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Transition Reports (1977) - Labor Department (2)
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The original documents are located in Box 38, folder "Transition Reports (1977) - Labor
Department (2)" of the John Marsh Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 38 of The John Marsh Files at the Gerald R. Ford Presidential Library
OSHA
OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION
ISSUES - FIRST SIX MONTHS
Approval of State Plans
Policy Issue
Inflationary and Economic Impact
Policy Issue
Statements
On-site Consultation
Legislative Issue
MESA Transfer
Legislative Issue
Toxic Substances Act
Program Issue
Noise Standard
Program Issue
Special Susceptibility Groups
Policy Issue
Revision of Safety Standards
Policy Issue
Agriculture
Policy Issue
(Issues listed in approximate order of importance and
urgency)
APPROVAL OF STATE PLANS
I.
Statement of Issues
How should OSHA determine whether or not a state may operate
its own job safety and health plan, as provided in the Act?
II.
Background
The OSH Act requires that OSHA, following its approval of a
state plan, carry out a monitoring and evaluation process of the state
program for a total of four years. Specific factors are monitored by
OSHA for purposes of determining that the plan does or does not meet
the standard set out in the Act: any state plan should be as effective
as OSHA. Parenthetically, labor groups have been of the view that state
plans are not "as effective as" OSHA and have therefore opposed approval
and certification of state plans.
The specific factors to be monitored are presently under review
to identify more meaningful performance measures. For example, should
a state be certified if its safety program is up to par but its health
program, upon which OSHA put little emphasis until now, is seriously
lagging? In addition, many states are at odds with OSHA over other,
more specific criteria. Even with development of specific criteria,
the judgment will be largely subjective and subject to great controversy,
both substantive and political.
III. Status
Twenty-four state plans have received approval. Five of them
have received initial certification and are in the one year (18e) final
decision period. There are a number of other state plans that are also
likely to be considered for certification in the next few months. It is,
therefore, essential that the substance of OSHA monitoring and evaluation
of state plans be defensible with respect to safety and health protection
and be able to stand up to legal review. Much work has been done on this
issue in terms of laying out objective criteria. The more subjective
criteria are the subject of discussions now scheduled to be held in
December.
IV.
Critical Dates
First six months of 1977, fourteen states will become
eligible to receive initial certification: Alaska, California,
Colorado, Connecticut, Hawaii, Indiana, Kentucky, Maryland,
Michigan, Oregon, Tennessee, Vermont, Virgin Islands and Washington
State.
INFLATIONARY IMPACT STATEMENTS
I. Statement of Issue
How should OSHA react if Executive Order 11821, which requires
assessment of inflationary impact of government actions,
expires as planned on December 31, 1976?
II. Background
Executive Order #11821 requires that major proposals for
legislation and regulations be accompanied by a certification
that inflationary impact of the proposal has been evaluated.
This has been the subject of frequent criticism, particularly
by organized labor, including two letters from George Meany
to the Secretary of Labor and at least one major suit urging
repeal of the order. OSHA's position has been that studies
of this nature are essential to establish fairness and com-
prehensiveness in the rulemaking process. Thus, critical
elements for OSHA consideration include the state of industrial
technology and the economic consequences of proposed actions,
especially when considering the timing of compliance require-
ments. The data developed through this process can provide
factual answers to many questions and criticisms of OSHA
regulations as examples of expensive and ineffective govern-
mental regulation. Further, these studies provide evidence
when inevitable court challenges arise from standard setting
or enforcement actions.
III. Status
OSHA has taken actions to internalize the requirements of
the order by establishing agency procedures to make it an
integral part of standards development, without delaying
the rulemaking process. It is important to continue this
sort of analysis whether the Executive Order expires or is
extended.
The inflation impact analysis requirement, therefore serves
a useful purpose even while making the rule-making process
for OSHA somewhat more cumbersome. It has been helpful both
in the development of productive standards and to fend off
criticisms of arbitrary actions in the standards development
process, particularly from industry groups. Should Executive
Order 11821 expire, OSHA may find itself under considerable
pressure not to perform the very sort of economic analysis
that is becoming increasingly important in the rulemaking,
regulating and judicial processes.
V. Critical Dates
Early 1977 -- define and defend an appropriate economic
analysis procedure should Executive Order 11821 expire.
ON-SITE CONSULTATIVE ASSISTANCE TO EMPLOYERS
I. Statement of Issue
What should the Administration's position be with respect
to providing on-site consultative assistance to employers?
II. Background
Since its inception OSHA has been urged by employers to
provide assistance in understanding and complying with the
OSH Act primarily through on-site consultation without threat
of citation or penalty. Proponents of this service have main-
tained that OSHA's safety and health standards are sufficiently
technical as to require expertise not readily available to most
employers. DOL has interpreted the OSH Act such that Federal
OSHA inspectors on the worksite were bound to cite violations
and thus could not provide sanction-free consultations or in-
spections. However, in support of consultative services OSHA
has allowed the 24 existing State job safety and health programs,
to provide this service. In addition, 13 States without safety
and health programs are offering consultation reimbursed by
Federal funds. In the remaining 19 States or jurisdictions
employers must avail themselves of private consultants or
discuss problems with OSHA away from the worksite. Many bills
have been introduced in Congress during the last 5 years to
provide Federal on-site consultation. An on-site consultation
bill passed the House in November 1975, 115-15, but a counterpart
measure failed to receive Senate approval. The Ford Administration
had supported both bills, The business community, for the most
part, has supported consultation amendments while organized
labor has opposed them, claiming that consultation by Federal
OSHA would dilute enforcement.
III. Status of Work on the Issue
OSHA has prepared a number of issue papers on this topic
and is near completion of 2 contracted studies designed to
evaluate and describe the nature and effectiveness of existing
consultation activities. There are varying interpretations of
what # consultation" is. In addition, a recent reorganization
of OSHA posits an expanded role for the offices dealing with
consultative services. Legislative action in favor of consul-
tation would require a series of major resource decisions for
OSHA.
IV. Critical Dates
On-site consultation amendments will certainly be introduced
in the 95th Congress, probably early in the session, even though
the main supporters in the Senate and the House will not be re-
turning. The policy issue here is whether to support or oppose
consultation amendments and which alternative methods of providing
consultation, if any, are to be developed. An early decision on
the first issue is necessary in order to determine our legislative
strategy. The timing of the second issue depends on the lead
time granted OSHA by any new statute.
TRANSFERRING MESA TC DOL
I. Statement of Issue
What should the Administration's position be regarding the
the proposal to transfer the Mine Enforcement Safety Administra-
tion (MESA) to the Department of Labor?
II. Background
Legislation to transfer MESA from Department of the In-
terior to DOL was introduced in both Houses of the 94th Con-
gress. The House passed a MESA transfer bill, which also
contained major amendments to the Federal Metal and Nonmetallic
Mine Safety Act, by 309-86; the Senate bill mandating transfer
and strengthening of mine safety laws was reported out of Commit-
tee but did not receive floor consideration before Congress
adjourned. Both bills also contained provisions delineating
jurisdictional areas between OSHA and MESA, a point of contention
with the mining industry, unions and the agencies. The Ford
Administration and the mining industry opposed MESA transfer,
maintaining that the Interior Department had the requisite
experience and expertise to administer mine safety laws;
segments of organized labor, especially the United Mine Workers
and the United Steelworkers, pressed for transfer to DOL, claiming
that Interior's responsibilities for energy resource development
conflicted with its safety duties.
III. Status of Work on the Issue
A series of issue papers on MESA transfer has been prepared by
DOL during discussions with OMB and Interior this year.
IV. Critical Dates
Although the sponsor of the MESA transfer bill in the
House, Congressman Dominick Daniels (D. N.J.), has retired, it
is likely that similar legislation will be introduced in both
the House and Senate immediately after Congress resumes. The
issues to be resolved include the Administration's position on
the transfer issue; the administrative location of MESA within
DOL, if transfer is approved, and the position to be taken re-
garding the provisions which add OSHA-like features to the
current mine safety laws (e.g. employee walkaround rights,
general duty clause, etc.).
TOXIC SUBSTANCES CONTROL ACT
I. Statement of Issue
What inputs should OSHA make to EPA to assure proper implementation
of the toxic substance control act?
II. Background
The Toxic Substances Control Act of 1976 was recently signed into
law after some five years of Congressional debate. This major
piece of legislation presents OSHA with a real opportunity to help
structure a meaningful Federal effort to prevent occupational health
problems, such as occurred with Kepone, before they arise. However,
because of EPA's mission it will undoubtely use its substantial
resources to focus regulations on environmental protection rather
than workplace protection. It is therefore incumbent upon OSHA to
work closely with EPA in order to ensure application of the provisions
of the statute to worker protection.
III. Status
EPA has set up a number of working groups that OSHA has been invited
tc attend. OSHA is also represented by statute on the interagency
committee on priorities. Key concerns, among others, that OSHA will
want to focus on are: regulatory strategy, interagency coordination,
scope and content of reporting and recordkeeping programs; identifica-
tion of 50 priority substances; design of data systems; implementation
of premarket notification programs; and definition of categories under
testing regulations. Close monitoring of proposed regulations and
implementation plans will be required to insure that OSHA concerns are
taken into full consideration. What OSHA's precise role will be in
helping to define "toxic substances" is still unclear. Another open
question is to what extent OSHA will be able to acquire data on all
firms utilizing a particular toxic substance. Such data, while im-
posing a larger enforcement burden on OSHA, would be enormously helpful
in identifying workplace hazards. Finally, there are a number of
concerns that attach to broader DOL goals, such as workers' compensa-
tion, occupational illness data, and joint environmental/inflation
impact statements.
IV. Critical Dates
Immediate participation in task groups, etc.
March 1977 -- Initial publication of EPA regulatory strategy.
FORD 010335 LIBRARY
NOISE STANDARD
I. Statement of Issue
What permissible noise exposure limit will OSHA establish and
what methods of compliance with that standard will be required?
II. Background
OSHA published a proposed amendment to its present noise standard
in October 1974. The current noise standard being enforced by OSHA
includes an average 90 decibel exposure limit for an 8-hour work period,
engineering and administrative controls as the primary means of limiting
exposure, and a general requirement for a hearing conservation program.
The new, proposed standard, similar in many respects to the present
standard, would clarify the requirement for the use of engineering
controls for noise reduction and add specific requirements for a' hearing
conservation program.
OSHA's proposal has been sharply criticized by EPA and several
labor unions as not being sufficiently protective and these groups
suggest that the exposure level be reduced below 90 decibels. Industry
has been equally critical of OSHA's proposal to require the use of engi-
neering controls in lieu of less costly ear protectors and related
hearing conservation measures. Industry likewise argues that the
present 90 decibel exposure limit provides adequate protection. The
impact of this standard across industries and the substantial discus-
sion surrounding the economic and engineering feasibility issues has
engendered major controversy.
Enforcement of the current OSHA noise standard is also becoming
increasingly difficult in light of a recent Occupational Safety and
Health Review Commission decision. That ruling would require OSHA to
prove the economic and technological feasibility of required engi-
neering controls on a case by case basis. Issuance of a final noise
standard would presumably relieve much of that burden by providing a
public record that would establish the feasibility of such a standard
in a general fashion.
III. Status
Two public hearings have been held; two economic impact studies
have been issued by OSHA; and several thousand pages of written comment,
oral testimony, and exhibits received. Cost estimates for the various
options under consideration have been substantial, ranging from
$284 million to in excess of $18 billion in annualized cost to industry.
Labor groups have charged OSHA, because of these costs, with delaying
the rulemaking with lengthy studies related to these cost estimates.
IV. Critical Dates
The public comment period is scheduled to close December 8, 1976.
Normally, a final standard should be issued within 60 days after that.
OSHA has indicated in letters to Mr. Meany and Congressman Obey that a
final standard will be issued in "early 1977.' Failure to do so or to
develop an acceptable alternative will likely result in renewed criticism
of OSHA by numerous interest groups, particularly organized labor.
GROUPS WITH SPECIAL SUSCEPTIBILITY TO WORKPLACE HAZARDS
I. Statement of Issue
What should be OSHA's lead standard? More generally, how can OSHA
protect highly susceptible groups in the working population
without violating Equal Employment Opportunity regulations or
other, less formal conventions regarding employment opportunities?
II. Background
The Secretary of Labor is faced with conflicting goals in this
area. OSHA is charged with assuring all workers a safe and healthy
workplace. Medical evidence indicates that some groups have common
characteristics which comprise a heightened susceptibility to
certain toxic substances found in the workplace. Most prominent
are women of childbearing capacity when exposed to lead or to ionizing
radiation or Blacks with sickle cell anemia when exposed to lead.
There are numerous other substances, known and unknown, that affect
particular groups. Moreover, it is often neither technologically
nor economically feasible to lower exposures to such substances
to a level that would protect all workers, including highly susceptible
groups. The alternative may be that OSHA should move to exclude such
groups from the risk of such exposure.
However, this raises issues of equal employment opportunity. For
example, The Office of Federal Contract Compliance, under Executive
Order 11246 and Section 503 of the Rehabilitation Act of 1973, is
required to assure that affirmative action is taken in the employ-
ment and promotion of minority, female and handicapped workers
by Federal contractors. Title VII of the Civil Rights Act of
1964, as amended, also prohibits any employment discrimination.
III. Status
The issue, perhaps, arises most clearly with regard to women.
Currently, 36,000,000 women are in the labor force. The National
Institute for Occupational Safety and Health estimates that more
than 1,000,000 of these women between the ages of 16 and 34 are
currently exposed to chemicals that could affect their capacity
to bear children. The growing awareness of this problem in the
media and increasing activism in major women's groups are creating
special pressures to deal with this side of the issue. The upcoming
hearings on the proposed lead standard are likely to be used as a
forum for their views. Consideration is being given to forming
a special task force on women in the workplace to follow-up
on a just-completed OSHA study on this issue.
IV. Critical Dates
FORD
Early 1977- The hearings on the proposed lead standard will bring
this issue to a head.
LIBRA,
REVISION OF SAFETY STANDARDS
I.
Statement of Issue
How should OSHA proceed on the revision of it safety standards?
II. Background
Comprehensive revision of the several thousand consensus safety standards
began in 1976. Adopted in bulk shortly after the signing, in 1970, of
OSHA's authorizing legislation, these standards were never thoroughly
reviewed. Consequently, many are overly complex, redundant and often
unrelated to employee safety. The standards, in fact, had originally
been written by technicians and were designed principally for voluntary
use in manufacturing by other technicians. They were not meant to be
mandatory standards for use in all workplaces or without professional
advice. Nevertheless, the OSH Act essentially adopted them in toto,
effective August 1971. They have been the subject of much criticism of
OSHA such as "confusing," "petty," and "irrelevant."
After several months of preparation, OSHA launched its revision process
in April 1976 by publishing about 15 percent of the consensus safety
standards and requesting information and comment on areas which should be
modified. Publication was followed by a series of public meetings around
the country to provide full opportunity for inputs. The written and oral
comments received are now being reviewed prior to publication, probably
in February 1977, of a proposed rule suggesting specific revisions of the
subject safety standards. The standards currently undergoing revision
were selected because of their broad impact. Revision should greatly
lessen the regulatory burden on employers while affording at least the
same degree of protection to employees. Nevertheless, some controversy
is likely to surround publication of these revisions.
III. Status
Shortly after OSHA began work, a Presidential Task Force of attorneys
and safety experts detailed from outside agencies, as well as OSHA, was
established to provide assistance. The Task Force addressed itself to
revising an additional 10% of the consensus safety standards. The Task
Force made two separate but related recommendations: one involving
specific areas where revisions of the standards seemed appropriate, and
the other involving a new approach to administering safety standards,
substituting goal-oriented performance standards for the cumbersome
specification standards. These recommendations were conveyed to OSHA
and were publicly discussed by the National Advisory Committee on
Occupational Safety and Health in October 1976. The Task Force's recom-
mendations are now being studied further by OSHA. The next step is
publication in the Federal Register for comment.
IV. Critical Dates
OSHA should revise additional sections of the standards. The Task
Force is presently scheduled to be dissolved at the end of December and
a decision must be made on how to continue the safety standards revision
effort.
FORD LIBRARY
OSHA AGRICULTURAL POLICY
I. Statement of Issue
How should OSHA treat the agricultural sector which, in
many respects, is unique in the spectrum of industries in the
U.S.?
II. Background
OSHA's efforts in the agricultural sector have been limited,
with six standards promulgated pertaining specifically to farm
employers and only 1.5% of OSHA's total inspections made on
farms. Nevertheless, OSHA's actions in this area have drawn
considerable and vocal opposition from the farm community, and
farm state legislators have led several Congressional attempts
to amend the OSH Act. This resulted in the appropriations
amendment exempting farms with 10 or fewer employees from OSHA's
authority for fiscal year 1977. The agency regards as unfor-
tunate the precedent of exclusion of a segment of the working
population from safety and health coverage. Agriculture spokesmen
have maintained that OSHA is insensitive to the nature of farm
employment and has not consulted sufficiently with agriculture
experts in devising farm policy. The fact remains that agri-
culture is a dangerous occupation; the National Safety Council
lists it second in number of employee deaths during 1975.
III. Status of Work on the Issue
As a result of the controversial nature of OSHA's actions in
this area, the Agency has tried to augment its use of agricultural
expertise and advice. A special adviser for agricultural affairs,
with broad agriculture experience, has been hired; OSHA has in-
creased its contacts with the Department of Agriculture and with
Congressional Agriculture committees; the composition of the
Standards Advisory Committee on Agriculture has been strengthened;
and the controversial field sanitation standard proposal of last
summer is being intensively reviewed to determine the proper dis-
position of such a rule.
IV. Critical Dates
The appropriations amendment exempting small farms ex-
pires with the end of the fiscal year, but floor discussion of
the FY 1978 DOL-HEW appropriations is expected in late spring.
It would be particularly important to try and keep the exclusion
from recurring. Any strategy for dealing with this and further
amendments should thus be considered immediately.
In regard to the field sanitation proposal, the OSHA Act
provides that within 60 days after the period for public comment,
OSHA shall direct that a hearing take place or a determination be
made that the rule not be issued. A decision to commence public
hearings, which is expected soon, would set this statutory time-
table in motion.
EMPLOYMENT STANDARDS ADMINISTRATION
ISSUES - FIRST SIX MONTHS
State Workers' Compensation
Legislative Issue
Hearing Loss
Policy Issue
Black Lung Benefits
Legislative Issue
ESA-Continuation of Pay
Policy Issue
Executive Order 11246
Regulatory Issue
Consolidation - Executive Order 11246
Program Issue
ESA-Davis-Bacon/PWEDA
Program Issue
ESA-Davis-Bacon Enforcement
Program Issue
Amend FLSA
Legislative Issue
(Issues listed in approximate order of importance and
urgency.)
Legislative Issue
State Workers' Compensation
I. Statement of Issue
How should DOL respond to the recommendations of the
Interdepartmental Workers' Compensation Task Force?
II. Background
In a July 1972 report, the National Commission on State Workmen's Com-
pensation Laws made 84 recommendations to improve workers' compensation
programs, including 19 identified as so essential that they should be
implemented by the States by July 1, 1975. Six of the essential recom-
mendations concerned closing coverage gaps, nine dealt with the adequacy
of income replacement benefits, Others concerned coverage for work-related
diseased, medical care and rehabilitation benefits, and choice of
jurisdiction to file claims. In May 1974, the President issued a White
Paper generally supporting the 19 essential recommendations and other
improvements in State programs, although generally opposing further
Federal involvement in favor of encouraging State initiative. In addition,
an Interdepartmental Workers' Compensation Task Force was established
to accelerate State reform to evaluate State progress, and to implement
a program of further research.
Both the House Subcommittee on Manpower, Compensation, and Health and
Safety of the House Education and Labor Committee and the Senate Sub-
committee of Labor of the Senate Committee on Labor and Public Welfare
have held lengthy hearings in the 94th Congress. Bills considered by
the subcommittees contained provisions imposing varying levels of
Federalization of the workers' compensation programs. Active interest
by the Congress can be anticipated during the next two years.
III. Status of Work on the Issue
A report by the Interdepartmental Workers' Compensation Task Force is
scheduled in the near future. In addition, ASPER is preparing a decision
paper scheduled for completion in December, which will propose options
related to legislation and the future of the task force.
IV. Critical Dates
A decision of the future of the task force will be necessary soon after
it submits its report. Recommendations to the Congress, based on the
task force report, should be developed by late spring.
Policy Issue
Hearing Loss
I. Statement of Issue
What criteria should be used to determine job-related hearing loss
under the Federal Employees' Compensation Act (FECA) and the Long-
shoremen's and Harbor Workers' Compensation Act (LSHWCA).
II. Background
In 1969, the Department departed from the American Medical Association
guidelines for testing for hearing loss cases under the FECA, adopting
more liberalized criteria based on studies by the National Institute of
Occupational Safety and Health. The more liberal standards were applied
to the LSHWCA in July 1976. The change in standards involves the tonal
frequency levels at which hearing loss is tested and the formulae by
which impairment is calculated.
Concurrent with the change in standards, the number of FECA claims
filed annually alledging hearing loss rose from approximately 400
annually to between 5,000 and 7,000 annually. The Department of Defense,
the General Accounting Office and Labor's Internal Audit group have
raised issues suggesting that the more liberal criteria are encouraging
claims, resulting in undue benefits for limited impairment. There
are no universally accepted frequency levels for testing hearing impair-
ment as it related to workers' compensation principles. There are also
criticisms-from the same source regarding the procedural aspects of
hearing loss adjudication which are being received. With a possible
liability of $90 million associated with the 14,000 plus hearing loss
cases currently in the pipeline, the credibility of adjudicatory
standards is paramount.
III. Status of Work on the Issue
Several papers have been prepared in prior years on the subject by the
Department's internal audit group. Results of GAO's inquiries into the
subject are contained in House Report 94-1757 and accompanying testimony
from this fall's House oversight hearings on the FECA. ESA is internally
reviewing several options to assess changes in hearing loss procedures
and is negotiating with AMA'a Academy of Ophthamology and Otoloryngology
(AA00) for research on testing criteria.
IV. Critical Dates
With pressures from claimants for prompt adjudication continuing and equal
pressures to change procedures from Federal agencies also continue, a
policy and operational determination is urgently needed.
Legislative Issue
Black Lung Benefits
I. Statement of Issue
The Department must develop a position on probable proposals to amend
the Black Lung Benefits Act, to among other things, extend the 1981
termination date of Federal payment of Black Lung benefits, establish
a trust fund to pay the benefits, establish automatic entitlements to
benefits, and to liberalize the medical evidence required to approve
claims.
II. Background
Both the House of Representatives' and the Senate's Committee on Labor
and Public Welfare (with amendments by the Senate Finance Committee)
approved bills in 1976 to amend the Black Lung Benefit provisions of
the Federal Coal Mine Health and Safety Act, although the measures
had significant differences. Both bills sought to liberalize standards
for eligibility to counter the low rate of approval of claims (8-10%),
and extend the statutory termination date of the program (currently
at 1981). The Congress can be expected to take up the legislation
when it returns in January. There is a degree of interest within the
Department on the trust fund concept. The Administration has, however,
flatly opposed both the House and Senate measures proposed in the last
Congress, particularly any liberalization of entitlement, due to the
impact on Federal costs.
III. Status of Work on the Issue
The Office of the Solicitor of Labor is preparing an issue paper which
will consider the various options for restructuring the Black Lung
legislation, including possible trust fund proposals.
IV. Critical Dates
The SOL paper is scheduled for completion and subsequent circulation for
comment in December. If the Executive Branch wants to take the initiative
on Black Lung Benefits Act legislation, it should have formulated positions
for the preparation of testimony and have drafted any alternative legis-
lation by the end of February 1976.
Policy Issue
ESA- ; Continuation of Pay
I. Statement of Issue
The Department must determine whether or not the expanding caseflow
and alleged claims filing abuses resulting from the Continuation-of-
Pay (COP) provisions of the Federal Employees' Compensation Act
(FECA) are sufficient to warrant revisions to the present legislation
or regulations.
II. Background
The 1974 Amendments to the FECA included a provision for salary
continuation for up to 45 days for an employee's job-related "traumatic"
injury, elimination of the initial 3-day waiting period before receipt
of benefits, and free choice of a personal physician to examine and
certify an injury. The COP provision intended to alleviate the then-
existing major timelag between the date of an employee's injury and
the initial receipt of benefits. In this respect, that particular
provision has succeeded. However in combination these provisions
appear to have stimulated increased utilization of the FECA for short-
term injuries, with over 80,000 COP cases filed in FY 1976, compared
to about 28,000 initially projected at the time the provisions were
enacted. Federal agencies are experiencing increasing amounts of
dollar outlays for non-productive labor time as a result of such cases,
and are alleging that the provisions encourage abuse and malingering.
This has been brought out in Congressional oversight testimony by
several agencies. The FECA program has the responsibility to "post-
adjudicate" these agency-paid claims (certify for job-relatedness and
proper level of payment), and process all bills and costs for medical
treatment associated with COP cases. There is evidence that current
procedures do not permit either the agencies or FECA to realistically
monitor the use of the COP provisions.
III. Status of Work on the Issue
An in-depth analysis of the COP provision, and its workload and fiscal
impact on both the FECA program and other Federal agencies, is currently
underway. It will address the proper period of agency responsibility
for salary continuation, the need, if any, for the re-institution of an
initial waiting period for benefits, the process for an agency to
controvert an employee's claim, and the impact of the free choice of
physicians on FECA utilization. Other Federal agencies, as well as
the General Accounting Office and Congressional staff, are also studying
the rising costs and potential for abuse in claims filed under the
FECA. A number of options to increase agency involvement and to simplify
operational procedures are being developed.
IV. Critical Dates
With oversight hearings having been just concluded, mounting pressures
from Federal agencies, and widespread, if often inaccurate, adverse
publicity of the FECA program, decisions will be needed early in 1977
with regard to the approach to the subject. Federal agencies, such as
the Postal Service, are pushing for a quick response.
While a number of corrective actions could be taken administratively,
under current authorities it may be necessary to seek amendatory legislation.
Regulatory Issue
Executive Order 11246
I. Statement of Issue
Should the Department finalize the proposed regulations under E.O. 11246
for comment to simplify compliance procedures and reporting requirements
for Federal contractors subject to the Executive Order.
II. Background
On September 17, 1976, the Department published for comment material
changes in the regulations establishing requirements for contractor com-
pliance under E.O. 11246. The Executive Order establishes requirements
that Federal contractors must meet in taking affirmative action to hire
and advance in employment minorities and women. The proposed regulations
are designed to reduce the costly paperwork burden associated with the
affirmative action requirements, particularly for small business. The
proposed changes would raise the dollar volume and employee threshold
before an Affirmative Action Plan and subsequent reports must be filed. The new
regulations would also substitute a "letter of deficiency" for the
present "show cause notice" procedures in case of non-compliance.
III. Status of Work on the Issue
Public comment was solicited at a series of hearings held during the
week of November 2. Women's groups and minority organizations do not
favor the proposal -- especially the elimination of the show cause notices.
Reaction was strong enough to provoke the House Subcommittee on Equal
Opportunities to call a hearing on November 10. The Department noted
that these changes had been under consideration for five years and were
developed in close consultation with a variety of interest groups,
although there was no attempt to obtain a consensus. No commitments
were made during that period.
IV. Critical Dates
The 60 day comment period is still in force. In addition, the testimony
obtained at the four open hearings must be reviewed.
The opinion expressed at the November 10 Congressional hearing was that
the first part of the regulations ready to go into effect would be
those dealing with E.O. 11246.
The current target date for the Department'slevaluation of comments and
final action is January 17, 1977.
Program Issue
ESA- ; Davis-Bacon/PWEDA
I. Statement of Issue
Federally funded construction work is being performed by local
government entities without the payment of Davis-Bacon Act prevailing
wages.
II. Background
Title X of the Public Works and Economic Development Act (PWEDA)
provides funds to local governments to undertake construction projects.
The more recent Local Public Works Capital Development and Investment
Act of 1976 funds projects which could begin within 90 days of grant.
The intent of the latter measure was to alleviate unemployment quickly,
and to provide quick stimulation to the economy. Some recipients are
using funds from the Acts to perform construction with their own
employees ("force account") rather than the rates paid to regular
employees for the trades in question. In most cases the latter
wage rates are lower than those specified for Davis-Bacon projects.
These Acts are administered by the Economic Development Administration
(EDA) in the Department of Commerce. The enabling legislation contains
the normal references to Davis-Bacon provisions for Federally funded
construction. Instances have occurred where grant recipients apparently
hire large numbers of employees on a temporary basis to perform
construction which would not normally be performed with their regular
work force. The Department has taken the position that in such
instances, Davis-Bacon provisions should apply.
III. Status of Work on the Issue
The Department's position was communicated to the Secretary of
Commerce initially in April 1976 concerning the PWEDA. (See
Attachments). The Secretary of Commerce responded in that same
month, in effect rejecting the DOL position, citing previous decisions
of the Solicitor of Labor concerning "force account" work. With regard
to the subsequently passed Local Public Works Capital Development
and Investment Act of 1976, which has similar provisions, the
Department has again voiced its position in a letter to the Secretary
of Commerce dated October 27, 1976. No response has yet been received.
IV. Critical Dates
Commerce will likely reiterate its conflicting position, thereby
leaving this issue at impasse. There is public interest in this
issue, and ultimate resolution of the differing agency positions
will be needed early in 1977.
Program Issue
ESA-2; Davis-Bacon Enforcement
I. Statement of Issue
The current minimal enforcement of the prevailing wage and other
provisions under the Davis-Bacon Act for Federally-funded construction,
requires a basic decision as to whether this circumstance can continue,
and the best means to obtain a strengthened enforcement posture.
II. Background
Davis-Bacon provisions apply to about 75,000 construction contracts
annually with an estimated total value of $35 - $40 billion. A
conservative estimate of direct wage payments on these projects is
approximately $13 billion annually. Enforcement authority under
the Davis-Bacon Act is fragmented. Primary enforcement responsibility
rests with Federal contracting or grant agencies, as delegated under
Reorganization Plan 14 of 1950. Investigation has shown that a
number of these agencies are performing little, and in some cases
no enforcement work. In FY 1976, all contracting agencies combined
conducted 2,135 compliance actions, and reported only 133 cases in
which violations exceeded $500. ESA conducted 904 compliance actions,
of which 304 involved over $500 in violations. Of particular concern
is the fact that some agencies conduct no enforcement whatsoever.
As part of the FY 1976 budget cycle, a proposal was made to OMB to
consolidate enforcement authority for Davis-Bacon in the Department
of Labor. This was based on a PBRC analysis of alternatives. OMB
has given a preliminary indication that this approach will be turned
down because of overall concern with the validity of determinations
and the fact that contracting and grant agencies do not have resources
discretely identified for DBRA enforcement purposes. The resource
aspect of the issue would thus remain unresolved, even if there is
approval or endorsement of the basic issue of enforcement authority.
Alternative program and budgetary strategies therefore need to be
developed if there is to be a viable enforcement program.
III. Status of Work on the Issue
To spot check the overall lack of enforcement, ESA undertook investi-
gations this fall, of twenty randomly selected projects. The contract
value of these projects was about $80 million. While the investigations
are not yet complete, preliminary findings show compliance on eight
projects, minor violations on three, substantial non-compliance on
eight, and no judgment yet on one. There was no agency enforcement
activity on 13 of the twenty. Wages found due to workers to date total
over $70,000, and will climb higher. All indications are that the
compliance situation will continue to deteriorate. ESA is initiating
an options study on alternative enforcement strategies.
IV. Critical Dates
Enforcement strategies and methodologies, and the identification of
resource needs will be required to be completed by mid-1977, prior to
final Departmental budgetary decisions for the FY 1979 budget cycle.
Legislative Issue
Amend FLSA
I. Statement of Issue
The Department must formulate a position on probable amendments to the
Fair Labor Standards Act to increase the Federal minimum wage by statutory
action and/or by utilizing a price or wage index, to increase the over-
time penalty, to eliminate or revise the tip credit, and to establish
a youth differential, and to eliminate current exemptions.
II. Background
During the Fall of 1975 the Subcommittee on Labor Standards of the House
Committee on Education and Labor held hearings on H. R. 10130, a bill
introduced by Chairman Dent to amend the Fair Labor Standards Act. The
bill would have increased the basic $2.30 an hour minimum in steps to
$3 an hour with subsequent increased tied to the Consumer Price Index
similar to the increases provided for the pensions of retired Federal
employees. Additionally, the bill would have increased the ovettime
penality rate and eliminated the 50 percent tip credit for tipped em-
ployees. Subsequent draft versions of the Dent bill would have lowered
the initial increases in the minimum and utilized average hourly earnings
concepts for subsequent increases, eliminated any change in the overtime
penalty, and modified the change in the tip credit. Throughout 1976,
the Dent subcommittee consistently indicated an intent to mark-up and
report a bill even in the final months of the session. Chairman Dent
has indicated that minimum wage legislation will be the first order of
business of his subcommittee when the Congress returns in January and
the Department and Executive Branch will be asked for views on the
legislation. The critical issues will be whether or how much the minimum
should be increased, and whether or how it should be indexed. Both
questions are tied directly to the lost real earnings of minimum wage
workers since the last amendments in 1974 and concerns about the disem-
ployment effects of increases particularly with high unemployment rates
of certain' components of the labor force, such as teenagers and minorities.
In addition, the Department is now completing a series of research studies
mandated by the 1974 amendments to the Fair Labor Standards Act on the
impact of current exemptions to the Act and the test for exclusion from
coverage of professional and administrative personnel. The results of these
studies will probably be incorporated in any consideration of amendments.
III. Status of Work on the Issue
The Assistant Secretary for Policy, Evaluation and Research held a seminar
of academicians on November 16, on the issues which was attended by staff
of ESA and other interested agencies. ASPER is preparing an issue paper
due for completion in December, based upon previous work done in connection
with the proposed legislation and hearings, and taking into account the
November 16 seminar.
IV. Critical Dates
The Administration should have its positions formulated
early in the Congressional session.
LMSA
LABOR-MANAGEMENT SERVICES ADMINISTRATION
ISSUES - FIRST SIX MONTHS
1.
UMTA - DOL jurisdictional Issue re:
Regulatory Issue
13(c) Employee Protections
2.
Issuance of new 13 (c) regulations
Regulatory Issue
3.
Reduction of FLMR case backlog
Program Issue
4.
LMSA involvement in pre-election
Program Issue
technical assistance
5.
Jurisdiction over National Education
Regulatory Issue
Association under LMRDA
6.
Memorandum of Understanding with FBI
Program Issue
re: investigation of criminal pro-
visions of LMRDA
7.
LMSA participation with Justice
Program Issue
Department in Strike Forces of
Organized Crime Program
8.
Confidentiality of construction
Program Issue
industry wage data under FOI claim
9.
Departmental response to anticipated
Legislative Issue
legislation re: Federal employee labor
relations
10.
Departmental response to anticipated
Legislative Issue
legislation re: collectivd bargaining
rights for state and local public
employees
11. Departmental response to anticipated
Legislative Issue
legislation re: "common situs"
picketing in construction industry
12.
Departmental response to anticipated
Legislative Issue
legislation re: repeal of Section
14 (b) of the Taft-Hartley Act.
Relationship of LMSA to Pension and
Welfare Benefits Programs (see PWBP
section)
(Issues listed in approximate order of importance and
urgency).
Employee Protections - Interdepartmental Jurisdiction Issue
I.
Statement of Issue
A policy statement published in the Federal Register on
October 20, 1976, for comment contained a paragraph which,
in the view of the Department of Labor, seeks to preempt
the Secretary of Labor' authority with respect to employee
protections in certain cases.
II.
Background
The Department of Transportation is not particularly enthusiastic
with the employee protection program and has, on occasion,
sought to limit its applicability. In the instant case, UMTA
(Urban Mass Transportation Administration of DOT) made
statements in the Federal Register concerning the application
of 13(c), and the eligibility of certain employees for coverage
thereby, in paratransit situations. That paragraph reads as follows:
Where an organization is providing paratransit
service as an incidental adjunct to its main
business, UMTA will not consider such organi-
zation to be a mass transportation company within
the meaning of Section 3(e) of the Act, or a mass
transportation company or system with employees
entitled to protection under Section 13(c). For
example, a nonprofit senior citizens center receiving
capital assistance directly or through a public body
under Section 3 or Section 16 of the Act for the purpose
of providing transportation services to and from the
center, would be considered by UMTA as not within
the meaning of Sections 3(e) and 13(c). Similarly,
a private taxi operator providing shared-ride para-
transit services or contract services to a public
transit authority, e.g., to provide special transpor-
tation services for elderly and handicapped persons,
could be held to be providing such services on an
incidental basis to its main business. (underscoring
added)
- 2 -
UMTA's promulgation of this Notice with the statements concerning
13(c) coverage constitutes a blatant disregard of the Secretary of
Labor's authority and responsibility under Section 13(c). UMTA
is obviously attempting to usurp the Secretary of Labor' S decision
making responsibility. At best, the Secretary of Labor is left in
a position of having to comment on a proposed policy statement
concerning his own program.
The UMTA statement on 13(c) seems to say that if a non-transit
organization provides transportation services only incidentally to
its primary business activity, then its provision of those transporta-
tion services, even with Federal assistance, will not invoke 13(c)
protections. UMTA then implies that even taxi firms might qualify
under this exception.
Left unanswered by the UMTA statement are numerous questions.
For example, if a firm qualifying under the "incidental service"
exception engages in Federally-supported activity which causes the
lay-off of employees on existing transit systems, are those employees
protected?
More important than these technical questions, however, is the matter
of UMTA's usurption of the Secretary of Labor's administrative re-
sponsibility under Section 13(c). If UMTA can define 13(c) jurisdiction
here, what is to keep UMTA from determining its application, or
interpretation, elsewhere.
III. Status
Assistant Secretary DeLury sent a strong letter of protest to
UMTA, and is currently awaiting a reply.
IV. Critical Dates
A retraction as soon as possible by UMTA, before any action is
taken under the proposed policy, is the only settlement of the matter
acceptable to the Department of Labor.
Employee Protections Regulations
I.
Statement of Issue
The issue is: (1) whether or not regulations or guidelines should
be issued; and (2) what the content should be, i.e., procedural
or substantive or both.
II.
Background
The Urban Mass Transportation Act of 1964, as amended, specifies
that the Secretary of Labor must certify that the required employee
protection provisions are in place before the Department of
Transportation may release grant money under the statute.
Until recently, Federal grant assistance to the Urban Mass
Transportation sector was almost exclusively devoted to improve-
ment of existing systems. The employees of most such systems
were organized and the parties were familiar with negotiations
techniques. During all of this time the program was administered
on an informal basis without written regulations or guidelines.
In the last two years substantially more money has been made
available, resulting in funding for a greatly increased number of
projects. A formula grant program for operating assistance has
been enacted, and support has been given to new modes of trans-
portation. This change has brought many new applicants into
the program many of whom represent public jurisdictions with
little or no experience in labor-management relations and, in
many cases, they are strongly opposed to public employee
bargaining.
On July 23, 1975, representatives of the American Public
Transit Association, the Amalgamated Transit Union, and the
Transport Workers Union of America signed a National Employee
Protective Agreement for application to operating assistance
grants under the Urban Mass Transportation Act. The agreement
was executed by members of the railroad unions on July 31, 1975.
Upon signing of the National Agreement the Secretary of Labor
joined with the parties in encouraging use of the agreement as
promptly as possible by individual transit employers and
appropriate local representatives of affected employees. Al-
though the agreement has worked well in providing a vehicle
for expedited certification in a vast number of cases, it has
met with vocal opposition from a select number of applicants.
Notwithstanding, the Department has continued to encourage its
utilization for operating assistance grants.
- 2 -
III. Status of Work on the Issue
In June 1976, the President, through the Domestic Council,
directed a number of actions by the Departments of Labor
and Transportation for purposes of review of the current pro-
cedures and practices utilized under Section 13(c). As part of
this review DOL met with and received proposals from numerous
organizations having an interest in Section 13(c).
The Department indicated in October 1976, its intention to
publish proposed guidelines. Final action on the proposals
was to be considered following receipt and review of comments
by various interest groups.
IV. Critical Dates
Consultative sessions on the guidelines began in October 1976.
They are continuing at the present time and should be concluded
by January. However, if widely differing reactions are evident
among the various affected groups, decisions will be required
concerning whether or not, and how much, the proposed guide-
lines should be modified on the basis of objections.
I.
Statement of Issue
What method should be devised to reduce the current excessive
growing FLMR case backlog at both the field and national office levels
in order to make the program more responsive to the needs of the
clientele in the Federal sector?
II. Background
Whereas representation case filings have remained constant in FY 75
and FY 76, unfair labor practice filings have increased 31% between FY 74
and 75 and again by 32% between FY 75 and 76. Grievability/arbitrability
application filings have increased 24% between FY 75 and 76. Without an
increase in staff, the increase in filings has resulted in FY 76 backlogs
in the field of 4.8 months in representation cases, 9.3 months in unfair
labor practice cases and 9.2 months in grievability/arbitrability cases.
During this same period, backlogs in the national office have increased
to 7.2 months for decisions and 3.5 months for request for reviews. With
FY 77 and FY 78 projections of 25% increases in unfair labor practice
filings and 15% increases in grievability/arbitrability filings, backlogs
for those years should be far greater. To have an effective and responsible
Federal labor relations program, backlogs in the field should be reduced
to 4 months for grievability/arbitrability and representation cases and 6
months for unfair labor practice cases. Backlogs in the national office
should be limited to 3 months. To offset the current excessive backlogs
and those anticipated for FY 77 and 78, the Assistant Secretary has
requested, and PBRC has approved, the seeking of 40 additional program
positions in a supplemental FY 77 budget request.
III. Status of Work on the Issue
A hearing on the 40 program positions was held before OMB on
September 22, 1976, and the matter is presently under consideration by
that agency.
IV. Critical Dates
If OMB does not authorize a supplemental budget increase in FY 77,
the seeking of a budget increase in FY 78 will be imperative.
To what extent should LMSA be involved in the provision
of pre-election technical assistance and in the actual
conduct of union elections?
I.
Statement of Issue
A decision will be required as to the extent, direction and
level of effort which LMSA, in its administration of the
Labor-Management Reporting and Disclosure Act (LMRDA), utilizes
for the provision of pre-election advice and technical assis-
tance and for the observation of the conduct of union elections.
II.
Background
In enforcing the LMRDA election standards, LMSA has adopted a
policy of encouraging unions to resolve their own problems
with government intervention as a last resort. In an attempt
to avoid potentially actionable complaints concerning an
election and to minimize future demands for an investigation
or rerun, LMSA, when requested, has provided a limited amount
of advice and technical assistance before the conduct of an
election to help the unions comply with the LMRDA election
standards. Although LMSA had been requested in advance to
supervise and conduct the elections for major unions, the
Agency has declined to do so because of a lack of authority
and resources to undertake such an activity.
In the last year, because of Secretary Usery's desire to anticipate
and head off possible problems, LMSA agreed to observe and
advise the IUE on its election of international officers.
This action sets a precedent for LMSA, one which has heavy
resource implications for the administration of this program.
III.
Status of Work on the Issue
Upon completion of its involvement in the IUE election, the
Agency will review and assess its experience and develop an
issue paper concerning the implications and policy options
for this activity.
IV.
Critical Dates
It is anticipated that over the next few months LMSA will
prepare an option paper for review at Departmental policy-
making levels. This review will be required in the first
half of calendar 1977 because of the impact on resource
requests associated with the FY 1973 planning cycle.
Is the National Education Association a Labor Organization under the LMRDA?
I. Statement of Issue
The issue is whether the National Education Association (NEA) is a labor
organization within the meaning of the Labor-Management Reporting and
Disclosure Act of 1959, as Amended (LMRDA) by virtue of the involvement
in the private sector of approximately 25 local affiliates, or whether
the NEA is not subject to the LMRDA in that its involvement in the private
sector is so limited as to be "de minimis."
II. Background
The Department issued a regulation in 1959 (29 CFR 451.3(a)(4)) providing
that a national labor organization composed of both governmental and non-
governmental locals is subject to the LMRDA, and has asserted coverage
over several national labor organizations which have only a minimal in-
volvement in the private sector (such as the American Federation of
Teachers (AFT), AFL-CIO, the American Federation of State, County, and
Municipal Employees, AFL-CIO, and the American Association of University
Professors). This position, which implicitly rejects "de minimis, may
be challenged in court by the NEA.
This issue is significant in that action cannot be taken on complaints
concerning the election of officers of the NEA until the question of the
Secretary's jurisdiction under the LMRDA is resolved. This matter is
especially significant at present in that there is a pending election
complaint on which action must be taken in the near future. We have
obtained a waiver to extend the statutory period for action until the
end of November 1976, and if an additional waiver is obtained, a decision
on the coverage of the NEA may be deferred until the beginning of 1977.
This issue has been raised regularly over the past ten years by election
complaints and by complaints from officials of the AFT that the Department
has not treated the AFT and the NEA equally in the matter of coverage.
The Department has not asserted coverage over the NEA in the past because
of the lack of evidence that the NEA has affiliated organizations which
are active in the private sector. Evidence on approximately 25 such
local organizations has now been obtained.
III. Status of Work on the Issue
In view of the possibility that legal action may arise whatever the de-
cision on this issue may be, the evidence and a recommendation were for-
warded to the Associate Solicitor for Labor-Management Laws.
IV. Critical Dates
The critical dates are late November 1976 for the pending election com-
plaint, and early next year with regard to the long-pending AFT coverage
complaint.
The Memorandum of Understanding re:
Enforcement of the LMRDA
1. Statement of Issue
Whether the Memorandum of Understanding entered into by the Depart-
ment of Labor and the Department of Justice in early 1960, delegat-
ing to the FBI the investigation of most of the criminal provisions
of the Act, should now be rescinded.
2. Background
Upon passage of the Labor-Management Reporting and Disclosure Act
in September 1959 it became apparent that the Bureau of Labor-
Management Reports of the Department did not have the expertise
for investigating the criminal provisions of the statute. Accord-
ingly, in early 1960, the Department of Labor entered into a
Memorandum of Understanding with the Department of Justice dele-
gating to the FBI the authority to investigate many
of the criminal violations of the LMRDA. Over the years the Memo-
randum of Understanding has been modified to the extent that the
individual U. S. attorneys may designate either LMSA or the FBI
to investigate the violations at issue; almost universally the
U. S. A's prefer LMSA to conduct the investigations in labor-
management matters. Since LMSA now has the expertise to enforce
all provisions of the Act the Memorandum of Understanding serves
no practical purpose and should be amended leaving to the FBI
only the enforcement of officer-convict and violence violations.
3. Status of Work on The Issue
A proposed revised Memorandum of Understanding is currently being
prepared for discussion with the D/J.
4. Critical Dates
Since the Memorandum of Understanding has always imposed barriers
to efficient field operations it is recommended that it be amended
by May 30, 1977.
President's Anti-Organized Crime Program
1. Statement of Issue
The necessity for formalizing with the Department of Justice the
Department of Labor's participation in the Anti-Organized Crime
Program.
2. Background
LMSE provides the Department of Labor support to the Anti-Organized
Crime Strike Forces presently operating in 14 major areas. Each
Strike Force is headed by a special attorney from the Department of
Justice and is supported by investigators from the various federal
law enforcement agencies participating in the program LMSE has
provided support to the President's Anti-Organized Crime Program
since its inception. However, we have never formalized the terms
and conditions of our participation with the Department of Justice.
As a result, we found LMSE Compliance Officers being used on investi-
gations involving mail fraud, internal revenue violations, etc.
We have, within house, corrected these situations and now limit our
participation to labor-management matters only. It is essential
that we enter into a Memorandum of Understanding with the Depart-
ment of Justice defining and delimiting Department of Labor partici-
pation in this program.
3. Status of Work on the Issue
LMSA has drafted a proposed Memorandum of Understanding which will
be discussed with appropriate officials in the D/J. A meeting was
recently held with the representative of the D/J responsible for
the Anti-Organized Crime Program at which time this issue was dis-
cussed. LMSA requested that coordinating plans be made by all
participating agencies for the coming year's activities and that
the participating agencies be given more say in where the Strike
Forces are to be located, the goals and targets, and the allocation
of personnel.
4. Critical Dates
The Memorandum of Understanding should be finalized within the next
six months. Coordinating planning by all participating agencies
should be undertaken within the same time frame. Therefore, this
matter should be concluded no later than May 30, 1977.
PROGRAM ISSUE
I.
Statement of Issue
Construction industry wage data submitted on a confidential
basis may be subject to release under the Freedom of
Information Act.
II.
Background
When the union members of the CISC pledged their support
to the continuation of the CISC data system in 1974, they
requested that the Department of Labor not make the total
system available on request except to the national construction
unions. The unions felt that the wholesale availability of this
data in a convenient computer format could prove inimical to
the best interests of the industry during negotiations. Specifi-
cally, the unions feared that the data would be widely published
and that efforts would be made to use the published data to
attempt to influence the course of negotiations.
The Department of Labor agreed to honor the union': request
to keep the file confidential and to date there has been no
formal effort made by unauthorized parties to obtain copies of
the file. During 1976, however, several inquiries, were
received by the Division concerning the availability of the file.
None of these inquiries resulted in a claim under the Freedom
of Information Act.
III. Status of Work on the Issue
As a result of the inquiries the Division sought an opinion from
the Solicitor of Labor concerning the defensibility of the
Department' S informal understanding with the building trades
unions. The SOL suggested that the unions supplying information
to the Division should expressly request confidentiality for that
information and that the Department should agree to notify the
unions should an FOIA request be received by the Department.
The Solicitor' S suggestion has been carried out through an
exchange of letters between Robert Georgine, President of the
Building and Construction Trade Department. AFL-CIO, and
Bernard DeLury, Assistant Secretary of Labor for Labor Manage-
ment Services Administration. However, the basic issue of
- 2 -
whether or not to release the data has not been resolved.
There is concern that, if the Department does not continue
to comply with the restrictions originally agreed upon, the
unions will no longer supply the basic data.
IV. Critical Dates
The matter will not require a decision unless a request
under the Freedom of Information Act is made by an organiza-
tion restricted under the agreement with the construction unions.
I.
Statement of Issue
Should there be a statutory, rather than Executive Order, framework
for the regulation of Federal labor-management relations?
II.
Background
Although Executive Order 11491 was extensively amended most recently
in February 1975, many interested parties view any changes short of
legislation as unsatisfactory, half-way measures. Federal employee
unions and outside groups, such as the ABA and the Federal Bar
Association, have cited fundamental defects in the present system
that can be remedied only by legislation. These include the narrow
scope of bargaining, the lack of a truly neutral and independent au-
thority to administer the program, and the absence of judicial review.
Several bills to replace the Order have been considered by recent
Congresses. No bill has ever been reported out of committee, but
it is likely that similar proposals will receive attention in the 95th
Congress. The issues involved in such legislation have been studied
at the staff level by several Task Forces within the Department over
the past several years, but no decisions were taken at a policy-making
level on how to proceed further.
III. Status of Work on the Issue
In the absence of a policy decision in this matter, no effort had been
made in prior years to draft a Departmental bill. Now, however,
renewed staff work leading to development of a legislative proposal
is ane of LMSA's high priority objectives for fiscal 1977, but work
has not begun pending resolution of the policy questions noted in part
IV below. Further, research contracts have been let and are in
progress to study several key issues in Federal labor-management
relations.
IV. Critical Dates and Questions
The major question that needs to be answered at this time is whether
the Department should begin to formulate draft legislation to regulate
Federal labor-management relations. If a decision is made to proceed
in this direction, a related question is how, and to what extent, other
interested parties, such as other Federal agencies, employees, unions,
and the public, should be brought into the process of formulating a
legislative proposal. Finally, the myriad substantive policy questions
involved in drafting the details of such legislation will have to be addressed.
If we are to avail ourselves of the findings of outstanding research
contracts, the earliest date by which a draft bill could be finalized
would be early 1978.
I. Statement of Issue
Is Federal legislation to protect the collective bargaining rights of
State and local government employees necessary or desirable?
II. Background
In the past, the Department has taken a public position opposing Federal
legislation in this area on numerous grounds, including the relative lack
of experience in public sector bargaining at all levels. Notwithstanding
this public position, some of the major issues and problems that might
be raised by Federal legislation in this area have in the past been under
study within the Department at the staff level.
In recent years, moreover, Congress has shown an interest in this area,
since some States have failed to enact even minimal guarantees of the
right of employees to organize and bargain, and the provisions of other
States' laws vary widely. Many unions and other interested groups, and
even some representatives of State and local labor relations systems,
advocate one form or another of Federal legislation. The recent Supreme
Court decision in the National League of Cities case holding unconstitu-
tional the application of the Fair Labor Standards Act to States and local
governments, however, may make Congress more cautious in proceeding
in this direction, since the ruling casts doubt on the constitutional
underpinning for Federal regulation of States that is grounded on the
Commerce Clause.
III. Status of Work on the Issue
In its legislative program for 1977, the Department proposes to study and
prepare recommendations on what Federal role, if any, is appropriate in
this area.
IV. Critical Dates and Questions
A decision by the Department on whether to modify its current opposition
to any Federal legislation in this area, and to begin to develop Federal
legislation will be influenced by several key factors, including the
state of labor relations in the non-Federal public sector and the interest
expressed in such legislation by the 95th Congress. If a decision is made
that Federal action is desirable, then it will be necessary to explore the
form that legislation should take, as well as how to avoid the constitutional
problems encountered by the FLSA amendments in the National League of
Cities case.
I. Statement of Issue
What official position should the DOL take towards legislation to
permit "common situs" picketing in the construction industry?
II. Background
The Supreme Court's decision (1949) in the Denver Building Trades
case held that Sec. 8(b)(4)(B) of the Taft-Hartley Act prohibited a
union from picketing a construction site whenever the picketing had
the effect of inducing the employees of contractors with whom the
union had no dispute to refuse to perform their services. The
construction unions have long opposed this ruling as denying their
members the same rights as industrial unions, who may picket any
employer at the industrial site which is involved in the normal
operations of the primary employer.
Bills have been introduced in the Congress over the past 25 years
to amend the law and overturn the Denver Building Trades decision.
Although such legislation was generally supported by previous
Administrations, none of those bills passed the Congress prior to
1975. Most recently, Secretary Dunlop in 1975 supported a legislative
proposal to permit "common situs" picketing, and formulated a
proposal to reform construction industry collective bargaining. The
two proposals were merged as H. R. 5900, which was passed by the
Congress but vetoed by President Ford (for which he was severely
criticized by the unions). The Democratic platform supports "the
full right of construction workers to picket a job site peacefully. "
III. Status of Work on the Issue
The DOL has done no work on this matter since the President's
veto.
IV. Critical Dates
It is anticipated that a "common situs" bill will be introduced in
the new Congress, but any action by the Congress will depend on
other priorities. A policy decision is needed as to whether or not
the DOL should take any legislative initiative in this matter.
I: Statement of Issue
What official position should be taken by the DOL towards Sec. 14(b)
of the Taft-Hartley Act?
II.
Background
Sec. 14(b) of the Taft-Hartley Act establishes the right of any State
to enact a so-called "right-to-work" law prohibiting union-shop
provisions in collective bargaining agreements covering employees
in that state. Twenty states currently have such laws, which the
unions oppose as a deterrent to their organizational efforts. Louisiana
was the most recent state (mid-1976) to enact such a statute and in
November 1976, the voters in Arkansas defeated a proposal to change
that state's "right-to-work" law.
President Ford opposed the repeal of Sec. 14(b); consequently, while
many DOL officials have on various occasions expressed their per-
sonal oppostion to "right-to-work" laws, no initiative has been taken
by the DOL to repeal Sec. 14(b), (nor was any such bill introduced by
any other person in the last Congress). The AFL-CIO has repeatedly
recorded its opposition to Sec. 14(b), and the 1976 Democratic platform
promises to "seek repeal of Sec. 14(b). 11
III. Status of Work on the Issue
No work is currently underway in the DOL with respect to Sec. 14(b).
It is likely that a bill to repeal Sec. 14(b) will be introduced in the
new Congress, but any Congressional action on this matter will depend
on other priorities.
IV. Critical Dates
The DOL regularly receives correspondence and inquiries (many
referred from the White House) on the Administration's views towards
Sec. 14(b) and "right-to-work" laws. Recent responses frequently
quote the President's opposition to the repeal of Sec. 14(b). It is
anticipated that the DOL will need to respond to further inquiries on
this matter at the outset of the new Administration. A policy decision
will also need to be made as to whether the DOL should take any
legislative initiatives in this matter.
PWBP
Priority
PENSION AND WELFARE BENEFITS PROGRAMS
I. Program Issues:
1. Case Quality Control and Inter-Intra Agency
A B C C
Coordination
2. Central States Teamsters Investigation
3. Report Form Processing Coordination
4. Training
II. Policy Issues:
A
1. Dual Jurisdiction with the Internal Revenue Service
A
2. Pension Program Location within Department
C
3. Pre-Emption of State Laws
B
4. Public Disclosure of Filings
III. Legislative Issues:
C
1. Amendments to the Employee Retirement Income
Security Act (ERISA)
IV. Regulatory Issues:
1. Compliance Strategy Implementation
A A B C
2. Exemptions from ERISA Requirements
3. Regulations Interpreting ERISA
4. Technical Assistance and Public Education
Strategy
* A = Priority 1
B = Priority 2
C = Priority 3
I-1
I. Statement of Issue: Case Quality Control and Inter-Intra Agency Coordination
Control of ERISA case quality is closely tied to the level and quality of coordination
between the Department, the IRS, and the Department of Justice, and between the
Office of the Solicitor and PWBP.
II. Background
Upon enactment of ERISA there were no procedures or policies applicable to case
identification, control, investigationor resolution. Since a high degree of
quality in cases contributes to effective administration of ERISA an initial
investigation program was developed and set forth in a Compliance Officers Hand-
book. In addition, LMSA personnel responsible for ERISA program cases in the field
review all reports of investigation submitted (the National Office (NO) does not
have direct control over these persons). The Enforcement staff furnishes technical
advice to the investigating officer in unique or potential precedent setting
situations.
The NO is responsible for maintaining liaison with the Department of Justice (DOJ),
the Internal Revenue Service (IRS) and other agencies to augment the work of the
field, advises the field of appropriate areas of investigation in a case, and reviews
to assure that those areas are covered.
Coordination with the DOJ with respect to investigation and litigation has been a
tremendous problem. The DOJ has been reluctant to fully coordinate its activities
in the ERISA area. The situation with IRS has also been very bad, and both leave
substantial room for improvement. Also, the Department has had internal problems
of coordination as among audit, investigation and legal staff. This alone could
keep the Department from effective ERISA implementation. This problem ties to
resolution of issues I-2, I-3, II-1, II-2, and IV-1.
The effectiveness of the overall effort to date has not been great. If the
Department is unable to implement effective internal mechanisms, it may lose its
ERISA responsibilities. If the three agencies are unable to begin working together,
an option discussed in the past of a totally separate ERISA agency may gain new
support.
III. Status of Work on the Issue
The quality of cases is improving. As case reviews disclose shortcomings, they are
returned to the field. This procedure has improved the quality of cases. However,
until better internal control and coordination mechanisms are developed, little
additional improvement can be expected.
The program is currently working to develop better means of case control. In addition
the program is working on both the intra and inter agency coordination problems.
However, coordination solutions may ultimately have to be enforced from the White
House
IV. Critical Dates
Given the importance of case control, action must come as soon as possible. In
case new resources are needed, action must be taken by early 1977. Any changes
in organization relationships to ensure better coordination must also be immediate.
I-2
I. State of Issue: Teamsters Investigation
How to assure that the integrity of the current investigation into the
Teamsters Central States Southeast, Southwest Areas Health and Welfare
Funds is maintained.
II. Background
The subject investigation began in the fall of 1975. Initial work made it
clear (by December 1975) that the investigation of this very large plan would
demand special arrangements, and as a result, a Special Investigations Staff
(SIS) was formed.
A Memorandum of Understanding was also signed between PWBP and the Solicitor
making special arrangements for the makeup of the SIS. This arrangement
has allowed effective integration of legal, audit and investigative
personnel, and should be a model for restructuring the PWBP enforcement
staff and the Solicitor's staff persons assigned to ERISA work.
The Special Investigations Staff has been working extremely hard to move
forward with its responsibilities in this area. Among the results obtained
thusfar has been the restructuring of the Board of Trustees of this plan. This
restructuring, accomplished through mass resignations of trustees,
effectively changed control of the Board, and is being followed up by
negotiations leading to an agreement between the DOL and the Fund concerning
how the assets of the plan will be managed in the future. Also, one former
trustee of the Fund resigned as a direct result of a DOL demand that the
plan remove him for failing to cooperate. Primary staffing of 20 positions has been
completed, and staffing is now underway with respect to already authorized
15 additional positions.
This is the largest investigation undertaken under ERISA, and can be expected
to set the tone for what type of enforcement employee benefit plans officials
can expect. This investigation is clearly the Department's most visible
ERISA activity.
III. Status of Work on the Issue
The Department has requested that 25 positions be included in a FY 1977
supplemental. However, in addition to this staffing request, other actions
must be taken. These include:
Continuing efforts will be necessary to insure proper coordinating
with the Internal Revenue Service and the Department of Justice;
support from the Secretary will have to continue to assure the present
level of independence of this staff. This includes a need to insure
that the Memorandum of Understanding signed by the Solicitor and the
Administrator is strictly followed as the investigation proceeds.
IV.
Critical Dates
The primary need at present is tied to the FY 1977 supplemental request.
Necessary actions must be taken in January to assure that this request goes
to Congress.
I-3
I. Statement of Issue: Reports Processing
How best to coordinate DOL and IRS reporting processing procedures under ERISA in
order to maximize economy and efficiency while minimizing the burden placed on
employee benefit plans by reporting requirements.
II. Background
ERISA requires annual reporting to both DOL and IRS on employee benefit plans. The
two agencies devised and have issued a joint annual report (Form 5500) to ease the
burden on filers by avoiding their having to complete two different forms. Both
agencies receive a copy of the Form 5500, but the filers are often different
(welfare plans file only with DOL), provide different information (schedules go only
to DOL), and file at different time (tax year VS. plan year). By intent, ERISA
establishes different uses for the information, at different times, for each
agency. Finally, certain data disclosure restrictions apply to IRS which are
specifically not applied to DOL.
OMB has expressed concern about DOL and IRS both publishing statistics from Form
5500 data and has stressed the need for coordination in this area. In this
respect, two areas of potential coordination are (1) data editing (identification
and correction of errors or omissions on reports) and (2) data entry (key punching).
It seems particularly important that we avoid a situation where both agencies would
be contacting the same filers to correct report errors or omissions such dupli-
cation could be expected to bring public and possible Congressional criticism.
III. Status of Work on the Issue
The program has met with IRS and has informed IRS of our needs with respect to data
editing and data entry of some 100,000 Form 5500's DOL had selected as a sample for
statistical publishing purposes. We have asked IRS to study our needs and let us
know if they can handle the additional workload within the time deadlines we have
specified. We pointed out that they do not currently receive Form 5500 from welfare
plans (they receive Form 5500's for all pension plans) and that both pension and
welfare plans are included in our report sample.
The IRS representative reacted favorably, but implied that IRS wished to go well
beyond statistics related servicing. He said IRS could probably handle our work.
He also said IRS might be willing to receive Form 5500 from welfare plans to over-
come the single agency filing problem. He was unable to comment on time needs.
Agreement by DOL and IRS to the above proposition may be the start of an irrever-
sible trend that could result in the transfer of sufficient DOL report related
activities to IRS to endanger adequate fulfillment of DOL disclosure, enforcement
and statistical publishing responsibilities under ERISA.
The full ramifications of this issue must be explored before any action is taken,
and that analysis is not in progress.
IV. Critical Dates
Need to have DOL/IRS understanding by February 1977 to permit maximum coordination
of report processing on 1977 annual report forms and to allow any resulting
changes in the FY 1978 budget.
I - 4
I. Statement of Issue: Training
Training and maintaining the professional skills of the PWBP staff.
II. Background
Upon passage of ERISA the administration of a broad and complex area of benefit
plan operations and the people involved in those operations are made the
responsibility of DOL. There were limited numbers of experienced personnel
available for recruitment. Those who did not have a degree of expertise
required indoctrination and training in the new law. At the same time they
were being indoctrinated many of these people were developing policies and
procedures for the administration of that law. A limited field staff was
transferred from other programs within DOL. This staff, as well as national
office personnel, required training in the law, employee benefit plans, and
proposed PWBP enforcement program, investigative skills and techniques and
PWBP policies.
On a crash basis a handbook for the guidance of Compliance Officers was developed.
It assembled procedures and policies in various types of investigations and the
PWBP enforcement strategy.
Also, a contract was let for the provision of nine courses for employees cover-
ing all the areas noted above. These efforts have provided a knowledge base
for many employees, but over 200 new employees now need this same training.
In addition, all employees now need this in-depth training covering provisions
of ERISA if they are to effectively and competently perform thier duties.
III. Status of Work on Issue
The initial training program successfully exposed PWBP personnel to various
facets of the law, the operating procedures of the office and some of the policies.
This was done by making heavy demands upon the time of many staff people who
neglected their primary responsibilities to respond to training requirements.
There were no staff personnel who had sole responsibility for training. There
are now no PWBP personnel solely responsible for training. The updating of the
Compliance Officers Handbook as policies, procedures and investigating methods
are refined or changed is a requisite, but personnel are not available to perform
this task. Failure to continue a training program and to maintain a handbook
that is current concerning policies, procedures and decisions affecting ERISA
will seriously affect the field staff and will further erode their ability to
properly administer the law.
The program is working to develop a training program, but must depend on an
LMSA training office that has neither the staffnor technical expertise to develop
that which is needed.
IV. Critical Dates
The implementation of ERISA will not competently be performed unless staff
receive training. First, an organization decision is needed that will place
full responsibility for teaching in PWBP. Second, necessary staff will need
to be made available to develop the training program. Neither of these actions
can afford delay.
II - 1
I.
Statement of Issue: Dual Jurisdiction
ERISA as enacted was a statute with joint responsibilities and overlapping
jurisdictions that has demanded a high degree of consultation and coordi-
nation between the Department of Labor and the Internal Revenue Service.
II.
Background
Employee benefit plans have historically been the subject of interest by
both agencies. The IRS has established standards for initial qualification
of plans for tax deferred status and monitors continued compliance by annual
tax reporting. The Department of Labor (DOL) has become concerned with
protecting the interest of plan participants first through reporting and
disclosure alone, the Welfare Pension Plans Disclosure Act (WPPDA), sub-
sequently advocating legislation to establish standards for plan operation
and conduct of plan officials. The passage of ERISA created a statute
administered in part by these two agencies with differing interests to protect.
III.
Status of Work on the Issue
In the area of regulations the agencies recently reached agreement on a
priority for consideration of certain regulations requiring coordination.
It is important that (DOL) "input" into IRS regulations because the interests
served are different and DOL comments often enable plan participants to
achieve a greater degree of protection than might otherwise be the case.
Also in the area of regulations, the agencies have held joint hearings to
assist in the development of common positions. This is new, and an exper-
ience assessment is not yet possible. However, it would be difficult for
progress under this new agreement to be less than in the past.
The exemptions from the prohibited transactions provisions are another impor-
tant area requiring cooperation. In August, 1976, a Memo of Understanding
was agreed to that should permit a more orderly consideration of dual
jurisdiction exemptions. This has not yet occurred, however.
ERISA also permitted the Department to comment on plan submissions for qual-
ification. The procedures have been developed and contacts established to
enable the Department to make a worthwhile contribution in this area.
While the Department and IRS have taken steps to ensure good relations, the
tie has been strained at best. Experience would clearly justify a new
jurisdictional arrangement, making the success of new agreements exceptionally
important. It is not our expectation however, that this will be the result,
and intense public and congressional pressure can be expected.
The program is now developing an options paper on the issue as part of an
overall review of the legislation. Resolution of this issue is tied to
numbers IV 2 and 3.
IV.
Critical Dates
Because of Congressional concern and public interest in the issue of dual
jurisdiction, the Department must demonstrate the ability to administer ERISA
in its present form or be prepared for Congressional attempts to either split
the responsibilities for administration between the agencies or grant one
agency the prime responsibility for regulating the employee benefit plan field.
Continuous high level oversight is therefore essential to insure progress
under dual jurisdiction. Should legislative action in this area be deter-
mined desirable a decision would have to be made by February, 1977.
II-2
I. Statement of Issue: Pension Program Location Within the Department
Where should the program charged with ERISA implementation be located within
the Department of Labor.
II. Background
Up until the final stages of conference committee consideration of ERISA, the
bill before the Congress contained a provision which would have created a new
ERISA assistant secretary within the Department. This provision came out of the
legislation, and the program was placed within the Labor-Management Services
Administration (IMSA).
The Secretary created the position of Administrator, PWBP, in April 1975. In
May 1976, the Secretary issued Secretary's Order 13-76 which delegated to the
Administrator, PWBP, policy and program management for carrying out responsi-
bilities of the Department under the ERISA. The Assistant Secretary for LMSA
was assigned responsibility for directing field and management operations and
systems services for PWBP.
LMSA directs its field staff, including staff which handles ERISA work, through
a Field Operations office and six Regional Administrators who have line authority
for all LMSA programs. PWBP has responsibility for program
implementation, but has no line authority to direct support personnel.
Overall experience to date has convinced some persons that placement of PWBP within
LMSA, with the current delegations, has not worked. A consensus does exist that
the current situation needs review. The issue is of significance because of
implications for ERISA implementation.
III. Status of Work on the Issue
The Assistant Secretary for Administration has been charged with completing a
full options paper on this issue. Separation could be accomplished without legis-
lation unless a new Assistant Secretary position is to be created.
Should a decision be made to keep PWBP within LMSA, a decision would be needed on
the issue of the relations of the Administrator, PWBP, to the Assistant Secretary,
LMSA.
IV. Critical Dates
The issue should be resolved in the very near future if the Department is to avoid
serious morale problems which flow from the present uncertainty that exists.
Separation, if it included the creation of a new assistant secretary position,
would require legislative action. This would require a decision by February 1977.
Also, such a decision would involve a reallocation of resources or additional
resources to handle those administrative and support functions which are now
provided to PWBP by LMSA.
II-3
I.
Statement of Issue: Preemption
Section 514 of ERISA preempts state laws regulating employee benefit plans.
II.
Background
A basic problem is created by Section 514's preemption of state laws. It
is universally recognized that employee benefit plans (both pension and wel-
fare benefit plans) require regulation. In acknowledgement of this need,
such regulation should exist--to whatever degree necessary--at both the
federal and state levels. Preemption of state regulation by ERISA, with-
out the simultaneous substitution of some other form of regulation, results
in a void of supervision in areas united by a common denominator of sus-
ceptibility to, and an historical pattern of, abuse.
With respect to state regulation of insurance, several states have enacted
legislation directly focusing on employee benefit plans (both welfare and
pension plans) separate and apart from the insurance code. In addition,
states regulate (1) group insurance arrangements used to fund many employee
benefit plans (including regulation of the carrier, the transacting of group
business and the content of group insurance contracts). (2) Blue Cross/
Blue Shield type plans and (3) prepaid professional service plans (HMO's,
legal and dental plans). Finally, some states have sought to regulate
self-insured employee benefit plans either under the insurance code or
through specific legislation (both the comprehensive regulatory approach
and the more limited mandating of minimum benefits).
Thus, the potential result of Section 514 on the above areas of state reg-
ulation of insurance, if a broad preemption of state laws occurs, is the
absence of supervision over these benefit plan arrangements. Current in-
terpretation of ERISA has led to this result.
III.
Status of Work on the Issue
Litigation has been initiated, or is in the process of being initiated, by
DOL against at least one state to enforce the preemptive power of Section
514. The program is developing a paper on this issue as part of its overall
legislative review. This is an essential and sensitive issue that must be
resolved in order to avoid problems in the regulation of employee benefit
plans.
IV. Critical Dates
A decision will need to be made by February, 1977 on whether legislative
action will be sought. If legislative action is not sought a policy decis-
ion will have to be made on what the enforcement strategy of the Department
should be in this area.
II-4
I. Statement of Issue: Public Disclosure of Filings
Should the Department allow its ERISA microfiche contractor to disclose filings
directly to the public, and directly receive such requests.
II. Background
SOL has ruled to date that all requests for public disclosure of documents filed
pursuant to ERISA, including high volume requests which will be serviced by the
microfiche contractor, must be received by DOL's Public Document Room and
transmitted to the contractor, rather than being received directly by the
contractor from the public, for direct service to the public.
The impact of ERISA includes a mass of report filings which cannot be handled
other than through use of microfiche. A contractor is employed to provide micro-
fiche copies of reports to DOL and to receive and service large volume requests
for provision of copies of microfiched plan information or paper copies of same,
at prescribed rates paid by the customer to DOL. The contractor then bills DOL
for services rendered.
Other Governmental agencies will refer the public to DOL for ERISA disclosure
service. DOL and the microfiche contractor's representatives are working toward
trying to meet the coming impact of reports disclosure without the effective tool
used by other Federal Agencies such as SEC, which is the provision of direct
access by the public to the contractor to provide microfiche and paper copies of
plan information available in any form or amount desired.
Unless this situation is changed, program resources will have to be devoted to this
unneeded step in the disclosure process.
III. Status of Work on the Issue
A paper on the legal issue was prepared by the Plan Benefits Security Division,
Office of the Solicitor.
Options on the subject are now being prepared.
IV. Critical Dates
Form EBS-1 (plan descriptions) to be available for public disclosure by 9-15-77.
Form 5500 series (Annual Financial Report - through Dec. 31, 1976) to be available
for public disclosure by 6-15-77.
Any change in policy which would provide direct access to the contractor for pro-
vision of plan information disclosure would have to be made in early 1977 in
order to be of any value in meeting the DOL needs for prompt and efficient
disclosure service to the public, Congress and other Governmental agencies.
Should legislation be necessary, a decision would have to be made by February 1977.
III - 1
I. Statement of Issue: ERISA Amendments
The Department must decide whether it wishes to recommend any amendments
to the Employee Retirement Income Security Act of 1974.
II.
Background
A number of legislative proposals were made during the present session of
Congress which have not been enacted by the Congress, (e.g., H.R. 7597).
It can be expected that a number of proposals will be introduced during
the next session of Congress which will gain more serious consideration
and on which the Department will have to take early positions.
The ERISA is now two years old, and experience to date has highlighted many
areas in which changes may be desirable.
III. Status of Work on the Issue
The program is now preparing a detailed analysis of the statute to identify
areas where amendments should be supported by the Department. This paper
should be completed by early January.
IV. Critical Dates
Decisions will have to be made by February, 1977, on what positions the
Department will take on given amendments.
IV-1
I. Statement of Issue: Compliance Strategy Implementation
Implementing a comprehensive strategy for ERISA enforcement.
II. Background
Early PWBP compliance strategy was to fully respond to public and Congressional
requests for ERISA information and assistance. Servicing forty million plan
participants with a field staff of 135 people has fully taxed the capabilities of
the entire organization. Added to this was a decision to respond to benefit
disputes and participants rights complaints in order to obtain voluntary
compliance. Handling these cases placed even further demands upon our limited
field staff.
The Administrator, PWBP, changed this strategy in mid-1976 to focus primarily on
fiduciary violations. Progress in transferring the emphasis of PWBP programs
towards the investigation of fiduciary responsibilities has been slow and
difficult because of the demands on the time of the field staff in all other
areas.
The Internal Revenue Service has declined to furnish information or assistance
to plan participants or others until regulations are developed. People who have
been denied assistance at the IRS turned to DOL and PWBP. Since a primary focus
of DOL sections of ERISA are Reporting and Disclosure sections, such decision
was made shortly after enactment of ERISA that PWBP would respond to requests
for information and assistance.
The result of these actions taken together has been a tremendous flow of requests
to DOL. The Department cannot, with current resources, meet these demands and
enforce the multiple provisions of ERISA.
III. Status of Work on the Issue
Repeated efforts (through budgetary requests) have been made to increase both the
field staff and the National Office staff to enable them to respond to the
large workload that is generated by outside sources, and carry out directed
compliance simultaneously.
The program outlines to work on refinement of its overall compliance strategy to
ensure the most effective use of current resources.
IV. Critical Dates
In order for adequate resources to be available, a decision would have to be
made by January for inclusion either in FY 1977 supplemental or the FY 1978
budget.
IV-2
I. Statement of Issue: Exemptions for ERISA Requirements
An enormous number of exemption applications have been filed with DOL and IRS in the
2 years since the passage of ERISA, the delay in the processing of which has resulted
in significant Congressional and public pressure on both the DOL and the IRS.
II. Background
Due to ERISA's extememly broad coverage, many common, established business practices
have become prohibited transactions. Congress granted the DOL and the IRS dual juris-
diction over the granting of exemptions as a relief in such situations if the exemption
would be administratively feasible, in the interests of and protection of plan partic-
ipants and assets respectively. To date, performance of the agencies has been terrible.
It has proven to be nearly impossible, due to the necessity of merging the conflicting
perspectives and philosophies of DOL and IRS. In addition, there have been substantial
conflicts between PWBP and the Office of the Solicitor.
III. Status of Work on the Issue
Effective October 15, 1976, the DOL and the IRS executed a Memorandum of Understanding
which is intended to expedite the processing of exemption applications which up to that
date had been backlogged for lengthy periods of time. In addition, in an attempt to
standardize incoming applications, DOL has published an ERISA application procedure.
Since the passage of ERISA, a total of 538 applications for exemption have been filed
with DOL and IRS. During that period, the agencies have granted only 3 exemptions.
This poor record is the result of conflicts between DOL and IRS, conflicts between
PWBP and SOL, and inadequate staff. The Department and the IRS have been severely
criticized for this record, and Congress has made it clear that legislative action
will be taken during the coming session if the agencies do not solve the problems
themselves. They are working to develop better processing approaches, but the basic
philosophical differences may make a non-legislative solution impractical. PWBP is
studying the issue, which ties closely to issue II-I, dual jurisdiction. Within the
Department the Under Secretary has set up a system of weekly status reports, and
has delineated responsibilities of the Solicitor and the program. Strict goals have
been set for exemptions to be processed, and this new system will be evaluated in
April to determine how the long term Solicitor/Program relationship should be defined.
IV. Critical Dates
The following target dates have been established with respect to class exemptions:
November 1976 -- Mutual Funds "In House"
Mutual Funds "Out House"
Sale of Insurance Policies By and To Plans
December
1976 -- Consultants, Ins. Agents and Brokers, Mutual Fund
Salesmen, Third Party Notes
January 1977 --
Ins. Co. Pooled Separate Accounts
Captive Ins. Companies
There are statutory exemptions which expire in mid-1977 and must be extended by
administrative action if they are to continue.
The Department will have to decide on any legislative actions by February, 1977.
IV-3
I. Statement of Issue: Regulations Interpreting ERISA
In order to meet statutory effective dates, further regulations in the areas of
coverage, reporting and disclosure and fiduciary responsibility must be issued,
addressing several significant issues which remain outstanding.
II. Background
To implement Congressional intent has required that the Department promulgate a
massive volume of regulations (over 90) to govern employee benefit plans sub-
ject to ERISA. Certain basic regulations on coverage and reporting requirements
have been published but are not yet finalized.
Many of the issues to be covered by regulation have been subject to intense
public and legislative criticism.
III. Status of Work on the Issue
This program and the Office of the Solicitor recently established a master listing
of DOL priority regulation projects and the months in which they should be
considered. This proposal has been cleared by the Administrator, PWBP, and the
Under Secretary. Coordination between the Department and IRS should assist in
meeting the deadlines established. DOL and the IRS have recently agreed on
priorities for certain joint regulation projects which will permit a more
efficient utilization of available resources.
Regulation projects previously published which are currently under re-evaluation
include annual reporting, minimum standards and gratuitous payments.
IV. Critical Dates
During 1977, employee benefit plans will be required to adopt the necessary
amendments to achieve compliance with the minimum standard provisions of ERISA and
meet the annual report filing requirement. Therefore, publication of these
regulations is essential.
IV-4
I. Statement of Issue: Technical Assistance Strategy
Strategy to direct PWBP public education program in calendar year 1977.
II. Background
To date the PWBP program to educate the public about their rights under the ERISA
has been limited to the issuance of publications (generally aimed at assisting
employers and plan administrators to meet their obligations under the Act) and an
audio-visual presentation which explains the Act generally. Little has been done
to reach plan participants and beneficiaries directly, explain their rights, and/or
offer PWBP assistance in the settlement of disputes with plan administrator's over
the interpretation of plan provisions. This direction was taken on the basis of a
policy decision issued in 1975 at the Administrator's level to commit PWBP's current
limited resources to situations in which statutory violations are alleged or suspected.
There are millions of participants who are unaware of their rights under ERISA. A
decision as to whether PWBP will continue this present low key approach to the
problem, or will be given the resources required to implement a nation-wide public
education program aimed at participants, should be made early in 1977.
III. Status of Work on Issue
Additional publications aimed at plan participants and containing detailed information
about their rights are being worked on currently.
Limited resources continue to be a major factor impeding any effort to initiate a
broad based public education and assistance program as it appears was contemplated
by the ERISA.
Additional resources were requested during the last two budget cycles.
IV. Critical Dates
A decision to change the current strategy would demand additional resources. Were
a FY 1977 supplemental appropriation requested a decision would have to be made by
January 1977. Were a change in the FY 1978 request made it would have to be done by
February at the latest.
BLS
U.S. DEPARTMENT OF LABOR
BUREAU OF LABOR STATISTICS
WASHINGTON, D.C. 20212
DEAMERICA
NOV161976
MEMORANDUM FOR: THE SECRETARY
FROM
:
Commissioner JULIUS SHISKIN of Labor Statistics
SUBJECT
: Transition Planning: Major Issues and Problems
to be Addressed in the Coming Year
The Bureau of Labor Statistics--as the research and statistical arm of
the Department really has no issues of such paramount importance as to
require Secretarial action in the coming year. It does, however, have
three activities that may create outside interest; hence, the top
policy staff should be at least aware of them. They are:
1. The Employment Review Commission: PL 94-444, which authorized
appropriations for public service jobs, also establishes a
National Commission on Employment and Unemployment Statistics,
which will have responsibility for "examining the procedures,
concepts, and methodology involved in unemployment statistics
and suggesting ways and means of improving them. " The
President, according to the Act, is to appoint nine members to
the Commission, seven to be experts on employment and unemploy-
ment statistics and two to represent the general public. The
Commission's report of its findings and recommendations is due
18 months after the appointment of the first five members of the
Commission.
The Bureau is developing a list of qualified persons which may
be helpful in selecting candidates for the Commission. We are
also preparing a supplemental budget request for the Commission
and to support the computer and other costs for studies required
from the BLS and the Census Bureau. This will be submitted to
the Department shortly.
2. Two Consumer Price Indexes: The Bureau plans to release two
Consumer Price Indexes in April 1977: a revised index for urban
wage earner and clerical workers, which represents 40 percent of
The Secretary--2
the population; and a new index, broader in scope, for all urban
consumers, which represents 80 percent of the population.
Since these indexes involve both conceptual and methodological
changes, top level officials should be aware of the principal
differences between them.
3. Local Area Unemployment Estimates: Congress, in recent legislation
such as the Comprehensive Employment and Training Act, the Public
Works Employment Act of 1976, and the 1976 amendments to the Public
Works and Economic Development Act, has required the use of local
area unemployment rates in the allocation of Federal revenue sharing
funds. The development of these estimates for small areas places a
strain on BLS standards for quality, since the data base for develop-
ing the estimates is inadequate. The Bureau has undertaken a long-
range program to improve the data. The fund allocations, however, are
politically sensitive, and the administrative needs are running ahead
of the Bureau's capacity to produce high quality data.
ASPER
November 17, 1976
WELFARE REFORM
I. Statement of the Issue
What should be the character of welfare reform and, par-
ticularly, the Labor Department's role in the new system?
II. Background
Several important features of any design for welfare reform
can have an important bearing on workers and on labor markets.
These include benefit levels, work incentives, coverage of
the working poor and work requirements.
Many reform proposals have included a major added role for
the Department. For example, the Nixon Administration's
Family Assistance Plan would have given the Department full
responsibility not only for moving employable recipients
toward jobs, but also for paying their benefits. HEW would
have handled the non-employables.
Dividing the welfare population is intended to reduce the
risk that employables will opt for the improved benefits
rather than work. Strong financial incentives for claimants
to work and coverage of the working poor would ease the
Department's task of determining whether or not appropriate
work has been refused. These "work test" decisions are
difficult, and equal treatment by thousands of government
officials in offices throughout the country is hard to
achieve.
The character and scope of the manpower and social services-
training, child care, etc.--that are provided employables
is another major issue involving the Department.
III. Status of Work on the Issue
ASPER and ETA staff have been following the welfare reform
debate since the defeat of FAP.
IV. Critical Dates
These are dependent on the timing of the Administration's
plans to submit welfare reform legislation. An early decision
may be needed on whether to attempt to delay incremental
changes to existing programs until a planned schedule for
broader welfare reform can be adopted.
Management Issue
I. Statement of Issue
To improve labor-management relations in the Department.
II. Background
Significance of the issue. The inability of both labor and
management to realize a signed agreement reflects the less
than desirable labor-management relations climate. Failure
to reach an agreement will tend to further deteriorate the
overall climate and relationship.
Brief history of issue. Local 12 (National Office). Negotiations
started in August of 1975 and continued until January of 1976.
Even with the assistance of the Federal Mediation and Concili-
ation Service negotiations were terminated by Local 12.
Based on subsequent actions of the Secretary negotiations
were resumed in November 1976.
National Council of Field Labor Lodges (NCFLL) Negotiations
with the Field Council are deadlocked even though that contract
has terminated. Management by law is prevented from resuming
negotiations since the Field Council is engaged in a juris-
dictional dispute with the National Union of Compliance
Officers.
III. Status of Work on the Issue
- The Secretary appointed a three-member team of labor-
management neutrals to help devise the very best labor-manage-
ment relations program that would be beneficial to employees,
their unions and the Department. Their report has been issued
and is being worked on.
- A complete reorganization of the DOL labor relations
program has been initiated and efforts are underway to identify
and select a qualified Director of Labor Relations.
- The Secretary has engaged a consultant assisted by key
agency managers to lead the Local 12 negotiations.
- A Task Force is working on defining and clarifying
the Local 12 unit. After completion, a similar approach
will be taken to clarify and define the NCFLL unit.
Migrants
MIGRANT FARM WORKERS
ISSUES - FIRST SIX MONTHS
Migrant Housing Standards
Program Issue
Richey Court Order
Program Issue
Use of Foreign Workers
Regulatory Issue
Extension of National Labor Relations
Legislative
Act
(Issues are listed in approximate order of importance and
urgency)
I. Statement of Issue
Should CSHA assume total responsibility for enforcement of
migrant housing standards?
II. Background
Currently, three agencies in the Department of Labor share res-
ponsibility for conducting migrant housin inspections and the
enforcement of two different housing standards. The Employment
and Training Administration (ETA), through its State employment
service system, conducts pre-occupancy inspections of migrant
farmworker housing under terms of CFR 620. This regulation
requires all housing owned by employers placing an order for
purposes of interstate recruitment of farm labor to be inspec-
ted prior to clearing the order to supply states. OSHA is
responsible for enforcement of CFR 1510. This regulation governs
temporary labor camps. The Employment Standards Administration
(ESA) inspects migrant housing owned or controlled by contractors
under authority of the Farm Labor Contractor Registration Act--
applying CFR 620 or CFR 1510. Conflicts exist between OSHA
standards and the standards issued by ETA.
The Department is under sharp criticism for having two different
standards and shared responsibility for their enforcement by
three different agencies.
III. Status of Work on Issue
The DOL Standing Committee on Farmworker Concerns proposed a
twofold course of action, subsequently approved by the Under
Secretary. First, OSHA will publish a proposed set of regu-
lations combining CFR 620 and CFR 1510 by December, 1976.
Final rulemaking is scheduled by April 1, 1977. Second, in
order to maximize the limited resources currently available
to inspect an estimated 50,000 migrant housing units, all three
agencies were required to assume enforcement responsibility
during the 1976 harvest season. The development of a single
standard and the coordinated enforcement program were designed
to eliminate confusion and to maximize resources.
IV. Critical Dates and Questions
The important question to be addressed is whether OSHA should
assume total responsibility for enforcement of migrant housing
standards given the large requirement for staff resources to
accomplish the task. Such effort imposes a burden which this
agency is unable to meet with its present level of staff. On
the other hand, OSHA is mandated by law to protect employee
health and safety-- including that of migrant and seasonal
farmworkers.
season. A decision is required before the beginning of the 1977 harvest
OSHA, ETA, ESA
FORD & LIBR
I.
Statement of Issue
To decide DOL's legal and administrative posture if
U.S. District Judge Charles Richey rules that DOL has
not complied with his court order of 1974, concerning
Employment Service (ES) services to migrant and seasonal
farmworkers (MSFWs).
II.
Background
In 1972, DOL was sued by a number of plaintiffs repre-
senting MSFWs charging that DOL violated several laws
by not ensuring that ES agencies served MSFWs on a
non-discriminatory basis. In 1973, Judge Richey issued
an injunction and declaratory judgement finding DOL
had violated several laws and directing DOL to implement
certain reforms. A consent decree agreed to by DOL and
plaintiffs was signed by Judge Richey in 1974, as a
court order. The order requires DOL to take certain
actions to insure proper treatment of MSFWs by the ES
and also established a Special Review Committee to
oversee DOL implementation and to report to the court.
III. Status of Work on Issue
DOL has worked very hard for 2 years to implement the
order. A report to the court from the Secretary in
November 1976, detailed DOL's compliance and asked that
the court remove its administrative constraints. The
Special Review Committee's report to the court indicated
DOL had not fully complied and recommended the court
appoint an independent source to monitor DOL for another
year. Plaintiffs have indicated they intend to seek
further injunctive relief.
IV. Critical Dates
Dates will be determined by the nature and timing of
the Judge's ruling, which could come at any time.
ETA
I. Statement of Issue
Should the Department modify its present policy, designed
to minimize temporary use of foreign workers in agriculture?
II.
Background
Due in part to mechanization, the use of temporary workers
in agriculture is now generally confined to apple harvest,
cane sugar harvest, the Maine woods industry and sheepherding
activities. Such employers assert that American workers
no longer seek these jobs, which often involve arduous
labor at modest wages. On the other hand, some public
interest and migrant legal action groups maintain that,
with adequate wages and improved working conditions,
American workers will fill these temporary jobs.
This is a politically sensitive issue, with spokesmen for
growers and workers, as well as members of Congress, often
in frequent contact with the Department over the use of
aliens and on wages paid in such activities. The Department
of Labor's responsibility is to assure that growers do have
access to adequate labor supply to avoid spoilage of crops,
at wages which assure that the employment of aliens will
not have an adverse effect on U.S. workers. This is done
by pre-season recruitment for U.S. workers, and by the
annual determinations of "adverse effect wage rates"
which must be offered to American workers before the use
of temporary alien workers is authorized. DOL responsi-
bilities in implementing provisions of the immigration
law relating to the use of such temporary workers in
agriculture also involve inspections of available housing
facilities for their use.
III. Status of Work on Issue
New approaches for such "adverse effect wage rates" are
being studied. Among major problems are: Apple harvest -
widely differing rates for many States, such as Maryland,
Virginia, West Virginia; Sheep - unauthorized transfer of
workers among employers in the western range which may
ignore DOL labor supply, wage and housing determinations;
Maine woods - some areas accessible primarily from Canada;
Cane harvest - work is among the most arduous type of
agricultural labor and may require substantially higher
wages to attract U.S. workers.
IV. Critical Dates
Ground rules for 1977 foreign worker use must be resolved
in time for pre-season meetings to be held in the late
winter or early spring of 1977.
ETA
I. Statement of Issue
Should the National Labor Relations Act be amended to cover farmworkers?
II. Background
The nation's farmworkers are the only major group of employees (except
for domestics) in the private sector of the economy who are not now
covered by Federal labor relations legislation. To date only a handful
of states have enacted legislation protecting the collective bargaining
rights of farmworkers, and the variations in state laws are creating
inequities for both employees and employers in the various states.
Over the past decade, a variety of legislative proposals in this area
have been introduced in the Congress, and Department of Labor officials
have repeatedly gone on record as favoring the extension of Federally-
protected collective bargaining rights to farmworkers. In FY 1975 a
draft bill was formulated by the Department after lengthy discussions
with the Department of Agriculture and representatives of agricultural
employees and employers. Disagreements between the principal
interested parties on particular provisions of the legislative proposal
stalled further action at that time. Shortly thereafter, California enacted
an agricultural labor relations law, and the Department postponed further
action pending an assessment of experience under the California statute.
Congressional actionsin this area also were shelved at that time.
III. Status of Work on the Issue
The Department has continued to monitor agricultural labor relations in
California and elsewhere. Further, the formulation of farmworker
legislation is currently an LMSA high priority objective for fiscal 1977,
but work cannot proceed much further pending the resolution of the
policy question noted in part IV below.
IV. Critical Dates and Questions
The most important question that must be addressed is whether the
Department should now resume its efforts to draft a Federal collective
bargaining law for farmworkers. Such efforts will necessarily include
an assessment of the effectiveness of the California law and discussions
with the interested parties, both inside and outside the government.
It is likely that bills will again be introduced in the new Congress on
this issue, but any action by the Congress will depend on other priorities.
LMSA
Veterans
CROSSCUTTING ISSUE - VETERANS AFFAIRS
I. Statement of Issue
A determination must be made as to the organizational
placement and the duties and responsibilities of the
newly created position of Deputy Assistant Secretary for
Veterans Employment.
II.
Background
Public Law 94-502, Veterans Education and Employment
Assistance Act of 1976, created the position of Deputy
Assistant Secretary for Veterans Employment. The
principal function of the position is that of advisor
to the Secretary of Labor on Departmental employment,
unemployment and training programs to the extent they
affect veterans. The primary purpose for creating the
position, according to the Senate Report accompanying
the bill, was to establish at a significantly high
level a position that "will produce the responsiveness
to veteran problems within the Department of Labor which
has been lacking to date." All the major veteran
organizations endorsed the creating of the position,
however, at the Assistant Secretary level. The Senate
originally contemplated the position of the Director of
the Veterans Employment Service being elevated to the
level of Assistant Secretary.
III. Status of Work on Issue
Key decisions remain to be made regarding the following:
Where to locate the position? The Employment
and Training Administration, the Employment
Standards Administration and the Labor-
Management Services Administration all have
significant responsibilities which affect
veterans employment.
What duties and responsibilities are to be
assigned to the position? Is the position to
function in an advisory and coordinative
capacity and/or have direct operational
responsibilities?
Staff recommendations are currently being prepared by the
Department.
IV. Critical Dates
P.L. 94-502 is effective on December 1, 1976. Immediate
attention must be given to this issue, as any hesitation
will invite criticism from veterans groups. After a candi-
date is chosen for the job, Senate confirmation will also
be necessary. What duties