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Priorities for New Leadership at Department of Labor

There is a new sheriff in town at the Department of Labor. After Labor Secretary Alexander Acosta resigned today from his post, President Trump announced that Deputy Secretary of Labor Patrick Pizzella will become Acting Secretary of Labor.

As I wrote in a statement on the move:

Patrick Pizzella is an outstanding choice to lead the Department of Labor. He cares deeply about removing regulatory barriers that deny individuals the right to earn a living and entrepreneurs ability to start a business. In addition, Pizzella’s extensive experience in government, specifically at the Labor Department, will enable him to hit the ground running and successfully carry out the agency’s mission.  

Below are several policy initiatives that the agency should prioritize.

Finalize Outstanding Rules

Critical regulatory reform that started during Acosta’s tenure still needs to be finalized. In particular, it is crucial for the department to finalize rules on overtime pay and joint employer relationships. These rule changes are a welcome reversal from the Obama-era Labor Department’s job-killing proposals on these policy issues.

Yet, if the agency fails to swiftly finalize these rules, the possibility exists that a new administration or Congress could undo the regulatory reforms either via the Congressional Review Act or merely rescinding unfinished rulemakings.

Activate Office of Labor-Management Standards

The Office of Labor-Management Standards (OLMS), a division within the DOL which is responsible for holding union officials accountable to members, has been dormant during the Trump administration. Regulatory proposals to increase union transparency to membership have languished on the agency’s Unified Agenda of Regulatory and Deregulatory Actions.

One policy the OLMS should prioritize is restoring a George W. Bush-era rule titled “Labor Organization Annual Financial Reports: Coverage of Intermediate Bodies.” The Competitive Enterprise Institute led coalition letter that made that request to the outgoing Labor Secretary. 

The rule extends the coverage of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA), which was passed with bipartisan support to address widespread union corruption, to certain state and regional unions that represent only public employees and are a subordinate to an international or national labor union. As such, these state-level unions would be required to file annual financial disclosure reports to the DOL.

Without such a rule in place, a large number of union members cannot “easily assess whether union leadership spends dues payments prudently and in a way that represents worker interests.” These LM forms provide union members with information on union “assets, liabilities, receipts, salaries, loans to officers, employees, members or businesses and other disbursements.” Expanding the coverage of the LMRDA allows a private sector local union member to better track disbursements from a national labor union to its state intermediate unions. It is important for this information to be public because union members are the real owners of union property and they deserve to be provided with a detailed accounting of how their union spends their funds.

Produce Statutorily Required Report on Wage and Hour Laws

The Competitive Enterprise Institute has notified the DOL that it has neglected its duty to produce a statutorily required report in several regulatory comments, and it is past time to fulfill this obligation.

Section 204(d) of the Fair Labor Standards Act (FLSA) requires the Secretary of Labor to submit a biennial report to Congress that evaluates and appraises wage and hour laws. Specifically, the Labor Secretary is required to study “wage and hour provisions established by the FLSA and present recommendations to prevent curtailment of employment opportunities. Another area of research includes evaluating and appraising the effects of minimum wage and overtime requirements by taking into account increased costs and other relevant factors.”

Further, Congress requests that the Secretary of Labor to initiate a continuing study of “means to prevent curtailment of employment opportunities for manpower groups which have had historically high incidences of unemployment (such as disadvantaged minorities, youth, elderly, and such other groups as the Secretary may designate).”

It is crucial to continuously study how government mandates stifle entrepreneurship, reduce employment, and create obstacles for individuals trying to make a living. Such a report would be an invaluable resource that could inform members of Congress on the potential detriments of overzealous regulatory proposals or laws. A report of this kind would be especially useful today since the House of Representatives is considering an ill-advised bill that would set a national minimum wage of $15 per hour.

In-depth study and original data on these issues is necessary to ensure that future DOL regulations and laws enacted by Congress do not curtail employment, and to provide a better understanding of which current policies put jobs at risk. FLSA Section 204(d) already requires that the Department provide this invaluable resource to Congress, it is past time to produce it.