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Statement Of Ann L. Combs Assistant
Secretary of Labor for Pension and Welfare Benefits, David
Lauriski Assistant Secretary of Labor for Mine Safety and Health, Joe N.
Kennedy Acting Assistant Secretary of Labor for Employment Standards, R.
Davis Layne Acting Assistant Secretary of Labor for Occupational Safety and
Health Before The Subcommittee on Labor, Health and Human Services,
and Education Committee on Appropriations United States House of
Representatives
May 23, 2001
Mr. Chairman, and distinguished Members of the Subcommittee, we
appreciate the opportunity to appear before you today to present the Department
of Labor's Fiscal Year (FY) 2002 Budget as it relates to the Pension and
Welfare Benefits Administration (PWBA), Employment Standards Administration
(ESA), Occupational Safety and Health Administration (OSHA), and Mine Safety
and Health Administration (MSHA).
At Secretary Chao's confirmation hearing three months ago, she
identified six key priorities for the Department that are reflected in our 2002
budget. Three of these priorities are addressed by the agencies represented on
this panel. Today, we four can put several of the Secretary's goals in context
as they relate to our Worker Protection Agencies.
The Secretary's second goal is to ensure the safety and health
of every worker.
As the Secretary has stated, the Department needs to be in the business
of assisting workers -- through employers -- before an accident
occurs. Make no mistake: enforcement is a crucial part of the Department's job.
But inspections and citations alone will not achieve the Department's goal of
ensuring safe and healthful workplaces. Compliance assistance is an equally
important element of the Department's strategy. OSHA's 2002 budget is $426
million; MSHA's is $246 million, for a combined total of $672 million.
The Secretary's third goal is to guarantee an honest day's pay
for an honest day's work.
The Department needs to enforce our nation's labor laws using common
sense, not just a reflexive, one-size-fits-all approach. The Department's 2002
request maintains our worker protection agencies at 2001 levels -- and we are
expanding our compliance assistance efforts in 2002. Since 1996, the Department
realized a 36% increase in worker protection programs -- significantly
outpacing inflation. The Employment Standards Administration has an FY 2002
budget request of $284 million.
The Secretary's sixth goal is to make sure workers' pension and
welfare benefits are protected.
The Secretary recently met with Attorney General Ashcroft to ensure that
the Departments of Justice and Labor will do their utmost to protect our
worker's pension funds. PWBA, which guards the integrity of the nation's
pension funds, has an FY 2002 budget request of $108 million.
This concludes an overview of the Secretary's specific goals as they tie
to our respective missions; agency-specific 2002 plans follow:
Pension and Welfare Benefits
Administration
PWBA's budget request for 2002 provides for a total of $108 million and
837 FTE. The 2002 request is essentially a continuation of our FY 2001 resource
level.
The Pension and Welfare Benefits Administration (PWBA) promotes and
protects the pension, health, and other benefits of over 150 million
participants and beneficiaries in more than six million private sector employee
benefit plans, holding nearly $5 trillion in assets.
Private sector employee benefit plans provide retirement income, health
care, and other employee benefits on which the majority of our nation's
population has come to rely. The economic security of an individual or family
is obviously weakened if pension, health, and other benefits are not paid as
promised.
In order to implement Title I of the Employee Retirement Income Security
Act (ERISA), the primary Federal statute that protects employee benefits under
privately-sponsored pension, health, and other benefit plans, PWBA employs a
comprehensive compliance and education strategy. This strategy assists workers
in understanding their rights and responsibilities, educates plan officials
about their responsibilities and options, and deters and corrects violations of
the relevant statutes.
Here, too, compliance assistance aims at intervening before the pension
check or health care is lost, rather than solely enforcing the law afterward.
The budget request for 2002 expands our compliance assistance activities.
PWBA assists workers by maintaining a nationwide participant assistance
program with over 100 staff who provide written and telephone responses to
participant inquiries. In FY 2000, our benefits advisors answered 158,000
inquiries and recovered $67 million directly for participants. These inquiries
also are an excellent source of referrals for potential compliance actions. In
FY 2000, 1,252 investigations were opened as a result of referral.
PWBA also develops and distributes a variety of educational materials.
Thirty brochures on a variety of benefit subjects are currently available
through our toll-free line. In FY 2000, we distributed approximately 950,000
copies of our publications. The Agency has created Retirement Savings and
Health Benefits Education Campaigns through public and private sector
partnerships leading to a significant increase in the number of inquiries and
fostering a better informed public. Outreach efforts have been undertaken in
conjunction with the American Savings Education Council, U.S. Chamber of
Commerce, Merrill Lynch, the Small Business Administration (SBA), American
Society of Actuaries, American Institute of Certified Public Accountants, and
the American Bar Association to name just a few.
Our web site is another source of valuable information for plan
officials and participants with links to information designed to assist
consumers and plan sponsors. Working with the U.S. Chamber of Commerce, the SBA
and Merrill Lynch, PWBA has developed an interactive website designed to help
small business employers select the retirement savings vehicle that best meets
their needs.
To assist plan officials, we participate in conferences, symposia and
programs designed to expand their understanding of ERISA's compliance
requirements and have also put into operation a toll-free "help desk" and a web
site to provide compliance and technical assistance to all plan sponsors in
connection with the approximately one million annual report filings we receive
each year under ERISA filing requirements (Form 5500 and the new EFAST filing
system).
Despite the emphasis on education and other forms of compliance
assistance, situations remain where direct enforcement action is necessary to
protect plan assets and the benefits of America's workers, retirees and their
families. Our enforcement program is guided by a Strategic Plan which
designates certain areas of special emphasis - areas that target populations of
plan participants who are potentially exposed to the greatest risk of loss. In
FY 2000, 4,216 civil cases were closed -- 53% with corrective action. We also
closed 151 criminal cases, obtained 90 indictments, and 52 convictions and
guilty pleas. We recovered $564 million for plan participants as a result of
investigations.
In developing our FY 2002 request, we protected our base of front line
staff by carefully examining FY 2000 and 2001 activities and, as appropriate,
shifted resources to fully maintain our current level of enforcement compliance
and participant assistance and education and outreach activities.
Within the FY 2002 resource level, we are also requesting $500,000 for
our "Orphan" Plan project to cover the costs associated with providing, when
necessary, independent fiduciary services to handle termination and
distribution issues related to plans that have been abandoned to ensure that
participants and beneficiaries receive their pension benefits.
Employment Standards Administration
In FY 2002, ESA is requesting $584.4 million and 4,404 full-time
equivalents (FTE) to conduct its worker protection and workers' compensation
programs. Specifically, ESA is requesting $331.4 million and 3,013 FTE for the
Salaries and Expenses account; $80.3 million and 845 FTE to be financed by the
proposed Federal Employees' Compensation Act (FECA) surcharge; $36.7 million
and 133 FTE in the Fair Share portion of the Special Benefits account; and $136
million and 413 FTE for the new Energy Employees' Occupational Illness
Compensation Act program.
ESA is the largest agency in the Department of Labor with well over
4,000 employees located in offices throughout the country. ESA administers
several programs that protect the basic rights of workers, including:
overseeing minimum wage, child labor, and overtime pay standards; ensuring
equal employment opportunities for employees of Federal contractors;
administering Federal workers' compensation programs; and protecting workers'
rights as union members. As a result, we make every effort to be as accessible
to the American worker as possible, whether through one of our many field
offices, toll-free telephone hotlines, the Internet, or by some other
means.
ESA's mission is vital to the success in achieving the Department's
goals of having a Secure Workforce and Quality Workplaces. Our strategic goals
are: 1) to create a better workplace by increasing both employer and employee
awareness of, commitment to, and involvement in assuring fair wages and equal
employment opportunity, minimizing the financial burden of work-related
injuries, and safeguarding union democracy; and 2) to secure public confidence
through excellence in the management and delivery of ESA's programs and
services. ESA's FY 2002 budget request supports these goals.
In FY 2002, ESA is concentrating on two new major initiatives, both of
which fall under the purview of the Office of Workers' Compensation Programs
(OWCP). These two initiatives are: further developing the new Energy Employees
Occupational Illness Compensation Program Act (EEOICPA) program and
establishing a surcharge to pay for the administration of the Federal
Employees' Compensation Act (FECA) program.
EEOICPA is the newest addition to the compensation programs that OWCP
administers. Established in FY 2001, EEOICPA was created to provide
compensation to employees or survivors of employees of the Department of Energy
(DOE), its contractors and subcontractors, companies that sold beryllium to
DOE, and atomic weapons employers who have developed a radiation-related
cancer, beryllium-related disease, or chronic silicosis as a result of their
work in producing or testing nuclear weapons.
In order to implement this new program, OWCP created a Task Force which
has:
- developed draft regulations that will be published by the end of this
month;
- drafted an organizational structure currently under review;
- designed claim forms;
- established claims intake centers with support from DOE;
- set up a call center;
- developed training for staff; and
- started information systems, including an automated medical bill
payment system, in preparation for accepting claims on July 31, 2001.
Because this is the start-up year, it is anticipated that EEOICPA will
grow dramatically in response to projected claims filing. ESA's FY 2002 request
includes a funding level for EEOICPA that will enable OWCP to fully serve these
claimants. Specifically, the FY 2002 request will support EEOICPA program
management, claims processing, and customer support services. This budget
request will also provide funding for activities to be conducted by the
Department of Health and Human Services.
The second major initiative in ESA's FY 2002 request is to change the
manner in which FECA Salaries and Expenses costs are funded. Currently, these
administrative costs are financed by the Department of Labor. However, in this
budget request OWCP proposes that each Federal agency pay a surcharge for FECA
administration in addition to the amount they currently pay for compensation
benefits. There is proposed statutory language in this request that amends the
FECA to establish a separate Administrative Expenses Account within the
Employees' Compensation Fund. Each year, the Secretary of Labor will determine
each agency's proportionate share of the administrative costs needed to cover
expenses for the subsequent fiscal year. Funds to cover FECA's administrative
costs would then be transferred from each Federal agency into this new account
based upon this annual determination.
This initiative is intended to more fully highlight the cost of workers'
compensation, thus providing an additional incentive for agencies to strengthen
their work-site safety programs.
Enforcement
In FY 2002, ESA will continue its commitment to promoting compliance
with employment standards and worker protection laws; reducing the incidence of
federal contractors out of compliance with their contractual Equal Employment
Opportunity obligations; and safeguarding union democracy and financial
integrity.
Wage and Hour's overall compliance program balances public education and
outreach with enforcement efforts using a variety of enforcement techniques.
The program targets low-wage industries to increase compliance, with particular
emphasis on child labor, and remedy of violations. In low-wage industries
violations are more often egregious and complaints less common. Many of these
industries, such as agriculture, garment, health care, guard and janitorial
services, restaurants, hotels/motels and day-haul continue to offer a source of
employment for vulnerable workers including many immigrants -- both legal and
undocumented -- who are commonly exploited but unlikely to complain.
A cornerstone of the Office of Federal Contract Compliance Programs'
(OFCCP) strategy to ensure compliance, while at the same time reducing the
reporting burden on Federal contractors, is the implementation of the tiered
compliance evaluation, in accordance with 60-1 regulations. This strategy of
tiered compliance evaluation streamlines the rules and requirements, promotes
voluntary compliance by encouraging contractor self-audits, and focuses limited
agency resources toward contractors who are not in compliance with the law.
OFCCP also implements strategies that focus on contractor technical assistance,
outreach and education. This, too, promotes voluntary compliance by encouraging
self-audits.
The Office of Labor-Management Standards will implement the
Labor-Management Reporting and Disclosure Act (LMRDA) electronic filing and
Internet public disclosure system by the end of calendar year 2001. This system
will make the information from the LMRDA union reports available to the public
through the Internet and will also allow unions the option of electronically
submitting their LMRDA reports.
Occupational Safety and Health
Administration
For OSHA in FY 2002, the President is requesting $426 million -- a
slight increase over 2001 -- and 2,292 full-time equivalents (FTE). Secretary
Chao has made it very clear that workplace safety and health is one of her top
priorities. The Department's priorities for OSHA are: to target the most
serious hazards and the most dangerous workplaces; and to emphasize prevention
through compliance assistance.
Last month marked the thirtieth anniversary of OSHA's inception and we
are very pleased with the progress made in reducing workplace injuries and
illnesses in this country. The Bureau of Labor Statistics (BLS) reports that
the overall injury/illness rate now stands at 6.3 per 100 workers. This
represents a drop of 43 percent since the first BLS survey in 1973, the ninth
decrease in the past ten years. Although that is good news, there are also
indications of work to be done. In 1999, BLS reported that there were 5.7
million injuries and illnesses in American workplaces and more than 6,000
workers were killed on-the-job.
Enforcement is essential, but our initial efforts should be on
prevention through compliance assistance -- which would include a range of
activities such as outreach, education, training, technical assistance,
voluntary protection programs, and partnerships with the private sector.
In recent years, compliance assistance has received an increased share
of the agency's budget. There are now compliance assistance positions in
virtually every OSHA office around the nation. These specialists provide
information about the agency, inform employers of "best practices" in workplace
safety and health, and direct the public to other sources of assistance. OSHA
also enters into partnerships with the private sector. There are now 97
partnerships with the private sector or public agencies -- an increase of about
90% from three years ago. For example, last year OSHA signed an agreement with
the Associated Building Contractors (ABC). This agreement is an industry model
for OSHA and construction companies with exemplary safety records. Under its
terms, ABC has created a "platinum" level safety designation for contractors
who meet the most stringent safety requirements. "Platinum" contractors receive
inspections only in response to signed complaints from employees, reports of
imminent danger, or fatalities and major accidents. Contractors around the
country who have enlisted in this effort include two dozen employers in the
Cleveland Area who are members of the Construction Employers Association. To
encourage even more agreements with the private sector, OSHA launched a page on
its website that highlights successful partnerships and provides a step-by-step
guide on how to initiate a partnership.
The on-site consultation program continues to provide free assistance to
small business employers in identifying and removing hazards from their
workplaces. In FY 2001, 31,200 consultation visits are planned, with priority
given to small business employers in high-hazard industries. Consultants visit
the worksite, conduct inspections and make suggestions to employers without
issuing citations or penalties. Sanctions are levied only if employers fail to
correct serious violations. Since OSHA's inception nearly 400,000 employers
have received this service.
The Voluntary Protection Program (VPP), which recognizes employers who
maintain exemplary safe and healthful workplaces, is another compliance
assistance program that continued to grow last year. VPP workplaces go beyond
OSHA's requirements in protecting their employees and, therefore, do not
receive routine OSHA inspections. Working with the Voluntary Protection Program
Plan Association, OSHA has encouraged VPP participants to serve as mentors to
employers who need assistance in improving their working conditions. Last year,
OSHA expanded the VPP, allowing resident contractors at VPP sites to
participate.
The agency also uses technology to enable employers and employees to
eliminate on-the job dangers. For instance, OSHA's website provides timely and
complete information about the agency's standards, compliance assistance tools
and other activities. In March, the website received almost 30 million "hits."
Each month, more than 50,000 users download electronic "Hazard Awareness
Advisors." These Advisors help employers and employees identify and understand
the hazards specific to their workplaces and their industries. The software
interviews the user about his or her workplace activity and equipment, follows
up with intelligent questions for the user, identifies applicable OSHA
standards, and even lists the nearest state office to apply for a consultation
visit. The Hazard Awareness Advisor software program has been recognized for
its unique approach to assisting the public. In August 2000, the software was
named a finalist for the Innovations in American Government
Award, which is sponsored by the Ford Foundation and Harvard's John F. Kennedy
School of Government.
While OSHA has enhanced compliance assistance it has not short-changed
enforcement. During the first six months of FY 2001 the agency has
approximately 90 significant cases -- those resulting in proposed penalties of
$100,000 or more. The agency will continue to focus on the worst hazards and
those workplaces with high injury and illness rates.
Earlier this year OSHA ensured protection for almost 500,000 additional
workers when it approved New Jersey's public employee safety and health
program. New Jersey has adopted standards that are identical to most OSHA rules
and has committed to adopting all future OSHA standards. For the first time
public employees in New Jersey will be fully protected while working in such
dangerous occupations as firefighting, sanitation, and municipal waste
disposal.
Mine Safety and Health Administration
In FY 2002, MSHA is proposing a budget of $246.3 million and 2,310 FTE,
a net decrease of 47 FTE. MSHA's request supports the Department of Labor's
strategic goal of fostering quality workplaces that are safe, healthy, and
fair. The request is critical to our mission of protecting miners' safety and
health and will enable the Agency to focus on activities designed to achieve
our performance goals to reduce work-related deaths, injuries, and illnesses in
the mining industry.
MSHA's program to improve miners' safety and health integrates all of
the tools found in the Federal Mine Safety and Health Act of 1977. Our statute
includes annual inspections, education and training and technical support
functions. The preventive effects of MSHA's inspection activities are enhanced
by our compliance assistance activities. For example, Agency personnel are
currently engaged in a multi-state effort to raise miners' and mine operators'
awareness of safety hazards. As part of this effort, MSHA will visit more than
1,600 mining operations and share information on the causes of accidents and
how best to avoid them. In addition, Agency personnel will make presentations
at public seminars, safety conferences, and industry and labor meetings around
the country. As Secretary Chao stated in her testimony, with this emphasis on
prevention, we believe that we can save lives, and help the mining community
avoid occupationally-related injuries and illnesses.
MSHA kicked off its "Stay Out-Stay Alive" national public awareness
campaign on April 16. In cooperation with more than 50 federal and state
agencies, private organizations, businesses, and individuals, sponsors programs
and events to warn children and adults of the dangers of playing and exploring
on active and abandoned mine sites. Every year, dozens of people are injured or
killed in recreational accidents on mine property, because the hazards of mines
are not readily apparent. MSHA pioneered "Stay Out-Stay Alive" three years ago
to educate the public about the hazards.
MSHA's compliance assistance activities also extend to its rulemaking
efforts. In 1999, as directed by this Committee, the Agency published new
training requirements, Part 46, that impact about 10,000 surface nonmetal
mines. The effective date of the Part 46 standard was October 2, 2000, 1-year
after its publication. MSHA specifically included a 1-year implementation
schedule to allow sufficient time for the affected mines to understand and
comply with the requirements of the rule. In addition to continuing a
concentrated outreach program, MSHA is conducting a special compliance
assistance Part 46 visit in conjunction with the first regular inspection at
the mines impacted by the part 46 regulation. These compliance assistance
activities will help to ensure that mine operators and miners fully understand
the training requirements, and will help us achieve the intent of the rule:
trained miners.
MSHA is taking a similar approach with its regulation concerning miners'
exposure to diesel particulate matter in underground coal mines. These rules
have staggered effective dates, the first of which was May 21, to ensure
compliance feasibility. In addition, the Agency recently completed five
seminars to provide the coal mining industry information about the new rules.
About 300 individuals attended the seminars, which provided the attendees an
opportunity to question Agency staff about the provisions of the rule, and the
Agency's implementation approach. Providing these forums before the
effective date of the rule, allows mine operators and miners to understand and
comply with the rule from the outset.
The metal and nonmetal mining sector continues to experience growth in
the number of active mining operations. As a result, MSHA is proposing a
transfer of $3.7 million and 40 FTE from the coal mine safety and health
program to the metal and nonmetal safety and health program. These resources
will be used to address basic compliance efforts, focus on accident prevention,
and enhance compliance assistance activities, particularly at small mining
operations and those experiencing safety and health compliance problems.
The Department appreciates the opportunity to submit this testimony.
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