![]() ![]() |
![]() |
|
![]() |
www.dol.gov
|
![]() |
![]() |
![]() |
November 4, 2008 DOL Home > About DOL > Annual Report 2005 > Strategic Goal 2 |
DOL Annual Report, Fiscal Year
2005 Strategic Goal 2: A Secure Workforce Promote the Economic Security of Workers and Families Enforcing legal standards for workers' wages and working conditions, providing unemployment compensation and other benefits when workers are unable to work, and protecting retirement and health benefit security are central to the DOL mission. Agencies supporting this strategic goal are the Employment and Training Administration (ETA), the Employment Standards Administration (ESA), the Employee Benefits Security Administration (EBSA), and the Pension Benefits Guaranty Corporation (PBGC). Outcome goals 2.1 and 2.2 contain six performance goals, of which two were achieved, three were substantially achieved and one not achieved in FY 2005. The Department continued to improve worker protection and security, as measured by union compliance, employee benefit plan enforcement and administration of unemployment benefit and workers' compensation programs.
The following charts illustrate DOL's strategic goal net costs in FY 2005, with A Secure Workforce shares set apart. The first allocates total Departmental costs of $49.912 billion; the second allocates an adjusted net cost of $12.222 billion that excludes major non-discretionary items associated with this goal.20 Net costs of this goal in FY 2004 (less Income Maintenance) were $1.383 billion.
The outcome goals and programs listed above, along with their results, costs, and future challenges are discussed in more detail on the following pages. 19Costs for this
goal are not included because the corporation's financial statements are
separate from those of the Department and are not included in this document.
Outcome Goal 2.1 Increase Compliance with Worker Protection Laws The Employment Standard Administration's (ESA) primary challenge is to ensure that protections for workers keep pace with the changes occurring in the American workforce, such as virtual workplaces, demographic shifts, immigration, organized labor, the growth of small businesses, and the shift from manufacturing to services. Under the Fair Labor Standards Act (FLSA), the Migrant and Seasonal Agricultural Worker Protection Act, the Family and Medical Leave Act, the Davis-Bacon Act (DBA) and the Service Contract Act, ESA's Wage and Hour Division (WHD) administers standards for wages and working conditions such as the minimum wage and overtime; child labor protections; field sanitation standards in the agriculture industry; and prevailing wage requirements on government contracts. The key to ensuring worker protections is to focus on industries and employers with the most persistent and serious violations; to quickly resolve employee complaints; and to ensure accuracy in established wage rates. ESA's Office of Labor-Management Standards (OLMS) ensures union transparency, financial integrity, and democracy by administering and enforcing the Labor-Management Reporting and Disclosure Act (LMRDA). OLMS responsibilities under the Act include compliance assistance; civil and criminal investigations and enforcement; union compliance audits; and reports/public disclosure administration. OLMS strategies are aimed at improving timeliness and quality of union reports filed for public disclosure and strengthening LMRDA compliance through union audits and outreach efforts.
Results Summary
Net Cost of Programs Future Challenges Protect Workers' Wages American workplaces legally employ and compensate workers. Program Perspective WHD's allocation of resources and performance indicators reflect the keys to ensuring worker protections focusing on industries and employers with the most persistent and serious violations; resolving employee complaints expeditiously and effectively; and ensuring that established wage rates are accurate. By directing resources to compliance efforts in low-wage industries, such as agriculture, construction and garment manufacturing, WHD seeks to protect those low-wage workers most likely to be paid less than legally required or to be employed in unsafe, illegal situations. WHD's efforts in this regard have led to demonstrated successes over the years with increasing compliance rates in industries like health care, garment manufacturing and quick service restaurants. By reducing repeat violations, WHD can achieve lasting compliance on behalf of many employees. WHD ensures responsiveness by reducing the time it takes to resolve employee complaints and ensuring that the resolution of violations promotes future compliance. Timely and accurate prevailing wage determinations encourage efficiency and help ensure government contract workers receive the wages to which they are entitled.
A number of external factors influence WHD's program outcomes. As the supply of and demand for vulnerable immigrant workers increases, the potential for violations increases. Compliance levels in many low-wage industries are also heavily influenced by competitive pressures and by subcontracting arrangements in which smaller companies have little opportunity to influence market prices. Analysis and Future Plans In FY 2005, WHD completed its third statistically valid investigation-based compliance survey of prior FLSA violators finding 72 percent of prior violators in compliance. The results improve on the FY 2004 measure of 71 percent. WHD is seeing the impact of recently employed strategies such as investigation accountability standards, strategic use of penalties, and effective publicity. WHD's traditional measurements of compliance in low-wage industries have been in garment manufacturing, health care and agriculture. In FY 2005, WHD saw the percent of New York City garment workers employed in compliance increase from 62 to 76 percent. In Southern California, the percent of garment workers employed in compliance fell from 63 to 54 percent. The balance of three strategies compliance assistance; partnerships and collaborative efforts; and enforcement promote long-term compliance in these low-wage industries. In FY 2006, WHD will undertake its first investigation-based compliance survey in a broad cross section of low-wage industries. The survey will provide WHD with a baseline measure of the percent of low-wage workers employed in compliance with the FLSA. Future performance targets and measures of improvements in the percent of low-wage employees employed in compliance will be determined from the survey results. The results will lead to strategies for addressing off-the-clock violations and will enhance WHD's Overtime Security Enforcement Task Force efforts. WHD continues to work on upgrades in information technology to see performance success in the wage determination program. Management Issues WHD is monitoring legislative proposals that would expand the use of compensatory time to the private sector and create a new temporary worker program. If successful, both will impact WHD's employee complaint and low-wage compliance goals. WHD completed three program evaluations in FY 2005 focusing on the agency's budget and performance integration and its compliance assistance efforts. The first, Findings from Employers Pocket Guide on Youth Employment: YouthRules! Telephone Survey, conducted by the private research firm Westat (Study 15 in Appendix 2), found that while the publication was deemed useful by readers, it was not relevant to many of the employers in the census, as they do not employ young workers. In response, DOL is encouraging WHD field offices to target employers with young workers. A second evaluation, The Fair Labor Standards Act: Executive, Administrative, and Professional Exemptions Seminar Evaluation, also conducted by Westat (Study 16 in Appendix 2), found the seminar to be both informative and prompted attendees to perform additional research on overtime security laws. Budget and Performance Integration Model Evaluation, conducted by the private research firm ICF Consulting (Study 17 in Appendix 2), found that WHD is well on its way to successfully integrating budget and performance. The evaluation also recommended that the integration will improve upon further use of spreadsheet technology and all currently available data. WHD continues to evaluate performance measures in low-wage industries, focusing on developing models for common compliance strategies across low-wage industries. A second evaluation of the agency's compliance assistance web information is ongoing. In 2003 a Program Assessment Rating Tool assessment of WHD's Davis Bacon wage determination program found it did not demonstrate results and recommended that WHD launch an external review; convene a work group to develop indicators and targets; modify the wage survey or outreach strategies; and work with stakeholders to identify appropriate regulatory, administrative, or statutory reforms. In response, WHD developed goals and specific numeric targets to ensure program performance improvements and contracted with a contractor to evaluate the Davis-Bacon wage determination process. Union Financial Integrity and Transparency Ensure union financial integrity, democracy, and transparency
Program Perspective Union transparency underpins the union democracy and financial integrity objectives of the LMRDA and is a critical component of the OLMS program. Therefore, a primary performance objective is to secure complete and accurate union financial reports for public disclosure. Approximately 25 percent of OLMS resources support the agency's Internet public disclosure system and a wide range of compliance assistance, liaison, enforcement, and regulatory activities to increase union transparency and LMRDA reporting compliance. Enforcement of LMRDA union financial integrity protections is another critical OLMS responsibility. A primary performance objective is to reduce union fraud. Union audits and embezzlement investigations are key strategies aligned with that effort. OLMS dedicates more than 50 percent of appropriated resources annually to support a program of audits and criminal investigations to protect the millions of dollars in dues paid by labor union members. OLMS seeks efficiency and program impact in using audit resources to protect union financial integrity. Therefore, the goal to increase union receipts protected relative to staff resources expended on audits supplements the broader union financial integrity goal to reduce union fraud.
Analysis and Future Plans Union Transparency Management Issues To report performance against DOL's union financial integrity goal, OLMS measures indicators of union fraud. A baseline study in FY 2004 indicated a 9 percent incidence of fraud in unions. Although the level of fraud was not re-measured in FY 2005, annual performance targets are in place and measurement is again planned for FY 2006-2009. Maintaining effective union outreach, a visible audit presence, and a strong criminal enforcement program are essential to increasing union financial integrity. Timely, accurate union financial reports are also essential. The completeness and accuracy of union reports are markedly increasing as a result of compliance assistance efforts and the increasing use of electronic report formats. Additionally, beginning in September 2005 the largest reporting unions will begin to submit the required LMRDA annual financial report on the recently revised LM-2 report form. The new LM-2 form will significantly increase union transparency and promote union financial integrity and democracy. In spite of comprehensive program efforts, securing timely filed reports for public disclosure remains a continuing challenge. To address this challenge, DOL supports amending the LMRDA to authorize civil monetary penalties for late LMRDA filing. Outcome Goal 2.2 Protect Worker Benefits DOL increases the economic security of America's working families by protecting the benefits earned and promised to workers. Three DOL agencies and one government corporation chaired by the Secretary of Labor the Employment and Training Administration (ETA), the Employment Standards Administration (ESA), the Employee Benefits Security Administration (EBSA), and the Pension Benefit Guaranty Corporation (PBGC) administer payment of temporary benefits for the unemployed; protect Federal workers from the economic effects of work-related injuries and illness; protect employee benefits plans against fraud and abuse; and insure pension payments. ETA temporarily replaces the wages of the unemployed through the Unemployment Insurance (UI) program, which provides grants to State-operated programs and manages the Unemployment Trust Fund. ETA ensures that States' programs are administered efficiently according to Federal standards and requirements, and manages the trust fund to provide a buffer to volatile cycles in tax revenues and benefit claims. ESA protects Federal and certain other workers from the economic effects of work-related injuries and illnesses through the Office of Workers' Compensation Programs' (OWCP) four disability compensation programs. OWCP provides wage replacement and cash benefits, medical treatment, vocational rehabilitation, and other benefits to covered workers, their dependents and survivors. EBSA protects private employee pension plans, health plans and other benefits plans against fraud and abuse by enforcing Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA); through compliance assistance, and through education. Where there has been malfeasance, EBSA restores benefits and assets by bringing civil and criminal cases. PBGC protects the pension benefits of participants in defined benefit plans that have been terminated, usually due to the sponsoring employer's bankruptcy, by serving as both insurer and administrator. As an insurer, PBGC collects insurance premiums from employers that sponsor insured pension plans. As an administrator, PBGC pays monthly retirement benefits to the participants in terminated plans.
Results Summary
While the PBGC practitioner score is one point lower than in FY 2004 and four points below the target, it is worth noting that PBGC scored higher than other Federal agencies that collect payments. PBGC is considering whether to adjust the target in future years.
Net Cost of Programs FY 2005 program costs decreased by approximately $6 billion, or 13 percent, from FY 2004. Unemployment Insurance program costs, which account for $34.243 billion (84 percent) of FY 2005 costs for this outcome goal, dropped due to a decrease in benefits paid from $41.424 billion in FY 2004 to an estimated $31.761 billion in FY 2005. UI Program costs are largely driven by average weekly insured unemployment (AWIU) the average number of people filing claims for continuing UI benefits each week. The AWIU figure decreased from 3.167 million in FY 2004 to an estimated 2.722 million in FY 2005. Workers' compensation costs, which account for most of the remaining costs of this goal ($6.131 billion, or 15 percent), rose from FY 2004 because DOL assumed Part E of the Energy Employees Occupational Illness Compensation program from the Department of Energy in FY 2005. With this responsibility came a one-time increase in actuarial liability of $3.5 billion. Future Challenges
21PBGC is not included in the Consolidated Statement of Net Costs, hence the costs of its programs are not reflected here. Pay Unemployment Insurance Claims Accurately and
Promptly Make timely and accurate benefit payments to unemployed workers, facilitate the reemployment of Unemployment Insurance (UI) claimants, and set up unemployment tax accounts promptly for new employers.
Program Perspective Economic conditions and the resulting program workloads affect many aspects of UI performance. For example, when unemployment rises, more claims are filed; UI payment timeliness generally declines; and efficiency tends to decrease. On the other hand, slower creation of new businesses reduces the number of new employer tax accounts, and the timeliness of tax liability determinations generally goes up. In addition, external factors such as natural disasters could have a negative affect on UI performance. Performance targets are based on the Administration's current economic assumptions. Analysis and Future Plans DOL continues to improve UI payment integrity by providing funds for States to implement data exchanges with the Social Security Administration (SSA) to identify false and stolen numbers; access data from other State agencies to verify personally identifying information; and gain access to the National Directory of New Hires, an additional tool for swiftly detecting and preventing payments to claimants who have returned to work. For FY 2006, targets for all indicators will be raised. The UI Program continues to demonstrate improved efficiency as evidenced by the result exceeding the FY 2005 target. The Department promoted efficiency through competitive grants for automation and remote systems (e.g., telephone and Internet claims-taking). To date, lack of data has precluded measuring the extent that the UI system is meeting the goal of facilitating UI claimants' reemployment. In 2006, States will begin gathering data for a UI reemployment indicator and a performance target will be set.
Management Issues To reduce overpayments and facilitate reemployment, DOL awarded Reemployment and Eligibility Assessments (REA) grants to 21 States during FY 2005. The grants have been used to conduct in-person claimant interviews in One-Stop Career Centers to assess UI beneficiaries' need for reemployment services and their continued eligibility for benefits, and to ensure that beneficiaries understand that they must stop claiming benefits upon their return to work. The FY 2006 budget request includes funding to continue this effort and to combat identity theft. In recent years, UI trust fund solvency has been another major management challenge. Borrowing from the UI trust fund by States has declined since last year, and significant portions of previously borrowed amounts have been repaid. Due in part to improved economic conditions, most States' trust fund accounts had a positive cash flow over the last 12 months, and overall, the funds are more solvent than last year. DOL requested that the OIG review Internal Revenue Service administration charges because of past overcharges. The Government Accountability Office (GAO) released Better Data Needed to Assess Reemployment Services to Claimants in June 2005 (Study 18 in Appendix 2). The report recommended that DOL collect more comprehensive information on reemployment services used by UI claimants and their outcomes. DOL will be collecting additional data that, combined with currently collected data, provide adequate information to guide policies promoting the reemployment of UI beneficiaries. The GAO issued another report, Unemployment Insurance Information on Benefit Receipt (Study 19 in Appendix 2), in March 2005. GAO analyzed the data and information on UI benefits and UI recipients in the past two decades, but offered no recommendations. The Program Assessment Rating Tool review of the UI program rated it Moderately Effective. Recommendations, which included simplifying performance measures, funding New Hire crossmatch and focusing resources on reemployment through REA's, have been implemented. Reduce the Consequences of Work-Related
Injuries Minimize impact of work-related injuries
Program Perspective
The Office of Workers' Compensation Programs (OWCP) adjudicates claims; mediates disputes; makes benefit payments; helps with injury recovery and return to work; controls costs; and offers technical and customer services. Program results are influenced by how effectively resources are deployed to these activities. Ten indicators reflect the outcome objectives of OWCP's key mission strategies. Quality Case Management success in FECA is measured as reductions in lost production days (LPD) rates. Communications goals seek to improve customer access to program information and raise service responsiveness and quality levels. Ensuring claims processing efficiency is central to the objectives of the EEOIC program. Effective mediation of disputes and improved decision quality are measured in the Black Lung and Longshore programs. Financial integrity of the FECA Compensation Fund is the objective of beneficiary roll reviews and medical benefit cost control. OWCP program goals are impacted by several external factors. FECA and EEOIC are continually challenged by large numbers of cases. Economic and workplace trends change the nature of new injuries and job availability for workers ready to return to duty. For the Longshore program, the potential for greater security threats on American facilities and an increasing volume of War Hazard Act claims require additional planning and resource investment. Medical costs continue to push higher as technology expands and the use of medicines and treatment procedures increase. While business practices become increasingly automated and customer demands for information and assistance grow more sophisticated and accelerated, OWCP capabilities remain limited, and communications are costly. Analysis and Future Plans Returning Injured Employees to Work Reducing Program Expenses Periodic Roll Management (PRM) generates benefit cost savings through careful review of cases to determine if continued disability status is warranted, and to determine the reemployment potential of those currently receiving compensation. Through PRM, DOL has saved over $1 billion since FY 1999, and DOL intends to continue this goal into the future. DOL reached its target by producing $21 million in savings in FY 2005. DOL also reached its target of keeping the inflation of Federal Employees' Compensation Act (FECA) medical costs below the national rate of health care inflation, as measured by the Milliman USA Health Cost Index. In the past year, the rate of increase in average FECA medical benefit payments rose by only 2.8 percent well below the national average as reported by Milliman for this year and all recent years. This success results from several administrative steps DOL has taken in recent years (centralized bill processing, strengthened review of treatment authorization requests, fee schedules and stronger automated edits and other controls). In the long term, the rate of growth in average FECA medical case costs has consistently remained below the growth rate in nationwide costs as measured by the Milliman USA, Health Cost Index. Against that index, FECA has saved nearly $40 million annually in medical treatment costs since FY 2000. Customer Service OWCP reached its target to reduce requests for further action following Black Lung benefit eligibility decisions (for claims subject to revised regulations). Performance for this indicator was 80.6 percent, against a target 76.5 percent. The revised regulations for Black Lung benefit claims were designed to produce faster and fairer final benefit determinations without changing eligibility requirements. The result has been an increase in the number of stakeholders who accept the district director's initial decision and decide not to pursue the claim further. Out-year workload projections for the next ten years are also being reviewed in a program evaluation recommended during Black Lung's PART assessment. In addition, the Program is completing a two-year review of all Part B Claims; the first systematic review these claims have received since initial approval by Social Security Administration. DOL reached its targets for processing timeliness in the Energy Part B program. This program processed 80 percent of initial claims and 94.7 percent of final decisions within standard time frames, against targets of 80 percent for both indicators. DOL also exceeded its target to make 1,200 payments under the new Part E program during FY 2005. In FY 2006, DOL plans to incorporate the processing of new Part E claims in the timeliness indicators and to add a new indicator to significantly reduce the unadjudicated inventory of claims transferred from the DOE under Part E. Management Issues OWCP and OSHA are in the second year of the SHARE initiative, directed at improving Federal agency performance in returning their injured employees to work. SHARE has generated intense interest among the agencies and their progress is being noted in SHARE reports. In October 2004 Congress transferred benefit coverage to DOL from the Department of Energy for DOE contract employees who became ill from exposure to toxic substances. This component of the program is referred to as Part E. DOL has moved quickly to hire new staff and process more than 25,000 DOE claims. Participation with audits of the Department's Office of Inspector General and other outside auditing agencies is a significant activity for OWCP. These studies generally examine OWCP compliance with legal and administrative requirements; impact of new program mandates; management effectiveness; program performance and results; data integrity and systems compliance; legislative and Governmental administrative impacts; and comparison to and OWCP impact on other programs. Two GAO audits were completed in FY 2005: Limited Information is Available on the Number of Civilians Exposed in Vietnam and Their Workers' Compensation Claims ; and Defense Base Act Insurance: Review Needed of Cost and Implementation Issues (see Studies 20 and 21 in Appendix 2). The FECA and Black Lung Programs have received PART ratings of Moderately Effective and both continue to implement PART recommendations. Provide for Secure Pension and Health Plans Enhance Pension and Health Benefit Security
Program Perspective EBSA oversees benefit security for nearly seven million plans, 150 million participants and beneficiaries, and in excess of $4.5 trillion in assets with a relatively modest budget of $131 million dollars and approximately 880 FTE to achieve its performance goal of enhancing pension and health benefit security. Externalities, such as the economy and tax policy, have a significant impact on whether employers opt to offer benefits, and whether employees choose to participate and to what extent.
Analysis and Future Plans In addition to long-term targets for civil and criminal ratios, we have added annual targets to reflect success with respect to national enforcement initiatives, which may change from year-to-year based on strategic priorities. EBSA worked with The Gallup Organization (Gallup) to refine the long-term target for their customer service satisfaction index consistent with other industry standards and experience. EBSA also added an internal compliance assistance measure that will demonstrate success in voluntary compliance programs such as the Voluntary Fiduciary Correction Program and their Delinquent Filer Voluntary Compliance Program.
Management Issues EBSA has acted on recommendations from its PART assessments in FY 2004 and FY 2005 by conducting evaluations and regulatory reviews. DOL contracted with Gallup to evaluate EBSA's participant assistance program (Study 22 in Appendix 2). EBSA was provided detailed performance information that helped improve their customer satisfaction score. In addition, with Gallup's assistance, EBSA conducted targeted training to address employee weaknesses and share best practices. Finally, field offices developed plans to continue improving their customer satisfaction scores. In FY 2006, Gallup will perform a follow-up study of EBSA's participant assistance program. As noted in Appendix 2, GAO published a report in June 2005, Government Actions Could Improve the Timeliness and Content of Form 5500 Pension Information (Study 24 in Appendix 2). EBSA and PBGC are working with IRS to collect pension plan information more efficiently through electronic filing. EBSA has established a regulatory review program that sets forth a process for identifying initiatives for review; provides for cost and benefit evaluation of identified regulations and exemptions; and explores modifying or eliminating those rules for which costs and administrative burdens outweigh benefits. In EBSA Should Mandate Electronic Filing Of the Form 5500 to Improve Data Accuracy (Study 23 in Appendix 2), the Office of Inspector General (OIG) recommends that mandating electronic filing will improve the collection of employee benefit plan information. EBSA concurs with OIG's recommendation and has issued a Notice of Proposed Regulation in the Federal Register to require electronic filing. Provide Timely and Responsive Services to
Customers Improve service to pension plan customers.
Program Perspective PBGC is now the trustee of nearly 3,500 defined benefit plans that have failed since 1974, and provides timely and uninterrupted payment of pension benefits to over 600,000 participants. In 2005, PBGC assumed responsibility for an additional 270,000 plan participants, increasing the total number of participants for which PBGC is responsible for current and future pension benefits to over 1.5 million. A large influx of customers with service demands puts a strain on their ability to handle the workload and improve service. Providing exceptional service is an important part of PBGC's mission. PBGC's efforts are measured by the American Customer Satisfaction Index (ACSI), from which PBGC receives useful information about its customers' expectations and needs. PBGC improves processes and adjusts performance targets to achieve or exceed benchmark results and meet growing customer expectations. As a customer-focused agency, PBGC allocates resources to provide exceptional service to customers and stakeholders. Approximately seventy-eight percent of funds are allocated to serving participants, while twenty-two percent are used to provide services to plan sponsors and pension practitioners. PBGC chose the practitioner and participant performance indicators to help identify areas for improving quality of service provided to customers. To assess its effectiveness, PBGC uses the ACSI survey methodology, which provides comparisons to both private businesses and the federal government. Analysis and Future Plans Participant Performance Indicator In 2005, PBGC expanded online business transactions for participants. In addition to making address changes and requesting electronic funds deposit, participants who access their benefit accounts electronically through the Web-based My Pension Benefit Account (My PBA) can now apply for benefits, designate a beneficiary and submit a request for a benefit estimate.
Management Issues In 2005, PBGC restructured its organization to focus more on managing risks and minimizing losses for the insurance program. Newly created offices will increase PBGC's effectiveness in identifying troubled plans and assisting their sponsors in complying with funding requirements. A steady workload increase resulting from newly terminated plans with large numbers of participants continues to present PBGC with challenges. Despite that, providing exceptional service to customers remains a key goal at PBGC. Constant upgrades to technology will enable PBGC to provide better and faster service to participants. For example, PBGC began implementing a customer relationship management system to track customer interactions from the telephone, e-mail, fax, incoming and outgoing correspondence, and Web-based transactions. All these efforts are expected to yield positive results over the next cycles of improvement and evaluation. 22PBGC is not included in the Consolidated Statement of Net Costs, hence the costs of its programs are not reflected here.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|