Labor Secretary Discusses Overtime Rule and Job Programs with Congress

 

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Labor Secretary Discusses Overtime Rule and Job Programs with Congress

​Secretary of Labor Alexander Acosta addressed the House Education and Labor Committee on May 1—the first time he'd done so since Democrats took control of the U.S. House of Representatives. He discussed the priorities of the Department of Labor (DOL), which included finalizing a new overtime rule, expanding apprenticeships and introducing the Job Corps Scholars program.

Acosta said the department is focused on expanding vocational training and education programs to fill job vacancies. "We are seeing wages increase, and we all benefit when wages go up," he said.

"With record-low unemployment and a job-seeker's market, it's a good time to be an American worker," said Rep. Virginia Foxx, R-N.C., at the hearing. There are more than 7 million unfilled jobs in the United States, and many of those jobs remain open because there aren't enough workers with the necessary skills to fill them, she noted.

"Republicans have worked hard to expand skills programs and fill job vacancies at the local level," Foxx said, adding that she hopes Acosta will use his authority to supplement these efforts. "This is an urgent concern, and we need workforce development solutions that connect disenfranchised workers with the skills they need to fill good-paying, in-demand jobs."

Democrats, however, worried about the DOL's focus on the economy rather than on workers. "The economy doing well doesn't always necessarily mean that workers are doing well," said Rep. Susan Davis, D-Calif. "So I hope you don't … lose sight of the fact that the mission of the department is to protect workers first, foremost and above all else," she said to Acosta.

Overtime Rule

Foxx said she was pleased to see the DOL's Notice of Proposed Rulemaking for "a modernized overtime salary threshold." She asked Acosta what assurances he can give that the DOL will issue a new overtime rule in a timely matter.

Acosta noted that the comment period is live and the department is working on it. The DOL proposed an increase in the salary-level threshold for white-collar exemptions to $35,308 per year from $23,660—and the special rule for highly compensated employees would require workers to earn a total annual compensation of at least $147,414.

[SHRM members-only resource: FLSA Proposed Salary Increase: Impact Analysis Guide and Calculator]

"The federal government has a tremendous sense of urgency to get rules finalized by the end of this year," Michael Lotito, an attorney with Littler in San Francisco, said in an interview with SHRM Online. "All bets are off once we get into an election year."

For employers, Lotito noted, it would be useful to have a finalized overtime salary threshold before October. Many businesses start their fiscal year in October, and knowing the new rate would help them plan their budgets.

The federal government has to be extra careful with its approach to rulemaking, he added, because federal departments anticipate that lawsuits will be filed attacking their rules and regulations. So the challenge isn't just about issuing a timely rule, he said, it's about the long-term viability of the rule and whether the administration will be able to defend it.

Apprenticeship Programs

Acosta and President Donald Trump support industry-led, government-sanctioned apprenticeship programs that are separate from the federal and state registered apprenticeship system that some view as cumbersome.

Davis said at the hearing that she is concerned that industry-led apprenticeship programs would not meet the same wage and labor standard as government programs. The government plays a critical role in improving programs and ensuring quality, she said.

"Those critical issues are covered by the law," Acosta replied. Industry-led programs will cover those issues because all employment relationships are covered, he said.

"Our biggest problem is finding an adequately trained workforce," said Rep. Phil Roe, R-Tenn., citing Tennessee's 3.2 percent unemployment rate.

"Apprenticeships are a phenomenal opportunity," Acosta said, noting that the government is looking to expand apprenticeships beyond construction and the building trades to coding, high-tech, health care, nursing and advanced manufacturing. Workers "need skills that lead to good, safe, high-paying jobs," he said.

Acosta and Trump "have been bullish on expanding apprenticeships," Lotito noted. "Particularly with the skills gap in artificial intelligence and robotics, apprenticeships are vital to ensuring job seekers have the skills they need."

Job Corps Scholars

The Job Corps program provides free education and vocational training for participants ages 16 to 24, to prepare them for the workforce.

Acosta said the program needs to be modernized. "Although the economy has changed, the Job Corps program hasn't changed in decades," he said.

He's "excited" about a pilot project called Job Corps Scholars, through which the DOL will request bids from community colleges across the country and offer grants.

"This is going to be for up to 1,600 students," he said. "Mini Job Corps" centers would be set up within the community colleges and would offer about $15,000 per student, to cover tuition and the expense of hiring counselors and making other services available to the Job Corps site. 

Democrats were skeptical about how the DOL could support expanded apprenticeship and Job Corps programs when the president's proposed budget aims to cut funds, including about a 40 percent cut to job-training programs.

The president's proposal for fiscal year 2020 reduces the DOL's budget by $1.2 billion, which "reflects less support for hardworking people who are struggling to get ahead," said Chairman Bobby Scott, D-Va.

Acosta said the department is investing "time and effort" into such programs to modernize them and change the metrics for evaluating effectiveness. The DOL is trying to find alternative methods to provide Job Corps-style education to more people, and the Job Corps Scholars program would be at half the cost, he said.

On April 29, the House Appropriations Committee released a draft funding bill for fiscal year 2020 that would increase funding for job training and education, among other things.

"Not only does this bill resoundingly reject the proposed cuts in President Trump's budget that would have hurt working families, it provides a robust increase in funding for important national priorities that create jobs and grow the economy," said House Appropriations Committee Chair Nita Lowey, D-N.Y.

[Visit SHRM's resource page on FLSA exemption classification.]

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