is enhancing 
re-employment services and eligibility assessments. The other is 
rewarding States which not only enhance the program's connection to 
work and work-based learning opportunities but that also expand 
eligibility for the program.
    How would eligibility for UI be expanded under your proposal?
    Answer. In order to receive the State's portion of the proposed $5 
billion, States that meet certain minimum thresholds for receiving 
funds would need to adopt two new eligibility expansions of the State's 
choice from the defined list. These include adoption of an alternative 
base period for UI eligibility; provision of benefits to individuals 
who voluntarily quit their jobs due to compelling family reasons 
(including escape from domestic violence); allowing recipients to seek 
part-time work; allowing benefits while claimants are in training; and 
providing for a maximum weekly benefit amount that is at least two-
thirds of the State's average weekly wage in covered employment.
    Question. How does expanding eligibility for unemployment 
compensation, especially with the economy projected to be improving 
through fiscal year 2016, strengthen or modernize the program? What 
purpose does it serve?
    Answer. While the labor market has changed over the past several 
decades, in many States UI eligibility rules have not adapted to these 
changes, leaving too many workers without the safety net of 
unemployment insurance when they are laid off. For example, one of the 
eligibility expansions allows for UI recipients to seek part-time work, 
which will help get them reattached to the labor market. The proposal 
also seeks to modernize the UI program by incorporating sound program 
policies, such as allowing beneficiaries to participate in training 
that will facilitate their reemployment.
    Question. Why should States receive financial rewards for doing so?
    Answer. The funding provides an incentive for State adoption at a 
time when States may be reluctant to expand eligibility. Funding 
provided to States under this proposal is likely to be used to help 
defray the costs of benefit payments and help make changes to their 
business processes and information systems to enable making benefit 
payments under the new modernization provisions.
              loan balances for unemployment disbursements
    Question. How many States currently have loan balances?
    Answer. As of May 1, 2015, nine States had outstanding Title XII 
advance balances.
    Question. In what year did each of these States begin borrowing to 
cover unemployment disbursements?
    Answer. The following table displays amounts of outstanding 
balances and dates on which borrowing commenced:

                       TITLE XII ADVANCE BALANCES
                            As of May 1, 2015
------------------------------------------------------------------------
                                           Outstanding
                 State                       Advance         Start of
                                             Balance        Borrowing
------------------------------------------------------------------------
California.............................   8,344,706,350          Jan-09
Connecticut............................     343,835,034          Oct-09
Indiana................................     743,250,158          Nov-08
Kentucky...............................     328,090,486          Jan-09
New York...............................   1,452,350,157          Jan-09
Ohio...................................   1,149,326,368          Jan-09
Rhode Island...........................       9,810,785          Mar-09
South Carolina.........................     120,475,033          Dec-08
Virgin Islands.........................      75,227,186          Aug-09
------------------------------------------------------------------------

    Question. Is each debt growing or shrinking?
    Answer. Compared to last year, each debt is shrinking.
   implementing demonstration program for drug testing uc recipients
    Question. To increase the chances of an unemployed worker regaining 
full time employment while receiving unemployment compensation (UC) it 
is critical--in fact it is required--that beneficiaries be searching 
for employment and be as job-ready as possible. Congress established a 
limited demonstration program via the Middle Class Tax Relief and Job 
Creation Act to encourage and evaluate State testing of UC recipients 
for illegal drug use to help ensure that job searchers are fully job 
ready and are using tax payer funds to support them constructively 
during a job search.
    What is the status of this implementation?
    Answer. The Middle Class Tax Relief and Job Creation Act 
established authority for States to conduct demonstration projects to 
test and evaluate measures designed to expedite the reemployment of UC 
claimants or to improve the effectiveness of a State in carrying out 
its law with respect to reemployment. The period for States to apply to 
conduct a demonstration under this authority expired on October 31, 
2014. Drug testing is not among the activities permitted by the statute 
for a demonstration.
    However, the Middle Class Tax Relief and Job Creation Act amended 
Federal UC law to permit States to drug test applicants for UC if they 
were terminated from their most recent employer for unlawful use of a 
controlled substance, or if the only suitable work for them is in an 
occupation that regularly conducts drug testing. The statute required 
the Department to issue a regulation identifying the occupations that 
regularly conduct drug testing, and the Department issued a Notice of 
Proposed Rulemaking last year.
    To date, two States enacted legislation consistent with the drug 
testing provisions in the Middle Class Tax Relief and Job Creation Act 
(Mississippi and Texas).
    Question. What is the next step and when will that occur?
    Answer. The Department is analyzing and preparing responses to the 
comments received from the Notice of Proposed Rule Making (NPRM) to 
identify occupations that regularly drug test. The NPRM was published 
on October 9, 2014 and was open for comment until December 8, 2014.
    Question. When should we expect the final regulation?
    Answer. The Department is planning to publish the final rule in 
late fall 2015.
                     engaging res/rea participants
    Question. Re-employment services and assessments (RES/REA) can be a 
very effective part of the broader re-employment services provided at 
the local levels. These efforts can reduce unemployment duration, help 
detect fraud and improper payments, and increase placement rates into 
good, well-suited jobs. However, some States' experience with mandatory 
One Stop revisit requirements has been mixed because large percentages 
of individuals fail to show up.
    How can the Department ensure participants engage at higher rates?
    Answer. The fiscal year 2016 President's Budget proposal builds on 
the successes achieved by the Reemployment and Eligibility Assessment 
(REA) initiative to pair Unemployment Insurance (UI) eligibility 
assessments with reemployment services designed to expedite the 
reemployment of UI claimants into good jobs. UI claimants that are 
referred to services under this program are required to participate, 
and States will have funding to follow-up with those who miss required 
appointments. Failure to participate in these program services may 
result in a denial of benefits. The fiscal year 2016 Budget will 
support the top 1/3 of claimants (1.2 million) most likely to exhaust 
their benefits and are likely to have more barriers to reemployment and 
need a higher degree of assistance. States will also be required to 
apply the program to returning service members receiving Unemployment 
Compensation for Ex-Military members (UCX) benefits. As your question 
indicates, evidence shows that these in-person reviews can reduce 
unemployment duration and provide increased access to services that 
will connect claimants to good jobs, while also helping to detect fraud 
and improper payments.
    Question. In what specific ways would RES/REA engagement be 
enhanced with increased funding? Aside from more specific targeting and 
increased numbers of participants, how will the actual assessments and 
individual services be enhanced (if at all)?
    Answer. Although the 2015 appropriation provided the authority for 
States and local areas to provide reemployment services within their 
REA programs, it did not add the necessary funding to allow them to 
provide the high-quality services that evaluation has shown to be 
effective when paired with REA. The funding level proposed for the 
permanent RES/REA program in the Budget will enable States to provide 
these reemployment services, including basic labor exchange services, 
more personalized staff-assisted services such as skills assessments, 
customized career counseling (e.g., helping UCX claimants translate 
their military skills to civilian occupations), more frequent and 
targeted job referrals based on skills, and referrals to a broader 
range of services available through AJCs, including referrals to 
training.
                workforce data quality initiative (wdqi)
    Question. Strong oversight of the investments proposed for 
information technology to bridge and integrate data systems to 
implement WIOA will be critical to ensure full compatibility among data 
systems, cost and schedule adherence, proper data security and privacy 
protections for personal participant data, and contractor management. 
Several other Federal departments have faced significant problems in 
recent years in similar efforts. The Department has provided little 
detail on the specific objectives for these investments, the specific 
timelines over the life of the development periods, information on how 
cost estimates for fiscal year 2016 and total costs were developed, and 
what specifically can be accomplished with the fiscal year 2016 funds.
    Please provide more detail on these issues to the Subcommittee.
    Answer. Data integration between workforce and education data can 
be an arduous and costly endeavor. The ability for States to link 
workforce data across systems, and with wage data, is essential for 
implementing the performance and accountability provisions of WIOA, 
including the development of common performance reports 
(``scorecards'') for the providers of WIOA training services. This 
accountability and transparency is incredibly important in supporting 
the consumer choice provisions in WIOA as well as supporting State 
efforts to continuously improve programs.
    The WDQI funds have historically been one of the few sources of 
funding for integrating and bridging workforce data, and WDQI funds 
(and grants) have not been large. States indicate that the grants have 
played an important catalyst role, providing States with the anchor 
funding that allows them to leverage other funds and resources to work 
on these important data issues.
    Implementing these upgrades takes time, and States' work is 
ongoing. The grants have been structured to help States continuously 
progress, and DOL has taken the prudent approach of funding this work 
in chunks in order to increase the likelihood that each ``chunk'' is 
valuable in and of itself while States build out their systems. This 
approach is intended to maximize the utility of the data systems while 
they are being built, to enable States to build or enhance their 
information technology infrastructure to develop longitudinal workforce 
databases that connect State workforce and education data. In recent 
years, the WDQI grants have prioritized the development of scorecard 
systems, since these systems are an ambitious goal for States, improve 
consumer information, and require the kinds of data linkages that 
facilitate other important data analysis and program performance/
improvement work. This is just the kind of work that WIOA places a high 
value on. Even now we've seen some important accomplishments, 
including:

  --Florida: Collects and maintains longitudinal data on education 
        supply indicators, workforce participation supply, occupational 
        demand data (short-term indicator), and Labor Market 
        Information: http://freida.labormarketinfo.com/.
  --North Dakota: North Dakota built and implemented the WDQI data 
        warehouse and has completed numerous products available for the 
        public: https://www.ndworkforceintelligence.com/gsipub/
        index.asp?docid=339.
  --Texas: The Texas Workforce Commission built a dashboard to display 
        exiter data: http://www.texasindustryprofiles.com/apps/sti/
        dashboard/dash_2011.html.
  --Virginia: Completed development of a Workforce Investment Act 
        program specific version 2.0 scorecard: https://
        bi.vita.virginia.gov/VCCS_WIA/rdPage.aspx?
        rdReport=Default&rdRequestForwarding=Form.

    Your question also focuses on the fiscal year 2016 President's 
budget requests for $37 million for WDQI grants to help States build 
integrated or bridged data systems to facilitate WIOA implementation 
and support building state-based wage data matching infrastructure to 
enable and/or streamline WIOA performance reporting, including eligible 
training provider (ETP) performance reporting.
    Using fiscal year 2014 and fiscal year 2015 grant funding, in the 
grant solicitation the Department requires applicants to describe their 
plan to develop or augment their state-based wage data matching 
systems. Furthermore, the fiscal year 2014/fiscal year 2015 grant 
solicitation also emphasizes the use of grant funds to align and 
integrate data systems to support program management, performance 
reporting, and common case management systems.
    Given the immediacy of WIOA implementation, WDQI plans to shift its 
strategy in fiscal year 2016, and focus the vast majority of funding on 
helping States meet the bare minimum data linkage infrastructure 
necessary to comply with the performance and accountability provisions 
of WIOA. We anticipate that these funds will continue to play a ``seed 
money'' or ``anchor funds'' role within States, and the requested 
amount was never envisioned as being fully sufficient to cover all of 
the costs involved in implementing data systems upgrades.
    The request is consistent with the recommendations made in the 
recent IMPAQ report (available at http://www.dol.gov/asp/evaluation/
completed-studies/IMPAQ_
Scorecards_Report_2014-06-02.pdf).
    In addition, we agree that DOL and the Department of Education can 
continue to improve our provision of technical assistance on data 
linkage issues, particularly around how data protected by the Family 
Educational Rights & Privacy Act (FERPA) can be matched with workforce 
data in ways that protect the privacy and confidentiality of the data. 
That's why we're also requesting funds for the cross-agency data team.
    Question. Can you assure the Subcommittee that implementation of 
the full range of proposed IT investments will receive qualified and 
focused oversight from the Department from start to finish?
    Answer. With the WDQI grantee support and oversight team available 
to the grantee during the grant period, the Department is able to 
ensure that grantees have the tools and resources needed to build data 
system that are supportable, sustainable, and secure.
                covering costs of new job corps centers
    Question. The Job Corps system is expected to have two additional 
centers online in fiscal year 2016. Yet the operating request does not 
seem to incorporate funding to accommodate their operation without 
affecting funds for the existing centers. Even with the closure of one 
center, the net savings would probably not be adequate to compensate 
for the new expenses generated by these two new centers.
    How does the DOL propose to cover the new centers' costs in this 
request?
    Answer. The fiscal year 2016 Budget for Job Corps Operations will 
support a total student population of 38,194 and the costs of operating 
the Manchester Job Corps Center, as well as the new Wyoming Job Corps 
Center, both of which will begin enrolling students later this summer 
(fiscal year 2015). Funding for the construction of these centers as 
well as the cost of operating these centers was requested and provided 
in previous appropriations. Based on the cost model, our operating 
budget is sufficient to manage the addition of operating two new 
centers. The Department will continue to efficiently manage the number 
of students at each center in line with the overall number of student 
slots and within our appropriation.
                    oig audits of job corps centers
    Question. I understand that the Office of Inspector General 
released a recent audit report highlighting its concern about student 
safety at a number of Job Corps centers. Over the past few years, 
problems have arisen related to fiscal management, concerns about how 
the contracts office often excludes the best center operators from 
bidding on these contracts, and now potential safety issues.
    What steps are you taking to address these issues?
    Answer. The safety and security of Job Corps' students and 
employees is one of the Department's top priorities. The Department 
agrees with the OIG's recommendations and takes seriously our 
responsibility to quickly and effectively address them. We are working 
with contractors on strengthening implementation of our Zero Tolerance 
and disciplinary policies and developing Job Corps's capacity for more 
effective and efficient monitoring.
    Job Corps has placed an increased programmatic focus on student 
misconduct issues and has taken a number of actions that strengthen 
identification of centers where the reporting, investigation, and 
resolution of student misconduct may be a concern. It has also 
identified procedures and tools that improve Job Corps' ability to 
provide oversight of student misconduct issues and take timely action 
to address issues when they occur. Specifically, Job Corps is taking or 
has taken the following actions:

  --In late 2014, ETA convened a team of senior Federal staff and 
        experts to conduct a broad national review of the Job Corps 
        oversight and accountability systems.
  --Job Corps has intensified monitoring and oversight of safety and 
        security policies by its Regional Office staff, increasing the 
        use of unannounced visits, developing corrective action plans 
        for individual centers as needed, following up more 
        aggressively in monitoring student misconduct issues, and 
        ensuring consistent enforcement of Job Corps policies.
  --Job Corps developed the Center Safety Site Visit Guide, intended 
        for use by regional staff conducting center behavior management 
        systems and safety site visits.
  --Job Corps is modernizing the Policy and Requirements Handbook, 
        which governs centers and contractors. This initiative will 
        strengthen personal safety and security requirements, as well 
        as quality controls on centers.
  --Job Corps is now piloting an early warning process that uses key 
        indicators to predict emerging problems at centers. The tool 
        will help Job Corps staff identify centers that potentially 
        need increased monitoring.
  --Job Corps regions have conducted data and file reviews in order to 
        perform a risk assessment of each center. The results 
        identified centers for on-site safety evaluations, which were 
        conducted according to a new Center Safety Site Visit guide. 
        This highly detailed protocol includes on-site data reviews, 
        on-site interviews, and on-site focus groups with students and 
        staff.
  --ETA has started the process of centralizing quality assurance in 
        the national Office of Job Corps to coordinate directly with 
        Regional offices and develop standardized operating procedures 
        to address these problems. The President's fiscal year 2016 
        budget requests an increase of $3.5 million to provide staff 
        for increased quality assurance.
  --Job Corps and ETA have also issued several memorandums to the 
        regions, to Job Corps Federal staff, and to operators, 
        regarding the application of the Zero Tolerance policy and the 
        consequences of falsifying records.

    A more detailed list of our activities can be found in our response 
to the OIG report at http://www.oig.dol.gov/public/reports/oa/2015/26-
15-001-03-370.pdf.
    Question. Why are additional personnel requested when the regional 
office structure is intended, in part, to provide direct field 
oversight?
    Answer. Regional office staff play a pivotal role in providing 
direct oversight of Job Corps Centers. At the same time, additional 
personnel are critical to help institutionalize strong quality 
assurance and risk management practices and to ensure consistent 
protocols and practices across regional offices. The oversight team 
will work to improve Job Corps' capacity to provide strong oversight 
and monitoring by providing staff whose main function will be to focus 
on monitoring the quality of the direct field oversight provided by the 
regions, ensuring consistency in monitoring across regions, ensuring 
that corrective action plans are being developed to address identified 
deficiencies, and assisting regional staff in evaluating progress 
against the corrective action plans. The requested staff will also help 
ensure coordination with the contracting officers to ensure appropriate 
contractual actions are taken when operators fail to correct problems.
      senior community service employment program (scsep) proposal
    Question. The Department has made a new proposal to allow use of 
private sector employers for some SCSEP placements.
    Would local Workforce Investment Boards select and work with such 
employers directly at the local level to arrange participation and 
placement?
    Answer. While SCSEP grantees are ultimately responsible for on-the-
job training placements with employers, the Department expects SCSEP 
grantees to work closely with Workforce Development Boards, as well as 
business service representatives in American Job Centers, to identify 
and conduct outreach to employers. SCSEP regulations require grantees 
to describe their relationship with the boards and American Job Centers 
in their grant plans. SCSEP is a required one-stop partner, and must 
have an MOU with the local board.
    Question. Are there particular work environments or industrial 
sectors ETA expects to prioritize, or is that fully up to each State or 
locality?
    Answer. SCSEP grantees, which include both States and national 
organizations working in designated service areas, identify the service 
delivery strategies and sectors to prioritize, tailored to their own 
local economy. The Department expects SCSEP grantees to align service 
delivery strategies with State and local sector strategies, and be 
based on State and regional labor market information.
    Question. Is the average SCSEP participant age rising?
    Answer. The age at SCSEP enrollment has remained fairly stable over 
the past 5 years. The below table shows the percentage of age at 
enrollment over the entire program for PY 2009-2013:

----------------------------------------------------------------------------------------------------------------
                                                                       2009     2010     2011     2012     2013
                                                                       (%)      (%)      (%)      (%)      (%)
----------------------------------------------------------------------------------------------------------------
55-59..............................................................       36       41       40       40       41
60-64..............................................................       28       28       28       29       29
65-69..............................................................       18       17       17       17       17
70-74..............................................................       10        9        9        9        8
75 & over..........................................................        7        5        6        5        5
----------------------------------------------------------------------------------------------------------------

    Question. What percent of SCSEP participants are over 70?
    Answer. In PY 2013, about 13 percent of SCSEP participants were 
over 70 years of age.
    Question. Is ETA measuring results for participants across the full 
age spectrum, even if not mandated above a certain age?
    Answer. Yes, ETA measures results for all participants.
    Question. Why does the Department seek to conform eligibility 
criteria for SCSEP to other public assistance programs?
    Answer. The Department seeks to bring SCSEP eligibility criteria 
into alignment with other means-tested public assistance programs for 
older Americans. This change will better target the SCSEP program to 
those seniors who most need it and simplify eligibility determinations 
by removing the need to determine income eligibility for individuals 
already receiving means-tested benefits. Such alignment also is 
intended to facilitate better coordination across programs that serve 
this population.
        accomodating private wage surveys in new h-2b rulemaking
    Question. In December, in response to a court order, DOL stopped 
issuing prevailing wage determinations based on employer provided wage 
surveys.
    Does DOL, in its cooperative role with DHS, intend to accommodate 
private wage surveys in new rulemaking?
    Answer. On April 29, 2015, DOL and the Department of Homeland 
Security (DHS) jointly issued a final H-2B wage rule permitting 
employers to submit state-conducted surveys to set the prevailing wage 
and to submit non-government surveys in limited circumstances 
consistent with the court's decision in Comite de Apoyo a los 
Trabajadores Agricolas v. Perez (CATA III). The final H-2B wage rule 
was effective on the date of publication.
         limiting role of dol in administration of h-2b program
    Question. Congress directed the DOL in legislation to consult with 
the Department of Homeland Security. As ruled by the court, DOL does 
not have rulemaking authority under the program.
    What assurances can you provide to the committee that a new interim 
final rule will limit the role of DOL in administering the program to 
the consultant function mandated by Congress?
    Answer. There have been conflicting court decisions on the issue of 
whether DOL has independent rulemaking authority in the H-2B program. 
In order to ensure that there can be no question about the authority 
for and validity of the regulations in this area, DHS and DOL worked 
expeditiously to jointly issue an interim final rule governing the 
issuance of temporary labor certifications and enforcement in the H-2B 
program. That regulation was published on April 29, 2015 with an 
immediate effective date. The interim final rule is consistent with the 
role of each agency under the Immigration and Nationality Act (INA). 
Section 214(c)(1) of the INA requires DHS to consult with ``appropriate 
agencies of the Government'' before adjudicating an H-2B petition. DHS, 
in conjunction with DOL, has determined that the best way to provide 
this consultation is by requiring the employer to first apply for a 
temporary labor certification from DOL before filing an H-2B petition, 
and DHS has put this requirement in its regulation. The temporary labor 
certification serves as DOL's expert consultation and advice to DHS on 
whether U.S. workers capable of performing the services or labor are 
available, and whether the employment of the foreign worker(s) will 
adversely affect the wages and working conditions of similarly employed 
U.S. workers.
                  h-2b prevailing wage determinations
    Question. Has DOL's ability to issue H-2B prevailing wage 
determinations using the Occupational Employment Statistics (OES) wage 
levels, pursuant to the 2013 Interim Final Rule ever been challenged in 
court?
    Answer. The issuing of prevailing wage rates under the 2013 Interim 
Final Rule (2013 IFR) at the OES mean was not challenged in court. The 
issuing of OES prevailing wage rates at ``skill levels'' under the 2008 
rule was challenged. In response to court decision Comite de Apoyo a 
los Trabajadores Agricolas v. Solis (CATA II), DOL and DHS issued the 
2013 IFR, which requires prevailing wages based on the OES survey to be 
set at the OES mean, rather than at OES ``skill levels'' under the 2008 
rule. The 2013 IFR left in place all other provisions of the 2008 rule, 
including the rest of the prevailing wage methodology and all 
procedures for requesting a prevailing wage. The 2013 IFR was replaced 
by a new final H-2B wage rule, which was published and took effect on 
April 29, 2015.
    Question. Why didn't DOL continue to provide DHS with OES-based 
prevailing wage determinations during the period the Department was 
seeking a stay (and potentially after it expires if a new rule is not 
yet in place)?
    Answer. The court in Comite de Apoyo a los Trabajadores Agricolas 
v. Solis (CATA III) in December 2014 vacated the regulatory provision 
permitting employer-provided surveys. The court order in Perez v. Perez 
in March 2015 then vacated the remainder of DOL's regulations setting 
the methodology and procedures for requesting and issuing prevailing 
wages, except for the isolated provision setting the methodology for 
wages based on the OES mean. This combination left DOL without a 
complete methodology or any procedures to set prevailing wages in the 
H-2B program.
    During the court's stay, DOL returned to issuing prevailing wage 
determinations. On April 29, 2015, DOL and DHS issued a new final H-2B 
wage rule with an immediate effective date.
           dol h-2b rules impact on state workforce agencies
    Question. Do the Wagner-Peyser Act of 1933, Workforce Investment 
Act of 1998, and/or the WIOA of 2014 authorize State workforce agencies 
to operate a labor exchange of unemployed workers?
    Answer. Yes. Providing unemployed workers, job seekers, and 
employers universal access to labor exchange services is one of the 
primary services provided by the Employment Service established under 
the Wagner-Peyser Act, which is operated through the State Workforce 
Agencies (SWAs). The initial authorization for labor exchange 
activities was established under the Wagner-Peyser Act of 1933 and 
continued under both the Workforce Investment Act of 1998 and the 
Workforce Innovation and Opportunity Act.
    During Program Year 2013, the Employment Service provided services 
to approximately 17 million job seekers, including approximately 7 
million Unemployment Insurance claimants.
    Question. Do these laws allow State workforce agencies to identify 
unemployed workers who are available for a particular job, including a 
job for which an employer is seeking H-2B workers?
    Answer. The Employment Service is authorized to provide a variety 
of employment-related labor exchange services intended to match job 
seekers and employment opportunities. These labor exchange services 
include but are not limited to job search assistance, job referral, and 
placement assistance for job seekers, re-employment services to 
unemployment insurance claimants, and recruitment services to 
employers. The services offered to employers include assistance in 
development of job order requirements, matching job seeker experience 
with job requirements, assisting employers with special recruitment 
needs, arranging for job fairs, and assisting employers in analyzing 
hard-to-fill job orders. However, these services may only be used to 
fulfill H-2B program requirements if there is a Federal regulation in 
place that sets the parameters for H-2B employers to conduct 
recruitment through the SWAs.
    Question. Why couldn't State workforce agencies perform this work 
without DOL's 2008 or 2012 H-2B rules in place?
    Answer. Federal H-2B regulations set the requirements for SWA job 
orders to be used for recruitment of U.S. workers under the H-2B 
program. Without an H-2B regulation in place, there would be no 
regulatory structure setting these requirements (e.g., the prevailing 
wage to be advertised, the minimum time period the job order must be 
posted, or the requirements for the contents of the job order). In 
addition, both DOL's 2008 and 2012 rules required employers to conduct 
additional recruitment beyond the posting of a job order with the SWA, 
as does the new 2015 interim final rule governing the issuance of 
temporary labor certifications in the H-2B program, effective April 29, 
2015.
     perez v. perez decision impact on processing h-2b applications
    Question. Did the decision in Perez v. Perez restrict funding to 
State workforce agencies?
    Answer. No, it did not restrict such funding.
    Question. To DOL?
    Answer. No, it did not restrict such funding.
    Question. To any other agency?
    Answer. No, it did not restrict funding to any agencies.
    Question. On what basis did DOL tell State workforce agencies to 
stop processing H-2B applications?
    Answer. H-2B applications are processed only by DOL's Office of 
Foreign Labor Certification (OFLC). The SWAs are responsible for 
posting employer-submitted job orders that fulfilled some of the H-2B 
employer's recruitment obligations under the 2008 regulation. Without 
an H-2B regulation there was no regulatory structure setting the 
parameters under which SWA job order could be used in the H-2B program.
    Question. How many H-2B labor certification applications were in 
hand when processing was frozen on March 5, 2015?
    Answer. On March 5, 2015, a total of 790 temporary employment 
certification applications were pending and 416 requests for a 
prevailing wage were pending.
    Question. On average, how many applications are typically received 
in March, April, and May?
    Answer. Based on fiscal year 2012-2014 data, on average, 776 total 
applications were received from March to May. In March an average of 
411 applications were received; in April an average of 251 applications 
were received; and in May an average of 114 applications were received.
     dol maintaining consulting role in h-2b program administration
    Question. Can DOL perform its role of consulting with DHS without 
issuing formal rules?
    Answer. No, DOL cannot perform its consultative function without 
issuing regulations. In 2011, in Comite de Apoyo a los Trabajadores 
Agricolas v. Solis (CATA I), the district court held that DOL's pre-
2008 H-2B guidance document was a legislative rule that determined the 
rights and obligations of employers and employees, and DOL's failure to 
issue the guidance through the notice and comment process was a 
procedural violation of the Administrative Procedure Act (APA). As a 
result, the court invalidated the guidance. Similarly, in Mendoza v. 
Perez, the U.S. Court of Appeals for the D.C. Circuit held that DOL 
violated the procedural requirements of the APA when it established 
requirements that ``set the bar for what employers must do to obtain 
approval'' of the H-2A labor certification application, including wage 
and housing requirements, in guidance documents.
    Question. If the court's stay expires before new regulations are 
issued, will DOL continue to process during the interim period?
    Answer. DOL and DHS jointly issued a new interim final rule 
governing the issuance of temporary labor certifications and 
enforcement in the H-2B program and a new final H-2B wage rule on April 
29, 2015, before the expiration of the court's stay. Both rules had an 
immediate effective date.
    Question. Didn't DOL do exactly that for almost 60 years from 1952 
until December 2008?
    Answer. Since 1968, DOL has established regulatory procedures to 
certify whether a qualified U.S. worker is available to fill the job 
opportunity described in the employer's petition for a temporary 
nonagricultural worker, and whether a foreign worker's employment in 
the job opportunity will adversely affect the wages or working 
conditions of similarly employed U.S. workers. However, DOL continued 
to set some substantive requirements for the H-2B program through sub-
regulatory guidance.
    Question. What changed that made formal rules necessary?
    Answer. Recently, courts have held that it was a violation of the 
APA for DOL to set substantive requirements for the H-2A and H-2B 
programs through guidance documents that had not undergone notice-and-
comment rulemaking. In CATA, the district court held that DOL's pre-
2008 H-2B guidance document was a legislative rule that determined the 
rights and obligations of employers and employees, and DOL's failure to 
issue the guidance through the notice and comment process was a 
procedural violation of the APA. As a result, the court invalidated the 
guidance. Similarly, in Mendoza v. Perez, the U.S. Court of Appeals for 
the D.C. Circuit held that DOL violated the procedural requirements of 
the APA when it established requirements that ``set the bar for what 
employers must do to obtain approval'' of the H-2A labor certification 
application, including wage and housing requirements, in guidance 
documents.
    Question. Why could not the Department simply issue informal 
written guidance to allow for the full and immediate resumption of 
processing rather than working with DHS to put a new comprehensive 
regulation in place?
    Answer. Recently, courts have held that it was a violation of the 
APA for DOL to set substantive requirements for the H-2A and H-2B 
programs through guidance documents that had not undergone notice-and-
comment rulemaking. In CATA, the district court held that DOL's pre-
2008 H-2B guidance document was a legislative rule that determined the 
rights and obligations of employers and employees, and DOL's failure to 
issue the guidance through the notice and comment process was a 
procedural violation of the APA. As a result, the court invalidated the 
guidance. Similarly, in Mendoza v. Perez, the U.S. Court of Appeals for 
the D.C. Circuit held that DOL violated the procedural requirements of 
the APA when it established requirements that ``set the bar for what 
employers must do to obtain approval'' of the H-2A labor certification 
application, including wage and housing requirements, in guidance 
documents.
                     interpreting h-2b court order
    Question. What part of the District Court order on March 4, 2015, 
did DOL interpret as an order to cease fulfilling its statutory 
responsibility to provide certifications to DHS?
    Answer. On March 4, 2015, the court vacated DOL's 2008 H-2B rule on 
the ground that the agency lacks authority under the Immigration and 
Nationality Act to issue regulations governing the H-2B program. The 
Court also permanently enjoined DOL from enforcing the 2008 H-2B rule. 
At the time of the Court's decision, the DOL 2008 rule was the only 
mechanism in place for processing prevailing wage requests and labor 
certification applications, and for assessing whether there are 
available United States workers to fill the employer's job opportunity. 
As a result of the vacatur of the 2008 rule, DOL had no authority to 
process labor certification applications and or to consult with DHS on 
the availability of U.S. workers as required by the INA. To comply with 
the Court's order, DOL immediately ceased operating the H-2B program.
    Question. Doesn't the court-affirmed fact that DOL does not have 
authority to issue comprehensive regulations answer the question of 
whether certifications can be processed without a regulation in place, 
given the Department's statutory responsibility?
    Answer. DOL cannot perform its statutory consultative function 
without a regulation in place. The courts have invalidated past 
subregulatory actions in the H-2B program, including the issuance of 
guidance in the absence of rulemaking. In order to ensure that there 
can be no question about the authority for and validity of the H-2B 
program, DOL and DHS worked expeditiously to issue an interim final 
rule governing the issuance of temporary labor certifications on April 
29, 2015.
                     appealing h-2b wage decisions
    Question. DOL recently announced plans to issue a declaratory order 
that would deny employers of their right to appeal wage decisions by 
circumventing the ruling of the Department's own administrative law 
judges.
    Why would DOL intentionally ignore the findings of its own Bureau 
of Alien Labor Certification Appeals (BALCA)?
    Answer. On December 17, 2014, the Department announced in the 
Federal Register that it is considering issuing a declaratory order to 
address uncertainty that the Board of Alien Labor Certification Appeals 
(BALCA) created when it issued the Island Holdings decision, (2013-PWD-
00002), in which it held that the Department lacked the authority to 
issue supplemental prevailing wage determinations in contravention to 
the Secretary of Labor's view, which had been articulated in a notice 
and in an interim final rule, among other guidance. As a body of 
administrative law judges, the BALCA is bound by agency policy 
statements, regulations, and interpretive rules.
    The purpose of a declaratory order, therefore, would be to remove 
the uncertainty about the Secretary's authority created by the BALCA's 
Island Holdings decision. At this time, the Department is still 
reviewing comments received from the public regarding the issuance of a 
declaratory order and considering its options.
    Question. Is there any precedent for issuing an order simply 
because the Department disagrees with its administrative law judges?
    Answer. As a body of administrative law judges, the BALCA is bound 
by agency policy statements, regulations, and interpretive rules. 
Consistent with the Administrative Procedure Act (APA), if the 
Secretary's rules or interpretations are invalid, only an Article III 
Court would have the authority to set aside the Secretary's actions. 
The APA allows for the issuance of a declaratory order by an agency to 
terminate a controversy or remove uncertainty, and courts have 
routinely recognized and consistently upheld that Federal agencies 
possess this discretionary authority to issue declaratory orders.
    Question. How can DOL justify first refusing to implement the 
findings of BALCA in the Island Holdings case and then attempt to 
circumvent the Bureau's decision by announcing its intention to issue a 
declaratory order?
    Answer. On December 20, 2013, DOL announced that it was postponing 
action on the Island Holdings decision pending judicial review, as 
permitted by the Administrative Procedure Act, 5 U.S.C. 705. This 
action was taken in the interest of justice, given the confusion and 
substantial disruption that would be created if the Department 
implemented the decision and it was subsequently overturned by the 
district court. Subsequently, the Department published the Notice of 
Intent to Issue a Declaratory Order to remove the uncertainty about the 
Secretary's authority created by the BALCA's Island Holdings decision.
                 collaboration on fiduciary rulemaking
    Question. Can you please provide the titles of those with whom you 
have communicated at the SEC, FINRA, OMB, the Treasury Department 
(including the IRS), and the White House (including, but not limited 
to, the Domestic Policy Council, Council of Economic Advisors, and 
Office of Political Affairs) concerning the fiduciary rulemaking?
    Answer. Secretary Perez has discussed relevant aspects of the draft 
proposal with Securities and Exchange Commission (SEC) Chair White on 
at least eight occasions, including:

  --Nov. 22, 2013: Secretary Perez met with SEC Chair White and staff;
  --Jan. 8, 2014: Secretary Perez met with SEC Chair White;
  --Apr. 3, 2014: Secretary Perez spoke by phone with SEC Chair White;
  --Jul. 28, 2014: Secretary Perez spoke by phone with SEC Chair White 
        and staff;
  --Aug. 26, 2014: Secretary Perez met with SEC Chair White and staff;
  --Nov. 6, 2014: Secretary Perez spoke by phone with SEC Chair White;
  --Dec. 3, 2014: Secretary Perez spoke by phone with SEC Chair White;
  --Jan. 8, 2015: Secretary Perez met with SEC Chair White and staff.

    Other senior officials and staff from the Department, including 
staff from the Employee Benefits Security Administration, have 
consulted extensively with SEC staff throughout the development of the 
draft proposal. These collaborative discussions were wide-ranging. The 
SEC staff provided technical assistance on the Department's proposal. 
The Department made numerous changes in response to observations and 
issues that were raised by SEC staff and is grateful for the staff's 
thorough technical assistance.
    During the development of the draft proposal, the Department also 
engaged in discussions with Treasury, the Office of Management and 
Budget (OMB), and the White House.
    In addition, the Department consulted with a wide range of other 
stakeholders through the development process, including the Financial 
Industry Regulatory Authority (FINRA), a self-regulatory organization 
for the securities industry.
    On February 23, 2015, the Department formally submitted the draft 
proposal to OMB for review. Pursuant to Executive Order 12866, OMB/OIRA 
conducted an interagency review of the Department's new proposal. The 
Department's proposal was published in the Federal Register on April 
20, 2015 for public comment.
                    justification of fiduciary rule
    Question. I am concerned about the Department's justification for 
the fiduciary rule and its assessment of the costs and benefits 
associated with it.
    What deficiencies in the existing legal authorities or enforcement 
efforts of the SEC and FINRA warrant adding DOL to the list of 
regulators policing this issue?
    Answer. The Employee Retirement Income Security Act of 1974 gives 
the Department broad authority to regulate employer-sponsored employee 
benefit plans as well as persons who provide services to those plans. 
In 1978, authority over certain aspects of the prohibited transaction 
rules (including the definition of ``fiduciary'') under both ERISA and 
the Internal Revenue Code (IRC) with respect to IRAs was transferred 
from the Secretary of the Treasury to the Secretary of Labor.
    Retirement savings plans and IRAs receive special tax treatment and 
also receive special protections under Federal retirement and employee 
benefits law. The SEC has a separate related authority to regulate 
securities markets. And while securities in tax-preferred retirement 
savings accounts are regulated by both the Department and SEC, there 
are many transactions involving retirement savings over which the SEC 
has no jurisdiction to protect consumers. The same is true of FINRA. 
The proposed rule uses the Department's authority to ensure that 
retirement investment advice will be uniformly treated as fiduciary 
advice.
    ERISA expressly defines a person who provides investment advice to 
an employee benefit plan for a fee or other compensation, direct or 
indirect, as a fiduciary subject to standards of prudence and loyalty 
and prohibited from having certain conflicts of interest. A similar 
definition applies to investment advisers to IRAs under the IRC. The 
Federal securities laws do not impose a fiduciary standard on broker-
dealers who provide investment advice incidental to their other 
services. Instead, under SEC and FINRA rules, broker-dealers are 
generally required to have a reasonable basis to believe that a 
recommended transaction is ``suitable'' for a customer. The Supreme 
Court has interpreted the anti-fraud provisions of the securities laws 
to impose a fiduciary standard on investment advisers, i.e., those in 
the business of providing investment advice on securities. This 
standard requires such professional advisers to act in the best 
interest of their clients. It is not, however, the same as the 
fiduciary standard in ERISA. For example, the securities laws allow an 
investment adviser to act on a conflict of interest as long as the 
adviser appropriately discloses the conflict to the investor. ERISA and 
the IRC, by contrast, flatly prohibit a fiduciary from engaging in a 
transaction involving assets of the plan or IRA, if he or she has a 
conflict of interest, unless an existing exemption applies or DOL 
grants a new exemption administratively.
    As reflected in the detailed Regulatory Impact Analysis that the 
Department has published as part of its new proposal, a careful review 
of the available data suggests that IRA holders receiving conflicted 
investment advice can expect their investments to underperform by an 
average of 100 basis points per year over the next 20 years. The 
underperformance associated with conflicts of interest--in the mutual 
funds segment alone--could cost IRA investors more than $210 billion 
over the next 10 years and nearly $500 billion over the next 20 years. 
These ongoing losses to retirement investors under the current 
regulatory structure support the need for change. The Department's 
proposed regulation and exemptions are aimed at reducing the harmful 
impact of conflicts of interest by ensuring that advisers act in the 
best interest of retirement investors. The proposed regulation and 
exemptions also provide additional enforcement avenues for plan 
fiduciaries, participants, and IRA owners. Under the proposal, 
individual investors would be able to bring suit to enforce the terms 
of the contract required under the proposed Best Interest Contract 
Exemption. Sponsors, participants, and beneficiaries of ERISA-covered 
plans would also have a private cause of action under ERISA. Under the 
proposal, investors would not be required to prove that the adviser 
acted with the intent to deceive them in order to be successful in 
their complaint. In addition, the Best Interest Contract Exemption 
would permit the resolution of individual contract claims through 
binding arbitration, rather than court proceedings.
    In addition, the scope of the securities laws (and the 
corresponding SEC authority to regulate) is not coextensive with the 
scope of ERISA. With certain exceptions, the SEC regulates securities. 
The classes of assets invested in retirement plans and IRAs under the 
Department's regulatory purview include both securities regulated by 
the SEC and other investments as well. For instance, retirement plans 
and IRA investments often include non-securities, such as certain 
insurance products, real estate, and bank collective trusts.
    Finally, this proposal brings much-needed transparency to the 
regulation of investment advice to retirement savings. In most cases, 
at best, either the SEC best interest or suitability standard will 
apply and many investors will not know the differences between them. 
Under the new proposal, ERISA's stricter fiduciary and best interest 
standards and accountability provisions would be applicable in many 
more instances for retirement savers, regardless of whether the 
investment advice was provided by a broker-dealer, a registered 
investment adviser, or any other type of paid investment advice 
provider.
     defining authorities and jurisdictions in fiduciary regulation
    Question. Please explain the lines that will clearly distinguish 
where the authority of each agency will end and another will begin.
    Answer. The Department's regulatory authority extends to investment 
advice provided to most private sector employee benefit plans, their 
participants, and beneficiaries as well as that provided to IRAs. The 
Department's enforcement authority extends only to violations related 
to ERISA-covered plans. The Department of the Treasury has excise tax 
enforcement authority for advisers to IRAs and other non-ERISA plans 
subject to the prohibited transaction rules in the Internal Revenue 
Code. The Department of the Treasury also may impose excise taxes for 
violations in connection with tax-qualified ERISA-covered employee 
benefit plans. Anyone who gives investment advice to a retirement 
investor will be subject to the new proposal, regardless of whether 
they are a registered investment adviser, broker-dealer, or neither. 
ERISA's fiduciary standards also apply to advice for retirement savings 
investments that are not covered by the securities laws.
    The regulatory and enforcement authority of the SEC and Financial 
Industry Regulatory Authority (FINRA) apply to a broader class of 
investors, retirement or otherwise, but only if the advice concerns 
securities covered by the securities laws (e.g., publicly-traded 
stocks, bonds). Therefore, the SEC and FINRA do not have jurisdiction 
over some common non-security retirement investments, like certain 
insurance products, while the Department does. The Department's 
authority extends to employee benefit plans and IRAs.
    Question. Do you envision the three agencies having overlapping 
jurisdictions and authorities?
    Answer. As indicated by the response to the previous question, 
under current law there is some overlap in jurisdiction among the 
agencies. This will remain true if the proposal is adopted. For 
example, the Federal securities laws do not impose a fiduciary standard 
on broker-dealers who provide investment advice incidental to their 
other services. Instead, under SEC and FINRA rules, broker-dealers are 
generally required to have a reasonable basis to believe that a 
recommended transaction is ``suitable'' for a customer. Thus, if a 
broker-dealer provides advice to a retirement savings plan participant 
that violates the suitability standard as well as the fiduciary 
standards of ERISA, the Department, the SEC, and FINRA would each have 
authority to enforce violations of their requirements. They, however, 
have largely different missions and different spheres of enforcement. 
The Department and Treasury are tasked with overseeing the investment 
advice provided to retirement investors, including ERISA-covered plans, 
plan participants and beneficiaries, and IRA owners. These tax-favored 
investments receive special protection under ERISA and the Tax Code. 
This is true even for non-securities for example, certain insurance 
products. In contrast, the regulatory and enforcement regime of SEC and 
FINRA is triggered when investors (retirement or otherwise) receive 
advice, but it must relate to covered securities. Also, unlike the SEC, 
FINRA is not a Federal Government agency. FINRA is a self-regulatory 
organization subject to SEC oversight.
    The Department has engaged in extensive conversations with SEC 
staff, in order to obtain technical assistance, to ensure that the 
proposal complements, and does not contradict, the current securities 
regime. If the proposal is finalized, the Department will engage in 
further coordination with other regulators to assure a smooth and fair 
implementation of the rule and exemptions.
    Question. What discussions have been conducted between DOL, the 
SEC, FINRA and OMB about reducing any unnecessary overlap to prevent 
redundant expenditures of taxpayer money?
    Answer. Although the Department and the SEC have different 
statutory responsibilities, we both recognize the importance of working 
together on regulatory issues in which our interests overlap, 
particularly where action by one agency may affect the community 
regulated by the other agency. To that end, the Department sought 
technical assistance from SEC staff during the development of the draft 
proposal. That technical assistance has helped the Department draft a 
proposal that strikes a balance between protecting individuals looking 
to build their savings and minimizing disruptions to the many good 
practices and good advice that the financial services industry provides 
today.
    In addition, the Department consulted with a wide range of other 
stakeholders through the development process, including FINRA, a self-
regulatory organization for the securities industry.
    On February 23, 2015, the Department formally submitted the draft 
proposal to OMB for review. Pursuant to Executive Order 12866, OMB/OIRA 
conducted an interagency review of the Department's new proposal. The 
Department's proposal was published in the Federal Register on April 
20, 2015 for public comment.
                  costs of fiduciary rule enforcement
    Question. Have the enforcement resources DOL believes will be 
necessary to carry out this expanded regulatory authority been 
quantified and included in the Department's cost-benefit analysis for 
the re-proposed rule?
    Answer. Because the fiduciary rule has not been finalized, the 
scope of any potential need for additional resources has not been 
determined. The fiscal year 2016 budget request does not include any 
funding or FTE for new responsibilities associated with the conflict of 
interest rule.
    Question. When do you envision these resources being required?
    Answer. EBSA does not expect to expend resources on enforcement and 
implementation until the final fiduciary rule becomes effective. At 
this point, EBSA is expecting that enforcement activities will be 
undertaken as part of its overall budget for conducting enforcement, 
outreach/education, and regulatory activities with respect to its areas 
of responsibilities under ERISA and Reorganization Plan No. 4 of 1978. 
EBSA expects that its experience with implementation and enforcement of 
a final conflict of interest rule could inform its analysis of whether 
a request for additional funding or FTE resources is appropriate in 
later fiscal years.
      protecting cost-sharing arrangements in fiduciary regulation
    Question. Many concerns were raised by members on both sides of the 
aisle with the Department's original 2010 fiduciary rule because it 
completely disregarded the protections Congress put in place to ensure 
cost-sharing arrangements that gives choices for IRA services remain in 
place. You have repeatedly said over the past year that the re-proposed 
rule will preserve commissions. But, commissions, without cost-sharing 
arrangements, will produce the same bad policy result as the original 
proposal--less choice for middle-income families to find affordable 
financial help. While you have made a commitment to protect commissions 
in the upcoming fiduciary re-proposal, commissions alone are 
insufficient to provide small account services.
    Will you also commit to protect standard cost-sharing arrangements 
that securities laws protect so that middle-income IRA holders and 
small businesses have options to find personal financial help at an 
affordable price?
    Answer. The proposed regulatory package does not prohibit common 
compensation practices, including load sharing, revenue sharing and 
12b-1 fees, which may be considered ``cost-sharing'' arrangements. 
Investment advisers will be permitted to receive these common forms of 
compensation as long as they comply with the proposal's requirements, 
including adherence to basic standards aimed at ensuring that their 
advice is in the best interest of their customers. In this way, the 
proposal preserves customer choice by allowing customers to retain the 
ability to enter into different types of payment arrangements with 
their investment advisers, depending on what best suits the customers' 
needs.
         department of labor review of fair labor standards act
    Question. Last March the President instructed the Department to 
review and propose changes to the rules under the Fair Labor Standards 
Act concerning which employees are exempt from overtime pay.
    When will these changes be publicly released?
    Answer. We continue working diligently to construct an updated 
regulation defining exempt executive, administrative, and professional 
employees that reflects the President's directive as well as the input 
we've sought from a wide array of stakeholders, including workers and 
their employers. As of May 26, 2015, the regulation is at OMB for 
review.
                    changes to overtime regulations
    Question. Upcoming changes to overtime regulations could cause 
employers to reclassify millions of salaried employees to hourly 
workers, resulting in less workplace autonomy. Many salaried employees 
enjoy a variety of flexible work arrangements; however, requiring 
employees to track hours can sometimes make employers restrict flexible 
work arrangements.
    How can you ensure that overtime regulations will not hinder the 
expansion of workplace flexibility for millions of working men and 
women in the country?
    Answer. The Department fully supports workplace flexibility for 
working men and women in this country, and believes that coverage for 
overtime is compatible with workplace flexibility. As we continue to 
develop the changes to the regulations defining exempt executive, 
administrative, and professional employees, however, we will remain 
mindful of potential unintended consequences.
                   metrics used to audit contractors
    Question. Can you please provide the Subcommittee with information 
concerning what types of metrics OFCCP uses when auditing contractors?
    Answer. When conducting compliance evaluations, OFCCP uses a 
variety of metrics commonly used in the labor economic and statistics 
professions to assess whether contractors are meeting their affirmative 
action and non-discrimination obligations. For example, contractors 
must perform a utilization analysis that includes the placement of the 
contractor's employees into job groups, the determination of the 
availability for employment of minorities and women, and a comparison 
of their incumbency in the job groups to their availability. If a 
contractor's utilization analysis reveals underutilization of 
minorities or women, or both, in any of the job groups the contractor 
must establish placement goals designed to cure the underutilization, 
and OFCCP reviews those contractor analyses. If the contractor has not 
met its placement goal, OFCCP will evaluate the contractor's good faith 
efforts to meet that goal, including its outreach, recruitment and 
training efforts. It will also review representation trends using EEO-1 
data over time. OFCCP also reviews a contractor's established 
aspirational benchmark for covered veterans and 7 percent utilization 
goal for individuals with disabilities to assess their progress and 
their outreach and recruitment efforts to reach the benchmark and goal.
    To assess personnel transactions such as hiring, promotions and 
terminations, OFCCP reviews contractor data for statistically 
significant differences in selection rates of qualified applicants 
across race and sex groups. Similarly, in the review of compensation 
practices, OFCCP reviews contractor data for statistically significant 
differences in pay across race and sex groups. OFCCP uses tests of 
statistical significance that are commonly used in the statistics 
profession, which include professionally recognized techniques such as 
regression modeling to account for factors that legitimately explain 
differences in a contractor's selection or pay practices.
    Question. If these metrics change, would the changes be 
communicated to Federal contractors via public notice and comment or 
via an interpretation letter?
    Answer. Yes, OFCCP would communicate changes to Federal contractors 
publicly. OFCCP communicates its policy and enforcement changes to 
Federal contractors and other stakeholders through a variety of means, 
including rulemaking; issuance of guidance through written directives; 
changes to OFCCP's Federal Contract Compliance Manual (FCCM), which is 
published on OFCCP's website; publication of Technical Assistance 
Guides; publication of Fact Sheets; issuance of Frequently Asked 
Questions (FAQs); emails to stakeholders; webinars; compliance 
assistance events; and public speeches. OFCCP follows the 
Administrative Procedures Act standards regarding whether and when to 
issue notices for public comment.
  office of federal contract compliance programs proposed ``pay data 
                                 tool''
    Question. The OFCCP recently issued a proposed rule, which would 
create a new ``Pay Data Tool'' where contractors would file a new 
report as OFCCP develops industry standards on pay. There have been 
concerns raised that collecting data solely from employees' W-2's will 
not be an accurate depiction of what an employee's full compensation 
is.
    Based on the information OFCCP already collects, what prohibits 
OFCCP from further evaluating a contractor's pay, thus necessitating 
this rule?
    Answer. OFCCP currently collects information from contractors about 
their employees' compensation only from those contractor establishments 
that OFCCP schedules for compliance reviews or investigates pursuant to 
a compensation discrimination complaint. Thus, in searching for pay 
discrimination violations, OFCCP is limited to the data provided by the 
approximately 4,000 contractors and subcontractors it evaluates 
annually. This cohort is a small fraction of the more than 116,000 
establishments that are estimated to fall under OFCCP's jurisdiction. 
Using some combination of aggregate contractor summary compensation 
data and data from publicly available sources such as the Bureau of 
Labor Statistics and American Community Survey would allow OFCCP to 
develop a data-driven approach for identifying and focusing OFCCP's 
evaluations and resources on Federal contractors that have potentially 
discriminatory compensation differences when compared to an objective 
industry standard.
    The Notice of Proposed Rulemaking for the Data Compensation Tool 
proposed collecting W-2 wages because, among other reasons, W-2 wages 
account for a broad range of pay elements such as bonuses and 
commissions, because existing contractor systems currently gather and 
report W-2 earnings data, and because W-2 earnings are most appropriate 
for setting objective industry standards because all contractors must 
annually report W-2 earnings to the IRS. The NPRM solicited public 
comments on various issues, including possible sources of pay data 
other than W-2 earnings.
                          proposed silica rule
    Question. Instead of proposing a new rule on silica, shouldn't OSHA 
instead use its limited resources to improve compliance rates for the 
existing standard, which has resulted in a 93 percent drop in silicosis 
deaths?
    Answer. Although the number of deaths attributed to silicosis has 
declined in recent decades, the existing standard is insufficient to 
protect workers. From 2009 through 2013, silicosis was listed as the 
underlying or a contributing cause of death on over 500 death 
certificates in the United States, and, as explained in the Notice of 
Proposed Rulemaking, these data are likely to understate the true 
impact of exposure of U.S. workers to crystalline silica. Factors like 
healthcare professionals' lack of information about worker exposure 
histories and difficulty in recognizing occupational illnesses, like 
silicosis, that have long latency periods, contributes to under-
recognition and under-reporting by healthcare providers. Also, many 
silica-related deaths are caused by chronic bronchitis, emphysema, lung 
cancer, kidney disease and other diseases. The proposed rule is 
expected to save close to 700 lives and prevent more than 1,600 cases 
of silicosis each year. Simply enforcing the current PELs will not 
substantially reduce or eliminate the significant risk that workers 
face.
                       osha regulatory approaches
    Question. On October 10, 2014, OSHA issued a request for 
information (RFI) on chemical management and permissible exposure 
limits where the agency outlined the review of its overall approach to 
managing chemical exposures in the workplace and sought stakeholder 
input about different regulatory approaches. The RFI has the potential 
to fundamentally alter the approach that the agency takes in 
promulgating health standards, an approach already grounded in 
Congress's direction to OSHA as set forth in the Occupational Safety 
and Health Act of 1970 (OSH Act).
    Will OSHA commit to following the process for promulgating 
standards set forth in the OSH Act, established case law on the 
promulgation of health standards, and the Regulatory Flexibility Act 
which requires Federal agencies to review regulations for their impact 
on small businesses and consider less burdensome alternatives?
    Answer. The Chemical Management RFI will have no impact on the 
existing regulatory process by which OSHA promulgates health standards. 
The purpose of the RFI is to solicit information about approaches the 
Agency may take to address the serious problem of OSHA's outdated 
permissible exposure limits and to better assist employers in managing 
the risk from exposure to chemicals. The ideas and concepts that are 
explored in the RFI will not circumvent legal requirements established 
under the OSH Act, the Regulatory Flexibility Act, and other 
legislative mandates for promulgating new standards.
                    department of labor advertising
    Question. Please provide for the Committee a year by year summary 
of marketing and advertising expense totals across DOL agencies over 
the last three fiscal years.
    Answer. Over the past 3 fiscal years, the Department has obligated 
advertising dollars in the following programs:

  --fiscal year 2012 Job Corps--Media Buy, $2,000,000;
  --fiscal year 2012 OPA--No expenses;
  --fiscal year 2013 Job Corps--Media Buy, $2,997,561;
  --fiscal year 2013 OPA--Strategic communications, marketing and 
        outreach for DOL Centennial, $208,970;
  --fiscal year 2013 OPA--Media placements of DOL articles/featurettes, 
        $21,600;
  --fiscal year 2014 Job Corps--Media Buy, $2,999,965;
  --fiscal year 2014 OPA--Media placements of DOL articles/featurettes, 
        $13,755.

    Question. What are the primary programs involved in such marketing 
and what are the objectives?
    Answer. The majority of resources used by the Office of Public 
Affairs (OPA) for marketing are to educate the public about services 
provided by the Department, the significance of the Department in 
shaping and adapting to the evolution of work in America, and to give 
the public pertinent and practical information to ensure they have job 
skills, fair pay and a safe working environment.
    The goal of the Job Corps national media buy campaign is to reach 
prospective students to produce enough leads and enrollees to reach 100 
percent of planned slot levels. The media buy helps inform the 16-24 
year old, at-risk population about the opportunity to complete their 
high school education, learn a trade, and obtain their first good-
paying job. While advertising, Job Corps consistently experiences 
higher call volume at its toll-free number; about half of those calls 
result in referrals to admissions counselors.
    Question. In particular, how much has been spent to specifically 
market the Affordable Care Act?
    Answer. The Department has not expended advertising resources to 
market the Affordable Care Act. The Employee Benefits Security 
Administration (EBSA) does have a number of publications and materials, 
but these are exclusively for education and outreach to inform the 
participants and regulated community of their rights and 
responsibilities. These materials are available on the EBSA website.
              fair pay and safe workplaces executive order
    Question. With respect to Federal contractors, it has been said in 
a recent hearing, in former Chairman Harkin's report of December 2013, 
and in other forums that the playing field is not level and that repeat 
offenders of labor laws are still awarded additional contracts. The 
Department and other Federal agencies, however, have suspension and 
debarment authorities to suspend these ``bad actors'' from future 
Federal contract awards.
    Why do you believe the current suspension and debarment office at 
the Department is failing its responsibility such that creating 
additional overlapping bureaucracy and processes is necessary?
    Answer. Suspension and debarment procedures play an important role 
in the procurement process. They serve to exclude from the Federal 
contracting process those contractors whose performance on a Federal 
contract is so poor that it serves the public interest to preclude them 
completely from receiving additional contracts. The processes and tools 
DOL and the FAR Council will establish are designed to help in 
identifying and addressing labor violations before they require 
consideration of suspension and debarment and will help contractors 
avoid the consequences of those remedies
    In addition, we do not believe DOL's suspension and debarment 
office is failing its responsibilities. In fiscal year 2014, the 
Department executed 74 statutory S&Ds. In addition, DOL is in the 
process of taking the following steps to improve its discretionary S&D 
program:

  --Issuing a detailed policies and procedures manual that outlines the 
        structure of the S&D program, which is expected to increase the 
        number of referrals;
  --Actively engaging the Department's acquisition professionals, the 
        Solicitor's office, the Office of the Inspector General, and 
        other departmental stakeholders on the requirement to protect 
        the government from bad contractors;
  --Working closely with the Interagency Suspension and Debarment 
        Committee (IDSC) on the implementation of best S&D practices/
        templates, and samples; and
  --Facilitating meetings with and among all DOL programs and 
        contracting activities about the S&D process and on the 
        policies and procedure manual.
              improving suspension and debarment programs
    Question. In testimony to the House last year, GAO stated agencies 
with the most suspension and debarment activity shared certain 
characteristics, such as a dedicated suspension and debarment program 
with a full-time staff, detailed policies and procedures, and practices 
that encourage an active referral process. In contrast, they said, 
agencies that GAO reviewed in 2011 that did not have these 
characteristics generally had few or no suspensions or debarments of 
Federal contractors. GAO has recommended that ``agencies take steps to 
improve their suspension and debarment programs ensuring that they 
incorporate the characteristics identified as common among agencies 
with more active programs.'' A similar report in 2011 also states that 
``it was noted by the Administrator for Federal Procurement Policy that 
management and resources devoted to suspension and debarment are 
inconsistent across agencies and more could be done to protect the 
government and taxpayers from bad contractors.''
    What steps has the Department taken to implement these 
characteristics to improve its suspension and debarment program?
    Answer. When discussing suspension and debarments (S&D), it is 
important to distinguish the two types of S&D: statutory and 
discretionary (also known as administrative).
    Statutory S&D provisions are created by Congress principally to 
further statutory enforcement or compliance goals, and are often 
mandatory.
    In 1933, the Buy America Act became the first statute to include a 
debarment provision, providing for exclusion from public building 
construction contracts, for failure to use American produced building 
materials on government funded projects. See 42 U.S.C.Sec. 10. Shortly 
thereafter, Congress enacted additional statutory debarment provisions 
in the labor context, including the Davis-Bacon Act of 1931, currently 
at 40 U.S.C.Sec. Sec. 3141-3148, and the Walsh-Healey Public Contracts 
Act of 1936, currently at 41 U.S.C.Sec. 35-45.
    Discretionary/Administrative debarment is a remedy that springs 
from the inherent authority of the Government acting in its capacity as 
a purchaser and consumer of goods and services. It serves the purpose 
of protection not punishment. The focus is on business risk where the 
Government learns of information indicating that a potential contractor 
or award participant lacks business honesty, integrity, or has 
evidenced poor performance. The action is forward looking. It serves 
best to head off the participation of problem actors in Federal funded 
activities rather than to remediate misconduct after occurrence of 
misconduct.
    In fiscal year 2014, DOL executed 74 statutory suspensions and 
debarments. The Department is in the process of taking the following 
steps to improve its discretionary S&D program:

  --Issuing a detailed policies and procedures manual that outlines the 
        structure of the S&D program which is expected to increase the 
        number of referrals;
  --Actively engaging the Department's acquisition professionals, the 
        Solicitor's office, the Office of the Inspector General, and 
        other departmental stakeholders on the requirement to protect 
        the government from bad contractors;
  --Working closely with the Interagency Suspension and Debarment 
        Committee (ISDC) on the implementation of best S&D practices/
        templates, and samples; and
  --Facilitating meetings with and among all DOL programs and 
        contracting activities on the S&D process and the policy and 
        procedure manual.

    Question. Rather than expanding bureaucracy, creating overlap, and 
blurring lines of authority, shouldn't the GAO's recommendation be a 
prudent first step to ensure that repeat offenders are undergoing the 
proper scrutiny prior to obtaining any further awards?
    Answer. DOL agrees that repeat offenders must undergo proper 
scrutiny prior to obtaining any further awards. For this reason, we 
continue to improve DOL's S&D process, implementing the items above and 
making the acquisition community aware of the need to identify and 
refer all contract cases in which the contractors are ``bad actors'' to 
the Department's Suspension and Debarment Official to investigate and 
determine whether proposed S&D is appropriate.
    The processes and tools that DOL and the FAR Council are 
establishing as part of the Fair Pay and Safe Workplaces EO are 
designed to help in identifying and addressing labor violations before 
they require consideration of suspension and debarment. The expectation 
is that those processes and tools will reduce the need for an agency to 
consider suspension and debarment and help contractors avoid the 
consequences of those remedies.
       implementing fair pay and safe workplaces executive order
    Question. Please explain your proposal for an Office of Labor 
Compliance to implement the Fair Pay & Safe Workplaces Executive Order.
    Answer. The Department of Labor will establish an office to help 
contractors and subcontractors understand their responsibilities under 
the Executive Order and comply with relevant law, and work with 
dedicated personnel at contracting agencies to share information and 
ensure consistency across the Government.
    Question. How much will it cost to implement this new office is it 
limited to the $2.6 million included in the Departmental Management 
account or will there be other costs associated?
    Answer. The Department's fiscal year 2016 Budget request of $2.62 
million will ensure that we have the resources we need to provide 
assistance to the contracting community, including contractors and 
contracting officers across the government. Our assistance will focus 
on ensuring contractors have the support they need to understand their 
obligations under the Executive Order and that procurement officials 
across the government can make efficient, accurate and consistent 
decisions about contractors' ethics and business integrity. We do not 
anticipate additional costs to DOL at this time.
    Question. Will the 15 requested new FTE be the anticipated staffing 
requirement for full operation, or is that an initial, start-up level 
which the Department expects to expand upon over the following year or 
two?
    Answer. The Department has not assessed the need for additional FTE 
at this point, but is doing so as part of its 2017 Budget formulation 
process and as it gets further along in implementing the Order.
    Question. Where will the office fall within the structure of the 
Department, and what challenges do you anticipate getting this office 
up and running?
    Answer. DOL has not yet determined where the Bureau of Labor 
Compliance will fall within the Department's current structure. The 
Department is working diligently to ensure smooth implementation of all 
facets of the Executive Order, including the establishment of the 
Bureau of Labor Compliance.
       impacts of executive order on fair pay and safe workplaces
    Question. A March 5 memo to agencies from DOL and OMB titled 
``Implementation of the President's Executive Order on Fair Pay and 
Safe Workplaces'' directs the heads of executive departments and 
agencies to have Labor Compliance Advisors (LCAs) in place by June 3 
and elaborates the criteria for hiring or appointing them.
    Exactly how many of these individuals do you anticipate DOL's 
office of Labor Compliance having to coordinate, what will be their 
training, and what sort of analysis has your department done to ensure 
this new bureaucracy does not overburden and massively disrupt the 
Federal procurement system?
    Answer. Under the EO and the accompanying OMB memo, each 
contracting agency is directed to designate a senior agency official to 
serve as a Labor Compliance Advisor. The OMB memo also allows agencies, 
particularly small agencies, that wish to build the LCA capabilities 
through a shared services arrangement to work with DOL and OMB on the 
best way to do so. We expect the staffing of these offices will differ 
based on each agency's contracting volume and structure. The Department 
of Labor is working with OMB to develop training for these staff.
    Changes required by the EO build on the existing procurement system 
and will fit into established contracting practices that are familiar 
to contractors. The Administration is working to make it easy and 
efficient for contracting officers to implement and for businesses to 
comply, by setting up systems to report violations only once, by 
allowing companies to identify and remedy potential problems before 
bidding on contracts, by ensuring that determinations of contractor 
responsibility are made as promptly as possible, and by phasing-in the 
requirements over time.
    Question. If an agency does not have an existing employee qualified 
or capable of taking on this task, from what agency(s) and what 
account(s) would the costs for a new LCA come?
    Answer. Under the EO and the accompanying OMB memo, each agency has 
the authority and flexibility to make determinations on how to fill the 
Labor Compliance Advisor position(s) and where to place it.
    Question. How could it happen by the June deadline?
    Answer. We believe agencies are working as expeditiously as they 
can to designate LCAs by the 90-day deadline outlined in the OMB 
Memorandum.
    Question. Would each department-based LCA have a staff?
    Answer. Each agency has the flexibility to make appropriate 
staffing decisions based on its needs.
    Question. From where would that funding come?
    Answer. Each agency would have to determine available resources 
that could be used for the LCA.
    Question. Was it requested for fiscal year 2016?
    Answer. The Department cannot speak to specifics of other agency 
budget requests.
    Question. Has the Department developed a plan on how it will 
provide guidance to and field the numerous questions from the LCAs?
    Answer. DOL is committed to providing guidance and support, in 
coordination with OMB's Office of Federal Procurement Policy, to all 
LCAs and contracting officers. This will be one of the roles played by 
the new Office of Labor Compliance.
       labor compliance advisor (lca) review of contract actions
    Question. In 2014, the U.S. government executed nearly 100,000 
different contract actions valued at more than over $500,000. The EO 
requires the labor compliance advisor to review the actual and 
potential labor violations submitted by the prime contractor on all 
such contract actions. The LCA must then consult with enforcement 
authorities at the Federal and State level to determine ``whether 
agreements are in place or are otherwise needed to address appropriate 
remedial measures, compliance assistance, steps to resolve issues to 
avoid further violations, or other related matters.'' The EO then 
requires the contracting officer to consult with the LCA subsequent to 
labor compliance advisor's consultation with Federal and State 
enforcement authorities. The DOL is charged with issuing guidance 
concerning the role of the LCA.
    How does the DOL plan, from a practical perspective, to make this 
required review feasible without slowing down the procurement process?
    Answer. Contracting officers are already required to assess a 
contractor's business integrity before awarding a contract; the EO 
helps to provide tools that will make it easier for contracting 
officers to do so. The proposed DOL guidance and FAR Council 
regulation, which were published in the Federal Register on May 28, 
2015, are designed to minimize burden to the extent possible. To do so, 
they build on existing procurement processes, have companies report 
violations in the same system they are already using for other 
reporting, allow companies to identify and remedy potential problems 
before bidding on contracts, and phase in requirements over time. 
Furthermore, many Federal contractors have more than one contract, and 
we anticipate that responsibility determinations for contractors who 
have previously been determined to be responsible sources under the EO 
will be made quickly as long as the contractor has not committed any 
reportable violations since its most recent responsibility 
determination.
    Question. Or are procurement delays likely to be another cost of 
the initiative?
    Answer. We do not anticipate any undue procurement delays as a 
result of implementation of the EO, because we are building on the 
existing system and using established contracting practices.
                 defining serious labor law violations
    Question. As part of your testimony before the Subcommittee you 
described the goal of the EO as requiring Federal contractors to report 
serious violations of Federal labor laws.
    How will serious violations be defined? Will they be limited to 
final determinations on the merits or will even allegations of serious 
violations have to be reported?
    Answer. On May 28, 2015, the Department published proposed guidance 
in the Federal Register for notice and comment that will define the 
term ``serious violations'' and will identify those judgments and 
determinations that need to be reported. We will be available to brief 
those who are interested on the documents once they have completed 
interagency review and are published.
      reporting under fair pay and safe workplaces executive order
    Question. You stated that the goal of the EO is to ensure that 
serious violators are not awarded Federal contracts.
    Do you envision that the reporting requirements would be limited to 
those violations related to government contracts or by divisions within 
a company performing government contracts or would a Federal contractor 
be obligated to report on all violations by a company, not only those 
that occurred on Federal contracts?
    Answer. Changes required by the EO, and the guidance and 
regulations implementing it, build on the existing procurement system 
and will fit into established contracting practices that are familiar 
to contractors. Under the current responsibility determination process, 
contractors have to disclose information related to all facets of the 
company, not just those related to Federal contracts. By building on 
the existing system, procurement officials across the government will 
be able to make efficient, accurate and consistent decisions about 
contractors' responsibility and business integrity.
    Question. The EO encompasses over 14 Federal labor laws and 
equivalent State laws. How will the differing Federal and State 
standards in current Federal and State labor laws be reconciled in 
determining whether something is reportable?
    Answer. The requirement that contractors and subcontractors 
disclose violations of equivalent State laws will be phased in at a 
later time, with the exception of OSHA-approved State plans, which were 
included in the proposed DOL guidance and FAR Council regulations 
published on May 28. DOL will issue a second round of proposed guidance 
defining equivalent State laws and the FAR Council will use a second 
set of regulations to implement this portion of the EO's disclosure 
requirements. When fully implemented, the EO will require contractors 
and subcontractors to report determinations, judgments, and decisions 
finding that they have violated any of the 14 Federal labor laws 
enumerated in the EO or any equivalent State laws as defined by DOL. No 
reconciliation will be necessary.
    Question. If the agencies that are administering the 14 Federal 
laws referenced in the EO are doing their job, why do we need the 
additional layer of bureaucracy, that this EO would establish at the 
taxpayers' expense, to `watch the watchers'?
    Answer. The goal of the EO is to increase efficiency and cost 
savings in Federal contracting by ensuring that the parties with which 
the Government contracts are responsible and provide basic workplace 
protections. While the vast majority of Federal contractors play by the 
rules, every year tens of thousands of American workers are denied 
overtime wages, not hired or paid fairly because of their gender or 
race, or have their health and safety put at risk by companies 
contracting with the Federal Government. This EO is designed to give a 
full picture of a contractor's labor compliance record so that 
contracting agencies are not awarding contracts to employers who do not 
provide basic workplace protections. Additionally, some companies may 
not be deterred by existing penalties for violations of labor laws, 
viewing them as merely the ``cost of doing business.'' By requiring 
Federal agencies to evaluate compliance with labor laws as part of the 
contracting process, the EO provides such companies with a strong 
incentive to come into compliance. Finally, labor violations by Federal 
contractors can reduce productivity and creativity and increase 
workplace disruptions and workforce turnover, thus risking the timely, 
predictable, and satisfactory delivery of goods and services to the 
Federal Government. Federal agencies thus risk poor performance by 
awarding contracts to companies with histories of labor law violations.
    Question. If the agencies are not doing or need more resources to 
do their jobs in administering these laws, why doesn't the 
Administration just address the problem areas directly?
    Answer. The EO, and proposed guidance and regulations implementing 
it, provide agencies with the tools to better identify, evaluate, and 
address labor violations of Federal contractors. As noted, the goal of 
the EO is to increase efficiency and cost savings in Federal 
contracting by ensuring that the parties with which the Government 
contracts are responsible and provide basic workplace protections. By 
improving agency awareness of the labor violations of their 
contractors, the EO will make sure that companies that play by the 
rules do not have to compete against bidders who put in lower bids by 
cutting corners on workers' fair pay and safety.
                implementation of executive order 13672
    Question. In implementing Executive Order 13672 and OFCCP's new 
final rule governing its application to Federal contractors and 
subcontractors, will the Department of Labor honor the religious 
staffing exemption or instead enforce it in a manner that nullifies the 
exemption?
    Answer. Yes, the Department intends to fully comply with both the 
First Amendment ``ministerial exception'' and the ``religious 
organization'' exemption in the Executive Order.
    There are two different exemptions of particular relevance to 
OFCCP's enforcement of Executive Order 11246, as amended by Executive 
Order 13672, as to religious contractors. The first, known as the 
``ministerial exception,'' is grounded in the First Amendment to the 
Constitution, as recognized by the Supreme Court in the case of 
Hosanna-Tabor Evangelical Lutheran Church and School v. Equal 
Employment Opportunity Commission, 565 U.S. __ (2012). Under that 
doctrine, the government is prohibited from interfering with the 
ability of a religious organization to make employment decisions about 
its ``ministers,'' a category that includes, but is not limited to, 
clergy. OFCCP has honored, and will continue to honor, the ministerial 
exception. In determining whether the ministerial exception applies to 
an employer's decision in a particular case under Executive Order 
11246, OFCCP, as guided by Supreme Court precedent, makes an assessment 
of all of the facts and circumstances of employment, including the 
functions performed by the employee, the job title given to and used by 
the employee, and the amount of time the employee spends on particular 
activities.
    In addition to the ministerial exception, Section 204 of Executive 
Order 11246 contains a ``religious organization'' exemption, which is 
also set forth in the implementing regulations at 41 C.F.R. 60-
1.5(a)(5). This exemption was added to EO 11246 in 2002, and allows 
religious corporations, associations, educational institutions, or 
societies to favor individuals of a particular religion when making 
employment decisions. Under established case law, this exemption 
applies only to those institutions whose purpose and character are 
primarily religious. As per the text of the Executive Order, such 
contractors are ``not exempted or excused from complying with the other 
requirements contained in'' Executive Order 11246. Neither Executive 
Order 13672 nor its implementing regulations make any change to this 
exemption.
    OFCCP will continue to honor this exemption, and will analyze any 
claims of exemption based on the specific facts presented. In general, 
this exemption allows religious organizations to prefer to employ only 
members of a particular faith, but it does not allow religious 
organizations to discriminate in employment on the basis of race, 
color, sex, sexual orientation, gender identity, or national origin. In 
determining whether the exemption applies in a given scenario, OFCCP 
looks to Federal case law and EEOC guidance interpreting the 
substantively identical religious organization exemption contained in 
Title VII of the Civil Rights Act of 1964.
                                 ______
                                 
              Questions Submitted by Senator Thad Cochran
                               youthbuild
    Question. Secretary Perez, in August 2014 you stated that 
``YouthBuild offers thousands of young people the tools, resources and 
opportunities they need to punch their ticket to the middle class.''
    Can you speak to why the Department chose to prioritize the 
discretionary and mandatory funding of programs that do not necessarily 
enjoy bipartisan support, over a larger increase in funding for 
programs like YouthBuild that have broad bipartisan Congressional 
support and operate effectively with close attention to quality, 
performance outcomes, and community need?
    Answer. The Budget addresses the needs of youth, including 
disconnected youth, through several programs including the Youth 
formula program, YouthBuild, Job Corps, and the proposed Connecting for 
Opportunity initiative. Increases in Youth formula funding expand our 
reach to serve more youth in all 50 States, and many local areas 
allocate Youth formula funds to YouthBuild programs. The Administration 
agrees that YouthBuild is worthy of support, and for this reason the 
fiscal year 2016 Budget provides a 6 percent increase for the program, 
exceeding the program's authorized funding level under the Workforce 
Innovation and Opportunity Act.
                      governor's reserve set-aside
    Question. Secretary Perez, the Workforce Innovation and Opportunity 
Act, which I supported, authorized the Governor's Reserve Set-Aside for 
15 percent.
    Will you please state the Department's position on increasing the 
Governor's Set-Aside under the Employment and Training Administration 
to 15 percent.
    Answer. The Department recognizes the significant role that States 
have within the public workforce system and the importance of 
activities funded under the Governor's set-aside. However, without 
significant new funding, reverting to a 15 percent set-aside would 
reduce funding for direct training and employment services provided to 
participants by local workforce areas. The Budget maintains the 10 
percent set-aside provided by Congress in the 2015 appropriation--
double the 5 percent level provided in 2013. The Budget also increases 
the WIOA formula grants by $86 million (3 percent) to help States and 
local areas provide training and employment services to their 
unemployed workers.
                          spending discipline
    Question. Secretary Perez, I know you understand the extremely 
tight fiscal environment in which we find ourselves. Yet, the 
Department's overall request reflects an increase of over 10 percent 
above fiscal year 2015 for discretionary spending alone. There are some 
priorities we share, of course, and there could be willingness on this 
subcommittee to help pursue some innovative new ideas but we cannot 
ignore budget realities, nor should you.
    Are you prepared to present offset proposals from within the 
Department's own budget, possible rescissions, or other approaches that 
might make addressing some of your proposals feasible?
    Answer. The President's Budget provides the funding needed to 
execute our mission, and fully pays for these higher discretionary 
levels with a balanced mix of common sense spending cuts and tax 
reforms. This budget is an expression of our priorities and values 
ensuring that American workers acquire the skills they need to succeed 
in jobs today and in emerging fields tomorrow; helping employers find 
and hire those skilled workers to grow their businesses; and ensure 
that workers' health, benefits, and safety are protected. Failing to 
make the investments described in the Budget would weaken our ability 
to provide services to job seekers, veterans, and basic protections to 
workers in America.
                                 ______
                                 
             Questions Submitted by Senator Lamar Alexander
                   impacts of proposed fiduciary rule
    Question. When drafting the re-proposed ``fiduciary'' rule, did you 
conduct an analysis of whether, and by how much, costs for professional 
investment advice, education, and/or guidance may increase and whether 
it would negatively impact consumer access to retirement education and 
services?
    Answer. Yes, the Department thoroughly analyzed these questions. 
The RIA foresees no adverse impact on the cost of advice or consumer 
access to retirement education and services. The analysis finds the 
proposal will deliver gains for retirement investors that far exceed 
compliance costs for the financial industry.
    Question. If not, please explain why. If so, please provide the 
analysis.
    Answer. The Department's full Regulatory Impact Analysis is 
available on the Department's website at http://www.dol.gov/ebsa/regs/
conflictsofinterest.html.
            working with the sec on proposed fiduciary rule
    Question. You stated you received ``technical assistance'' from the 
SEC when drafting the re-proposed ``fiduciary'' rule.
    Beyond simple technical assistance, did you discuss larger policy 
or economic implications of the re-proposed rule with the SEC, 
including whether the re-proposed rule may be redundant or inconsistent 
with the regulations being drafted by the SEC, or is the SEC supportive 
of this re-proposed rule?
    Answer. The Department discussed with the SEC the larger policy and 
economic implications of its new proposal, including whether it may be 
redundant or inconsistent with current or planned SEC rules. SEC has 
agreed with the Department that the two agencies respectively are 
responsible for administering two different statutory frameworks. The 
Department believes its new proposal would complement and harmonize 
with SEC's rules.
          eeoc targeting voluntary employer wellness programs
    Question. The Equal Employment Opportunity Commission (EEOC) is 
targeting voluntary employer wellness programs, claiming that financial 
incentives (in the form of lower healthcare premiums), offered by 
employers to employees to encourage healthy behavior, violate 
discrimination laws.
    Do you stand by the Department of Labor's regulations, issued in 
coordination with the Departments of Treasury and Health and Human 
Services, and support employers who offer employees premium rewards of 
up to 50 percent for making healthy lifestyle choices through a 
workplace wellness program?
    Answer. Yes, consistent with the Affordable Care Act, the tri-
agency (Departments of Labor, Health and Human Services, and the 
Treasury) rules effective January 1, 2014, support workplace health 
promotion and prevention. Among other things, the rules:

  --Ensure flexibility for employers by increasing the maximum reward 
        under a health-contingent wellness program that is part of a 
        group health plan (and any related health insurance coverage) 
        from 20 percent to 30 percent of the cost of health coverage 
        (up to 50 percent for wellness programs designed to prevent or 
        reduce tobacco use); and
  --Address the reasonable design of health-contingent wellness 
        programs and the reasonable alternatives that must be offered 
        in order to avoid prohibited discrimination.

    Question. Would it be appropriate for the EEOC to issue a 
regulation that is more restrictive on workplace wellness plans than 
the regulations issued by Labor, Health and Human Services, and 
Treasury?
    Answer. Recognizing that many other laws may regulate plans and 
issuers in their provision of benefits, including the ADA requirements 
issued by the EEOC, the final tri-agency Affordable Care Act wellness 
rules reiterate the Department's position that compliance with these 
final regulations does not automatically mean an employer has complied 
with every other applicable legal requirement. On April 20, 2015, the 
EEOC issued a notice of proposed rulemaking (NPRM) on how Title I of 
the Americans with Disabilities Act (ADA) applies to employer wellness 
programs that are part of a group health plan.
    The Labor Department continues to coordinate with other Departments 
when appropriate in order to provide helpful guidance and assist 
employers as they implement wellness programs. For instance, on April 
16, 2015, the Departments published frequently asked questions 
addressing several issues that have been raised since the publication 
of the wellness program regulations.
    Question. Should employers who want to offer these plans have to 
comply with two differing sets of regulations?
    Answer. The final tri-agency Affordable Care Act wellness rules 
reiterate the Departments' recognition that many other laws may 
regulate plans and issuers in their provision of benefits, including 
the ADA, Genetic Information Nondiscrimination Act (GINA), or the 
privacy and security obligations of the Health Insurance Portability 
and Accountability Act of 1996, where applicable. The final tri-agency 
Affordable Care Act wellness rules explain how employers can design 
wellness programs that comply with the Affordable Care Act's rules 
prohibiting plans or insurance companies from discriminating against 
individuals on the basis of health status factors. On April 20, 2015, 
the EEOC issued proposed regulations on how employers can design 
wellness programs that do not violate prohibitions on disability 
discrimination.
                    final rule on persuader activity
    Question. You have yet to issue the final rule placing additional 
reporting and disclosure obligations on ``persuader'' activity. I am 
concerned that the rule will infringe on employers' and employees' 
rights.
    Do you still plan to issue its final rule in July 2015 as the Fall 
2014 regulatory agenda indicates?
    Answer. The Department's most recent Regulatory Agenda states our 
intent to publish the rule in December 2015. The Regulatory Agenda 
indicates the target date of release and the Department will announce 
any changes to this timeline in the Fall 2015 Regulatory Agenda.
    Question. If not, when do you plan to issue its final rule?
    Answer. The Department's most recent Regulatory Agenda states our 
intent to publish the rule in December 2015. The Regulatory Agenda 
indicates the target date of release and the Department will announce 
any changes to this timeline in the Fall 2015 Regulatory Agenda.
    Question. As an attorney, are you concerned about issuing a rule 
that would infringe on attorney-client confidentiality?
    Answer. Given the status of this regulatory item, DOL is limited in 
its ability to discuss the details. However, the Notice of Proposed 
Rulemaking stated that ``privileged matters are protected from 
disclosure.'' DOL's intent remains that the final rule will fully 
comply with all legal requirements. The Department will fully consider 
all of the materials contained in the rulemaking docket, which include 
submitted comments that raise the confidentiality issue. Furthermore, 
any final rule will comply with Section 204 of the Labor Management 
Reporting and Disclosure Act, which exempts from reporting any 
information lawfully communicated to an attorney by a client.
              proposed rule on eeoicpa claims compensation
    Question. You plan to issue a proposed rule addressing ``claims for 
compensation'' under the Energy Employees Occupational Illness 
Compensation Program Act (EEOICPA), which compensates our Cold War 
heroes and their families working at Oak Ridge National Laboratory 
(ORNL), the Y-12 National Security Complex, and other sites across the 
country. This program is of particular concern to Tennessee, which has 
twice as many EEOICPA claims as any other state--with more than 4,100 
are still awaiting a final decision. The Fall 2014 regulatory agenda 
does not specify what the proposed rule will seek to address.
    Can you please provide additional detail?
    Answer. The proposed regulations are still under development, but 
are intended to update the regulations and improve the program's 
operation and delivery of benefits to claimants by, for example, making 
existing policies and practices more transparent by incorporating them 
into the existing regulations.
    Question. Do you plan to issue its proposed rule in April 2015 as 
the regulatory agenda indicates?
    Answer. The Department anticipates publishing a proposed rule in 
September 2015.
               discussing owcp administration of eeoicpa
    Question. According to a January 7, 2015 written notice from the 
Division of Energy Employees Occupational Illness Compensation's 
(DEEOIC), the Department's Office of Workers' Compensation Programs 
(OWCP) held a public listening session on January 15 to discuss 
``potential regulatory changes affecting the DEEOIC's administration of 
the EEOICPA program.''
    How (and when) was this notice made available to the public?
    Answer. OWCP received a meeting request from individuals 
representing several Energy Worker Advocacy Groups, including the 
Alliance of Nuclear Worker Advocates Group (ANWAG), Cold War Patriots, 
and other stakeholder groups. In response to their request, on January 
7, 2015 OWCP extended an invitation to these individuals to attend a 
session where OWCP would listen to any suggested regulatory changes to 
the EEOICPA program.
    Question. Do you have plans to hold additional listening sessions 
for those who may have been unaware of the Jan. 15 session?
    Answer. OWCP values stakeholder input, but does not anticipate 
holding an additional listening session. OWCP would have accommodated a 
request for a listening session from one individual who did not attend 
the January 15, 2015 session, but after OWCP contacted him to explain 
the listening session process, he withdrew his request, preferring, 
instead, to provide his comments during the proposed rulemaking 
process. Once the NPRM is published, all interested parties will have 
the opportunity to provide written comments on the proposed regulatory 
changes.
              costs of voluntary protection program (vpp)
    Question. The Occupational Safety and Health Administration's 
(OSHA) Voluntary Protection Program (VPP) is a vital compliance 
assistance program that allows the agency to establish cooperative 
relationships with employers who have implemented comprehensive safety 
and health management systems. VPP is funded through OSHA's Federal 
Compliance Assistance budget, but there is no individual budget line 
item outlining the costs associated with VPP.
    Can you estimate OSHA's annual cost to support VPP activity over 
the last 5 years.
    Answer. Because there is no individual line item for funding VPP, 
OSHA does not break out the program's annual costs within the overall 
Federal Compliance Assistance budget activity. The Federal Compliance 
Assistance budget activity has been funded at the following levels for 
the past 5 years.

------------------------------------------------------------------------
                                                                Funding
                         Fiscal Year                             ($000)
------------------------------------------------------------------------
2011.........................................................     73,383
2012.........................................................     76,355
2013.........................................................     61,444
2014.........................................................     69,433
2015.........................................................     68,433
------------------------------------------------------------------------

                                 ______
                                 
          Questions Submitted by Senator Shelley Moore Capito
                      msha state assistance grants
    Question. The President's budget request asks that the language 
mandating that not less than $8,441,000 for State assistance grants at 
MSHA be removed.
    Can you explain why MSHA would want to do this?
    Answer. This language was included in the 2015 Omnibus as a 
response to earlier proposals to reduce program funding. However, 
because the President's Budget funds the State Grants Program at 
$8,441,000, this language is unnecessary and could limit MSHA's 
flexibility to reallocate funds to other mine safety activities should 
a State choose not to participate in the program.
    Question. Are there plans to reduce the overall amount?
    Answer. MSHA has no plan to reduce the awarded amount below 
$8,441,000.
    Question. Do you have plans to reallocate among the States?
    Answer. Starting in 2015, MSHA calculated individual State grant 
awards based on a 5-year rolling average of the number of mines and 
miners in each State. This provides stability to State awards and 
prevents funding fluctuations (up or down) based on temporary changes 
to mining industry employment within each State.
                                 ______
                                 
              Questions Submitted by Senator Patty Murray
                  employee access to retirement plans
    Question. We are facing a retirement crisis, in large part, because 
40 percent of the workforce lacks access to a retirement plan at the 
workplace. Congress has failed to act for far too long, but thankfully, 
the States are picking up the slack. Now, over two dozen States have 
passed or are considering passing legislation designed to help workers 
save. As Ranking Member of this subcommittee and the HELP Committee, I 
am making it a priority to ensure that Washington DC doesn't get in the 
way of those efforts.
    Mr. Secretary, can I have your word that you will also prioritize 
helping States like Washington, Illinois, and California get their 
initiatives over the finish line?
    Answer. I am committed to exploring new and innovative ways to 
strengthen retirement security by expanding access to high quality 
retirement savings programs. The Department has been communicating with 
a number of the States exploring options for creating automatic 
retirement accounts for workers in the private sector without access to 
a workplace retirement plan, and will continue to provide such 
individualized technical assistance. Additionally, my staff and I will 
continue to pursue additional steps the Department can take to support 
State efforts.
                   plans for it modernization funding
    Question. As I stated during the hearing, I was pleased to see the 
investments proposed in your budget request. This includes the $50 
million increase requested for the Wage and Hour division that will in 
part support 300 additional staff that would help ensure that workers 
are paid the wages they've earned, and the $7 million increase 
requested for the Office of Federal Contract Compliance Programs which 
would bolster its ability to prevent discrimination by Federal 
contractors and narrow the wage gap based on gender and race. Your 
budget also proposes an increase of $104 million for information 
technology modernization and increases within agency budgets for 
upgrades of enforcement databases and other modernization efforts.
    What problems or shortcomings are being solved by these proposed 
investments?
    Answer. Bringing the Department's IT systems into the 21st Century 
is critical to our mission and in the long-run will save scarce 
resources by allowing the Department as a whole to operate more 
efficiently.
    DOL's outdated IT infrastructure is fragmented, fragile, and 
expensive to maintain and operate, and does not reliably support 
Department operations. DOL also does not have the ability to add new 
technology capabilities that would allow DOL to achieve its vision of a 
21st Century digital workplace to better serve the public.
    DOL is proposing to consolidate, standardize, replace and upgrade 
this outdated infrastructure. Specific investments include:

  --IT Infrastructure Modernization. DOL needs a reliable, secure, 
        well-performing network infrastructure that all its IT 
        activities can rely on. Funds are requested for data and voice 
        communications capacity, wireless infrastructure, video 
        teleconferencing, and infrastructure to support use of mobile 
        devices.
  --A Digital Government Integrated Platform (DGIP). The Department is 
        developing a common digital platform that can be used by all 
        DOL employees to share and store data. Currently, most 
        employees must tap into agency-specific systems and databases 
        from their desktops if they want to access information. A 
        common platform hosted centrally would facilitate data sharing 
        and mobile computing, which is particularly important for DOL 
        field staff. The DGIP would also give each agency a set of 
        integrated enterprise services that would support efforts to 
        build and deploy agency-specific applications. Additional DGIP 
        capabilities include:
      -- Management of digital data assets (images, audio, and video).
      -- Data model, repository and analytical support.
      -- Mobile device management and mobile content management.
      -- Expanded records management

    Question. What process has your Department established to ensure 
that this modernization effort is properly overseen?
    Answer. DOL has several processes in place at various levels:

  --During internal budget development, DOL identifies IT investments 
        that are common across DOL agencies, or that require common 
        prerequisite technologies to support the agency investments. 
        This is the basis for allocating an investment to the DOL 
        Department level IT investments, which are managed by the 
        Office of the Chief Information Officer (OCIO) such as 
        Infrastructure, platforms and enterprise applications including 
        HR, email, and procurement, or alternately to Agency specific 
        applications managed by the agencies.
  --After analyzing these requests, OCIO puts together a plan for 
        Department level investments that will satisfy the requirements 
        to support agency specific IT initiatives, completes a high 
        level cost and schedule estimate as the basis for the proposed 
        budget request, and integrates the proposed Department IT 
        initiatives into the department's strategic plan and roadmap. 
        This allows DOL to leverage economies of scale for common IT 
        requirements, and to focus agency resources on unique mission 
        requirements.
  --During budget execution, OCIO reviews agency IT spending plans and 
        individual IT purchases at the Departmental and agency level to 
        ensure consistency with the IT strategic plan.
  --Enterprise projects are subject to formal Program Review Board 
        Process which includes members from the Enterprise 
        Implementation Committee (EIC), as well as those responsible 
        for department level IT functions (i.e. Chief Information 
        Security Officer.) The EIC consists of OCIO and Agency 
        leadership, and is designed to ensure that cross-agency 
        initiatives affecting information technology infrastructure, 
        common services and customer service programs are implemented 
        to provide effective support for the Department's business 
        mission and operations. The Program Review Board is chaired by 
        the CIO, and is a structured technical and management review 
        process which assesses project risk based on key deliverables 
        at key project milestones.
  --In addition, the DOL OCIO IT Governance function provides oversight 
        and independently assesses IT investments based on Federal 
        guidelines. This assessment is provided to the CIO and supports 
        the IT Dashboard ratings.
  --The CIO provides input directly to the Assistant Secretary for 
        Administration and Management and to the Deputy Secretary on 
        the status of major IT initiatives, including IT projects and 
        investments.

    Question. How would the proposed information technology investments 
complement existing and additional enforcement staff proposed at 
agencies of the Department?
    Answer. An investment in IT is an investment in program results. IT 
Modernization will improve staff productivity, but we need the basic 
digital infrastructure and standards in place to develop applications 
that will allow more effective use of the way data is collected and 
used in the 21st Century in a digital format.
    All of DOL's agencies need to be able to rely on a strong network 
and security infrastructure. For example, a reliable and well 
performing network is necessary to be able to use shared Federal 
services like HR, to access cloud based software as a service such as 
cloud email or web teleconferencing. Mobile device management and 
desktop virtualization are necessary to allow staff to securely work 
off-site.
    In addition, components of the Digital Government Integrated 
Platform (DGIP) such as the data model, repository and analytics and 
digital asset management are directly related to agency mission 
application requirements. For example, for DOL to share data among 
agencies and externally, a consistent data model and data repository 
that supports data warehouse capabilities and data analytics is needed. 
Similar to IT Infrastructure described above, it is more cost-effective 
to build/buy/consolidate these services at the Department level due to 
economies of scale and to make the services available to the agencies.
    However, the Department also needs to invest in agency mission 
application systems. Each agency needs to interface its existing legacy 
systems with the data repository and decide how to use data analytics 
to focus its scarce human resources on highest priority cases--the 
analysis for OSHA, MSHA, and WHD would be different considering each 
agency's unique mission. Each agency needs to consider how images, 
audio, and video can be integrated with their respective missions, 
websites, and applications, and has to modify its legacy systems to 
make use of this. For example, using the DOL wide infrastructure and an 
agency-specific application, OSHA would be able to provide important 
construction safety information using video, photos, and audio for 
multiple audiences including workers with Low English Proficiency that 
could be available to OSHA compliance officers across the country. 
Videos can illustrate proper techniques for various work processes 
leading to a safer and healthier workforce. Another example of the need 
for agency-specific applications on a uniform platform is to enable the 
Solicitor to use the same images in the digital courtroom that OSHA 
captures in an investigation.
                 susan harwood training grants program
    Question. Mr. Secretary, we agree on the need to increase 
investments at the Occupational Safety and Health Administration so 
that it can effectively enforce the Occupational Safety and Health 
(OSH) Act which requires employers to provide safe and healthful 
working conditions for their employees. One of the ways to support that 
effort is through training and education for workers and employers on 
the recognition, avoidance, and prevention of safety and health hazards 
in their workplaces, and to inform workers of their rights and 
employers of their responsibilities under the OSH Act. The Susan 
Harwood Training grants program is designed with this purpose in mind.
    How successful has this program been in improving knowledge to 
recognize and prevent safety and health hazards in the workplace?
    Answer. Between 2005 and 2014, the Susan Harwood Training Grant 
Program has awarded over $104 million to train over 850,000 workers and 
employers in recognizing workplace safety, health hazards, prevention 
measures, and understanding their rights and responsibilities. Training 
has been conducted on such topics as fall prevention, heat illness 
prevention, chemical hazards, amputations, ergonomic hazards and 
temporary worker hazards, to name a few. A significant percentage of 
grantees train vulnerable high risk workers, many of whom have never 
received this type of training and education.
    For example, the Construction Advancement Foundation of Northwest 
Indiana initially received a Capacity Building Developmental grant to 
provide training to workers on process safety management hazards in 
construction, specifically refinery operations. Between 2010 and 2012, 
the grantee trained over 3,000 workers.
    Between May 2009 and January 2011, the Emergency Nurses Association 
(ENA) conducted a needs assessment on workplace violence incidents in 
U.S. emergency departments (EDs). Results from 7,169 emergency nurses 
indicated that incidents of both physical and verbal abuse frequently 
occur, and yet, most hospitals do not have comprehensive workplace 
violence prevention programs and policies. In fiscal year 2012, ENA 
received a 1 year Targeted Topic Training and Materials Development 
grant to develop an ED workplace violence prevention training program, 
including production of an ED violence prevention training video 
produced with the CDC National Institute of Occupational Safety and 
Health through a no-cost collaboration, for broader dissemination.
    In fiscal year 2010, the Port of San Diego Ship Repair Association 
received a Capacity Building Developmental grant to design and 
implement a Shipyard Training Center to support ongoing safety training 
for small shipyard sub-contractors at the four Master Ship Repair yards 
in the San Diego Area. From fiscal year 2010 to fiscal year 2012, the 
grantee trained over 1,500 workers.
    Since 2010, grantees have been required to evaluate the training 
conducted during their grant by providing answers to the following 
questions:

  --Do the trainees' initial reactions to the learning experience 
        indicate that the learning is relevant and immediately 
        applicable to their occupational safety and health needs?
  --Did the participants learn from the training?
  --What are the grantees doing differently and better as a result of 
        the evaluation?
  --Is the grant program making a difference, for example--has the 
        training had an impact on safety in the workplace?

    Examples of the success grantees report include the following from 
the Compacion Foundation, which provided training to largely limited-
English proficiency workers and small employers in the construction 
industry. In a follow up survey done a few months after the training, a 
majority of participants were able to recognize hazards and knew how to 
correct hazards to prevent injuries. The participants reported that as 
a result of their training, they were able to see the improvements in 
safety at their workplaces.
                    implementing ig recommendations
    Question. Mr. Secretary, you acknowledged during the hearing the 
important role that the Inspector General plays in identifying issues 
in the Department's programs and operations and helping ensure that 
taxpayer dollars are not wasted. I know that there are a number of open 
recommendations that your Department has not yet fully implemented.
    Would you please describe your plan for completing timely actions 
on these recommendations?
    Answer. The Department of Labor takes seriously its 
responsibilities to timely respond to the Office of the Inspector 
General. The Department has standard policies and procedures that 
govern the resolution, closure, and follow-up of OIG recommendations 
that all agencies are expected to follow. DOL agency heads are required 
to designate a top agency official for timely overall audit follow-up 
and resolution activities for that agency. In addition certain offices 
are responsible to oversee follow-up and resolution activities with 
regards to specific subject matter. For example, the Office of the 
Assistant Secretary for Administration and Management is responsible 
for overseeing efforts related to administrative management issues and 
the Office of the Chief Financial Officer is responsible for overseeing 
efforts related to financial management. There are, however, instances 
where a recommendation remains unresolved. For example, an agency may 
believe a recommendation is closed while OIG has not recorded it as 
such, or the agency and the OIG may disagree on what constitutes final 
resolution, resulting in a recommendation being recorded as remaining 
in a pending status. The responsible officials in the agency or at the 
Departmental level continue to work closely with the OIG to resolve and 
close any issues that may remain open.
            using administrative data for program evaluation
    Question. Congressman Paul Ryan and I have proposed a commission 
that would make recommendations about how to better utilize 
administrative data in the evaluation and improvement of Federal 
programs.
    Would you please describe work currently being done by agencies of 
your Department to harness the power of administrative data sets for 
program evaluation and improvement?
    Answer. There is tremendous value in using administrative data for 
program evaluation and improvement purposes, including efficiently 
conducting rigorous evaluations of the impact and effectiveness of 
programs, refining the procedures used to measure agency and program 
performance, and improving performance. The Department of Labor has 
taken important steps to improve the quality of, access to, and use of 
administrative data for evaluation and performance, including the 
following efforts:

  --A Data Analytics Unit was established in fiscal year 2014 within 
        the Chief Evaluation Office. The Secretary has dedicated a 
        small amount of departmental management funds to set up this 
        unit for the specific purpose of improving the quality and use 
        of administrative data. The small team of analysts and 
        statisticians work collaboratively with various program 
        agencies, and in the past year has worked on the following 
        types of activities:
      -- Developing data linking protocols to share and exchange data 
        securely by encrypting private information;
      -- Creating longitudinal data files (without personally 
        identifiable information) for statistical analysis and 
        evaluation purposes;
      -- Establishing standard quality guidelines, privacy, and 
        programming procedures that are now applied to all public use 
        files made available through the Department; and
      -- Working with several agencies (e.g., Employment and Training 
        Administration, Veterans Employment & Training Service, Wage 
        and Hour Division, Mine Safety and Health Administration, 
        Occupational Safety and Health Administration) within the 
        Department to improve administrative data and prepare files for 
        performance management and evaluations analysis.
  --For program evaluation, the Department has accomplished much to 
        date, including:
      -- Increased access to administrative data held by other Federal 
        Departments for evaluation purposes. The Department has 
        negotiated extensive cross-departmental memoranda of 
        understanding (with, for example, the Departments of Defense, 
        Education, Social Security, and Health and Human Services) to 
        securely exchange and link administrative data for formal 
        program evaluations. These exchanges will enhance the 
        evaluations of the Department's workforce development and 
        veterans' programs.
      -- Supporting States to make better use of their administrative 
        data as a part of WIOA implementation. The Departments of Labor 
        and Education recently published proposed regulations for 
        implementing the Workforce Innovation and Opportunity Act 
        (WIOA), including provisions that would expand the use of and 
        improve the quality of State administrative data for managing 
        performance, conducting evaluations, and providing consumers 
        with information about outcomes of training programs available 
        in their communities. A key concept in the proposed regulations 
        is the importance of sharing and exchanging data across partner 
        programs.
      -- Using administrative data to reduce the cost and improve the 
        reliability of tracking evaluation results. DOL has 
        incorporated the use of administrative data to track the 
        results of several evaluations, including for example:
          -- The recently-completed study regarding the Occupational 
        Safety and Health Administration's (OSHA) practice of sending a 
        letter to work establishments that have injury and illness 
        rates above the national average. This study used 
        administrative data to track whether these letters result in 
        employer requests for OSHA's On-site Consultation (OSC) 
        program. The results provide preliminary yet encouraging 
        evidence that the high-rate letters increase requests for OSC 
        consultations by twenty-percent. The study reported here is 
        part of a larger evaluation of the OSC program, which will 
        include, among other analyses, changes in injury and illness 
        rates.
  --For Federal statistics, the Bureau of Labor Statistics (BLS) has 
        effectively used administrative data for a range of statistical 
        purposes to support its mission to measure labor market 
        activity, working conditions, and price changes in the economy. 
        For example:
      -- The BLS collaborates with each State to leverage State 
        employment data as an integral part of its labor market 
        statistics;
      -- The International Price Program uses data from the U.S. 
        Customs and Border Protection to develop the market basket of 
        items necessary to produce the monthly price indices of U.S. 
        exports and imports of goods; and
      -- The BLS collaborates with the Census Bureau in various ways, 
        in newly sharing the responsibility for the administration of 
        the Federal Statistical Research Data Centers to facilitate 
        analysis by evaluators and others.
  --For performance management and program improvement, the Department 
        has made significant headway, including:
      -- The Employment and Training Administration provides grants to 
        States to develop cross-program longitudinal data bases to 
        better support State analysis of program performance across 
        programs and to support ``report cards'' for institutions of 
        higher education.
      -- The WIOA Notices of Proposed Rulemaking include language that 
        proposes:
          -- Expanding the availability of UI wage record data to 
        public institutions of higher education so they can manage and 
        improve performance; and
          -- Working with States to better standardize data definitions 
        and reporting processes for State wage records to improve their 
        consistency and quality and their value when combined with 
        other data sets.
      -- The Departmental e-Business Suite (DEBS), which 
        operationalizes the provisions of the Government Performance 
        and Results Modernization Act and integrates performance 
        management with our budget, includes over 300 performance 
        measures. These measures include, for example, DOL Priority 
        Goals for industry-recognized credentials (increase the 
        percentage of training program completers who attain industry-
        recognized credentials) and for worker safety (increase the 
        number of abated workplace hazards associated with falls, 
        through inspections at workplaces covered by the Occupational 
        Safety and Health Administration, and reduce worker fatality 
        rates in mining by 5 percent per year based on a rolling 5-year 
        average). DOL's Deputy Secretary has Quarterly Operating Plan 
        Performance Review meetings with DOL agency heads, where the 
        primary topics discussed are administrative data trends, with a 
        balanced focus on quantity and quality results, and on 
        continuous improvement. A dashboard has been fully 
        operationalized that allows all staff to use and review 
        performance data department-wide.
  --Support for state-based efforts to access and link administrative 
        data is also taking place including:
      -- Working with States to better standardize data definitions and 
        reporting processes for State wage records to improve their 
        consistency and quality and their value when combined with 
        other data sets; and
      -- Extensively using UI quarterly wage records to support 
        performance measurement for workforce programs--both within 
        States and across state-lines utilizing the Wage Record 
        Interchange System (WRIS) and WRIS-2.
  --Accessing and using Unemployment Insurance data can play such a key 
        role in both evaluation and performance efforts, therefore the 
        Department has engaged in:
      -- Using UI administrative data to support analysis of UI program 
        performance and integrity issues including:
          -- Identification of root causes of UI improper payments 
        nationally and by State to help reduce improper payments and 
        improve overall program quality; and
          -- Identification of ``at risk'' state UI agencies that 
        require more intensive technical assistance to improve 
        performance or integrity.
      -- Developing an integrated data hub, similar to Treasury's Do 
        Not Pay (which is not currently available to States), that 
        provides state UI agencies the opportunity to compare a variety 
        of government administrative data sets to help prevent, detect, 
        and recover improper payments.

    Although a lot has been done, there are challenges to accessing and 
using administrative data, including legislative barriers to accessing 
or creating high-value administrative data sets, lack of clarity in 
existing policy and legal interpretations for using some administrative 
data sources, and resource and capacity constraints within the 
Department, within other Departments, and at the State level. We 
continue to strategize on solutions to address these challenges, and 
the Department's budget request for fiscal year 2016 includes several 
proposals that would allow the Department to improve and better use 
administrative data. As we look to maximize the effective use of these 
data, we also are working to ensure that privacy, security, and 
confidentiality of these data are protected.
    Question. Also, please describe efforts proposed or planned for 
fiscal year 2016.
    Answer. As mentioned previously, there are several challenges to 
accessing and using administrative data, including legislative barriers 
to accessing or creating high-value administrative data sets, lack of 
clarity in existing policy and legal interpretations for using some 
administrative data sources, and resource and capacity constraints 
within the Department, within other Departments, and at the State 
level.
    The Department's budget request for fiscal year 2016 includes 
several proposals to address these challenges and allow the Department 
to further improve and better use administrative data for evaluation 
and performance purposes while protecting the privacy, security, and 
confidentiality of these data. They are as follows:

  --Standardized, National Data on Workforce and Training Programs. 
        WIOA laid out a vision for a streamlined workforce system that 
        improves outcomes through standardized performance 
        requirements, integrated service delivery, and stronger 
        evaluation requirements. However, it did not include provisions 
        to allow DOL to further streamline, standardize, and more 
        accurately capture the outcome information essential to these 
        goals. The Departments of Labor and Education plan to take all 
        steps they are able to through the proposed rules implementing 
        WIOA, to further improve and standardize reporting data in the 
        workforce system and support WIOA's goals. While the proposed 
        WIOA regulations make significant progress in encouraging 
        States to make better use of their own UI data for these 
        purposes, using data compiled at the Federal level would 
        improve our understanding of employment outcomes. For example, 
        it would streamline access to cross-State data (so that we can 
        understand the employment outcomes for individuals who move 
        across State lines after completing a program), and make it 
        easier for the Departments of Labor and Education to conduct 
        their own evaluations of WIOA programs without placing 
        additional burdens on States. For these reasons, , the Budget 
        proposes to eliminate the ban on developing a national database 
        of personally identifiable information for WIOA participants.
  --Enable Efficient Access to Wage Data. The Department will continue 
        to identify ways to streamline access to earnings data that are 
        already transmitted to other Federal agencies by the Department 
        of Labor's State Workforce and Unemployment Insurance programs 
        and partners. Consistent with bipartisan Congressional 
        proposals, the fiscal year 2016 Budget would allow the 
        Department's Bureau of Labor Statistics, the Chief Evaluation 
        Office, and other select Federal statistical and evaluation 
        units to access the National Directory of New Hires (NDNH) for 
        statistical purposes including program evaluation. The 
        Department has established secure IT platforms for exchanging 
        and maintaining quarterly earnings and NDNH data, using the 
        latest encryption and security technology to protect privacy. 
        With a streamlined process for obtaining these data, we can 
        greatly improve the quality and efficiency of evaluations by 
        avoiding costs that currently must be incurred to obtain the 
        same data from individual States or from more expensive 
        surveys.
  --Improve the production of Federal Economic Outlook statistics. 
        Federal economic statistics can be improved by using business 
        tax data along with other administrative data. The fiscal year 
        2016 Budget would provide the Bureau of Labor Statistics with 
        access to limited tax data through the Census Bureau. This 
        collaborative cross-agency exchange of administrative data 
        would reduce costs and improve the accuracy of key economic 
        reports.

    Address resource and capacity constraints by:

  --Improving UI Data Infrastructure. The Department will continue the 
        expansive efforts to modernize the Nation's UI systems by 
        providing States with special funds to upgrade their data 
        infrastructure. As part of the Department's broader UI reform 
        package, the fiscal year 2016 Budget would require States 
        receiving Federal funds for UI modernization to allow the 
        Department broader use of earnings records they already provide 
        to the Census Bureau for the Longitudinal Employer Household 
        Dynamics program. The Department also requests $5 million to 
        conduct a feasibility study and pilot various approaches to 
        modernize and potentially streamline the way data for O*NET4 
        are collected. The Department would identify and test ways to 
        achieve more complete and up-to-date coverage of occupations 
        and skills, particularly for high-growth, changing industries.
  --Develop State capacity to use workforce data. Data linkages can 
        help State and local leaders identify effective pathways 
        through education and training services that lead to success in 
        the workforce, and can provide individuals with information 
        that helps them make smart choices about their education and 
        careers. The Department requests $37 million under the 
        Workforce Data Quality Initiative to help States build 
        integrated data systems to streamline WIOA performance 
        reporting; support States' efforts to create wage data matching 
        infrastructure to streamline wage data access requests; and 
        help high-achieving States fully implement their integrated 
        data systems.
  --Expanding capacity to conduct Data Analytics. The Department will 
        continue the data analytics work underway, allowing the 
        Departmental analytics unit to collaborate with other 
        Department agencies on programmatic and performance analysis 
        and data structures. The fiscal year 2016 Budget also would 
        establish an OSHA-specific Data Analytics Unit to support more 
        in-depth analysis of the extensive administrative data on the 
        performance and effectiveness of OSHA programs, including 
        business consultation and outreach and whistleblower 
        activities.

    Address policy and legal interpretation constraints by:

  --Supporting Cross-Agency Data Access at both the State and Federal 
        level. The Department will continue to work closely with other 
        Federal agencies to improve the exchange of administrative data 
        for evaluation and performance purposes. To address this, the 
        fiscal year 2016 Budget supports 5 FTE for program evaluation 
        in the Chief Evaluation Office to carry out some critical 
        cross-agency activities related to improving access to 
        administrative data, particularly requirements included in 
        WIOA. These staff will operate in collaboration with staff at 
        the Department of Education on shared workforce and training 
        data issues. This joint Federal data team will serve as the 
        central point of contact for stakeholders including States, 
        programs, and researchers and evaluators. The Team will work to 
        resolve and provide technical assistance on issues related to 
        data access (including FERPA and UI confidentiality), 
        collection, and use for workforce and training programs.
                       state paid leave programs
    Question. Mr. Secretary, I am very pleased with McDonald's recent 
announcement to raise wages and offer new benefits to 90,000 employees 
in 1,500 outlets in the United States. Starting July 1st, part and 
full-time McDonalds's employees will earn paid sick leave and at least 
$1 over the local legal minimum wage in restaurants that are under 
corporate control. I understand that many States and large employers 
have enacted or expressed interest in paid sick leave systems for 
workers as a result of our successful labor campaigns and competitive 
pressures in the job market. I am also pleased that several Republicans 
supported my Federal paid sick leave amendment that was included in 
Senate budget, demonstrating that this is no longer a partisan issue. 
Your budget includes a proposal for $2.2 billion in mandatory funds to 
assist States that wish to launch paid leave programs, following the 
example of California, New Jersey and Rhode Island. The budget also 
includes $35 million in discretionary funding to provide technical 
assistance to States that are still building the infrastructure to 
launch programs in the future.
    What are we learning from the State programs that have been 
implemented?
    Answer. Currently only three States (California, New Jersey and 
Rhode Island) have implemented paid leave programs. All three States 
fund their programs through employee-paid payroll taxes and are 
administered through their respective disability insurance programs. 
Studies of these programs demonstrate that paid leave policies can 
benefit businesses and workers. Paid leave programs can benefit 
businesses by providing an affordable way for employers to support and 
retain workers without creating significant new administrative burdens. 
For example, 10 years after California's law came into effect, the vast 
majority of employers reported positive effects or no effect in terms 
of productivity, profitably, retention, and morale.\1\ Additionally, 
research shows that with paid leave, more people, particularly low-
income parents, who may have taken no leave or dropped out of the work 
force after the birth of their child, are able to take time off. This 
effect can positively impact female labor force participation. In 
addition, paid leave can positively impact mothers' wages and 
employment in the long-run by encouraging them to return to their prior 
job, according to both cross-national studies \2\ and also studies of 
States like California that have enacted paid family leave policies.\3\
---------------------------------------------------------------------------
    \1\ Bartel, A., Baum, C., Rossin-Slater, M., Ruhm, C., Waldfogel, 
J. (2014). ``California's Paid Leave Law: Lessons from the First 
Decade.'' U.S. Department of Labor. Retrieved from: http://www.dol.gov/
asp/evaluation/completed-studies/California_Paid_Family_Leave_Law/
FINAL_REPORT_california_paid_family_leave_law.pdf.
    \2\ Jane Waldfogel, ``Understanding the `Family Gap' in Pay for 
Women with Children,'' Journal of Economic Perspectives, Vol. 12, No. 1 
(Winter, 1998), pp. 137-156 (http://www.jstor.org/stable/2646943) & 
``The Family Gap for Young Women in the United States and Britain: Can 
Maternity Leave Make a Difference?'' Journal of Labor Economics, Vol. 
16, No. 3 (July 1998), pp. 505-545 (http://www.jstor.org/stable/
10.1086/209897).
    \3\ Maya Rossin-Slater, Christopher J. Ruhm and Jane Waldfogel, 
``The Effects of California's Paid Family Leave Program on Mothers' 
Leave Taking and Subsequent Labor Market Outcomes,'' Journal of Policy 
Analysis and Management, Vol. 32, No. 2, pp. 224-245 (2013) (http://
www.ncbi.nlm.nih.gov/pmc/articles/PMC3701456/).
---------------------------------------------------------------------------
    In fiscal year 2014, the DOL's Women's Bureau awarded $500,000 in 
grants to Massachusetts, Montana, Rhode Island, and the District of 
Columbia to support feasibility studies to support the development or 
implementation of paid family and medical leave programs. We hope to 
have additional findings from these feasibility studies by fall of 
2015.
    Question. Which States and employers have adopted or expressed 
interest in setting up paid leave systems and how is Department 
currently supporting these efforts?
    Answer. A number of States, such as Ohio, Virginia and Illinois, 
offer paid parental leave for State employees; while a number of 
cities, including Washington, D.C.; St. Paul and Brooklyn Park, 
Minnesota; St. Petersburg, Florida; Chicago, Illinois; and Austin, 
Texas, offer these benefits for their municipal employees.
    The Department is engaging with local elected officials, 
businesses, and others to share policy and implementation successes. In 
addition, the Department has been using the Internet and social media 
to foster conversation around the topic. For one project, DOL invited 
the public, both workers and employers, to share stories about how 
access to paid leave--or lack thereof--has affected their lives or 
their business. Employers spoke about how important paid leave was to 
building a successful business, in part because it helps recruit and 
retain high quality staff.
    The Department is also investing in research and analysis that will 
help State and local policy makers design the best possible paid leave 
programs. Furthermore, DOL's Women's Bureau will use an additional $1 
million in existing funds in fiscal year 2015 to support a second round 
of paid leave analysis grants to help States and municipalities conduct 
feasibility studies.
    Question. Which States would be eligible to receive funding under 
your fiscal year 2016 budget proposals?
    Answer. All States will be eligible to receive funding under the 
proposed $35 million State Paid Leave Fund, which is discretionary 
funding. States that need to lay the groundwork for implementation of a 
paid leave program will be able to apply for pre-implementation 
planning grants. States that are ready to implement a program and 
States that have existing programs that want to expand them will be 
eligible to apply for implementation grants.
    Not all of the criteria have been established for participation in 
the $2.2 billion Paid Leave Partnership Initiative. States that are 
best positioned to begin ramping up a program, including those that 
have legislation enacted or close to enactment, are likely to be more 
competitive.
                                 ______
                                 
                Questions Submitted by Senator Jack Reed
                             wioa provision
    Question. The Workforce Innovation and Opportunity Act included new 
provisions to strengthen the collaboration between public libraries and 
the workforce investment system. Specifically, the Act includes public 
libraries as an allowable one-stop partner, calls for the use of 
technology to expand the access to one-stop services, and places new 
emphasis in the development of digital literacy skills as defined in 
the Museum and Library Services Act.
    How is the Department working with public libraries to implement 
these provisions?
    Answer. The Departments of Labor and Education, along with the 
Institute for Museum and Library Services, published and disseminated a 
statement highlighting the role of libraries in the workforce system. 
Both agencies also joined the American Library Association for a 
discussion with public libraries about WIOA, its main provisions, and 
opportunities for collaboration. Partnership with libraries, using 
technology to expand access to services, and digital literacy are also 
addressed in the Department's Notice of Proposed Rulemaking. Prior to 
WIOA, many States and local workforce areas collaborated with public 
libraries, and the Department will continue to encourage these 
important partnerships.
                   increasing job corps participation
    Question. The Department has restored some of the ``On Board 
Strength'' for Job Corps Centers after the across-the-board reductions 
were implemented to address funding shortfalls.
    What additional actions is the Department taking or planning to 
take to maximize the number of students who have the opportunity to 
participate in Job Corps?
    Answer. Job Corps enrollment has increased from just over 35,000 at 
the end of Program Year 2013 to 36,420 as of March 31, 2015 (the end of 
the third quarter of Program Year 2014). The current maximum enrollment 
for the program is 38,194. This increased enrollment during the past 
program year is a result of Job Corps' efforts to strengthen 
recruitment processes, such as responding to new potential student 
inquiries more rapidly; updating and improving its informational 
products; and tapping into and enhancing online inquiries and responses 
for potential students.
    Program Year 2015 begins on July 1, 2015. In Program Year 2015, Job 
Corps will be opening and fully enrolling centers in New Hampshire and 
Wyoming, with 300 student slots in each of these centers. With these 
openings, Job Corps will be serving students in all 50 States, the 
District of Columbia, and Puerto Rico.
    Job Corps is an open entrance, open exit program whereby students 
begin or graduate on a weekly basis. As such, the enrollment of the 
program changes regularly, though our goal is always to maintain an 
enrollment as close to the maximum that we can afford based upon our 
appropriation.
    Question. How will the budget request to boost operations funding 
support increasing the number of students served?
    Answer. The fiscal year 2016 President's budget request for Job 
Corps Operations would maintain the current number of student slots (or 
OBS) at 38,194. While the Department did request an increase in funds, 
the additional funding would be focused on implementing WIOA; 
modernizing curricula; upgrading equipment to meet industry standards; 
refining training to provide skills and credentials that are in high-
demand by employers; and adopting innovative and promising models that 
could produce better outcomes of younger youth, aged 16 to 19. Our goal 
remains to serve the maximum number students we can within our 
appropriated budget.
       report on implementation of layoff prevention act of 2012
    Question. When does the Department expect to publish its 
statutorily required report to Congress on the implementation of the 
Layoff Prevention Act of 2012, which was passed as part of the Middle 
Class Tax Relief and Job Creation Act of 2012?
    Answer. The Department is planning to meet the required report due 
date of February 22, 2016 (4 years after the date of enactment of the 
Middle Class Tax Relief and Job Creation Act of 2012).
    Question. What lessons do you expect the report to show?
    Answer. We expect the report to show the different factors that 
affect employers' decisions on whether to apply to participate in the 
STC program. We are collecting employer information about their 
experiences, awareness, and perceptions of the STC process. We also 
plan to report on promising variations in State implementation of the 
STC program, including automation of the STC employer application and 
other processes, including the use of innovative approaches to increase 
the take-up and awareness of the program by employers.
                                 ______
                                 
             Questions Submitted by Senator Jeanne Shaheen
       construction of manchester, new hampshire job corps center
    Question. For contract award number DOLJ131A22029, for the 
construction of a new Job Corps Center in Manchester, NH, how many 
workers (for both the prime contractor and subcontractors) were paid 
under the ``heavy'' wage determination, for how many hours of labor 
were they paid under that rate, for which trades, and for what period 
of time?
    Answer. DOL understands that approximately 75 employees for 
approximately 3,900 hours were paid under the heavy wage determination 
from June 1, 2013 through April 16, 2015. Due to procurement 
sensitivities and confidentiality concerns, DOL is limited in the 
information it can provide.
    Question. Did any subcontractors working under contract award 
number DOLJ131A22029 besides American Excavating and Continental Paving 
pay wages according to the ``heavy'' wage determination schedule?
    Answer. DOL understands that there were several subcontractors paid 
under the heavy wage determination schedule.
    Question. Were any electricians (journeyman or apprentice) working 
under contract award number DOLJ131A22029 paid less than the ``building 
rate'' and, if so, how many and for how many hours did they work at a 
rate other than ``building''?
    Answer. DOL understands that all electricians were paid at least 
the building rate or higher. All subcontractor-certified payrolls were 
reviewed by the Wage and Hour Division when determining which employers 
to investigate. There was one electrical contractor who warranted 
further investigation because the rates paid could have possibly been 
less than the Building wage determination rate for electricians. The 
investigation found the wages paid plus the fringe benefits provided 
were greater than or equal to the requirements of the building wage 
determination.
funding for student slots at manchester, new hampshire job corps center
    Question. The Department's fiscal year 2016 Congressional Budget 
Justification (CBJ) indicates that in PY 2016 it intends to operate 
38,194 Job Corps Center student slots. This is the same number of slots 
as is targeted in PY 2014 and PY 2015, despite the opening of the 
Manchester and Wind River Job Corps Centers in PY 2015, which have a 
combined capacity of 600 slots. Including the 180 slots made available 
by the closure of the Treasure Lake Job Corps Center, it appears that 
at least 210, or 70 percent, of Manchester's slots are unfunded in PY 
2015 and PY 2016.
    Are there sufficient funds to serve 300 youth at the Manchester Job 
Corps Center in either PY 2015 or PY 2016?
    Answer. Yes, there are sufficient funds to serve 300 youth at the 
Manchester Job Corps Center. Although students were not on center for 
the majority of PY 2014, resources were used from the Job Corps 
Operations account to prepare the new centers for opening. This 
includes costs such as purchasing student training equipment; 
recruitment, hiring, and training costs for new staff; student 
recruitment costs; and other start-up costs. All of the resources that 
were used for this purpose will be available for center operations.
    Question. If so, how are these funds being made available to 
Manchester given the static number of student slots across PY 2014, PY 
2015, and PY 2016?
    Answer. The fiscal year 2016 President's budget request of Job 
Corps Operations will support a total slot number of 38,194 and the 
costs of operating the Manchester Job Corps Center as well as the new 
WY Job Corps Center. The Department does not plan to add additional 
student slots in order to fill the available slots at the two new 
centers. Instead, slots will be reallocated from existing centers. The 
Department will continue to efficiently manage the number of students 
at each center in line with the overall number of student slots and 
within our appropriation.

                          SUBCOMMITTEE RECESS

    Senator Blunt. The subcommittee will stand in recess until 
10:00 a.m. on Thursday, April 16.
    Secretary Perez. Thank you, Mr. Chairman. Thanks, Senator 
Murray.
    [Whereupon, at 11:43 a.m., Thursday, March 26, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]