    [House Hearing, 116 Congress]
    [From the U.S. Government Publishing Office]

                     EXAMINING THE POLICIES AND PRIORITIES
                           OF THE LABOR DEPARTMENT'S
                             APPRENTICESHIP PROGRAM

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

                                    HEARING

                                   BEFORE THE

           SUBCOMMITTEE ON HIGHER EDUCATION AND WORKFORCE INVESTMENT

                             COMMITTEE ON EDUCATION
                                   AND LABOR
                         U.S. HOUSE OF REPRESENTATIVES

                         ONE HUNDRED SIXTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

               HEARING HELD IN WASHINGTON, DC, NOVEMBER 20, 2019

                                   __________

                               Serial No. 116-46

                                   __________

          Printed for the use of the Committee on Education and Labor

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

               Available via the World Wide Web: www.govinfo.gov
                                       or
                  Committee address: https://edlabor.house.gov

                                   __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    39-489 PDF                 WASHINGTON : 2021

    -----------------------------------------------------------------------------------

                        COMMITTEE ON EDUCATION AND LABOR

                 ROBERT C. ``BOBBY'' SCOTT, Virginia, Chairman

    Susan A. Davis, California           Virginia Foxx, North Carolina,
    Raul M. Grijalva, Arizona            Ranking Member
    Joe Courtney, Connecticut            David P. Roe, Tennessee
    Marcia L. Fudge, Ohio                Glenn Thompson, Pennsylvania
    Gregorio Kilili Camacho Sablan,      Tim Walberg, Michigan
      Northern Mariana Islands           Brett Guthrie, Kentucky
    Frederica S. Wilson, Florida         Bradley Byrne, Alabama
    Suzanne Bonamici, Oregon             Glenn Grothman, Wisconsin
    Mark Takano, California              Elise M. Stefanik, New York
    Alma S. Adams, North Carolina        Rick W. Allen, Georgia
    Mark DeSaulnier, California          Lloyd Smucker, Pennsylvania
    Donald Norcross, New Jersey          Jim Banks, Indiana
    Pramila Jayapal, Washington          Mark Walker, North Carolina
    Joseph D. Morelle, New York          James Comer, Kentucky
    Susan Wild, Pennsylvania             Ben Cline, Virginia
    Josh Harder, California              Russ Fulcher, Idaho
    Lucy McBath, Georgia                 Van Taylor, Texas
    Kim Schrier, Washington              Steve Watkins, Kansas
    Lauren Underwood, Illinois           Ron Wright, Texas
    Jahana Hayes, Connecticut            Daniel Meuser, Pennsylvania
    Donna E. Shalala, Florida            Dusty Johnson, South Dakota
    Andy Levin, Michigan*                Fred Keller, Pennsylvania
    Ilhan Omar, Minnesota                Gregory F. Murphy, North Carolina
    David J. Trone, Maryland
    Haley M. Stevens, Michigan
    Susie Lee, Nevada
    Lori Trahan, Massachusetts
    Joaquin Castro, Texas
    * Vice-Chair

                       Veronique Pluviose, Staff Director
                     Brandon Renz, Minority Staff Director

                                     ------

           SUBCOMMITTEE ON HIGHER EDUCATION AND WORKFORCE INVESTMENT

                     SUSAN A. DAVIS, California, Chairwoman

    Joe Courtney, Connecticut            Lloyd Smucker, Pennsylvania,
    Mark Takano, California                Ranking Member
    Pramila Jayapal, Washington          Brett Guthrie, Kentucky
    Josh Harder, California              Glenn Grothman, Wisconsin
    Andy Levin, Michigan                 Elise Stefanik, New York
    Ilhan Omar, Minnesota                Jim Banks, Indiana
    David Trone, Maryland                Mark Walker, North Carolina
    Susie Lee, Nevada                    James Comer, Kentucky
    Lori Trahan, Massachusetts           Ben Cline, Virginia
    Joaquin Castro, Texas                Russ Fulcher, Idaho
    Raul M. Grijalva, Arizona            Steve C. Watkins, Jr., Kansas
    Gregorio Kilili Camacho Sablan,      Dan Meuser, Pennsylvania
      Northern Mariana Islands           Gregory F. Murphy, North Carolina
    Suzanne Bonamici, Oregon
    Alma S. Adams, North Carolina
    Donald Norcross, New Jersey

                               C O N T E N T S

                                  ----------
                                                                       Page

    Hearing held on November 20, 2019................................     1

    Statement of Members:
        Davis, Hon. Susan A., Chairwoman, Subcommittee on Higher
          Education and Workforce Investment.........................     1
            Prepared statement of....................................     4
        Smucker, Hon. Lloyd, Ranking Member, Subcommittee on Higher
          Education and Workforce Investment.........................     5
            Prepared statement of....................................     6

    Statement of Witnesses:
        Pallasch, Mr. John,..........................................     8
            Prepared statement of....................................    10

    Additional Submissions:
        Jayapal, Hon. Pramila, a Representative in Congress from the
          State of Washington:
            Letter dated August 26, 2019 from the Attorney General of
              Washington.............................................    48
            Letter dated November 18, 2019 from the Western Governors
              Association............................................    54
        Norcross, Hon. Donald, a Representative in Congress from the
          State of New Jersey:
            Letter from Victor Rodeia................................    63
            Letter from Steven Vellegas..............................    64
            Letter from Brent Brockley...............................    65
            Letter from Dennis Smith.................................    66
            Letter from Joshua Sherrard..............................    67
            Letter from Benjamin Stilson.............................    69
            Letter from Christian Gailardo...........................    70
            Letter from Larry Gibertson..............................    72
            Letter from Wesley Anderson..............................    74
            Letter from Raymond A. Smith III.........................    75
            Letter from Jarett Dziarkowski...........................    77
        Questions submitted for the record by:
            Chairwoman Davis.........................................    83
            Fulcher, Hon. Russ, a Representative in Congress from the
              State of Idaho.........................................    89
            Foxx, Hon. Virginia, a Representative in Congress from
              the State of North Carolina............................    87
            Harder, Hon. Josh, a Representative in Congress from the
              State of California....................................    86
            Levin, Hon. Andy, a Representative in Congress from the
              State of Minnesota.....................................    86
            Norcross, Hon. Donald, a Representative in Congress from
              the State of New Jersey................................    85
            Scott, Hon. Robert C. ``Bobby'', a Representative in
              Congress from the State of Virginia....................    79
            Stefanik, Hon. Elise M., a Representative in Congress
              from the State of New York.............................    88
            Trone, Hon. David, a Representative in Congress from the
              State of Maryland......................................    87
        Mr. Pallasch response to questions submitted for the record..    90

                     EXAMINING THE POLICIES AND PRIORITIES
                OF THE LABOR DEPARTMENT'S APPRENTICESHIP PROGRAM

                                  ----------

                          Wednesday, November 20, 2019

                           House of Representatives,

           Subcommittee on Higher Education and Workforce Investment,

                        Committee on Education and Labor

                                Washington, D.C.

                                  ----------

        The subcommittee met, pursuant to call, at 1:05 p.m., in
    Room 2175, Rayburn House Office Building. Hon. Susan A. Davis
    (Chairwoman of the committee) presiding.
        Present: Representatives Davis, Takano, Jayapal, Harder,
    Levin, Trone, Bonamici, Adams, Norcross, Smucker, Guthrie,
    Grothman, Walker, Comer, Watkins, and Murphy.
        Also Present: Representatives Scott, Foxx, Hayes, and Wild.
        Staff Present: Christian Haines, General Counsel -; Eli
    Hovland, Staff Assistant; Stephanie Lalle, Deputy
    Communications Director; Andre Lindsay, Staff Assistant; Jaria
    Martin, Clerk/Special Assistant to the Staff Director; Katie
    McClelland, Professional Staff; Kevin McDermott, Senior Labor
    Policy Advisor; Richard Miller, Director of Labor Policy; Max
    Moore, Office Aide; Janice Nsor, Oversight Counsel; Udochi
    Onwubiko, Labor Policy Counsel; Veronique Pluviose, Staff
    Director; Jonathan Walter, Labor Policy Fellow; Joshua Weisz,
    Communications Director; Cyrus Artz, Minority Parliamentarian;
    Courtney Butcher, Minority Director of Member Services and
    Coalitions; Dean Johnson, Minority Staff Assistant; Amy Raaf
    Jones, Minority Director of Education and Human Resources
    Policy; Audra McGeorge, Minority Communications Director; Jake
    Middlebrooks, Minority Professional Staff Member; Carlton
    Norwood, Minority Press Secretary; Chance Russell, Minority
    Legislative Assistant; and Mandy Schaumburg, Minority Chief
    Counsel and Deputy Director of Education Policy.
        Chairwoman Davis. Good afternoon. The Committee on
    Education and Labor will come to order and I welcome everybody.
    I note that a quorum is present. The committee is meeting today
    for an oversight hearing on the policies and priorities of the
    Labor Department's apprenticeship program.
        Pursuant to Committee Rule 7(c) opening statements are
    limited to the Chair and the Ranking Member, and this allows us
    to hear from our witnesses or from our witness sooner and
    provides all members with adequate time to ask questions.
        I recognize myself now for the purpose of making an opening
    statement.
        Today, we will examine the Department of Labor's policies
    and actions regarding our Nation's apprenticeship system. I
    want to welcome Assistant Secretary Pallasch to the committee.
    Thank you for being with us today, sir.
        The national apprenticeship system is, simply put, our
    Nation's most successful job training program. First authorized
    by the 1937 National Apprenticeship Act, Registered
    Apprenticeships provide hundreds of thousands of workers each
    year with access to paid, on-the-job learning opportunities in
    high-demand fields. These programs place workers in
    apprenticeships that offer wages that increase as apprentices
    build their skills and competencies. It offers nationally
    portable and stackable credentials that are widely recognized
    and valued by employers and offers advancement in a rewarding
    career path. In fact, according to the most DOL data, and I
    would say also cited in our witness' prepared statement, 94
    percent of apprentices in Registered Apprenticeship programs
    successfully retain employment with an average starting salary
    of roughly 70,000 annually.
        At the same time, these programs help employers address the
    skills gap by building a pipeline of productive and talented
    workers who are more likely to remain at their jobs long term.
    The Registered Apprenticeship system has experienced tremendous
    growth with more than 600,000 new apprentices since 2017,
    showing that employers trust the strong quality standards that
    have made the Registered Apprenticeship system the gold
    standard in workforce training. Clearly, we should be building
    on the nationwide and bipartisan support for the Registered
    Apprenticeship, a system that has the public's trust.
        Unfortunately, under this administration, the Department of
    Labor is instead disregarding its core responsibility to
    support Registered Apprenticeships while irresponsibly moving
    forward on creating a separate and untested new program known
    as Industry-Recognized Apprenticeship Programs, or what has
    been referred to as IRAPs. The National Apprenticeship Act
    makes clear that the Labor Secretary alone has the authority to
    set quality standards for apprenticeship programs that
    safeguard the welfare of apprentices. And the act further
    requires the Secretary to cooperate with state apprenticeship
    agencies in doing so.
        Yet the IRAP model, which has been developed with little
    input from states, employers, or the public, actually
    eliminates the Secretary's responsibility to protect the
    welfare of apprentices through quality standards and
    safeguards. And IRAPs leave the 27 states and territories with
    their own apprenticeship agencies vulnerable to having multiple
    apprenticeship standards within their boundaries. And as a
    result, the apprenticeship may be subject to one set of
    standards for Registered Apprenticeship programs within a
    state, but also numerous different standards set by third
    parties, all under the name of apprenticeship.
        The Department has claimed that this new I-RAP system will
    not harm Registered Apprenticeships. On several occasions, the
    Department assured Congress that IRAPs would not divert funding
    away from Registered Apprenticeships to promote IRAPs. However,
    when the committee sought to clarify details, the Department
    provided inconsistent and contradictory answers.
        And then just recently, the Department admitted to taking
    at least $1.1 million that Congress specifically appropriated
    for high-quality Registered Apprenticeship programs to fund
    IRAPs. Press reports suggest that amount could actually be far
    higher, and we are looking to the Department for transparency
    that is long overdue. I am disappointed that the Department
    repeatedly misled this committee about its misuse of RA funds
    for IRAPs, Registered Apprenticeship funds. However, I am
    hopeful that the DOL Inspector General, who is investigating
    these discrepancies, will determine whether the Department
    violated the law by funding a program without appropriations
    from Congress.
        What we do know is that the reallocation of resources from
    the Registered Apprenticeship program has left state
    apprenticeship offices across the country without state
    directors. In fact, 6 out of the DOL's 25 offices of
    Apprenticeship in states across the country had no leadership
    for most of the past year, including in Alabama, Tennessee,
    Nevada, Oklahoma, Idaho, and Texas. Vacancies within the
    federal Office of Apprenticeship have also prohibited crucial
    operations, like streamlining the registration process and even
    ensuring implementation of nondiscrimination apprenticeship
    regulations.
        Despite all the resources expended to start this new I-RAP
    model, DOL itself admits that there is not one I-RAP currently
    in existence and has cancelled any guidance to describe what an
    IRAP might be. As I have said, the Registered Apprenticeship
    system has the potential, the great potential, to provide
    hundreds of thousands, if not millions, of Americans access to
    high-quality pathways that lead to the middle class and beyond.
    Yet to do so, the Department must fulfill its responsibility
    outlined in the National Apprenticeship Act to protect workers
    and provide high-quality apprenticeship opportunities that can
    empower them with the skills and credentials needed to be
    competitive in today's economy.
        Mr. Pallasch, before I close, I also wanted to acknowledge
    that this committee has been asking for more clarity on the
    Department's actions all year. But despite requests made in
    letters this February, hearings in May, more letters in June,
    briefings in August, September, and October, your agency waited
    until 9:30 last night to provide documentation responding to
    some, but not all, of our outstanding questions. And I would
    add an additional letter this morning. These actions show a
    lack of cooperation with Congress and a lack of transparency on
    the part of the department. And from my experience, this type
    of behavior typically means there is something to hide. These
    actions also show a lack of respect for this committee from the
    department and the Employment and Training Administration.
        So I hope this hearing will bring to light the many missing
    details of the department's actions, including the details that
    are still missing from the information provided to our
    committee last night. I hope that today's discussions will help
    both the Department of Labor and this committee refocus on what
    should be our common goal: strengthening the quality and
    variety of Registered Apprenticeship opportunities for all
    Americans.
        I now yield to Mr. Smucker for his opening statement. We
    are still looking for--we will be introducing you in just a
    moment, sir. Thank you. Mr. Smucker.
        [The statement of Chairwoman Davis follows:]

    Prepared Statement of Hon. Susan A. Davis, Chairwoman, Subcommittee on
                   Higher Education and Workforce Investment

        Today, we will examine the Department of Labor's policies and
    actions regarding our nation's apprenticeship system.
        I want to welcome Assistant Secretary Pallasch to the Committee.
    Thank you for being with us today.
        The national apprenticeship system is, simply put, our nation's
    most successful job training program. First authorized by the 1937
    National Apprenticeship Act, Registered Apprenticeships provide
    hundreds of thousands of workers each year with access to paid, on-the-
    job learning opportunities in high-demand fields. These programs place
    workers in apprenticeships that offer:
        * Wages that increase as apprentices build their skills and
    competencies;
        * Nationally portable and stackable credentials that are widely
    recognized and valued by employers; and,
        * Advancement in a rewarding career path.
        In fact, according to the most recent DOL data, 94 percent of
    apprentices in Registered Apprenticeship programs successfully retain
    employment, with an average starting salary of roughly $70,000
    annually.
        At the same time, these programs help employers address the skills
    gap by building a pipeline of productive and talented workers who are
    more likely to remain at their jobs long-term.
        The Registered Apprenticeship system has experienced tremendous
    growth, with more than 600,0000 new apprentices since 2017, showing
    that employers trust the strong quality standards that have made the
    Registered Apprenticeship system the gold-standard in workforce
    training.
        Clearly, we should be building on the nationwide and bipartisan
    support for the Registered Apprenticeship, a system that has the
    public's trust.
        Unfortunately, under this Administration, the Department of Labor
    is instead disregarding its core responsibility to support Registered
    Apprenticeships, while irresponsibly moving forward on creating a
    separate and untested new program, known as Industry-Recognized
    Apprenticeship Programs, or I-RAPs.
        The National Apprenticeship Act makes clear that the Labor
    Secretary, alone, has the authority to set quality standards for
    apprenticeship programs that safeguard the welfare of apprentices. The
    Act further requires the Secretary to cooperate with state
    apprenticeship agencies in doing so.
        Yet, the I-RAP model, which has been developed with little input
    from states, employers, or the public, eliminates the Secretary's
    responsibility to protect the welfare of apprentices through quality
    standards and safeguards.
        And I-RAPs leave the 27 states and territories with their own
    apprenticeship agencies vulnerable to having multiple apprenticeship
    standards within their boundaries. As a result, an apprenticeship may
    be subject to one set of standards for Registered Apprenticeship
    Programs within a state, but also numerous different standards set by
    third parties - all under the name of apprenticeship.
        The Department has claimed that this new I-RAP system will not harm
    Registered Apprenticeships. On several occasions, the Department
    assured Congress that I-RAPs would not divert funding away from
    Registered Apprenticeships to promote I-RAPs. However, when the
    Committee sought to clarify details, the Department provided
    inconsistent and contradictory answers.
        Then, just recently, the Department admitted to taking at least
    $1.1 million dollars that Congress specifically appropriated for high-
    quality Registered Apprenticeship programs to fund I-RAPs. Press
    reports suggest that amount could actually be far higher, and we are
    looking to the Department for transparency that is long overdue. I am
    disappointed that the Department repeatedly misled this Committee about
    its misuse of RA funds for I- RAPs.
        However, I am hopeful that the DOL Inspector General, who is
    investigating these discrepancies, will determine whether the
    Department violated the law by funding a program without appropriations
    from Congress.
        What we do know is that the reallocation of resources from the
    Registered Apprenticeship program has left state apprenticeships
    offices across the country without State directors. In fact, six out of
    DOL's 25 offices of Apprenticeship in states across the country had no
    leadership for much of the past year, including Alabama, Tennessee,
    Nevada, Oklahoma, Idaho, and Texas.
        Vacancies within the federal Office of Apprenticeship have also
    prohibited crucial operations, like streamlining the registration
    process and even ensuring implementation of non-discrimination
    apprenticeship regulations.
        And despite all the resources expended to start this new I-RAP
    model, DOL itself admits there is not one I-RAP currently in existence
    and has canceled any guidance to describe what an I-RAP might be.
        As I have said, the Registered Apprenticeship system has the
    potential to provide hundreds of thousands--if not millions--of
    Americans access high-quality pathways that lead to the middle class
    and beyond.
        Yet, to do so, the Department must fulfill its responsibility--
    outlined in the National Apprenticeship Act--to protect workers and
    provide high-quality apprenticeship opportunities that can empower them
    with the skills and credentials needed to be competitive in today's
    economy.
        Mr. Pallasch, before I close, I also want to acknowledge that this
    Committee has been asking for more clarity on the Department's actions
    all year. But despite requests made in letters this February, hearings
    in May, more letters in June, and briefings in August, September and
    October, your agency waited until 9:30 last night to provide
    documentation responding to some, but not all, of our outstanding
    questions. These actions show a lack of cooperation with Congress and a
    lack transparency on the part of the Department, and from my
    experience, this type of behavior typically means there is something to
    hide. These actions also show a lack of respect for this Committee from
    the Department and the Employment and Training Administration.
        I hope this hearing will bring to light the many missing details of
    the Department's actions, including the details that are still missing
    from the information provided to our Committee last night. I hope that
    today's discussions will help both the Department of Labor and this
    Committee refocus on what should be our common goal: strengthening the
    quality and variety of Registered Apprenticeship opportunities for all
    Americans.
        I now yield to the Ranking Member, Mr. Smucker, for his opening
    statement.
                                     ______

        Mr. Smucker. I would like to thank the Chair for yielding.
    Secretary Pallasch, good to see you. I believe we just spent
    some time together at one of the state prisons in Chester near
    my district in Pennsylvania. I appreciated you being part of
    what really was quite an amazing event there, talking about
    what we can do to ensure that those who are incarcerated, when
    they leave the prisons, have the skills to enter the workforce.
    And so you were a significant part of that event and I
    appreciate it, and it is good to see you here again.
        On the heels of National Apprenticeship Week, today we will
    hear from the Secretary from the Labor Department on their
    apprenticeship programs, which I think we agree can help to
    energize the U.S. workforce. By supporting apprenticeships and
    other earn-as-you-learn programs, we can help change the too
    often held misconception that a baccalaureate degree is the
    only pathway to a successful life.
        Thanks to some of the pro-growth policies that have been
    ushered in by Republican leadership in Congress and the White
    House, our economy is booming. Unemployment is at historic
    lows. And, in fact, we now have 7 million jobs that remain
    unfilled across the country. Apprenticeships offer one of the
    strongest solutions to closing this skills gap and
    strengthening the American workforce.
        Nothing can prepare a student quite like on-the-job
    experience and apprenticeships are a tried and true method to
    help students enter the workforce with the skills they need to
    succeed and to achieve their own American dream. In fact,
    according to the Department of Labor, 94 percent of apprentices
    retain employment after completing their apprenticeship program
    and the average starting salary after completion is around
    $70,000.
        Regrettably, a 2018 survey of U.S. employers showed that
    nearly half of all job creators struggle to hire employees with
    the right skills for the job and for the sixth year running
    skilled trade jobs continue to be the hardest position to fill
    all over the world really. Registered apprenticeships are one
    tool that we can use to strengthen the workforce, but it is
    important to give recognition to increasingly innovative and
    growing employer-led apprenticeship programs. Employer-led
    apprenticeship programs account for more than 80 percent of all
    apprenticeship programs nationwide.
        Employers know best what skills their employees need to
    excel in the workplace, and Congress should encourage employer-
    led innovation in the apprenticeship space. That is why I
    certainly support efforts to cut the regulatory red tape that
    prevents so many employers from revolutionizing the way that we
    integrate the education system with the workforce development
    system.
        We recently had a bipartisan roundtable in regards to
    apprenticeship and heard from employers about the need to be
    able to respond quickly and bring employees up to speed quickly
    and the flexibility that is required for them to be able to do
    that effectively.
        So I would like to thank the Trump administration, the Task
    Force on Apprenticeship Expansion, which was created to address
    this very issue. Among other suggestions the final report of
    the task force recommended reducing the regulatory burden faced
    by businesses, allowing them to be flexible in the program
    requirements to meet the varying needs of different industries.
    So I applaud you and the Trump administration for this
    commendable effort to close our widening skills gap with
    commonsense solutions.
        I also do look forward to pursuing a productive dialogue
    today about apprenticeships and taking time to address recent
    reports of misappropriated funds. I want to first and foremost
    go on the record that Congress must ensure that hard-earned
    taxpayer dollars are used efficiently and effectively. So I
    look forward to hearing from the Department today about the
    steps that they have taken to conduct a thorough review of its
    accounts.
        I know that we would all like to be reassured that the
    Department has been able to correct any issues discovered in
    that review so that they will not be repeated. But I hope that
    this committee can also take on its responsibility to work
    towards solutions that will increase access to career-changing
    opportunities. Workforce programs like apprenticeships will aid
    in closing the skills gaps and putting more Americans to work.
        So I look forward to hearing from today's witness and
    learning more about the innovative ways that we can help
    provide students with skills-based education and in-demand jobs
    through apprenticeship programs. Thank you, Madam Chair.
        [The statement of Mr. Smucker follows:]

    Prepared Statement of Hon. Lloyd Smucker, Ranking Member, Subcommittee
                  on Higher Education and Workforce Investment

        On the heels of National Apprenticeship week, today we will hear
    from the Labor Department on their apprenticeship programs, which can
    help energize the U.S. workforce. By supporting apprenticeships and
    other earn as you learn programs, we can help change the misconception
    that a baccalaureate degree is the only pathway to a successful life.
        Thanks to pro-growth policies ushered in by Republican leadership
    in Congress and the White House, our economy is booming and
    unemployment is at historic lows. However, more than seven million jobs
    remain unfilled across the country.
        Apprenticeships offer one of the strongest solutions to closing
    this skills gap and strengthening the American workforce. Nothing can
    prepare a student quite like on-the-job experience, and apprenticeships
    are a tried-and-true method to help students enter the workforce with
    the skills they need to succeed and achieve the American Dream. In
    fact, according to the Department of Labor, 94 percent of apprentices
    retain employment after completing an apprenticeship program and the
    average starting salary after completion is $70,000.
        Regrettably, a 2018 survey of U.S. employers showed that nearly
    half of all job creators struggle to hire employees with the right
    skills for the job, and for the sixth year running, skilled trade jobs
    continue to be the hardest positions to fill all over the world.
    Registered apprenticeships are one tool we can use to strengthen the
    workforce, but it's important to give recognition to increasingly
    innovative and growing employer-led apprenticeship programs. Employer-
    led apprenticeship programs account for more than 80 percent of all
    apprenticeship programs nationwide.
        Employers know what skills their employees need to excel in the
    workplace, and Congress should encourage employer-led innovation in the
    apprenticeship space. That's why I support efforts to cut the
    regulatory red tape that prevents so many employers from
    revolutionizing the way we integrate the education system with the
    workforce development system.
        Thanks to the Trump administration, the Task Force on
    Apprenticeship Expansion was created to address this very issue. Among
    other suggestions, the final report of the task force recommended
    reducing the regulatory burden faced by businesses, allowing them to be
    flexible in their program requirements to meet the varying needs of
    different industries. I applaud the Trump Administration for this
    commendable effort to close our widening skills gap with commonsense
    solutions.
        Instead of pursuing a productive dialogue today about
    apprenticeship programs, many of my Democratic colleagues will spend
    their time talking about recent reports of misappropriated funds. I
    want to first and foremost go on the record that Congress must ensure
    that hard-earned taxpayer dollars are used efficiently and effectively.
    I look forward to hearing from the Department about the steps they have
    taken to conduct a thorough review of its accounts. I know that we
    would all like to be reassured that the Department has been able to
    correct the issues discovered in that review so that they will not be
    repeated.
        This committee has a responsibility to work towards solutions that
    will increase access to career-changing opportunities. Workforce
    programs like apprenticeships will aid in closing the skills gap and
    putting more Americans to work. I look forward to hearing from today's
    witness and learning more about the innovative ways that we can help
    provide students with skills-based education and in-demand jobs through
    apprenticeship programs.
                                     ______

        Chairwoman Davis. Thank you, Mr. Smucker. Without
    objection, all other members who wish to insert written
    statements into the record may do so by submitting them to the
    Committee Clerk electronically in Microsoft Word format by 5
    p.m. on December 4, 2019.
        I will now go on to introduce our witness. I wanted to
    check, Mr. Guthrie, did you want to--
        Mr. Guthrie. Thanks. I just welcome Assistant Secretary
    Pallasch here. He worked in Kentucky and appreciating all the
    good effort that he did in Kentucky. And I appreciate being
    here to hear his testimony and ask questions today, so thank
    you.
        Chairwoman Davis. Thank you very much. And I will just
    formally, Assistant Secretary John Pallasch is responsible for
    overseeing the policies and priorities of the Employment and
    Training Administration, which administers federal government
    job training and worker dislocation programs, including the
    Office of Apprenticeship, federal grants to states for public
    employment service programs, and unemployment insurance
    benefits.
        And I want to administer the oath to him pursuant to
    Committee Rule 7(d). The witness will please stand and raise
    your right hand.
        [Witness sworn.]
        Chairwoman Davis. Let the record show that the witness
    answered in the affirmative.
        Assistant Secretary Pallasch, we appreciate your being here
    today and look forward to your testimony. I wanted to just
    remind you that we have read your written statement and it will
    appear in full in the hearing record.
        Pursuant to Committee Rule 7(d) and committee practice you
    are asked to limit your oral presentation to a 5-minute summary
    of your written statement. Before you begin your testimony,
    please remember to press the button on the microphone in front
    of you so that it will turn on and the members can hear you.
        As you begin to speak the light in front of you will turn
    green and after 4 minutes the light will turn yellow to signal
    that you have 1-minute remaining. When the light turns red,
    your 5 minutes have expired and we ask that you please wrap up.
        We will let Mr. Pallasch provide his testimony before we
    move to member questions. And when answering a question please
    remember, again, to turn your microphone on.
        I now recognize Assistant Secretary Pallasch. Welcome.

    TESTIMONY OF JOHN PALLASCH, ASSISTANT SECRETARY FOR EMPLOYMENT
          AND TRAINING, UNITED STATES DEPARTMENT OF LABOR[NJ1]

        Mr. Pallasch. Chairwoman Davis, Ranking Member Smucker,
    Chair Scott, members of the subcommittee, thank you for the
    invitation to testify today. As the Assistant Secretary of the
    Employment and Training Administration, I'm keenly aware of
    both the challenges we face and the promise our agency has to
    help grow America's workforce. Successfully helping people find
    a job is only possible because of the strong economy created by
    this administration's focus on removing barriers to opportunity
    for all Americans.
        Since January 2017, more than 6 million jobs have been
    added to the economy. The unemployment rate has remained at or
    below 4 percent for 20 straight months. The African American
    and Hispanic unemployment rate have reached historic lows. The
    unemployment for adult women has hit its lowest rate since
    1953. And the unemployment rate for those without a high school
    diploma has also fallen to historic lows. And in a remarkable
    achievement, for 19 months there have been more job openings in
    the United States than there are job seekers, a testament to
    this administration's pro-growth agenda.
        The mission of ETA is to contribute to the more efficient
    functioning of the U.S. labor market by providing high-quality
    workforce development, labor market information, income
    maintenance services, primarily through state and local
    workforce development systems. As with many of the programs at
    ETA, our mission in apprenticeships is to help develop the next
    generation of worker skills.
        Around the world and especially in Europe, apprenticeships
    serve as a strong foundation of the economy. In Austria,
    Germany, and Switzerland, for instance, 55 to 70 percent of
    young people begin their career with an apprenticeship. In
    contrast, apprenticeships make up only a third of a percent of
    the overall workforce in America.
        There are several ways that our agency is aggressively
    working towards expanding apprenticeships. We've invested in
    states, industry partners, and intermediaries to help fuel
    historic growth in apprenticeships.
        This year the department also launched efforts to expand
    apprenticeship pathways to equip workers with the skills needed
    for our--the next generation economy by committing $100 million
    for our Closing the Skills Gap grant opportunity. We emphasize
    skill-building because, as Ranking Member Smucker mentioned,
    after the completion of a registered apprenticeship, the
    average starting salary is $70,000 and 94 percent of
    apprentices will retain employment.
        These investments are paying dividends. Since January 2017,
    we've added more than 650,000 new apprentices. In FY '18 alone,
    we added an all-time high of 238,000 new apprentices, only to
    be surpassed in 2019, with more than 250,000 new apprentices
    added, including more than 80,000 in the last quarter alone,
    both record highs.
        This administration's commitment to growing the
    apprenticeship model cannot be disputed. As I conclude my
    testimony, I want to emphasize the important work being done by
    ETA and the importance of carrying out this mission in a way
    that is faithful to the American taxpayer.
        Shortly after arriving at the Department, I was made aware
    of a possible misapplication of training and employment
    services, or TES, appropriated funds. TES funds are
    appropriated to expand opportunities related to the Registered
    Apprenticeship Program. Upon my arrival on July 23rd of this
    year, it was brought to my attention that between mid-2018 and
    early 2019, TES funds may have been expended to directly
    support activities related to Industry-Recognized
    Apprenticeship Programs. Immediately upon receiving this
    information, I directed ETA to ascertain the facts and take
    appropriate corrective action.
        ETA, in consultation with career and noncareer staff from
    the Solicitor's Office, the departmental budget center, the
    Office of Apprenticeship, and the ETA front office reviewed the
    work that had been performed under three existing
    apprenticeship contracts. Working closely with a capable team
    from the Office of the Solicitor, the Departmental Budget
    Center, and the Office of Apprenticeship, we ensured that
    expenditures for this work were obligated against the proper
    appropriation accounts. Based on the facts known to us at this
    time, we believe the issue has now been corrected.
        While this particular use of test funds predated my arrival
    at the department, as head of ETA I can assure the members of
    this subcommittee that this is not an issue that I take
    lightly. Following referral requests from both Congress and
    ETA, the Office of the Inspector General's investigating this
    matter. And ETA intends to fully cooperate with the OIG to
    ensure full transparency and identify corrective measures that
    would avoid a similar situation in the future.
        As we move forward, I'm committed to ensuring funding is
    used appropriately at all times to support ETA's programs. As
    the Assistant Secretary of Employment and Training, it is an
    honor to serve the American people alongside the hardworking
    staff at the Department of Labor.
        I look forward to working with Congress to lift up all
    Americans through the dignity of work. Thank you.
        [The statement of Mr. Pallasch follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairwoman Davis. Thank you. Thank you very much.
        Under Committee Rule 8(a) we will now question our witness
    under the 5-minute rule. And as Chair I will ask the first
    question and then yield to the Ranking Member. We will then
    alternate between the parties.
        I want to recognize myself now for 5 minutes.
        Mr. Pallasch, as you know, the department has made clear to
    our committee through congressional testimony and questions for
    the record and responses to letters that the appropriations
    language is clear. Funds appropriated for apprenticeships are
    meant to expand opportunities related to Registered
    Apprenticeships and that DOL was not using funds for I-RAP
    establishment.
        Congressional intent was made even more clear this spring
    when over 20 Republicans joined Democrats in voting down an
    appropriations amendment aimed at opening up apprenticeship
    funding for IRAPs. And yet, we now know that the DOL has
    publicly admitted that they have used at least $1.1 million in
    Registered Apprenticeship funds on IRAPs and the DOL Inspector
    General is now auditing these actions, as you have mentioned.
        I am sure you know that knowingly and willingly making
    false statements or representations to Congress is a violation
    of Title 18. And I would like to state for the record that DOL
    has yet to correct misinformation previously provided to this
    committee, including communications to me in response to
    letters and questions for the record.
        As I mentioned in my opening statement, your agency
    provided our committee late last night documents attempting to
    demonstrate that actions have been fixed--have been taken to
    fix this misuse of funds, but, honestly, I am having difficulty
    believing that these actions have actually been fixed.
        The documents provided to our committee last night admitted
    that there are no IRAPs actually in existence. So I am having a
    hard time understanding how this administration is defining
    apprenticeship generally. Where is the cutoff line between what
    is and is not an apprenticeship? Could you answer that, sir?
        Mr. Pallasch. Yes. Thank you very much for your question,
    Chairwoman Davis.
        As head of ETA, I am tasked with increasing opportunities
    across all of our job-training programs. That includes the
    Registered Apprenticeship Program as well as any of the other
    job-training programs. The IRAP NPRM, the Notice of Proposed
    Rulemaking, intended to increase additional opportunities
    within the apprenticeship scope.
        As we've all discussed here today, the apprenticeship model
    is one that's recognized by all as a successful model. So in an
    attempt to grow opportunities within the apprenticeship space,
    in order to better closely match the performance that we see in
    our European colleagues, we've tried to create a new model.
    We've tried to create a new pathway, if you will, for
    individuals to enter the workforce.
        Chairwoman Davis. Could you--well, I will go on here, but I
    still am not hearing quite where you set that line in terms of
    apprenticeships, but I will go on. Because I am wondering if it
    concerns you that the millions of dollars that are being used
    by the contractors for Registered Apprenticeships results in
    only 41 referrals for programs to become Registered
    Apprenticeships.
        So, you know, the question here is whether DOL is somehow
    now prioritizing IRAPs over Registered Apprenticeships even
    with Registered Apprenticeship funds. What do we know about the
    Office of IRAPs? How is it being staffed? How many people are
    there? And where do potential applicants go? If somebody is
    interested and expressing an interest and wanting to move
    forward, there is a sense here that they could be directed to a
    newly created and apparently fully staffed Office of IRAPs.
    Could you explain that to us?
        Mr. Pallasch. Yes. Chairwoman Davis, I'm not familiar with
    the stat that you referenced, the 41 new Registered
    Apprenticeship programs. Currently, there are 23,000 Registered
    Apprenticeship programs and the Department added 3,000 in 2018
    alone. So we continue to aggressively pursue Registered
    Apprenticeships.
        I've worked very closely with the head of the Office of
    Apprenticeship to further streamline and increase the awareness
    of the Registered program. We have taken a number of steps in
    order to release the--reduce the burdens on employers who are
    looking to establish Registered Apprenticeship programs. So our
    commitment to that is very clear.
        With regards to the IRAP office that you mentioned, within
    the Office of Apprenticeship there is a division of Industry-
    Recognized Apprenticeship Program. There are a handful of staff
    in that office who work somewhat on the IRAP Program, but also
    on the Registered program, as well. Obviously, as we're in an
    active Notice and Comment Rulemaking, there are individuals who
    need to be working through the comments that we receive, so
    that's the majority of what that office is currently doing, is
    working on that NPRM with the hopes of publishing a final rule
    in the very near future.
        Chairwoman Davis. Do you have confidence? Because I think
    you mentioned that you really don't have any idea how all this
    happened. And I am just wondering do you think that there are
    clear lines now that you are going to be able to distinguish
    between how those funds are appropriately used?
        Mr. Pallasch. Yes, I think the lines are very clear. I have
    made those lines known to our staff. We have made those lines
    known to our contractor. There's a very clear distinction
    between what I referred to in my opening statement as the TES
    funds, the Training and Employment Services funds--
        Chairwoman Davis. We will look--
        Mr. Pallasch. I'm sorry?
        Chairwoman Davis. I am sorry. My time is running out, so I
    just wanted to clarify that I would look forward to your
    responses by the end of the next week to the questions that we
    have already asked. That would be helpful. And just be sure
    that we know that the standards that are being set are clear
    and that are being utilized.
        The whole idea, of course, of the National Apprenticeship
    Act is to be sure that we are protecting the welfare of
    apprentices. And is that something that you have a clear
    understanding of?
        Mr. Pallasch. Yes.
        Chairwoman Davis. Okay. Thank you very much. I appreciate
    your responses and want to go on to the Ranking Member. And in
    this case Mr. Comer is going to be first. Thank you.
        Mr. Comer. Thank you, Madam Chairman, and good to have a
    fellow Kentuckian here today. You mentioned in your opening
    statement that 55 to 70 percent of European countries take
    advantage of apprenticeships in the first step of their
    careers. Here in the U.S. that figure is much, much lower than
    that. It seems to me that for whatever reason there is a stigma
    in the United States attached with apprenticeships versus going
    to the old route of going to get a regular 4-year bachelor's
    degree in a regional university. What benefits do you see from
    youth apprenticeship programs that help them add value, you
    know, in the workplace versus a regular 4-year bachelor's
    degree?
        Mr. Pallasch. I believe that there is huge value in both
    youth apprenticeships or pre-apprenticeships and in the
    apprenticeship model in general. In the FY 2019 spending plan
    for the Office of the--or Office of Apprenticeship we've
    committed $42-1/2 million to just that, to explore and expand
    youth apprenticeships across the country. We've been very
    aggressive with the Registered Apprenticeship Program.
        You indicated that there was a stigma, that there is a
    misconception about the Registered program. Most folks think of
    it very much as a construction-only program. Construction does
    represent about 65 percent of the Registered program, but
    there's an additional 35 percent in other industries. And what
    we are working with the Office of Apprenticeship to do is to
    identify those states who have expanded outside of the
    construction world to see if we can't use those models and
    replicate them across the country.
        Mr. Comer. What can we do to change the minds of parents
    and some educators that apprenticeships is a better path for I
    would say most young Americans? Any time I go to a school or
    talk to parents or talk to different groups, you know, I tell
    the story that I am sure the majority of those of us in
    Congress hear from our employers every day is that their
    biggest challenge in business today is finding workers. They
    can grow their business, they can invest and make--invest
    additional capital, which is what we want to grow the economy.
    But the one thing holding them back more than anything is the
    hardship of finding skilled, qualified workers.
        But when you talk to students about their futures and you
    say, well, you know, you can go to college and you can get a 4-
    year degree and have a lot of student loan debt and you may or
    may not have a lot of value in that degree when you graduate
    versus you can go and do apprenticeships and get certifications
    and you can, you know, through a lot of communities get through
    with little to no debt and you have immediate quality job
    offers.
        What can we do to change the stigma to help parents realize
    that this is, in many cases, a better opportunity to go the
    apprenticeship route and the certification route versus a
    regular traditional 4-year degree?
        Mr. Pallasch. I appreciate your question because that's one
    of the largest challenges we have at the Department of Labor is
    trying to create, as I referenced earlier, this idea of
    multiple pathways, that there are any number of pathways that
    an individual can follow into the workforce, whether that's an
    apprenticeship model, whether that's a 2-year degree, whether
    that's a certificate program, whether that's a 4-year degree.
    That's very much going to be based on the individual and the
    resources and the skills that they have, but we need to make
    sure that we are creating those opportunities, so should a high
    school student want to begin a pre-apprenticeship program even
    before graduating high school, we need to help to foster that.
    We need to allow them to pursue that if they've decided for one
    reason or another that a 4-year degree is not in their future
    and not something they're interested in.
        We've got to make sure that they understand the benefits of
    the $70,000 starting salary that we talked about earlier and
    the 94 percent retention rate. And share that with not just
    students, but with their parents to say that there's a viable
    path forward to family-sustaining wages through any number of
    pathways.
        Mr. Comer. Well, I appreciate the work that the Trump
    administration is doing in focusing on this and trying to
    develop more apprenticeships. And really, we in Congress need
    to all work together in a unified voice to educate today's
    parents and school administrators that this is, in many cases,
    a better path to go for the future of those students. So I
    appreciate what you are doing and look forward to working with
    you in the future.
        And, Madam Chair, I yield the balance of my time back.
        Chairwoman Davis. Thank you. Ms. Jayapal.
        Ms. Jayapal. Thank you, Madam Chair. Apprenticeship
    programs are proven to help workers move into skilled middle-
    class jobs and we know that these programs work better than the
    alternative. In my home state of Washington these Registered
    Apprenticeship programs outperform nonunion apprenticeship
    programs across the board, including the inclusion and
    performance of women and people of color. But the Trump
    Department of Labor has proposed hasty and sweeping changes
    that lower the protections in place for these very successful
    apprenticeship programs.
        Mr. Pallasch, the bipartisan Western Governors Association
    issued a formal letter to the DOL in response to this proposal.
    Among many other objections, they expressed concerns that the
    Trump DOL's proposal has, and I quote, ``no strong requirements
    that employers abide by current regulations, including
    apprentice wage progressions and working conditions, program
    length, and equal employment opportunity requirements.''
        In two sentences, how do you respond to the association's
    concerns?
        Mr. Pallasch. Thank you, Representative, for your question.
    Unfortunately, because we're in Notice and Comment Rulemaking,
    I can't respond to specific questions and specific issues
    within the rule. But what I can share with you is a commitment
    that we have to serve and to bring underrepresented populations
    into not just traditional, but nontraditional apprenticeship
    programs, as well.
        Ms. Jayapal. Madam Chair, I seek unanimous consent to enter
    the following reports into the record, both of which express
    similar concerns about the Trump DOL's proposal. That is the
    Western Governors Association comments and the Attorney General
    of Washington comments regarding the apprenticeship programs.
        Chairwoman Davis. So ordered.
        Ms. Jayapal. Thank you. I also have concerns with the fact
    that DOL is not implementing Registered Apprenticeships
    according to the regulations currently in place. Right now
    states create affirmative action plans for their apprenticeship
    programs, programs that DOL must then approve.
        Mr. Pallasch, how many of the 27 state apprenticeship
    agency plans have gotten review from your office and how many
    have been approved?
        Mr. Pallasch. I apologize, I don't have that information
    with me today, but I'm happy to provide that information to
    you.
        Ms. Jayapal. I would appreciate that. It seems like a very
    important thing for the Assistant Secretary of Labor for
    Employment and Training to have.
        It is my understanding that the DOL is understaffing the
    Registered Apprenticeship department, which is in charge of
    ensuring protections for Registered Apprenticeships. Instead,
    your department has diverted resources to work on unregistered,
    nonunion industry apprenticeship programs even though these
    programs are unauthorized and unappropriated for. How many
    staff are dedicated to oversight of the Equal Opportunity
    requirements? And how many staff would be needed to complete
    the reviews that your department is required to perform by the
    end of this year?
        Mr. Pallasch. So the current staffing level,
    Representative, within Office of Apprenticeship is 122. The
    ceiling, the FTE ceiling, for that office is 141. Since I began
    with ETA back in July, I've been very aggressive not just with
    the Office of Apprenticeship, but with all the programs to
    ensure that we are backfilling any and all vacancies. So I can
    assure you, we are working aggressively to fill not only any
    vacancies within Office of Apprenticeship, but across ETA.
        With regards to your specific questions, as I mentioned
    earlier, there is a Division of Industry-Recognized
    Apprenticeship Program within the Office of Apprenticeship,
    which, I believe, has nine staff who part-time are working on
    the I-RAP program, part-time working on the Registered program.
    The rest of the staff within the Office of Apprenticeship are
    dedicated to the Registered Apprenticeship Program.
        Ms. Jayapal. And so the oversight of the Equal Opportunity
    requirements, what is the total number there? You gave me a lot
    of numbers and I am trying to figure out which one answers my
    question.
        Mr. Pallasch. Understood. I don't know that I have a
    specific staff breakdown for the EEO requirements, but I can
    certainly get that for you.
        Ms. Jayapal. Okay. And in terms of the oversight of the
    entire Registered Apprenticeship Program how many staff are
    dedicated to those activities?
        Mr. Pallasch. Again, so if we work under our current
    onboard strength of 121 and we remove out partial staff from
    the Division of Industry-Recognized Apprenticeship Program,
    somewhere around 112, 115 would be dedicated specifically to
    the Registered program.
        Ms. Jayapal. And what exactly are you doing to conduct
    oversight of the entire Registered Apprenticeship system?
        Mr. Pallasch. So within the Office of Apprenticeship, as
    you may know, at the state level there's both Office of
    Apprenticeship Registered programs and then there are what are
    called state apprenticeship agency programs. So in roughly half
    the states around the country ETA has a state director, an
    Office of Apprenticeship state director, who's responsible for
    the Registered program within that state; responsible for
    working with employers; standing up programs; working on
    competency frameworks. And the other half of the country,
    that's handled by the state through the state apprenticeship
    agency.
        Ms. Jayapal. Okay. I just want to get in one question. I
    only have 5 seconds. Will you commit to providing to me and
    this committee in the next week a detailed explanation and plan
    for how your department will comply with its responsibilities
    to conduct oversight of the Registered Apprenticeship system,
    including prompt review of all affirmative action plans?
        Mr. Pallasch. I can commit that we will work with you on
    this issue. This appears to be of great importance to you, so I
    commit to working with you on that, yes.
        Ms. Jayapal. So within a week you will provide me with
    updated information and we can begin that conversation?
        Mr. Pallasch. It wouldn't be fair for me to--I don't know
    the time that it will take us to pull that information
    together, but I certainly will work with you and your staff.
        Ms. Jayapal. Thank you, Mr. Pallasch. Yield back.
        Chairwoman Davis. Mr. Guthrie.
        Mr. Guthrie. Thank you very much. Hey, it is great to have
    you here. It is great to have you here in Washington. I know
    you did, as I said before, a good job back home as executive
    director of Kentucky's Department of Labor and appreciate your
    public service.
        And I will start with like every day hardworking Americans
    search for good-paying jobs. Many Americans find a pathway to
    good-paying jobs through apprenticeship programs that provide
    real earn-and-learn opportunities that often turn into careers.
    For workers, apprenticeships are a chance to learn technical
    skills alongside seasoned industry professionals.
        That is why I helped introduce, along with many members of
    this committee, several members of this committee, the Partners
    Act, which will allow small and medium-sized businesses to join
    together to support apprenticeship programs. I am also
    currently working on a bill to create a Registered
    Apprenticeship Program to help address the shortage of
    educators across the country.
        So the questions for you, Mr. Secretary, we know that
    apprenticeships work for students and employers. Therefore, I
    strongly believe Congress must find ways to best facilitate the
    apprenticeship system. During your time serving as executive
    director of Kentucky's Department of Labor's Office of
    Employment and Training, what feedback did you receive from
    employers participating in the Registered Apprenticeship
    system? And how are you using that information to improve
    apprenticeships broadly speaking?
        Mr. Pallasch. Thank you very much for your question,
    Representative Guthrie. Two of the major complaints that I
    heard while in Kentucky was the burden, the paperwork burden in
    the application process itself. And then the other issue that
    was consistently raised with me was the idea of how do we
    transition from a time-based model to a competency-based model
    within the apprenticeship program?
        Traditionally, the Registered Apprenticeship application
    was around 65 pages. Since coming to Washington, working with
    the Office of Apprenticeship we've reduced that down to 12
    pages, so a 70 percent reduction in the size of the
    application.
        With regards to the transition from time-based competency
    to a--I'm sorry, from time-based models to a competency-based
    model we've reduced that time from around 90 days down to 14.
    What we were learning was that if an individual wanted to
    change a registered program from time-based to competency-
    based, they would essentially have to go back to the beginning
    and start over. And what we've done is we've created a fast
    track that allows them to more easily do that. So that just
    creates more apprenticeable occupations that are available for
    any employer to take advantage of.
        Mr. Guthrie. Okay. Thank you very much. And also, I know we
    are looking at criminal justice reform and it is important that
    when people have the opportunity to leave the justice system
    that they have opportunities before them. And so I know in your
    testimony you mentioned that the department is committed to
    supporting second chances for those transitioning back into
    society from the criminal justice system. I believe it is
    important to support collaboration among state leaders to
    create smooth transitions for these individuals, and Kentucky
    has already begun these efforts.
        Given your experiences, what have been the most successful
    methods for ensuring that these individuals are able to
    reintegrate into the workforce in their communities? And what
    can Congress do to support these efforts?
        Mr. Pallasch. So one of the things that we were able to do
    in Kentucky was working with the warden of the North Point
    Prison in Lexington, and he allowed us, as the Employment and
    Training Administration, to come in and provide training, job
    training, workforce training to the inmates while in the
    prison. This is an issue, as Ranking Member Smucker mentioned,
    we discussed with the folks up at the Chester State
    Correctional Facility earlier this month.
        Seeing how we can help get folks from either the
    Pennsylvania workforce system or the local workforce system
    into the prisons to begin working with the incarcerated
    population while they're still in prison. So being as proactive
    as we can rather than waiting for them to achieve reentry, can
    we not work with them while they're incarcerated? So that to me
    is one way that we can be far more proactive and far more
    effective is if we're able to get in and work with the inmates
    in their facilities.
        Mr. Guthrie. How can Congress help with that?
        Mr. Pallasch. So there's--
        Mr. Guthrie. There is a lot of at state. There is a lot at
    state prisons, but there are Federal prisons, as well.
        Mr. Pallasch. Yeah. So it's a little bit trickier with the
    state and the Federal split. As you may know, with state
    prisons most of the inmates are somewhat local, whereas Federal
    prisons you may be coming from another state, you may be coming
    from the other side of the country. But with the state prisons
    it's very much usually local individuals, so there's a local
    tie to that community. And that local workforce board has a
    vested interest in making sure that those individuals, when
    they come out and reenter that local community, are prepared to
    work.
        So as with most of the workforce system, I think this is
    very much a local issue and a local-driven issue of how can
    local workforce boards and state workforce boards work with
    state Offices of Correction to ensure that there's a linkage
    between workforce training and inmates while in prison.
        Mr. Guthrie. Okay, thank you. My time just expired, so I
    appreciate your answers and appreciate you being here. I yield
    back.
        Chairwoman Davis. Thank you. Ms. Bonamici.
        Ms. Bonamici. Thank you, Chairwoman Davis and Ranking
    Member Smucker, and thank you to our witness for being here.
    Thank you, also, to Mr. Guthrie for mentioning the Partners
    Act. I have enjoyed working with you on that.
        I have heard from many people across Oregon who have told
    me that Registered Apprenticeships have changed their lives for
    the past several years. I have led more than 100 of my
    colleagues in urging the Appropriations Committee to increase
    Federal investments for these programs. So I am extremely
    concerned about reports showing that the department of Labor
    disregarded congressional intent when spending these dollars.
    And I align myself with the remarks of Chairwoman Davis
    regarding our disappointment with receiving responses late last
    night and early this morning. I still have some questions.
        In a recent call with Committee Staff, the department
    admitted to using $1.1 million of funds appropriated for
    Registered Apprenticeships to support IRAPs. And this was
    confirmed by a Department of Labor spokesperson in a November
    6, 2019, article in Bloomberg Law. Chairwoman Davis, I request
    unanimous consent to enter this article into the record.
        Chairwoman Davis. So ordered.
        Ms. Bonamici. Thank you. This suggests that the department
    knowingly violated the purpose statue which requires that
    agencies apply appropriations only to the purposes for which
    they were made.
        So, Assistant Secretary Pallasch, the department did use
    $1.1 million for IRAPs that was appropriated for Registered
    Apprenticeships, is that correct?
        Mr. Pallasch. Representative Bonamici, what happened was is
    there was a misapplication of that funding. As I mentioned--
        Ms. Bonamici. So I want to reclaim my time and just ask is
    it correct that the department used $1.1 million for IRAPs that
    was appropriated for Registered Apprenticeships?
        Mr. Pallasch. There was $1.1 million in funding misapplied
    to the TES account.
        Ms. Bonamici. And was that amount that was misappropriated
    limited to $1.1 million?
        Mr. Pallasch. Yes.
        Ms. Bonamici. What is the total amount of money that the
    department has spent or obligated to be spent on IRAPs, and
    that includes grants, personnel, funding that was provided by
    incidental benefit? And just to clarify, I am not just talking
    about the $1.1 million that was misused. What is the total
    amount of Department of Labor dollars that have been spent on
    IRAPs?
        Mr. Pallasch. So, Representative, that's a difficult number
    to come up with because of the nature of the program
    administration appropriation. There's broad discretion for
    agency and agency direction to use that PA funding, so it's
    very difficult for us to disaggregate out the I-RAP from that
    program administration account because it serves not only the
    Office of Apprenticeship, but all of the ETA programs.
        Ms. Bonamici. Well, I would submit, Mr. Assistant
    Secretary, that if it is--just because it is difficult doesn't
    mean that you shouldn't do it. And we need to know how much of
    that appropriated funding has gone to IRAPs. It is my
    understanding that there is a separate office to create IRAPs.
    Is the department--with nine staff assigned. Is the department
    tracking all of the costs associated with creating IRAPs?
        Mr. Pallasch. Again, Representative, it's difficult from a
    budgetary standpoint, not from a programmatic standpoint. It's
    difficult from a budgetary standpoint for the department or ETA
    to track spending within the program administration account
    because of the flexible nature of that account.
        Ms. Bonamici. And, again, just because it is difficult
    doesn't mean that it shouldn't be done. And it is my
    understanding that the department has admitted to using PA
    funds to replace the misappropriated money that was spent on
    IRAPs. Of that amount how much of the program administration,
    or PA, funds has the department spent on IRAPs?
        Mr. Pallasch. Again, if you're asking how much of the
    program administration funds was used for the misapplied TES
    account, that's the $1.1 million.
        Ms. Bonamici. I am asking how much the department has spent
    of PA funds on IRAPs.
        Mr. Pallasch. Again, that's a figure that budgetarily we
    just--we can't disaggregate.
        Ms. Bonamici. Has the department accounted for all of the
    appropriated funds that were misused?
        Mr. Pallasch. Yes. To my knowledge, the TES account has
    been made whole.
        Ms. Bonamici. Thank you. I remain concerned about how the
    department has used funding that was appropriated by Congress
    for Registered Apprenticeship programs for IRAPs, and I hope we
    can get some more complete answers from you on the record.
        But there are a few initiatives created by the Obama
    administration and continued under this administration that
    have supported Registered Apprenticeships. For example, the
    Industry and Equity Intermediary Partnership supported more
    than 20,000 Registered Apprentices in Fiscal Year 2019 alone,
    including intermediaries that created new apprenticeship
    programs.
        So does providing funding to intermediaries help scale up
    and expand existing apprenticeship initiatives and increase the
    number of apprentices across the country?
        Mr. Pallasch. Yes. We believe the use of intermediaries not
    only scales up apprentices, but it also helps us with the
    underrepresented populations that I referred to earlier,
    bringing more women into apprenticeships, more underrepresented
    populations.
        Ms. Bonamici. Thank you. We have in Oregon, Oregon
    Tradeswomen which is doing a great job of diversifying the
    workforce. And I just had a roundtable conversation with
    several apprentices and they have very compelling stories.
        So, again, I will be submitting questions for the record to
    see if we can get more detailed answers on the questions that I
    asked. And I yield back the balance of my time.
        Chairwoman Davis. Thank you. Mr. Watkins.
        Mr. Watkins. Thank you, ma'am. Sir, I often hear from
    employers that the most successful workforce development system
    is one that works well with the local education system. Part of
    integrating these systems is encouraging students to be
    lifelong learners and expose them to multiple pathways for
    career success, such as apprenticeship programs. However, we
    must also ensure that there is a better coordination among
    state agencies and the Federal agencies working on all these
    issues in order to accomplish that goal.
        What work does ETA do to help states better coordinate with
    their employment-focused agencies, with their education
    agencies? And what are you doing to work with the U.S.
    Department of Education to help achieve that goal?
        Mr. Pallasch. Thank you, Representatives Watkins. This
    issue was of paramount concern to me while working in Kentucky.
    It was very challenging as the head of the Office of Employment
    and Training to administer a workforce program while I received
    guidance from the Department of Labor that may have been
    inconsistent or even conflicting with guidance that was
    received by my fellow workforce partners from the Department of
    Education.
        So as soon as I arrived in Washington, one of the first
    things that I did was reach out to my colleagues at the
    Department of Education: the assistant secretary who handles
    their K through 12 programs, the assistant secretary who
    handles their adult and career technical ed, and the assistant
    secretary who handles vocational rehab. And I shared with them,
    as well as the assistant secretary at HHS, who handles the TANF
    program, and the assistant secretary at USDA, who handles the
    SNAP E&T, or the SNAP Employment and Training Program. And I
    shared with them that it's imperative that the Federal
    community speak with one voice.
        To your point, if states are going to be able to take
    advantage of the flexibility, if states are going to be able to
    work across programs, then we as a Federal community, as the
    oversight community, need to speak with one voice. And we need
    to empower states and locals to work together in education and
    workforce and vocational rehab and adult education and
    community colleges to create a holistic approach to workforce
    at a local level.
        So that's what I'm trying to facilitate is that cooperation
    amongst the Department of Education, USDA, HHS, and the
    Department of Labor.
        Mr. Watkins. Thank you. Not a day goes by when I don't hear
    about the skills gap between the 7 million unfilled jobs in our
    country. You mentioned in your testimony that the Department
    recently committed $100 million to your Closing the Skills Gap
    grant solicitation. You also mentioned that there were 238,000
    new apprentices in Fiscal Year 2018 alone.
        How would you reconcile this growing number of apprentices
    with a skills gap that seems to be growing? And what reforms do
    we need to make to our workforce development system, including
    apprenticeships, in order to meet this need?
        Mr. Pallasch. Thank you. Yes, in addition to the $100
    million for the Closing the Skills Gap, there was an additional
    $183 million for scaling of apprenticeships. So the department
    has been very committed to trying to close that skills gap
    while, at the same time, continuing to aggressively push the
    Registered program.
        As I mentioned, there's not only 250,000 new apprentices in
    2019, but there's 3,000 new Registered Apprenticeship programs
    in 2018. So the program continues to grow as we are
    simultaneously working to close that skills gap. And that's
    probably the biggest challenge facing the department right now
    is we hear about earn-and-learn and we hear about lifelong
    learning and stackable credentials.
        How is ETA able to facilitate so that state and local
    workforce boards can address the skills gap that exists in
    their local area? They have the labor market information. They
    know where jobs are going in their local communities. How do we
    provide them the support so that they can address those skills
    gaps?
        Mr. Watkins. I want to return to a statistic you mentioned
    that 55 to 70 percent of youth in a number of European
    countries take advantage of apprenticeships as a first step in
    their career. Here in the United States it seems that there's a
    stigma attached to pursuing any route other than a bachelor's
    degree. For some reason we have come to think that anyone who
    does not go down this path is less valuable of a member to
    society. I believe that part of changing that dehumanizing and
    discriminatory mindset is exposing youth to alternative career
    paths early on in life.
        What benefits do you see from programs like youth
    apprenticeships that show these young people the value of other
    forms of workforce development?
        Mr. Pallasch. Thank you. I think that early exposure to a
    pre-apprenticeship program or any type of job skills, job
    training, job education program that allows an individual as
    they're maturing through school and shortly after school to
    identify a career pathway that works for them. That's really
    what we're after.
        As I mentioned, $42 million in the Office of
    Apprenticeship's budget in FY '19 is dedicated to just that:
    youth apprentices. How do we grow those youth apprentices?
        Also within the Office of Apprenticeship we're trying to
    expand the scope of the Registered programs. I mentioned
    earlier that there's a stigma that Registered Apprentices are
    simply construction workers. We know, for example, that--
        Chairwoman Davis. Thank you. Mr. Pallasch, I am sorry, I
    just have to intervene because the gentleman's time is up, but
    we'd like to get back to that. Okay?
        Mr. Pallasch. Thank you.
        Chairwoman Davis. Mr. Norcross.
        Mr. Norcross. Thank you. Appreciate it. Standards count, we
    understand that. And certainly, when we look at the Registered
    Apprenticeship programs, and you have mentioned it several
    times now, people think of the trades which have been around
    for almost 100 years. It is a proven way of educating. And a
    pre-apprentice program in high school is what most people in
    this room absolutely know, it is called shop. They are taught
    firsthand in high school; been doing it since you went to
    school and I went to school. But you talked about that
    successful program and you compared it to the European model,
    and we have looked at that.
        The European model outside of the construction program is
    where they excel. The construction programs in this country are
    equal to any in the world. And, in fact, the Taft-Hartley
    programs in this country are not funded by government virtually
    at all. They are all self-funded. They have graduation rates at
    approximately 90 percent-plus versus those who are non-Taft-
    Hartley, which are less than 40 percent.
        So when we look at graduation rates of apprenticeship
    programs I think it is a great indicator of whether that
    program actually works.
        The point I am trying to make here is the construction
    industry is one that works extremely well, costs the government
    virtually nothing for the Taft-Hartley plans. Why would you
    want to interject a non-Registered program into something that
    works so well? Why wouldn't you exclude those construction
    industries that have worked for close to a hundred years?
        Mr. Pallasch. Representative Norcross, again, I appreciate
    your question. I can't comment specifically on the IRAP rule
    because it's in Notice and Comment Rulemaking.
        Mr. Norcross. I am not asking about the rule. Why would you
    want to change a program that has worked for a hundred years,
    that continues to work today? Forget the rule.
        Mr. Pallasch. So to answer your question, I don't want to
    change the Registered program. I want to enhance the Registered
    program.
        As you indicated, the construction--and as I indicated
    earlier, construction represents 65 percent of the Registered
    program. So how can we grow the Registered program in other
    industries? That's what we're asking.
        Mr. Norcross. That is what I want to hear, outside of the
    industries.
        Mr. Pallasch. Correct.
        Mr. Norcross. Because this is when it works. I spoke to you
    earlier, I went to that other 4-year school. I went to the
    apprenticeship. I have here letters from apprentices and
    journeymen that I would like to enter into the record with
    unanimous consent.
        Chairwoman Davis. So ordered.
        Mr. Norcross. That they are talking about those standards
    and how well they work. So, as you know, the construction
    industry is a transient where the work is. We follow it. You
    don't want somebody on the West Coast teaching one set of
    standards and somebody on the East Coast the other. This is a
    program that works.
        And you know what? When you talk about spending $42
    million, there is--you don't have to spend it in that industry.
        So what I want to leave us with is that the IRAP proposals
    do not follow the model that works, where the apprentices are
    given incremental increases in wages as their skills expand.
    That is something that they love in the industry. They know as
    they come in as a first-year apprentice that second year, as
    their skills improve, their wages will improve. Yet, in the I-
    RAP program, that is not involved in it.
        Why, without commenting on the rule, would you want not the
    apprentices to know what they are going to make over the course
    of their apprenticeship?
        Mr. Pallasch. Representative, there's certain hallmarks
    that we would look for in any apprenticeship program, whether a
    Registered Apprenticeship Program or an un-Registered
    Apprenticeship Program. And at the crux of that is the skill-
    based learning, the credential, the mentoring that exists
    within an apprenticeship program. Again, whether--
        Mr. Norcross. So why wouldn't you include wages?
        Mr. Pallasch. Pardon me?
        Mr. Norcross. Why wouldn't you include wages for those
    years of the apprenticeship? Why are you excluding that? Why
    would you not want them to know that?
        Mr. Pallasch. Again, under advice of our attorneys, I can't
    comment on the rule.
        Mr. Norcross. I am not asking about the IRAP rules. In an
    apprenticeship program, wouldn't you want the apprentices to
    know that with their skills increasing, their wages would
    increase?
        Mr. Pallasch. So that exists within the Registered program
    today.
        Mr. Norcross. So you approve of that and you think that is
    a good idea?
        Mr. Pallasch. As I mentioned earlier, yeah, my
    responsibility is to grow apprentices in any and all models.
        Mr. Norcross. Do you think having wage increases as part of
    those programs is a good idea or a bad idea?
        Mr. Pallasch. I think the Registered model is a good model
    and every--
        Mr. Norcross. Will you answer the question, please, with
    all due respect?
        Mr. Pallasch. I don't think it's appropriate given the
    Notice and Comment Rulemaking for me to weigh in on--
        Mr. Norcross. I was not asking about the rulemaking.
        Also, do you look at graduation rates of programs that say
    they are more successful or less successful? Do you have any
    standard when it comes to graduation rates?
        Mr. Pallasch. Graduation rates form Registered programs?
        Mr. Norcross. Yes.
        Mr. Pallasch. Do we look at the graduation rates?
        Mr. Norcross. Yes.
        Mr. Pallasch. Yes. So some of the measures that we look at
    are successful completion and earning the credential, yes.
        Mr. Norcross. Do you make that information public?
        Mr. Pallasch. Yes.
        Mr. Norcross. So every apprenticeship program reports back
    to you, those 23,000, to let you know what the graduation rates
    are?
        Mr. Pallasch. They--we track the number of credentials
    attained.
        Mr. Norcross. Graduation rates. I defer back.
        Chairwoman Davis. The gentleman's time is up.
        Mr. Norcross. I would like the answer to my question
    submitted to me, graduation rates of the 23,000 programs. I
    yield back.
        Chairwoman Davis. Thank you. Next is Mr. Grothman.
        Mr. Grothman. Thank you. First of all, I think we have an
    obvious problem here in that we don't have enough people
    getting involved in these apprenticeship programs, what I will
    call skills-based education. Part of it is attitude appearance.
    A lot of it, I think, is, quite frankly, bad advice from school
    counselors.
        Do you have any general suggestions--and as a result, we
    have way too many people getting degrees that are not of value
    to them or starting on a path to degrees that aren't going to
    be valuable to them and they drop out. And in addition to
    getting a degree that is not increasing their earning
    potential, a lot--frequently they have a lot of student debt to
    boot.
        What can we do to get around these attitude problems, get
    around sometimes bad advice people are getting from their
    schools?
        Mr. Pallasch. Representative, I thank you for your
    question. As I mentioned earlier, I think the way that I can
    address that or at least start to deal with that issue is by
    working with the Department of Education. Working with our
    elementary and secondary education office that's responsible
    for K through 12 education across the country and making sure
    that they understand the vital role that they play in
    workforce. And when I talk about workforce, I talk about the
    broader workforce, not just ETA's workforce, but the broader
    workforce. And how does the education system play into that?
    How are they preparing students upon graduation to enter the
    workforce?
        Mr. Grothman. Can we specifically talk about salary or wage
    compensation nor number of job openings? Is that something you
    could make available to the public?
        Mr. Pallasch. Absolutely. And we've talked not only about
    the 7.1 million open jobs, but the other number that keeps me
    awake at night are the 34 million Americans who aren't part of
    the labor force.
        Mr. Grothman. Okay.
        Mr. Pallasch. Not just the unemployment rate, but the
    forgotten men and women of the workforce.
        Mr. Grothman. We have also had even people in this
    committee talk about getting a college degree like it is
    somehow superior to getting an apprenticeship. And from what I
    can see, there is a lot more necessity for maintenance people,
    for people in manufacturing. So it kind of offends me when
    people imply like somehow they have accomplished something
    better than apprenticeship. And we have people talk that way
    here.
        Is there anything specific we can do to prevent that
    attitude from spreading, I mean, given that we do have people,
    including congressmen, who kind of talk that way? Can you--do
    you have any other suggestions how we can change the attitude?
        Mr. Pallasch. Again, I think hearings such as this where we
    shine a spotlight on the success of the apprenticeship model
    and what it means. And when we talk about 94 percent retention
    rate and we talk about $70,000 starting salary, those are real-
    world numbers. And that does not include the assumption of any
    debt, so individuals who are entering the workforce through an
    apprenticeship program, $70,000 debt-free. We need to make sure
    that individuals understand that apprenticeship is a viable
    option, that it is one of those multiple pathways that we
    talked about.
        Mr. Grothman. Okay. Right now there is some restrictions to
    employment, age-based restrictions on ability to use certain
    equipment, which maybe delays people entries into these fields.
    Do you have any plans to look into that or see whether some of
    these restrictions are perhaps too extreme and perhaps we could
    get people working in a manufacturing setting at a younger age?
        Mr. Pallasch. I'm not familiar with the specific
    restriction you talk about. I'm not sure if that's at the state
    or the Federal level, but I'm happy to work with you or your
    staff to look into that issue.
        Mr. Grothman. Okay. I yield the remainder of my time.
        Chairwoman Davis. Thank you. Thank you for yielding. Mr.
    Levin.
        Mr. Levin. Thank you, Madam Chairwoman. So, Assistant
    Secretary Pallasch, the data you were referring to, 70 percent
    or 94 percent employed, that is Registered Apprenticeship data,
    right?
        Mr. Pallasch. That's correct.
        Mr. Levin. Seventy thousand dollars a year, Registered
    Apprenticeship data, right?
        Mr. Pallasch. Correct.
        Mr. Levin. Growing fast, Registered Apprenticeships?
        Mr. Pallasch. Correct.
        Mr. Levin. Unbelievable data from the department, huge
    success?
        Mr. Pallasch. Correct.
        Mr. Levin. All right. So let us talk about this other
    enterprise you have going on.
        In a letter to the committee this past July, the department
    stated that IRAPs may receive ``incidental benefit'' from funds
    appropriated solely for Registered Apprenticeships. Will you
    please explain to the committee how the department is
    justifying the use of RA funds on the premise that this is
    permissible if it provides incidental benefit to IRAPs? And
    please explain the Solicitor's role in determining what
    constitutes an incidental benefit.
        Mr. Pallasch. Thank you very much for your question,
    Representative Levin. So this was one of the issues that we
    attempted to address in the letter that we delivered earlier
    today.
        Mr. Levin. Yes, so if you could just quickly explain it in
    simple terms, that is the point of the hearing.
        Mr. Pallasch. Understood. Yes, and the overarching doctrine
    that applies is the necessary expense doctrine that talks about
    any expense that is reasonably related to accomplish the stated
    purpose of the appropriation. Now, within that, there is an
    incidental benefit clause that says if another program were to
    receive an incidental benefit, that would be allowed. In an
    abundance--
        Mr. Levin. So let me just ask you, did the Solicitor's
    Office tell the department, tell ETA, that you can use
    Registered Apprenticeship funds if it can be shown that there
    is incidental benefit to IRAPs?
        Mr. Pallasch. Not to my knowledge.
        Mr. Levin. They didn't do that?
        Mr. Pallasch. Not to my knowledge. So, again, the
    controlling legal--
        Mr. Levin. Well, the information that has been made
    available to the committee says they did precisely that.
        Mr. Pallasch. The controlling legal document is the
    necessary expense rule. Within the necessary expense rule there
    is an incidental benefit that is allowed.
        Mr. Levin. And the Solicitor's Office didn't give you this
    information?
        Mr. Pallasch. Give me--I'm sorry, give me what information?
        Mr. Levin. My question to you is whether the Solicitor's
    Office told the department or ETA that you can use Registered
    Apprenticeship funds if it can be shown that there are
    incidental benefits to IRAPs. It is a simple yes or no
    question.
        Mr. Pallasch. I'm not familiar with that.
        Mr. Levin. Is the administration saying that as long as the
    money promotes both Registered Apprenticeships and IRAPs,
    appropriated funds can be used for IRAPs?
        Mr. Pallasch. When you say ``appropriated funds,'' are you
    talking about TES appropriated funds or PA?
        Mr. Levin. That is the only funds you have, sir, the funds
    we appropriate for your department.
        Mr. Pallasch. We also have program administration funds, or
    PA funds, which would be allowed to be used for both Registered
    and any industry-recognized work program.
        Mr. Levin. So you are saying that the program
    administration funds can be used without limit for IRAPs?
        Mr. Pallasch. It is my understanding that after talking
    with our departmental budget center and the Office of the
    Solicitor and the appropriations attorneys, yes, there's
    broad--
        Mr. Levin. And how much of those program administration
    funds have you used for IRAPs?
        Mr. Pallasch. As I discussed earlier, that's a number that
    we can't disaggregate. We're not able to--
        Mr. Levin. What did you think you would be asked, sir, when
    you came here today?
        Mr. Pallasch. Oh--
        Mr. Levin. What is going on where there has been
    misappropriated funds, where the Secretary repeatedly came here
    and he said he would not use RA funds for IRAPs, and now we
    found out that was not true, and that you have been using our
    appropriated funds for IRAPs? What do you think the topic of
    conversation would be here, sir?
        Mr. Pallasch. We thought that this would be a topic of
    conversation.
        Mr. Levin. And you are not prepared to give us the basic
    data on the funds expended?
        Mr. Pallasch. Again--
        Mr. Levin. I used to work--I used to run a state department
    in Michigan that only used your funds along with some funds
    from other Federal--you know, I ran the workforce system in
    Michigan. And I would not have dared to come to a hearing
    unprepared to explain the expenditure of funds.
        Mr. Pallasch. Again, I'm prepared to explain the
    expenditures of TES, Training and Employment Services, funding
    as that was the subject of the request from Congress.
        Mr. Levin. I am asking you about program administration
    funds right now.
        Mr. Pallasch. Again, program administration funds, as I
    mentioned, there's broad discretion for the agency.
        Mr. Levin. Too complicated, too hard to say how much have
    been used for IRAPs.
        Mr. Pallasch. Yeah, as I'm told by our departmental budget
    center, it's--I don't want to say impossible. It is extremely
    difficult to disaggregate the funding because program
    administration funding is used for all ETA programs.
        Mr. Levin. Right. My time is limited. Under the legal
    theory that apparently was proffered by the Solicitor's Office
    at DOL, would it not be the case that if Federal funds were
    appropriated for women's health, say, that they could also be
    used for abortion services on the grounds that they are
    expanding opportunities to receive services related to women's
    health?
        Mr. Pallasch. I'm--
        Mr. Levin. That would seem logical, wouldn't it?
        Mr. Pallasch. I'm not familiar with the instance you're
    referring to, so I'm not comfortable--
        Mr. Levin. I just told you what the instance is.
        Mr. Pallasch. Again, that's not my area of expertise. I
    wouldn't be comfortable commenting on whether that's an
    appropriate use or not.
        Mr. Levin. All right. Well, sir, my time has expired. I am
    extremely concerned about this department creating a new
    program for which we explicitly told you we are not
    appropriating funds and you are using funds made for--you are
    using funds for programs that you have proudly told us are
    extremely successful, are growing fast, lead to real middle
    class jobs for Americans, on your own unproven theory.
        Chairwoman Davis. Mr. Levin, I'm sorry, your time is up.
        Mr. Levin. Thank you.
        Chairwoman Davis. Thank you.
        Mr. Levin. I yield back.
        Chairwoman Davis. Thank you. Mr. Takano.
        Mr. Takano. Thank you, Chairwoman Davis, for this critical
    hearing on the Department of Labor's improper--improper--
    handling of the Registered Apprenticeship Program and the money
    appropriated by Congress.
        Mr. Pallasch, it is my understanding that DOL allowed a
    contractor to use Registered Apprenticeship funds to create a
    group called Apprenticeship Powered by Industry, known as API.
    Additionally, one of its three stated goals was to ``support
    the establishment of the I-RAP model.'' It is also my
    understanding that this API initiative was also used for
    recruiting and developing potential I-RAP accreditors, or SREs,
    despite DOL telling this committee that they have not convened
    any meetings or working groups on IRAPS.
        My first question to you, was API created with Registered
    Apprenticeship funds? And was it a major part of this
    initiative to support IRAPs?
        Mr. Pallasch. Thank you for your question, Representative.
    Just so we're clear, the committee that you're referring to
    both existed and was disbanded prior to my joining the
    Department of Labor, so I cannot speak definitively to how the
    committee came to be and what their work exactly was.
        Mr. Takano. It is really difficult to hold accountable a
    department that sends this committee people who weren't there
    when these committees were formed or disbanded and they can't
    answer questions. It is very frustrating. Well, so you can't
    answer the question because you weren't there.
        This includes finding programs to become IRAPs and
    organizations also to apply to become SREs. And was this all
    done using Registered Apprenticeship money?
        Mr. Pallasch. Again, Representative, any--
        Mr. Takano. You can't answer the question because you
    weren't there.
        Mr. Pallasch. So any money that was misapplied to the TES
    account, or the Training and Employment Services account, was
    discovered in the contractual review that we discussed earlier
    in the letter I provided. And all of that funding was
    appropriately charged to the program administration account.
        Mr. Takano. Well, let me just ask you the question again.
    Finding programs to become IRAPs and organizations also to
    apply to become SREs, was this done using Registered
    Apprenticeship money?
        Mr. Pallasch. Again, any funds there were misapplied from
    the TES account were appropriately charged against the program
    administration account, and that was done through a working
    group with career and noncareer staff from the Solicitor's
    Office, the departmental budget center, the Office of
    Apprenticeship, and the ETA front office. So that working
    group, a very capable working group, sat down and went
    deliverable by deliverable within those three contracts and
    anything that was attributable to the Industry-Recognized
    Apprenticeship Program was appropriately paid for out of the
    program administration account.
        Mr. Takano. Well, Assistant Secretary Pallasch, are you
    aware that the committee first requested information in
    February regarding the department's handling of apprenticeship
    funding?
        Mr. Pallasch. I am.
        Mr. Takano. Are you also aware that those requests were
    reiterated multiple times in public hearings, letters, and
    staff-level briefings over the last 9 months?
        Mr. Pallasch. I am.
        Mr. Takano. And is it your testimony today that this
    information was not available until 9:30 p.m. last night before
    this hearing?
        Mr. Pallasch. I was--Representative, I was attempting to,
    upon my arrival, to address some of these issues. I believe
    there was three briefings that I attended with Committee--or
    Subcommittee Staff to try to better understand those issues,
    better understand their concerns. And as I mentioned, there was
    an exhaustive review done, that contract review was very
    exhaustive, to ensure that we were identifying the appropriate
    funding amount and the appropriate appropriation to charge
    those funds against. So it was a complex issue.
        Mr. Takano. Well, in fact, the department finally sent a
    partial response to this committee at 9:30 last night. Are you
    aware of any internal policies or practices in which the
    Department of Labor collects information requested by Congress,
    but decides to withhold that information in order to impede
    congressional oversight?
        Mr. Pallasch. No, I am not aware of such a process.
        Mr. Takano. You are not aware of that, okay. Do you agree
    that the department's decision to provide long-requested
    information to the committee roughly 15 hours before this
    hearing makes it harder for the committee to conduct proper
    oversight on behalf of the American taxpayers?
        Mr. Pallasch. It was important for us to deliver the
    requested information as accurately and completely as we could,
    and, unfortunately, that finalized with us delivering that to
    you late last night.
        Mr. Takano. Well, and you already answered, yes, you were
    aware of the many, many times that we have requested this over
    several months. And yet, it is delivered 15 hours before. It is
    the intent of DOL to impede congressional oversight and
    authority?
        Mr. Pallasch. No, it is not.
        Mr. Takano. Well, from where I sit it is increasingly
    evident that the Department of Labor intentionally directed
    funds that Congress intended for the Registered Apprenticeship
    Program towards an untested program called IRAPs after
    explicitly telling Congress the opposite. This is unacceptable,
    Mr. Assistant Secretary.
        Thank you and I yield back.
        Chairwoman Davis. Thank you. Thank you. Your time is up. I
    now turn to the Ranking Member of the committee, Dr. Foxx.
        If it is the wish of the committee, we will go on to Ms.
    Adams at this time.
        Ms. Adams. Thank you, Chairwoman Davis and Ranking Member
    Smucker, for convening the hearing. And thank you, Mr.
    Secretary, for being here. I want to touch on a couple of items
    that my colleagues have addressed already as it relates to the
    Department of Labor's adherence to Federal law.
        As you may know, my home state of North Carolina has a
    state apprenticeship agency. The National Apprenticeship Act
    stipulates that the Department of Labor engage with state
    apprenticeship agencies when formulating and promoting labor
    standards. And given the department's new I-RAP rule implicates
    this law, how and when did you engage with state apprenticeship
    agencies in this formation?
        Mr. Pallasch. Again, Representative Adams, I appreciate
    your question, but the IRAP rule is in open Notice and Comment
    Rulemaking, so I'm unable to comment on the rule itself.
        During that Notice and Comment Rulemaking I would inform
    you that we received over 324,000 comments from states, from
    trade organizations, from business associations, from
    interested members of the public, which is most comments that
    the department--or that ETA has ever received on a rule.
        Ms. Adams. Okay. So you can't--I am not really asking about
    the rule itself, but the formation of the rule. And so the
    department is currently using money to develop IRAPs and has
    staff in an I-RAP office. So these actions and questions are
    within the scope of the committee's investigation of the
    department's misuse of appropriated funds. But you don't have
    any--I mean, I don't want you to comment about the proposed
    rule, but the formation of it.
        Mr. Pallasch. So the formation of the division of the
    Industry-Recognized Apprenticeship Program Office within the
    Office of Apprenticeship was done in consultation with the
    department's Solicitor's Office and the departmental budget
    center. So there were no appropriations issues with the
    creation of that office.
        Ms. Adams. Okay. So it is my understanding that you
    informed the staff from the House and the Senate committees
    that the Department of Labor has taken steps to streamline the
    registration process for Registered Apprenticeships to make it
    easier for employers to participate in the system, but those
    actions have not been implemented because all of the work on
    Registered Apprenticeship are on hold to create the IRAP
    system. It that is not actually the case will you commit that
    this streamlined registration process will be submitted to the
    Office of Management and Budget for official review by the end
    of this month? Can you commit to that?
        Mr. Pallasch. Representative Adams, I want to make sure
    that we're clear. The work on the Registered program not only
    has continued, but has been more aggressive than at any point
    in history. So simply, while we're going through the IRAP
    Notice and Comment Rulemaking, the Registered program is
    continuing to run, it's continuing to operate, we're continuing
    to making improvements to it and make it more efficient.
        Ms. Adams. So what about my question about the end of the
    month? Are you able to submit an official review?
        Mr. Pallasch. What--I'm sorry, I wasn't following?
        Ms. Adams. Well, you--
        Mr. Pallasch. What specifically are you asking us to
    produce?
        Ms. Adams. So you said that--I wanted to know if you could
    make a commitment that the registration process will be
    submitted to the Office of Management and Budget for review by
    the end of the month.
        Mr. Pallasch. Are you talking about--
        Ms. Adams. Have you reviewed it? Have they reviewed it?
        Mr. Pallasch. The streamlined application process for the
    Registered program that I referenced earlier?
        Ms. Adams. Yes. Has it been reviewed?
        Mr. Pallasch. I--
        Ms. Adams. So you can't commit. Okay, well, let me move on.
        One of the few quarrels that I have with our Registered
    Apprenticeships is the lack of diversity, particularly gender
    diversity. And the last figure I saw was that only 8 percent of
    all Registered Apprentices are women. So what is the department
    doing to address this gap?
        Mr. Pallasch. Representative Adams, that's a huge concern
    of mine. I've been working with the Women's Bureau within the
    Department of Labor. I spoke at their Women and Apprenticeship
    event earlier this month. One of the things that we are trying
    very hard to do through our intermediary contracts is improve
    not only diversity, but make sure that underrepresented
    populations are present in Registered Apprenticeship programs
    going forward. So we are very committed to that.
        Ms. Adams. Okay. So you are taking steps to address it?
        Mr. Pallasch. Absolutely.
        Ms. Adams. Okay. Can you specifically say, other than you
    said you made some presentations, what tangible kinds of things
    are you doing?
        Mr. Pallasch. So a number of those organizations, those
    intermediaries that I talked about, are working specifically
    with underrepresented populations. Some are working with women
    in trades. I'm happy to provide a breakdown of each of those
    contracts and the targeted deliverables within those. But those
    contracts very much speak to diversity and growing the
    Registered program.
        Ms. Adams. Well, thank you very much for your responses.
        Chairwoman Davis. Thank you.
        Ms. Adams. My office can probably help you with some of
    that. Thank you very much. I yield back.
        Chairwoman Davis. Thank you. I now turn to the Ranking
    Member, Dr. Foxx.
        Mrs. Foxx. Thank you, Madam Chairman. Mr. Pallasch, I have
    some questions to begin with and I would appreciate it if you
    could answer them as quickly as possible.
        You have said that there were misspent funds on the I-RAP
    program, is that correct?
        Mr. Pallasch. There were misapplied funds, yes.
        Mrs. Foxx. You are asserting today that you believe the
    review conducted to determine the amount of misspent funds was
    thorough and erred on the side of being overly inclusive of any
    funds spent on the program that should not have been, correct?
        Mr. Pallasch. Correct.
        Mrs. Foxx. Are you telling us today that the accounting
    issues with the spending have been addressed?
        Mr. Pallasch. Yes.
        Mrs. Foxx. And that means that any funds paid for out of
    the wrong account have been corrected?
        Mr. Pallasch. That is correct.
        Mrs. Foxx. In fact, I think you said that about four times.
    Mr. Pallasch, given all of this and your testimony, can you
    assure us that we will not see this happen again under your
    watch and that you have put in place the appropriate checks to
    ensure it will not happen again?
        Mr. Pallasch. Representative Foxx, I can. One of the things
    that we did was actually modify all three of the contracts in
    question and share those modifications with the contractors to
    alert them that there were to be no I-RAP deliverables under
    any of those contracts unless additional PA, or program
    administration, funding was added to those contracts. In
    addition, I've asked the department's chief procurement officer
    to take a look at the contract administration and the policies
    and procedures in place to make sure that they're as robust as
    need to be.
        And then, in addition, I've also asked the Inspector
    General in addition to Congress' request that they look into
    the ADA violation, I've asked the Inspector General to look
    into the procedures, the policies, exactly how we got to where
    we are, so that I can assure you that going forward that we
    won't find ourselves in this situation again.
        Mrs. Foxx. Mr. Pallasch, why were IRAPs created? What are
    you doing to address some of those issues in the Registered
    Apprenticeship space? And to be clear, are you sure you are
    properly spending the available Federal funds on these
    activities?
        Mr. Pallasch. So the I-RAP program is an outgrowth of both
    the Task Force on Apprenticeship and the executive order signed
    by the President. And what the department is trying to do is
    through the Notice and Comment Rulemaking with the Notice of
    Proposed Rulemaking is create an additional pathway that would
    allow individuals to enter the apprenticeship model. So that's
    very much what we are focused on with the I-RAP rule.
        Mrs. Foxx. And you said earlier you are making sure the
    money is being spent correctly?
        Mr. Pallasch. Yes.
        Mrs. Foxx. Okay. How many contracts do you currently have
    working on apprenticeships?
        Mr. Pallasch. I believe there are 27 contracts in one
    capacity or another that are working towards apprenticeships.
        Mrs. Foxx. Is any of that work related to IRAPs?
        Mr. Pallasch. Any work that is related to IRAPs will be
    appropriately paid for out of the program administration
    account.
        Mrs. Foxx. Who oversees the accounting of that work and
    ensures the contractor not has to do work that would be
    inconsistent with the funding appropriated?
        Mr. Pallasch. So that's the program office, the Office of
    Apprenticeship, and what's called the contracting officer's
    representative, or the COR.
        Mrs. Foxx. With the backup of the IG, as I understood you
    say earlier?
        Mr. Pallasch. We're asking the IG to look into the policies
    and procedures to make sure that they're as robust as needed.
        Mrs. Foxx. Have you included other safeguards to ensure the
    contractors will spend funds only on allowable expenses moving
    forward?
        Mr. Pallasch. As I mentioned earlier, those contract
    modifications are a very clear message to our contractors that
    there is to be no additional Industry-Recognized Apprenticeship
    Program work on any of those contracts if and until they are
    notified that additional appropriate funding is added to their
    contract.
        Mrs. Foxx. Now, Mr. Pallasch, this hearing is about
    apprenticeships, but while you are here I want to ask about the
    Job Corps program. This is a program that has a noble goal, but
    has fallen woefully short of expectations and hopes. This
    committee has had several hearings on the program, looking at
    implementation and safety of the program. In fact, the DOL IG
    just released its Management Challenges and Job Corps' safety
    was chief among those concerns. There is a lot that needs to be
    done in that program if it is ever going to achieve that noble
    goal.
        My question to you is whether your office is working on
    these issues. And if so, when can you come and brief us on
    these efforts?
        Mr. Pallasch. Yes, we are. One of the primary deputies
    within my office is dedicated entirely to the Job Corps
    program, so he's been on board with the department for over 2-
    1/2 years and been focused solely on Job Corps. And a
    significant amount of his time has been focused on this
    security and safety issue.
        There was a comprehensive safety and security plan that was
    adopted by the department in March of this year. There's been
    any number of security enhancements that have taken place. I
    believe that the funding is around $55 million.
        So we have worked very closely with the IG to address the
    concerns that they have in their Management Challenges Report
    to make sure. They had a report last year that had three
    recommendations. We have closed all three of those
    recommendations with the IG. So we work very closely with the
    IG when they come to us with issues or concerns related to the
    safety of our students.
        Mrs. Foxx. Madam Chairman, I think we are owed about 50
    seconds. I would like to take the remainder of that time to
    give Mr. Pallasch the time to clear the record about any other
    questions you have received today. Are there any answers from
    earlier today that you would like to expand upon at this time?
        Mr. Pallasch. I appreciate that, Chairwoman Foxx. One of
    the complicating issues is this idea of program administration.
    And I understand the frustration from some of the members that
    we're not able to articulate exactly how much money is spent
    under the program administration account. A large part of that
    has to do with the fact that staff, who are funded out of the
    program administration account, do not track their activities
    within that account.
        So we have staff who work on any number of programs, paid
    for out of the program administration account. So if we're
    asked to attribute some percentage of that program
    administration to a specific activity, we simply can't do it
    because that's not the way the time and attendance system
    works.
        So I want to be clear that we have--
        Chairwoman Davis. Thank you, Mr. Pallasch.
        Mr. Pallasch. Thank you.
        Chairwoman Davis. Yeah, thank you.
        Mrs. Foxx. Thank you, Madam Chairman.
        Chairwoman Davis. Mr. Trone.
        Mr. Trone. Thank you, Chairman Davis and Ranking Member
    Foxx, for holding this important hearing.
        Registered Apprenticeships are by far America's most
    successful workforce training program, delivering real results,
    both workers and employers. On a bipartisan basis, Congress has
    consistently provided for the expansion of Registered
    Apprenticeships. Unfortunately, rather than doing that, the
    Trump administration has improperly shifted funding from
    Registered Apprenticeships to start an entirely new program,
    the Trump-initiated, Industry-Recognized Apprenticeship, IRAP,
    Program, and then misled Congress as to what they are doing.
        I am concerned that the DOL isn't sufficiently carrying out
    its statutory requirements to safeguard the welfare of
    apprenticeships within the Registered Apprenticeship system.
    Can you explain why the DOL guidance on apprentice to
    journeyman worker ratios was pulled down in last December of
    last year and has yet to be replaced?
        Mr. Pallasch. So, Representative Trone, I appreciate the
    question. That's one of the issues that I'm working with the
    Office of Apprenticeship on. As I mentioned earlier, there are
    a number of initiatives that I'm working with that office on to
    try to improve the efficiency and the efficacy of the
    Registered program. And that ratio circular is one of those
    specific issues.
        Mr. Trone. One second, let me back up. It is 11 months.
        Mr. Pallasch. Understood. I was not at the department when
    it came down, but shortly after I joined in July, it was
    brought to my attention as something that we needed to address.
        Mr. Trone. Okay. Well, sooner versus later. I would also be
    interested to hear your plans for apprenticeship complaints,
    the complaint form that expires in January. I saw a notice was
    filed in the Federal Register soliciting comments on this form,
    but it is, again, already mid-November. And why is there such a
    delay in starting this process? And I am concerned the
    deadline--given there is about a 60-day comment period, can you
    confirm when that form will be complete and renewed, will it be
    done by January 31, 2020?
        Mr. Pallasch. We are aware of that deadline and we are
    working diligently to meet that deadline.
        Mr. Trone. Okay. We will count on that. Thank you.
        I would like a detailed explanation and plan on how these
    regulations can be fully implemented and approved in the coming
    weeks. And we would like a clear answer on why the guidance was
    pulled down and the complaint form was not addressed in a
    timely manner. If you could put something to committee in
    writing, that would be great. Could you get something back in
    the next week or so?
        Mr. Pallasch. I don't know if I can commit in the next
    week, but I will commit to working with you and your staff to
    get you the answers you need, yes.
        Mr. Trone. The week after Thanksgiving be good?
        Mr. Pallasch. We'll work as quickly as we can.
        Mr. Trone. Excellent. As my colleagues discussed today, the
    Department of Labor is awarded contracts supporting
    apprenticeships, three firms: Meyer & Meyer, Booz Allen,
    Edelman; $32 million. It is the department's position only $1.1
    million of the Registered Apprenticeship funds were expended on
    these contracts to support IRAP. What has been done to support
    the actual Registered Apprenticeships with these millions of
    dollars awarded?
        Mr. Pallasch. So those are three separate contracts. The
    first contract is the Edelman contract, which is an outreach
    contract. There's a campaign that we're working with the
    contractor to develop to promote apprenticeships. As I
    mentioned, we're very interested in growing the apprenticeship
    model, the uptake of the apprenticeship model, so that's--we're
    working very close with Edelman on that.
        Booz Allen Hamilton is responsible for creation of the
    apprenticeship.gov website. We've tried to create a one-stop
    shop for any--whether it's an employee, an employer, a parent,
    a student who's interested in apprenticeships that they can--
        Mr. Trone. I think that is important and I am glad you
    brought up the website because I always look for ways my
    constituents can get a better job. And I have to say that after
    searching that apprenticeship.gov website for Registered
    Apprenticeships in my district, I realized it is not really a
    website to help find Registered Apprenticeships. When I look
    for positions there is 2,526 postings on that site, but only 11
    were for Registered Apprenticeships.
        Can you explain to us how you justify using Registered
    Apprenticeship funds when less than 1 percent of the website's
    posting are for true Registered Apprenticeship positions?
        Mr. Pallasch. So I'm not familiar with the data that you
    refer to there, but I can assure you that in the contract
    review that I referenced earlier, we worked very closely with
    Booz Allen Hamilton to determine which were Registered
    Apprenticeship deliverables and which were IRAP deliverables
    under that very contract. And anything that was misapplied to
    the TES account, or the Training and Employment Services
    account, was appropriately funded out of the PA account.
        Mr. Trone. Well, there were over 100,000 new apprenticeship
    opportunities in Fiscal Year 2018 and I would like if we could,
    get a clear explanation as to why the department is using
    Registered Apprenticeship funds for a website that is clearly
    not being used to promote Registered Apprenticeship
    opportunities. Is that fair?
        Mr. Pallasch. I'm not necessarily understanding what you're
    saying. Again, the contractor, Booz Allen Hamilton, was brought
    on board to create--
        Mr. Trone. Twenty-five hundred jobs.
        Mr. Pallasch. Correct.
        Mr. Trone. Not only--versus 11 about Registered
    Apprenticeships.
        Mr. Pallasch. Again, I'm not familiar with that data. I'm
    happy to look into that issue and get back to you because
    that's something--
        Mr. Trone. If you could look into it and get back the week
    after Thanksgiving, that would be great.
        Chairwoman Davis. Thank you, Mr. Trone. We now turn to the
    Ranking Member for her closing statement. Oh, I am sorry.
    Sorry. Mr. Scott, Chairman of the committee, we now turn to you
    for your distinguished remarks.
        Mr. Scott. Thank you. Mr. Pallasch, you mentioned that
    virtually all of the students in the Registered
    Apprenticeships' 94 percent end up with jobs at $70,000 a year,
    is that right?
        Mr. Pallasch. Yes, that's the average, correct.
        Mr. Scott. Okay. And are there comparable numbers for the
    IRAPs?
        Mr. Pallasch. There is not an IRAP program, so there is no
    data.
        Mr. Scott. So you have no data at all on the IRAPs, okay.
    You indicated that there are 3,000 new apprenticeship programs
    in 2018 alone?
        Mr. Pallasch. That is correct.
        Mr. Scott. Are those Registered Apprenticeships?
        Mr. Pallasch. Correct.
        Mr. Scott. Now, Ms. Adams asked you about the streamlined
    process, the process to streamline the process for registering
    a program under the Registered Apprenticeship programs. Do you
    have proposals in the works to streamline the process for
    Registered Apprenticeship programs?
        Mr. Pallasch. Again, I was not--when Representative Adams
    referenced that, I'm not exactly sure what she's referring to.
    As I mentioned, we've taken some proactive measures within the
    Registered program to streamline the application process and
    reduce the paperwork. That is complete, that is done. The new
    application is up and active. And that showed about a, as I
    mentioned earlier, 70 percent reduction in that paperwork
    burden.
        Mr. Scott. Okay. And did I understand you to say that you
    had figured out a way to fund IRAPs with Department of Labor
    money even though the appropriations said Registered
    Apprenticeship programs only? How are you able to spend
    Department of Labor money anyway on IRAPs?
        Mr. Pallasch. So, again, there's two accounts that are the
    subject of this hearing. The first is the Training and
    Employment Services account, which is specifically appropriated
    to further and enhance the Registered Apprenticeship Program.
        There's also the program administration, or the PA account,
    which the agency has broad discretion to use for any
    directives, any policies as it sees fit. Any of the IRAP
    funding is coming out of that program administration account,
    which is an appropriate use of those funds.
        Mr. Scott. Now, have you been in touch with the Solicitor's
    Office on that to give you guidance on how to use appropriated
    money for IRAPs?
        Mr. Pallasch. Absolutely. The Solicitor's Office, the
    departmental budget center, career and noncareer staff from
    both of those offices have worked with us lockstep in this
    process.
        Mr. Scott. And is that guidance in written form so we can
    see it?
        Mr. Pallasch. I don't know. There was a working group
    created, as I mentioned earlier. I don't know that there was
    written guidance. There was membership on that group from the
    Office of the Solicitor and from the appropriations office
    within the Office of the Solicitor.
        Mr. Scott. Well, can you go look and see if you can find
    written guidance that says you can spend Department of Labor
    money on funding IRAPs?
        Mr. Pallasch. I will look into that issue.
        Mr. Scott. Now, my reading of the IRAP regulations is that
    the National Apprenticeship Act requires the DOL cooperate with
    state agencies engaged in the formulation and promotion of
    standards of apprenticeships. Is that requirement in IRAPs?
        Mr. Pallasch. Again, because the I-RAP rule is in Notice
    and Comment Rulemaking it's inappropriate for me to comment on
    specific elements within that rule.
        Mr. Scott. In the rule, okay. Can you tell me whether or
    not my home state of Virginia has been consulted in the
    development of IRAPs?
        Mr. Pallasch. I cannot tell you here today if Virginia
    submitted comments on that rule, but I'm certainly willing to
    get back to you with that information.
        Mr. Scott. Thank you. I yield back.
        Chairwoman Davis. Thank you. Thank you, Mr. Scott. And we
    now go to Ms. Hayes.
        Mrs. Hayes. Thank you. Assistant Secretary, Pallasch, thank
    you so much for being here. I am concerned that we are losing
    sight of the fact that every dollar misused by the department
    represents a lost opportunity for a stable, high-paying job for
    one of my constituents. I support apprenticeship programs and
    multiple pathways to success. I am listening and a lot of the
    questions that I had--this is not my committee. I waived onto
    this committee because I had lots of questions. And much of
    what--many of my questions were already brought up by my
    colleagues and it seems like there is this idea of either you
    support apprenticeship programs or you don't, and that is not
    really what is happening here.
        The thing I would like to say to you is that while
    assurances are great, you could have done a much better job to
    help us support what you are trying to do had we been provided
    with the documentation a lot sooner. The night before the
    hearing, and I have seen this, and I think that is what gives
    me concern hearing after hearing, whether it is the Department
    of Labor, the Department of Agriculture, the Department of
    Education, we are getting the information right before the
    hearing and we can't help you do your job better or support
    you, you know, as a collective body on both sides to say, you
    know, let us give you the support that you need.
        So just moving forward, we all support apprenticeship
    programs. I don't think that is the argument here.
        In my state, we have 4,312 Registered Apprenticeship
    programs, all bolstering higher--more access to opportunities.
    At my high school, I was a high school teacher, postsecondary
    education is not the pathway to success for everyone, so I get
    it.
        You said you want to enhance apprenticeship programs, but I
    don't understand if Registered Apprenticeship programs require
    wage progressions consistent with skills gained through those
    programs and IRAPs do not, then how could--how is IRAPs a
    better program as far as apprenticeships?
        Mr. Pallasch. Representative Hayes, thank you for your
    comments. And I first want to share my support for the
    apprenticeship model. As you mentioned, I think we all agree
    that the apprenticeship model is the model that we need to
    further. Again, unfortunately, I can't talk specifically about
    the I-RAP rule and what is contained and what is not contained
    in that rule.
        Mrs. Hayes. Okay, but can you say that--okay, so can we
    agree that Registered Apprenticeship programs require a salary
    progression while IRAPs do not?
        Mr. Pallasch. I cannot say what an I-RAP does or does not
    contain because there is no final rule yet.
        Mrs. Hayes. Okay. Can you say if IRAPs are required to have
    an Equal Opportunity plan, like Registered Apprenticeship
    programs?
        Mr. Pallasch. Again, under advisement of my attorneys I
    should not be speaking about specific elements within that
    rule.
        Mrs. Hayes. So I am assuming that you cannot say that there
    is comparable data that says that IRAPs have the same salary
    post-graduation as apprenticeship programs, that $70,000 a year
    that you talked about?
        Mr. Pallasch. Again, I can't specifically speak to the I-
    RAP program because it does not exist currently.
        Mrs. Hayes. Okay. So how about the fact that I think a lot
    of what you have heard today and a lot of the concerns of my
    colleagues are that congressionally appropriated funds, which
    we had been assured over and over would not be used for
    something other than they were appropriated, have now been
    shifted to support programs like IRAPs? And I have heard you
    say over and over that there is two accounts.
        If, in fact, you have worked with Solicitor General--I mean
    the Office of the Solicitor in order to implement these
    programs and you knew you were coming to this hearing, why
    wouldn't you just bring that information with you? We could
    have gaveled out an hour ago.
        Mr. Pallasch. Because, again, if you're talking about the
    program administration funding and how much--
        Mrs. Hayes. The program administration funding.
        Mr. Pallasch. Again, as I mentioned, it's the way that fund
    is tracked and the way that staff are assigned to that account
    and that their activities are not tracked within that account.
        Mrs. Hayes. Right.
        Mr. Pallasch. So there may be budget activities, there may
    be HR activities, there may be apprenticeship activities, there
    may be Registered activities. There's no way to break out an
    individual's time to provide you that specific number that
    you're looking for, under the PA account how much was applied
    to the I-RAP program.
        Mrs. Hayes. But if it is as complicated as you say, then I
    would--I am just imagining from in my office, if I were going
    into a hearing or going into a meeting and I had to give this
    complicated metrics that you are describing, there is no way to
    describe it, I would make sure that I sat with my staff and
    broke it down to the lowest common denominator and made it as
    simple as possible, so that when I sat on the other side of
    that dais in order to present this information, I would have
    given the committee more than 15 hours to go through it. I
    would have made the effort, you know, if we are truly trying to
    enhance these programs and move them forward, to say then what
    can we do to disaggregate it?
        I just find it very difficult to believe that the
    Department of Labor can't come up with a system by which we are
    pulling this apart. To simply say we can't do it just doesn't
    seem reasonable when we are talking about millions of dollars
    in appropriated funds and hundreds of thousands possibly of
    students on the other side of these programs that are looking
    for us to get it right.
        Mr. Pallasch. Real quick, I want to make sure that there
    were no misappropriated funds. There were misapplied funds that
    have since been corrected. So all of the Training and
    Employment Services funds were spent on the Registered
    Apprenticeship Program. There are challenges with the program
    administration account, I will admit that. But, unfortunately,
    I don't have the ability to disaggregate that data in the way
    you're looking for.
        Mrs. Hayes. Well, I thank you. My time is up.
        Chairwoman Davis. Thank you.
        Mrs. Hayes. But we could have helped you with those
    challenges had we had the information.
        Chairwoman Davis. Thank you. Now turn to Ms. Wild.
        Ms. Wild. Thank you, Madam Chair. Mr.Pallasch, let us wrap
    up this issue of money being misapplied. You do agree that to
    date Congress has never appropriated any funds for IRAPs,
    correct?
        Mr. Pallasch. There is--the department does not have a
    specific appropriation for the Industry-Recognized
    Apprenticeship Program, correct.
        Ms. Wild. Okay. So will you commit today, sitting here
    today, going forward that no money has been dedicated to
    Registered Apprenticeships will be used to fund and staff an I-
    RAP office?
        Mr. Pallasch. Yes.
        Ms. Wild. You will make that commitment today?
        Mr. Pallasch. Yes. If we're talking about TES, or Training
    and Employment Services, funds appropriated for the Registered
    program, yes.
        Ms. Wild. Thank you. You and I agree on the apprenticeship
    model and that we need to shine a spotlight on it. I, frankly,
    think that contrary to some of the statements on the other side
    of the aisle that everybody in this room agrees with that. But
    I have major concerns about the lack of action that the
    Department of Labor has taken with regard to staffing levels,
    especially in the state offices of apprenticeship. We all know
    that staffing is important to administration.
        And back in a March hearing, my colleague Mr. Walker asked
    a witness from the Dallas County Community College about his
    experience with working with the Federal Government on
    Registered Apprenticeships. And the witness responded about his
    regional office in Dallas saying they are great, they have
    terrific knowledge of apprenticeship programs. We consider them
    a critical partner, but they are understaffed.
        First of all, would you agree with the witness from the
    Dallas County Community College about the understaffing issue?
        Mr. Pallasch. Not knowing all of the facts that they were
    referring to, I would be reluctant to admit to that. But I what
    I would admit to is what I mentioned earlier, is that it's been
    a commitment of mine from the first day in office that all of
    our programs fill all of their vacancies.
        Ms. Wild. And I understand that you didn't come to the
    department until July, but that testimony was back in March.
    And the Texas state apprenticeship director position is still
    vacant along with now Alabama, Idaho, and Oklahoma directors.
    And at one point, when Tennessee and Alabama were both vacant,
    the director in Georgia was covering three states at once.
        You have now been on the job for 5 months, but we still
    have at least three state director vacancies and staffing
    levels are operating below 70 percent capacity. So if these
    state offices are critical to the success of the Registered
    Apprenticeship system, isn't it true that the vacancies are
    going to undermine the effectiveness of the system?
        Mr. Pallasch. So I'm not familiar with the 70 percent
    staffing level that you indicate, but I'm happy to provide a
    full accounting of where the Office of Apprenticeship is on all
    of the current vacancies that exist.
        Ms. Wild. Well, my next question was going to be, and you
    must have anticipated it, what exact steps have been taken
    since you came to this position to fill these positions? And
    can we expect that they will be filled by the end of this year,
    2019?
        Mr. Pallasch. Again, I would not commit to when they will
    be filled, but what I can commit is that I've got a weekly
    staff meeting with all the administrators for the programs
    across ETA. And on a weekly basis I provide an update on where
    we are as an agency with all of our vacancies.
        Ms. Wild. So tell us what you learned at your last weekly
    meeting. Where are we in terms of filling these vacancies?
        Mr. Pallasch. Again, I will commit to provide you a listing
    of exactly where we are in all of the Office of Apprenticeship
    vacancies.
        Ms. Wild. Okay. Well, that is great, but you just had a
    meeting last week, right, if you have weekly meetings?
        Mr. Pallasch. Correct.
        Ms. Wild. Tell us what you were told at that point.
        Mr. Pallasch. So it's not what I was told. Every week we
    provide to the administrators a listing of all the vacancies.
    For ETA-wide there's about 65 vacancies in any given week. So
    our Office and Management and Support Services provides that
    listing to the program administrators and I make it very clear
    that they are to fill any and all vacancies that they have in
    their program.
        Ms. Wild. Well, we have been asking for months about a plan
    for filling these offices and positions and the Department of
    Labor has yet to provide one. Can you commit to providing this
    plan to the committee in writing within the week after
    Thanksgiving?
        Mr. Pallasch. We will commit to providing you a listing of
    all the current vacancies and our efforts to fill those
    vacancies, yes.
        Ms. Wild. You will provide us with all of the current
    vacancies and your efforts to fill those vacancies by the end
    of the week after Thanksgiving?
        Mr. Pallasch. Again, I would be reluctant, especially given
    the holidays and staff--
        Ms. Wild. Well, the reason I am trying to pin you down is
    because we have been asking for months and we never get
    answers, so I need an answer.
        Mr. Pallasch. Understood. And I will commit to providing
    that information as quickly as we can to make sure that you've
    got full and accurate information.
        Ms. Wild. I need a deadline on that.
        Mr. Pallasch. It would be unwise for me to give you a
    deadline this day without talking to staff first.
        Ms. Wild. So you won't give me a deadline of, say, the end
    of 2019, December 31st of this year? Can we expect all of that
    information?
        Mr. Pallasch. Again, I--you can expect that information as
    quickly as we can get it to you.
        Ms. Wild. Thank you.
        Chairwoman Davis. Thank you very much. I'm sorry that your
    time is up.
        Ms. Wild. Thank you.
        Chairwoman Davis. And I want to make a point, I think, as
    you could appreciate, Mr. Pallasch, that this has been very
    frustrating from our end. I know it sounds like it has been
    frustrating from yours, as well. But we really need to have
    those responses. And what we are hoping for is that we can see
    a number of responses.
        And in a moment I will just remind my colleagues of the
    time that they have to submit those questions, as well, that
    there--really by the end of this month, but even as you receive
    that information. So we need to have an ability to have that
    dialogue. And it has been happening through the correspondence
    and yet that has been delayed on so many different fronts, so I
    wanted to bring that to your attention. Thank you.
        I believe everybody who wants to address the witness at
    this time has spoken. So I want to remind my colleagues that
    pursuant to committee practice, materials for submission for
    the hearing record must be submitted to the Committee Clerk
    within 14 days following the last day of the hearing,
    preferably in Microsoft Word format. The materials submitted
    must address the subject matter of the hearing. Only a Member
    of the committee or an invited witness may submit materials for
    inclusion in the hearing record.
        Documents are limited to 50 pages each. Documents longer
    than 50 pages will be incorporated into the record via an
    internet link that must be provided to the Committee Clerk
    within the required timeframe. But please recognize that years
    from now that link may no longer work.
        I also want to thank you again, Mr. Pallasch, for your
    participation. I think what we have heard is very valuable. I
    will have a comment in just a minute, but, at the same time, it
    reflects the lack--the frustration that I just mentioned in
    terms of getting appropriate information.
        Members of the committee may have some additional questions
    and we ask you to please respond to these questions in writing.
    The hearing record will be held open for 14 days in order to
    receive those responses. So even though we are looking for
    comments by the end of next week, at the same time we know that
    could be extended by virtue of when they come in.
        I remind my colleagues that pursuant to committee practice,
    witness questions for the hearing record must be submitted to
    the Majority Committee Staff or Committee Clerk within 7 days.
    And the questions submitted must address the subject matter of
    the hearing.
        I now want to recognize the distinguished Ranking Member
    for her closing statement.
        Mrs. Foxx. Thank you, Madam Chair. I also would like to
    thank Secretary Pallasch for testifying today. And I want to
    address just briefly the last questions that were being asked.
        We all know that there are 7.1 million vacant jobs in the
    country, so it is logical to assume that there are unfilled
    jobs in all of the government agencies. And demanding that the
    department explain every single job that is vacant and why it
    is vacant and what has been done to fill it seems a little
    unreasonable to me. I think everybody if they have a legitimate
    job that is vacant wants to fill it as quickly as they possibly
    can. I happen to have a job in my office that we would like to
    get filled. And I suspect if we talked to members, everybody
    has got some jobs unfilled.
        We all agree that apprenticeship programs are a tried and
    true method for providing students with the skills they need to
    remain competitive in today's economy. There are also tried and
    true methods for providing people who are already working with
    the skills they need to remain competitive. And I am, frankly,
    encouraged as I talk to people who have apprenticeship programs
    that they are talking more and more to existing workers about
    going into apprenticeship programs to improve their skills.
        There is certainly room for improvement in every--any
    government program, and I talk about that a lot. But I do
    appreciate the department's leadership in championing policies
    that work or American families and workers.
        I look forward to working with you and my colleagues here
    today on strengthening the apprenticeship programs and
    reversing the stigma that a baccalaureate degree is the only
    path to achieve lifelong success. I am, frankly, very happy
    that the world, and our country in particular, has awakened to
    that issue.
        We must ensure all funds are used not only efficiently and
    effectively, but in full accordance with the law. I am glad to
    hear that commitment from Mr. Pallasch today and I expect the
    high standards he promised to be kept. For apprenticeships to
    be part of solving the skills gap in the Nation, the programs
    need to be flexible and meet the needs of workers and
    employers, and be able to adapt to the growing needs of the
    economy.
        I thank you again, Mr. Pallasch, for your time. And I thank
    the Chairwoman for the hearing. I look forward to continuing
    the conversation and work on this issue. I yield back, Madam
    Chair.
        Chairwoman Davis. Thank you, Dr. Foxx. I appreciate that
    and now recognize myself for the purpose of making my closing
    statement.
        And I would say as I look to my good friend and the Ranking
    Member, I know that there are many things that we totally agree
    within this. We want this to succeed. We want--we know we have
    a depth of programs in our country, but we can do better than
    that. And we know that many, many more students throughout this
    country and adults can benefit from these programs, but we need
    to be sure that we are communicating honestly and clearly.
        Thank you, Mr. Pallasch, for being with us today. We know
    that this raises a number of serious issues with the Department
    of Labor's handling of the U.S. apprenticeship system. Despite
    your testimony, the fact remains that the department improperly
    spent over a million dollars, though likely much more, that
    should have been invested in expanding Registered
    Apprenticeships, which guarantee apprentices decent wages,
    valuable credentials, and a pathway to the middle class.
        As I said at the beginning of the hearing, the
    apprenticeship programs are experiencing record levels of
    participation and interest. We are very excited about that. We
    have a rare chance to strengthen Registered Apprenticeships so
    that more American workers can experience the benefits of high-
    quality apprenticeship programs. But we also know that we can't
    accomplish that in a bipartisan manner if the department
    continues to resist transparency, divert resources to
    unaccountable and unproven apprenticeship programs, and violate
    the clear intent of Congress to invest taxpayer money in
    Registered Apprenticeship programs that have a long record of
    success.
        I urge you, the Employment and Training Administration and
    the Department of Labor, to recommit to the core purpose of our
    apprenticeship system: to ensure access, opportunities that
    provide well-paying jobs and benefits, valuable skills, and a
    credential that can set apprentices on a path to a rewarding
    career. And I strongly urge you to reconsider your actions on
    supporting IRAPs.
        And think that today's hearing makes clear that stronger
    language and protections need to be included in our
    appropriation laws to protect from these unacceptable actions
    happening in the future. Our oversight in to the department's
    actions will only continue from here, but we also look forward
    to working with you and each of our colleagues to expand the
    high-quality Registered Apprenticeship opportunities that have
    helped so many Americans succeed in the modern economy.
        I urge my colleagues to send in their questions as we have
    talked about. And if there is no further business, without
    objection the committee stands adjourned. Thank you.
        [Additional submissions by Ms. Jayapal follow:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        [Whereupon, at 2:59 p.m., the subcommittee was adjourned.]

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