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Perez: We’re ‘Just Going to the Starting Line’

By Allen Smith  3/19/2014
The U.S. Department of Labor can connect businesses with overlooked talent, like the long-term unemployed, people with disabilities and veterans, Secretary of Labor Thomas Perez suggested to attendees of the SHRM Employment Law & Legislative Conference on March 18, 2014. He urged the audience to partner with the department to help companies find the workers they need.

Attendees were particularly eager to hear his views on the recent presidential directive to expand eligibility for overtime pay.

In response to questions on the directive, Perez noted that because the salary-basis threshold is so low—$455 a week—exempt employees working long hours sometimes wind up making less than the people they supervise. That runs contrary to an underlying justification of overtime: “If you work more, you should be paid more,” he said.

But it’s not just the salary-basis threshold that needs to be reviewed, he observed, suggesting that the duties test needs revisiting, as well. There are some instances where employees are working only 1 percent of the time in exempt duties and 99 percent in nonexempt ones; yet, because they are called management, they are classified as exempt.

Perez declined to elaborate on the rulemaking process or timeline, saying only that a proposed rule would be issued after the time needed to do “due diligence,” including getting HR’s input. “We’re just going to the starting line.”

Opportunity Agenda

Sworn in last July, Perez highlighted the Obama administration’s “opportunity agenda,” which strongly emphasizes the long-term unemployed.

The opportunity agenda has four goals:

  • Create more jobs that pay good wages.
  • Provide training on the skills needed to fill jobs.
  • Make a world-class education available to everyone.
  • Ensure hard work pays off with good wages, health care and retirement security.

Labor Department job centers across the nation can help workers find employment, particularly at companies that have the greatest needs, he said. But more employers need to be aware of the centers, he added, informing the audience that the agency has 2,500 job centers.

These days, when Perez meets with business executives, he’s hearing many of them say they want to grow their businesses. Some, such as PG&E, are planning large investments in the United States—$2 trillion in the utility’s case, to update much of its equipment.

Smaller businesses are investing, too. An executive at Fulton Machines in Pulaski, N.Y., told Perez the company wants to expand its staff from 650 employees to 900 in two years. But recently, Fulton had to use overseas workers to fill a big order because it didn’t have the employees it needed to complete the job stateside.

‘Small Victories’

Fulton isn’t alone in finding it difficult to staff up. The biggest challenge businesses have is finding the highly skilled workers they need to compete, Perez said.

He suggested that the long-term unemployed—those at the heart of the issue that most often keeps him awake at night—could be retrained to help bridge the skills gap. Usually the statistic for long-term unemployed is 1 percent, but that figure has jumped to 2.5 percent, Perez noted.

He shared the story of a single mom with two kids who had been laid off and was unable to find a new job. She asked one of her sons, a Marine, how he stayed positive, and he told her it’s important to see “small victories.” Although she hasn’t been hired yet, she’s vowed to look for small victories.

Businesses can help the long-term unemployed by suspending certain routine procedures, Perez said. One company ran credit checks on new employees and let workers go if they had a bad credit history. That kind of policy would lead to most recently long-term-unemployed workers losing newly found jobs, he cautioned. This company stopped running the credit screens because its only reason was that it had always done them.

Perez thanked the Society for Human Resource Management and its members for the work the association has done on behalf of the long-term unemployed. He added that he met SHRM President and CEO Henry “Hank” Jackson at a White House meeting on the problem.

And Perez urged conference-goers to contact the Labor Department with any insights on the skills gap at skills@dol.gov. They can comment on other department initiatives by contacting Deputy Chief of Staff Seema Nanda at nanda.seema@dol.gov.

Allen Smith, J.D., is the manager of workplace law content for SHRM. Follow him @SHRMlegaleditor.

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