Absent Labor Officials Stall Trump’s Jobs Agenda

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By Ben Penn

Delays in getting a labor secretary confirmed are stalling work at the agency tasked with carrying out much of President Donald Trump’s promise to restore jobs.

After Andrew Puzder’s withdrawal, Trump’s second labor secretary pick, Alexander Acosta, doesn’t have a Senate confirmation hearing on the schedule. Other principal Labor Department personnel, such as deputy secretary, solicitor and administrators of the subagencies that enforce wage and safety laws, may not be installed until after Trump’s first 100 days in office.

Previous administrations have also been hampered by delays, but some former officials say this time it’s happening at a critical juncture and at an even slower pace. The DOL still must decide how it will handle a handful of pending Obama administration rules, including those to expand overtime pay and tighten conflict-of-interest restrictions on retirement investment brokers. There are also enforcement policies and budgetary priorities that await decisions.

“It’s more of a problem than in the past,” Mark Wilson told Bloomberg BNA. Wilson held a variety of positions in the DOL under the four presidents who preceded Barack Obama.

“Getting off the ground quickly on implementing President Trump’s policy and economic plan, at least at the Department of Labor, has been significantly slowed down,” said Wilson, who is vice president of employment policy at the HR Policy Association.

The prior two presidents had their first labor secretaries confirmed on Jan. 29, 2001 (Elaine Chao) and Feb. 24, 2009 (Hilda Solis). Acosta, who was just tapped Feb. 16, is still completing paperwork before the Senate labor committee will announce his initial hearing.

During this prolonged transition, the DOL’s regional and district offices carry on with certain enforcement, litigation and compliance outreach protocols. Mine inspections, federal contractor discrimination audits, and workplace wage-and-hour investigations all continue, albeit in a more politically neutral posture, past department directors told Bloomberg BNA.

Field offices have been instructed to halt all press releases on enforcement actions and to take a pause from pursuing proactive workplace investigations, one source inside the DOL told Bloomberg BNA. The interpretations of this so-called pause are varying by region, said the source, who was not authorized to speak with the press and spoke on condition of anonymity.

“The Department of Labor is continuing to operate business as usual, including enforcement operations and executing the president’s policy directives,” Jillian Rogers, a DOL spokeswoman, told Bloomberg BNA via email. “These efforts are reflected across various media channels.”

Agency Mission May Suffer

If the Senate doesn’t move swiftly to confirm Acosta and others, the agency’s ability to fulfill its mission will suffer, warned Gregory Jacob, DOL solicitor under President George W. Bush. “It will hurt the American worker if they don’t get people into the subagencies within the department relatively expeditiously so that they can run as efficiently as they’re supposed to,” Jacob told Bloomberg BNA.

Career executives and temporary “beachhead” political appointees are keeping the department and its subagencies running by maintaining some of the Obama-era enforcement priorities on autopilot. Yet there are other key regulatory and policy decisions that cannot be made until a labor secretary is confirmed and begins rounding out top appointments.

Acting Labor Secretary Edward Hugler and other career leaders are said to be somewhat frozen as they await new political directions.

“It’s sort of like the department’s treading water at this point, and it needs some leadership in place to get things going again,” Alfred Robinson, an acting Wage and Hour Division administrator under George W. Bush, told Bloomberg BNA. “The longer it treads water, the more things need to be decided.”

One challenge is that Trump’s campaign message, while repeatedly focused on job creation and wages, was light on policy specifics to accomplish those goals. This leaves the beachhead team and career personnel in the dark, Chris Lu, deputy labor secretary under Obama, told Bloomberg BNA.

“This is a president who didn’t run a campaign grounded in any policy direction,” Lu, now a senior fellow at the University of Virginia’s Miller Center, told Bloomberg BNA. With Obama, “even in the absence of confirmed leadership, there were things you could look to in campaign proposals that could guide you.”

Sole Political Director Limited

Private attorneys involved in cases against DOL anecdotally pinpoint several operational lags since Jan. 20: The Employment and Training Administration has apparently slowed issuing grants and responding to questions from states seeking job training funds; some enforcement agencies are letting investigations linger as they await instruction from vacant policy personnel; and the Employee Benefits Security Administration is postponing resolution on cases that involve policy matters, such as what constitutes an adequate disclosure.

Current acting Solicitor Nicholas Geale can handle some of the top-priority legal matters but is still limited, said Jacob, who now represents employers as a partner at O’Melveny & Myers LLP in Washington.

“Nick is really the only political in there who is in a position of actual authority, and he can’t give direction to everybody across the entire department through all those different agencies,” Jacob said.

Subagencies below Geale are still operated by career personnel. Lu said career directors are waiting for political appointees to make tier-one decisions, such as whether to maintain apprenticeship and tech job training initiatives, whether to target vulnerable workers in specific industries, and how to balance enforcement and compliance assistance.

Wage-Hour Policy Matters Hit Stalemate

At the WHD, which investigates employers for overtime, minimum wage, and family and medical leave violations, there are cases pending under the prior administration’s policy preferences. For instance, Obama’s WHD Administrator David Weil directed field investigators to apply an expanded definition of what constitutes an employer, leading to more allegations of independent contractor misclassification and joint employer relationships.

Employers subjected to these investigations are now getting antsy for new political officers to get appointed inside the division, Tammy McCutchen, who represents management at Littler Mendelson P.C. in Washington, told Bloomberg BNA. They’re also waiting to settle investigations until after new personnel are installed that would be more likely to only pursue two years of back wages, not three, and to avoid liquidated damages, which would double the monetary penalty.

“I think that there are employers out there waiting for the new administration to come in place so that they can negotiate with more reasonable people,” said McCutchen, who was the first confirmed WHD administrator under George W. Bush. “The past eight years you just haven’t been able to negotiate.”

Acosta Can Get ‘Ducks in a Row.’

The next labor secretary’s ability to overcome the slow start depends on progress in vetting other Senate-confirmed DOL personnel. Acosta will likely work with the White House in reviewing candidates for those positions, but it’s unclear how much work can begin until after a confirmation.

“They have an opportunity to catch up if they have their ducks in a row” by collecting full paperwork and thoroughly vetting the candidates for the top spots, Portia Wu, a former assistant secretary at the DOL under Obama, told Bloomberg BNA.

“Acosta is clearly a very experienced government official. He’ll know how to do things,” added Wu, who used to vet labor nominees when she worked on the Senate Health, Education, Labor and Pensions Committee.

But until a labor secretary is confirmed, some essential DOL functions remain in a state of paralysis.

“These agencies are designed to have senior policy leadership; that’s how they’re structured,” David Fortney, an acting solicitor at George H.W. Bush’s DOL, told Bloomberg BNA. “We have a vacuum now, and that’s not a good process.”

To contact the reporter on this story: Ben Penn in Washington at bpenn@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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