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FOIA Number: 2013-0306-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Political Affairs
Series/Staff Member:
Joan Baggett
Subseries:
OA/ID Number:
4048
FolderID:
Folder Title:
[AFL-CIO Briefing Book] [loose] [2]
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28
4
1
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Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
NPR Issues
Divider Title:
THE DAVIS-BACON ACT OF 1931
NPR RECOMMENDATIONS
The Davis-Bacon Act applies to construction contracts and services above
$2000 and requires contractors to pay wage rates established by the Department
of Labor as well as to submit weekly payrolls to federal agency procurement
officials to ensure the payment of established wage rates to contract workers.
NPR recommended that, as part of procurement reform, the Administration should:
Under a proposed new $100,000 simplified acquisition threshold (SAT),
exempt construction contracts and services from the provisions of
Davis-Bacon.
By increasing the threshold to $100,000, about
88.7% of the actions (509,915) accounting for
6.8% of the total dollars ($811,640,000) would be
excluded.
Eliminate the Davis-Bacon requirement for the contractor to submit
weekly payrolls to the government.
-)
CBO estimates that changing from weekly to
monthly wage reporting will save $260 million
over 5 years (1994 through 1998). Savings would
be higher if payroll submission was eliminated in
entirety as recommended by NPR.
IMPORTANCE OF REFORM
Davis-Bacon reform is important to the government because
under the SAT, the federal government can significantly reduce
the costs it pays for smaller construction contracts.
CBO estimated in May 1993 that federal outlays for federal and
federally financed construction would be reduced by $130
million over 5 years (1994 through 1998) by raising the
threshold
Contract award time frames will be reduced and agency
administrative resources will be saved by exempting contracts
under the SAT from Davis Bacon requirements.
Agencies could reduce contract lead times by 30-60 days and
save $31.1 million in administrative costs annually by
eliminating wage determination and weekly payroll requirements.
STATUS OF NPR RECOMMENDATIONS
Out of deference to the unions, we agreed with Senator Glenn
when they dropped Davis-Bacon out of the procurement reform
legislation last fall, even though this cost us bi-partisan support
on the bill.
Since December various members of the Administration's
procurement team have been involved in negotiations with
Senator Kennedy over what to include in the Senate version of
the bill. Labor wants to see various provisions on "helpers" that
we believe will increase the cost of construction, thus we have
consistently rejected the inclusion of "helpers" in the bill.
The negotiations are likely to be in progress even as you go to
Bal Harbour, but our latest offer was a stripped down Davis-
Bacon in which we get an increase in the threshold (for repairs
as well as for new construction) to $100,000 plus a move to
monthly wage reporting, and labor gets an expanded definition
of "site of work" (this is not common situs) and one that
includes leased construction. Kennedy's staff rejected this but
counter offered with a tentative proposal (which they hadn't
cleared with labor) that increases the threshold and includes a
private right of action, as well as the first two concessions. We
aren't enthusiastic about private right of action either but we
could be getting close to a deal.
Our principle in the negotiations is to hold neutral on what the
government pays construction workers but to reduce the
government's administrative costs.
POSSIBLE Q & A
Question: Are you planning to touch Davis-Bacon as part of procurement reform?
Answer:
The threshold on Davis-Bacon has not been increased since 1931
when the bill was passed. At a minimum we should increase the
Davis-Bacon threshold to $100,000 which would make it
consistent with our proposed new threshold for simplified
acquisition.
The Administration's procurement reform team has been involved
in extensive discussions with Senator Kennedy's staff on this
question. I believe that these discussions are going on as we
speak.
Question: We would like to have any Davis-Bacon reform include "helpers" in the
law? Will you do that?
Answer:
We are trying to save the government administrative costs --
costs of bureaucracy. To that end, the principle we have been
working on during these negotiations has been to hold neutral
what the government pays construction workers while reducing
the Administrative cost to the government. Although I believe
there is a difference of opinion on this we think that the
inclusion of helpers in the law would significantly increase
construction costs to the government.
We are willing to expand the definition of "site of work" and to
include in a new law leased construction.
However, let me say that there are many aspects of Davis-Bacon
reform that we believe should be considered in a separate bill.
By raising the threshold to $100,000 we are only affecting %6.8
percent of all the federal money spent on construction. Thus we
think the Davis-Bacon portion of a procurement bill should be
kept as simple as possible.
BUY AMERICAN ACT
NPR RECOMMENDATIONS
The provisions of Buy American require U.S. firms to certify that 51% of the
value of the majority of product components were made in America and that
the final produc! was totally assembled in the US. Conversely, foreign
companies, under GATT, must only certify that their product was assembled in
their respective country; component parts can be purchased anywhere provided
assembly is solely performed in the certifying country.
The original NPR procurement proposal would have waived by
American for commercial products. This would simplify the
procurement process, reduce paperwork burdens on industry and
government, and provide more efficient contracting for small
purchases (under $100,000) and for buying commercial products.
It would also enhance DOD's ability to avail itself of the latest
technology that is readily available to the commercial sector.
The provisions of Buy American impose a tremendous burden on
American companies who must demonstrate that they comply
with the Act's provision. Many companies won't sell to the
federal government because they do not wish to maintain
separate inventory controls, systems and production lines in order
to meet certification requirements. As a result, many jobs are
lost because companies won't expand their operations to sell to
the federal government.
Conversely, many US. firms who comply with
Buy American are not as competitive as other
commercial vendors because they must carry the
heavy burden in order to comply with federal
requirements.
In the course of negotiating out this provision we have
concluded that the original recommendations are not politically
feasible in the post NAFTA climate. The following suggestions
have evolved during the course of negotiations on the
procurement reform legislation (S. 1587).
Exempt purchases under $2500 from the
provisions of the Buy American Act.
Exempt computer component purchases regardless
of cost from the components test of Buy
American, but still requiring that they be
manufactured in the US
Allow the Secretary of Defense to waive Buy American
provisions for national security.
POLITICAL IMPLICATIONS
Unions are concerned that the more we relax Buy American, the more
components can be bought outside the US. resulting in the loss of union jobs.
This is an issue which is very important symbolically.
On the above provisions. We have indications that labor will
not actively object to the first provision. We think they will
object to the second two provisions but believe that we have a
very strong case to make.
On exempting computers -- this industry is not unionized and
this technology is essential to our military industrial base.
On allowing the Secretary of Defense to waive Buy America for
national security -- this is critical to the ability of DOD to
maintain technological superiority and to protect the troops. It is
a critical flexibility in a world where technological innovation is
rapid and global.
POSSIBLE Q & A
Question: Are you planning to waive Buy America requirements as part of procurement
reform?
Answer:
The answer is no with certain well defined exceptions.
First, on very small purchases (under $2500) -- the kind of
purchases that federal employees complained that they need to
be able to make by going down the street to the local store and
getting the best price for the government -- we will waive Buy
American.
As a practical matter, it is waived already when
employees go out to buy pencils, notebooks,
computer disks and other simple matters.
At this level of purchase, we want to empower
employees to do what makes sense for the
government.
The only other exceptions that we as an Administration have under
consideration are as follows.
Computers. The Act requires not only that the
end product be made in the US but that more than
50% of the value of its components be made in
the US. This is especially burdensome for the US
computer industry which has large numbers of
components that are sourced from different places
at different times. Complying with this piece of
Buy America imposes a major record keeping
burden on these firms -- many of which are new.
Most importantly the effect this law is having is
that new American computer companies are
refusing to do business with the Pentagon and
hurting the Pentagon's ability to buy state of the
art computing technology.
National Security. Here we would allow the Secretary of
Defense to waive Buy-America when there is a clear issue of
national security at stake that involves either protection of
American troops or if the components test threatends the
American industrial base for finished manufactured products. In
other words -- if American lives or American jobs are on the
line the Secretary of Defense has the authority to waive this law.
Otherwise it stands as is.
GOVERNMENT PRINTING OFFICE
NPR RECOMMENDATIONS
Executive branch agencies have little flexibility in determining their sources for
obtaining printed materials in support of mission programs, time frames and
priorities. Agencies are required to use GPO for the majority of their printing
needs with little choice on whether GPO performs the work in-house or who
will be the private contractor selected.
GPO services do not necessarily meet agency needs, time frames or quality
expectations. GPO in-house printing costs 50% more than the private sector; agencies
must also pay GPO a surcharge of 6-9% for using GPO contracts. For print jobs
under $1000, agencies must spend time and administrative costs seeking waivers from
GPO before obtaining these small print jobs from sources other than GPO.
NPR recommended that GPO be required to compete for executive branch
printing by removing its current monopoly status. We also recommended that
GPO rightsize its operations by reducing in-house capabilities commensurate
with its Congressional workload and retain contracting out activities for all
other printing business performed for the congressional, judicial, and executive
branches.
STATUS OF NPR RECOMMENDATION
Frankly, this one is a dead duck. It got cut out of HR 3400 last fall and we
did not put it in the 1995 budget.
This however, does not spell the end of GPOs problems. Regardless, of
whether GPO retains its mandatory status, it must significantly downsize in-
house operations in order to make it cost efficient and stop its significant rising
annual deficits (e.g., $5 mil loss in FY 92, $13 mil loss in FY 93, $18 mil loss
estimated in FY 94). Some further downsizing would be required if GPO's
mandatory status were eliminated and executive branch agencies were free to
obtain printing needs from other sources, including GPO but its got a large
downsizing in store for it anyway.
POLITICAL IMPLICATIONS
This recommendation drew strong protests from CWA who represent the
government printers in town.
We believe that this action will not necessarily cost any small printers their
jobs, but that it will save the government the money it now pays to GPO to be
the middle man
There is strong disagreement from the unions who contend that if you
let government managers contract for their own printing it will result in
corruption, etc.
POSSIBLE Q & A
Questions: Are you planning to shut down the government printing office?
Answer: No. In fact the government printing office continues to print the congressional
record and other important documents. We recommended that it discontinue its roll as a
middle man between government managers and the small printers who do the bulk of the
government's work. However, we have not included this provision in the 1995 budget.
DOL-10
ENSURING WORKPLACE
SAFETY AND HEALTH
NPR RECOMMENDATION
The Occupational Safety and Health Act was passed to protect 60 million
workers in 1970 -- 55 of whom were dying on the job each working day.
Twenty-three years after the passage of this act 40 workers are dying on the
job daily and estimates of the number of workers suffering occupational
injuries is as high as 60,000 annually at a cost of $83 billion.
Department of Labor's Occupational Safety and Health Administration (OSHA) is
responsible for enforcing the provisions of the Act and currently oversees 2,400
inspectors (includes some state approved inspectors) to enforce safety and
health standards for 93 million workers at more than 6.2 million work sites.
NPR concluded that a new approach is needed that refocuses the responsibility
for ensuring work site safety and health at the workplace.
The NPR recommends that the Secretary of Labor issue regulations
requiring employers to develop work site safety and health programs
and to conduct inspections for safety and health. This program should
require one of two options for conducting work site inspections.
One option is that employers could be authorized
to use certified, private companies to audit their
safety and health programs. A second option
authorizes employers to use non-managerial
employees of a workplace to audit program
operations.
NPR also recommends that the Labor Department establish a
sliding scale of incentives and penalties for ensuring workplace
safety and health.
This scale would go into effect in approximately
one-two years and would include incentives such
as reduced penalties and frequency of audits.
Penalties might include increased penalties and
increased frequency of audits.
DOL-10
STATUS OF THE RECOMMENDATIONS
The Administration has been working with Senator Kennedy and Congressman
Ford of Michigan on legislation (HR1280) (S375) titled Comprehensive
Occupational Safety and Health Act. Both the Administration and the
Congress will look to creating a "worksite-based approach to workplace health
and safety."
POLITICAL ISSUES
The President promised Administration support of the Kennedy
bill to Lane Kirkland at their December meeting. Subsequently
the NEC has had criticisms of it but the politics have pretty
much taken Administration input off the table at least for the
time being.
The Kennedy bill deals with workplace sites but it
does not go as far the NPR recommendations on
this and it is silent on the issue of third party
inspectors.
You may be confronted with one left over misimpression. The
way the September 7 Report characterized this issue caused
some in the labor community to think we meant to hand safety
issues at the workplace over to management alone. Until we
circulated the Accompanying Report draft which made clear that
we viewed workplace safety inspections as having to include
workers and management - we were called "Reaganesque."
We never meant that. We were and are happy with the Kennedy
bill as far as it goes.
POSSIBLE Q & A
Question: What kind of OSHA reform do you support?
Answer: We support the bill that Senator Kennedy and the Department of Labor have been
working on and we are very encouraged by all the management improvements that are
underway at OSHA.
DOL-08
ONE STOP CENTERS FOR CAREER MANAGEMENT
NPR RECOMMENDATION
Current job training programs are a patchwork quilt of fragmented programs
with funding of $24 billion a year.
Existing job training programs exhibit several common problems: job seekers
lack information about labor market trends as well as about what job training
opportunities are available; each of the approximately 150 different programs
has different eligibility requirements, regulations and reporting requirements;
existing programs are only available for a limited number of Americans who
fit into the specific program categories; and existing programs are not
effectively coordinated with private sector training.
The NPR recommendation to create one-stop centers for career
management is intended to help American workers compete
successfully in the ever-changing job market. The NPR vision
for a Customer-Driven Workforce Development System would
use computer technology to electronically knit together the
information needed for informed choices; let customers drive
quality standards for employment training; and free our
employment and training professionals from outdated program
rules and restrictions.
In short, we recommended that the Department of Labor create
competitive, one-stop career development centers which make
effective use of existing government and private resources to
provide services for career development services for all
Americans.
STATUS OF NPR RECOMMENDATION
The Labor Department has a comprehensive bill in to Congress
on job training. In direct response to AFSCME President Jerry
McEntee's concerns in this area the bill includes:
!
full funding for the Employment Training Service
in the states;
$3 million in additional capacity building
measures for the Employment service;
DOL-08
A joint DOL/AFSCME partnership to improve ETS performance
and a guarantee that ETS cannot be excluded from any
competitive bid or from any consortiums put together to run the
one stop shops.
POLITICAL ISSUES
AFSCME. The most sensitive political issue is with AFSCME.
They are unhappy with the portion of the recommendation which
would allow anyone to compete for the right to run the one-stop
shops.
This is an important anti-government monopoly
issue for NPR. Previously AFSCME employees
manned the Employment Training Service and
they obviously would like to continue their
monopoly status.
We consulted directly with McEntee prior to
publication of the September 7 report and he
agreed to language on competition if we agreed to
insert the following sentence (which we did):
"In order for state Employment Services to
compete on a level playing field -- especially after
the negative effects of the last decade of spending
cuts and over-regulation -- line workers must be
given the opportunity to retool."
In crafting the legislation DOL retained the provision that
provides that management of these one-stop centers be awarded
competitively; however, DOL also gave AFSCME the above list
of goodies.
!
Despite the DOL concessions, McEntee is not yet
sure about supporting the Administration's bill
DOL wants to retain the competitive feature as
much as we do. They recommend "genuflecting"
before McEntee in hopes that he will come along.
The other affected union president, John Sweeney
of S.E.I.U. is planning to support the
DOL-08
Administration's bill.
POSSIBLE Q & A
Question: Will you require government workers to compete for management of the
new one stop shops?
Answer: Yes. Injecting competition into government service is an integral part of
making the government responsive to the citizenry. But when we first proposed this
we promised to make sure the Employment Training Service was places on a level
playing field with others who might also want to compete for management of these
entities and our bill makes good on that promise.
A NEW VISION
FOR LABOR MANAGEMENT RELATIONS
NPR RECOMMENDATION: THE NATIONAL PARTNERSHIP COUNCIL
Background. The National Partnership Council delivered its
Report to the President on Implementing Recommendations of
the National Performance Review on January 31, 1994. The
Report contains legislative proposals related to National
Performance Review (NPR) recommendations in the areas of
labor-management relations, hiring, classification, and
performance management.
In addition, the Council reviewed implementation
of the NPR's recommendation to eliminate the
Federal Personnel Manual (FPM), endorsed the
recommendations developed by the Office of
Personnel Management, agencies, and unions to
sunset the FPM, and provided recommendations
for developing alternatives to the FPM.
Review Process. The Council's process for developing
recommendations included establishing a Planning Group and
four Working Groups to assist the Council in information
gathering and analysis. The Council held four public meetings
to discuss issues, receive information and options from the
Working Groups, and receive presentations about successful
labor-management partnerships in government and the private
sector. Council members also met several times in subgroups to
discuss options.
THE COUNCIL'S RECOMMENDATIONS
The Council's most significant recommendations for legislation in the areas of
labor-management relations, hiring, classification, and performance management
can be summarized as follows:
Form Labor-Management Partnerships for Success
The Council recommends the establishment of a
good government substantive bargaining standard,
as follows:
"An agency and a labor organization are obligated
to bargain collectively in good faith. They shall
pursue solutions that promote increased quality
and productivity, customer service, mission
accomplishment, efficiency, quality of work life,
employee empowerment, organizational
performance, and, in the case of the Department
of Defense, military readiness, while considering
the legitimate interests of both parties."
The Council identified three options for addressing management rights:
Option 1. Codify Executive Order 12871 and
include in the federal labor-management relations
statute that agencies be required to bargain over
previously permissive subjects (numbers, types
and grades of employees; technology, methods and
means of performing work). Core matters
(mission, budget, organization, number of
employees, internal security, and the right to act in
an emergency) and operational matters (including
the right to hire, assign, direct, lay off, retain and
discipline employees; contract out; select and
appoint from any source, et cetera) would remain
reserved to agency management, but bargaining
would be required on proposals that did not
substantially interfere with such rights.
Option 2. Bargain over previously permissive
subjects, and provide a gradual, three-phased
implementation of mandatory bargaining over
agreed-upon operational matters. Open issues
include automatic versus discretionary transition
from one phase to the next, and evaluation criteria
and methodology.
Option 3. Immediately expand bargaining to
include operational matters.
The Council identified several options to address union
effectiveness (union security), including:
maintaining the status quo, with
support provided to unions through
dues from voluntary members and
official time provided by agencies;
establishing some type of
requirement for all bargaining unit
employees to pay to help support
the representational services
provided by the union on their
behalf.
The parties should be allowed to resolve all collective
bargaining disputes through a process they design
themselves or through a simplified statutory process with
a single forum. All parties should be trained in
alternative dispute resolution techniques.
Create a Flexible and Responsive Hiring System.
The Council recommends a federal hiring system
based on a legislative framework of
government-wide principles and flexible
authorities that form the basis for decentralized,
agency-based hiring programs.
Each agency will be able to develop recruiting and
hiring programs to meet its needs. Agencies will
be authorized to determine when positions need to
be filled, and to develop application and
evaluation methods for ranking and rating
candidates. Agencies will make appropriate use
of both internal and external candidates to achieve
a high-quality, diverse workforce.
The government-wide hiring system will provide
for the noncompetitive appointment of persons
with targeted and equivalent disabilities.
To simplify the hiring system, the number of
appointment types will be reduced from over 300
to two permanent and temporary. Depending
on the requirements of the position, agencies may
increase or decrease the length of the current one-
year probationary period, subject to collective
bargaining for bargaining unit employees.
Employee involvement is a key element in the
success of a decentralized hiring system. Where
bargaining unit employees are involved, use of the
additional hiring flexibilities will be contingent on
collective bargaining or labor-management
consensus.
Reform the General Schedule Classification System
->
Legislation will direct the establishment of broad
government-wide criteria for classification and
bioadbanding systems. No changes can be made to
current government-wide classification systems until the
Council has endorsed the national criteria.
Agencies will be authorized to establish broadbanding
programs in accordance with the adopted national criteria.
Broadbanding programs may be established for
bargaining unit employees only after agreement is
reached between labor and management at the local or
other appropriate level.
The employee's right to a third-party review of the
classification of his or her position will be
retained. Where an agency develops a new
classification program in partnership with the
union, the parties could agree to an alternative
appeals procedure. Once the new national criteria
are in place, bargaining unit employees will have
the right to grieve classification decisions.
Improve Individual and Organizational Performance
Each agency will design and implement performance
management programs for its employees. Employees and
their representatives will be fully involved in design and
implementation of performance management programs.
Where bargaining unit employees are involved, use of the
performance management flexibilities will be contingent
on collective bargaining or labor-management consensus.
A performance management program could be designed
to operate almost entirely at the group level. However,
the program must include some element of individual
accountability, which may be negotiated by the parties.
For incentive programs, the Council recommends a
similar legislative framework. In addition, it encourages
agencies to establish gain sharing programs.
For dealing with poor performers, the Council
recommends reducing the notice period for proposed
action from 30 days to 15 days, and eliminating the
confusing dual track for taking action against employees
who fail to meet performance expectations. The Council
also recognizes that poor performers are a critical
problem and that more work must be done in this area.
NEXT STEPS
The Council's report to the President states that:
"It is the Council's firm belief that, taken together and enacted as
a whole, (these) recommendations will promote the reinvention
of Government from a top-down bureaucracy to a high-
performance, customer-driven organization."
The phrase "taken together and enacted as a
whole" refers to the fact that the unions have
consistently stated that union support for
additional human resource management
flexibilities in the areas of hiring, classification
and performance management is contingent upon
reform of the federal labor-management relations
statute.
The National Performance Review is coordinating the receipt of
comments from stakeholders, including the Coalition for
Effective Change, and line managers from the Social Security
Administration, Internal Revenue Service, and Department of
Defense. This effort should be completed early in March.
SUCCESS STORIES
Examples of successful partnership efforts taking place within agencies include
the following:
United States Mint. On February 8, 1994, the U.S. Mint and
the American Federation of Government Employees (AFGE)
announced an agreement to resolve a wide range of long-
standing issues at the San Francisco Mint, following negotiations
between senior Mint and AFGE officials.
The agreement encompasses changes in
management practices, information sharing, and
the use of alternative dispute resolution processes
for equal employment complaints.
The negotiations also resolved six pending equal
employment opportunity complaints and another
29 informal complaints, some dating back two
years, saving taxpayers almost $210,000.
Department of Labor (DOL). DOL began developing a
partnership two years ago with negotiation of new labor
agreements using interest-based bargaining. Partnership is
institutionalized in the DOL Reinvention Leadership Team,
Agency Reinvention Teams, and the Office of Reinvention where
unions have representatives working as full partners. Unions are
represented on all reinvention bodies, where decisions are made
by consensus.
Recent accomplishments during the past year include the following:
Reinvention of the Occupational Safety and Health
Administration (OSHA) inspection process, by
empowering front-line OSHA compliance officers and
inspectors, and eliminating over 630 pages (90%) of the
OSHA Field Operations Manual.
Delegation of authority to the employees of the
Mine Safety and Health Administration to handle
routine cases which were previously handled by
attorneys in the Office of the Solicitor.
Establishment of pilot program for OSHA and the
Employment and Training Administration to use
bottom-line budgeting, providing program
managers with more control over their budgets.
Elimination of 2,372 pages (73%) of the DOL
Manual Series and one-third of all internal reports.
Internal Revenue Service (IRS). In 1993, the IRS and the
National Treasury Employees Union (NTEU) signed a Total
Quality Organization Partnership Agreement.
It addresses
a systems management approach to actively
improve work processes;
empowerment from the perspective of the
individual and the organization;
an evolutionary change in the relationships among
IRS managers, the union, and employees; and
the quality of work life that will result in
enhanced productivity and employee pride in the
workplace.
This agreement is radically redefining the relationship between
management and labor.
In November 1993, the IRS Commissioner, IRS Deputy
Commissioner, and NTEU President jointly announced the
location of 23 Customer Service Centers and five Submission
Processing Centers, operational components of IRS which are
central to the bureau's successful reinvention. This impacts
approximately 22,000 IRS jobs.
Concurrently, they announced a cooperatively developed
workforce investment agreement founded on a shared belief in
the value of the organization's human resources and a common
interest in ensuring that this workforce was prepared to
effectively perform the jobs of the future.
These joint announcements reflect the progress that is being
made in the management and labor relations environment to
augment good government at IRS.
General Services Administration (GSA). Within days of the
President's Executive Order last October, GSA brought together a
group of senior managers, labor relations specialists, and top
GSA union officials of the American Federation of Government
Employees and the National Federation of Federal Employees.
This group crafted a GSA Partnership Resolution
premised on a commitment to respect each other
and work towards good faith pre-decisional
involvement of the labor organizations in the way
the agency would be "reinvented."
A four-member GSA National Partnership Council
was created at the national level which has as its
major function to spearhead and encourage the
partnership relationship throughout GSA at all
levels.
The GSA National Partnership Council
empowered regional and service organizations to
create additional GSA Partnership Councils
beyond the national level in whatever manner the
parties agree to be the most appropriate for their
needs and cultures.
Together the parties have been working on a wide
range of issues, from reorganization to
telecommuting.
The parties recognize that commitment to partnership requires a
new way of working and communicating, that support and
training are needed, and that commitment to partnership is laden
with opportunities.
During the week of February 14, 1994, for the
first time in the history of GSA, the entire top
management of the agency along with top union
officials from all parts of the country met together
in Baltimore to share information, discuss
interests, and continue the process of jointly
developing future directions for GSA.
Department of Defense, Letterkenny Army Depot. Management
and unions have developed a charter which establishes a
corporate Board of Directors for the purpose of jointly managing
the Public Works Center (PWC) as a for-profit business which
provides services and technical expertise to the military
command, local business, other military entities, and various
cities and towns in Maryland, West Virginia, and Pennsylvania.
The Board of Directors uses total quality
management concepts and best business practices
to enhance the competitiveness of the PWC and to
aggressively seek out opportunities for growth and
expansion into the workplace for employees and
managers through education incentives, alternative
work sites, and self-directed work teams.
Although the charter is already in operation, PWC
personnel would like to have a formal signing
ceremony or other acknowledgement, possibly
attended by the Vice President.
Miscellaneous. The Federal Labor Relations Authority (FLRA)
points out that the substantially increased number of contacts
they are receiving from agencies interested in working on
partnership relationships with FLRA's help is one early indicator
of the success of government-wide efforts to promote workplace
partnerships.
FLRA reports tremendous activity and interest on
the part of agencies, including the Veterans
Administration, Department of Commerce, Bureau
of Engraving and Printing, Defense Logistics
Agency, and others, in scheduling programs for
labor and management to learn to work together in
partnership, which FLRA attributes to the issuance
of the Executive Order.
COMMISSION To REVIEW
THE U.S. MARITIME INDUSTRY
NPR RECOMMENDATION
The President should establish a commission to review the U.S. maritime
industry and consider alternatives to the current mosaic of direct and indirect
subsidies. In particular, the commission should consider whether the U.S.
economy as a whole would be better served by a less regulated maritime
sector.
STATUS OF THE RECOMMENDATION
This is one of those items that has been overtaken by events.
Essentially, the National Economic Council (NEC) conducted
this review in the last few months and the Administration in the
FY 1995 Budget has recommended a new maritime subsidy.
Department of Transportation (DOT) has taken no action on this
recommendation pending the issuance of the report. During the
formulation of the FY 1995 Budget, moving the Ready Reserve
Force to Defense and discontinuing the Cargo Preference
program were considered, but that idea was dropped.
POLITICAL IMPLICATIONS
There is apt to be some lingering uncertainty about this issue from the
Maritime unions due to leaks last summer that NPR was considering
recommending doing away with subsidies.
The Maritime unions will also be concerned because some in the
NEC shared our views on doing away with subsidies.
There are big remaining questions about the future of the
Maritime industry and DOT may wish to form a commission to
look at these.
POSSIBLE Q & A
Question: Are you planning to get rid of maritime subsidies?
Answer: No. In fact, the FY 1995 Budget includes subsidies.
GOVERNMENT PRINTING OFFICE
NPR RECOMMENDATIONS
Executive branch agencies have little flexibility in determining their sources for
obtaining printed materials in support of mission programs, time frames and
priorities. Agencies are required to use GPO for the majority of their printing
needs with little choice on whether GPO performs the work in-house or who
will be the private contractor selected.
GPO services do not necessarily meet agency needs, time frames or quality
expectations. GPO in-house printing costs 50% more than the private sector; agencies
must also pay GPO a surcharge of 6-9% for using GPO contracts. For print jobs
under $1000, agencies must spend time and administrative costs seeking waivers from
GPO before obtaining these small print jobs from sources other than GPO.
NPR recommended that GPO be required to compete for executive branch
printing by removing its current monopoly status. We also recommended that
GPO rightsize its operations by reducing in-house capabilities commensurate
with its Congressional workload and retain contracting out activities for all
other printing business performed for the congressional, judicial, and executive
branches.
STATUS OF NPR RECOMMENDATION
Frankly, this one is a dead duck. It got cut out of HR 3400 last fall and we
did not put it in the 1995 budget.
This however, does not spell the end of GPOs problems. Regardless, of
whether GPO retains its mandatory status, it must significantly downsize in-
house operations in order to make it cost efficient and stop its significant rising
annual deficits (e.g., $5 mil loss in FY 92, $13 mil loss in FY 93, $18 mil loss
estimated in FY 94). Some further downsizing would be required if GPO's
mandatory status were eliminated and executive branch agencies were free to
obtain printing needs from other sources, including GPO but its got a large
downsizing in store for it anyway.
POLITICAL IMPLICATIONS
This recommendation drew strong protests from CWA who represent the
government printers in town.
We believe that this action will not necessarily cost any small printers their
jobs, but that it will save the government the money it now pays to GPO to be
the middle man.
There is strong disagreement from the unions who contend that if you
let government managers contract for their own printing it will result in
corruption, etc.
POSSIBLE Q & A
Questions: Are you planning to shut down the government printing office?
Answer: No. In fact the government printing office continues to print the congressional
record and other important documents. We recommended that it discontinue its roll as a
middle man between government managers and the small printers who do the bulk of the
government's work. However, we have not included this provision in the 1995 budget.
RAILROAD RETIREMENT BOARD
NPR RECOMMENDATIONS
Social Security Administration should take over administration of
social security benefits for rail workers and retirees.
The Health Care Finance Administration (HHS) should administer
Medicare claims.
The Rail unemployment insurance program should be administered
by federal/state unemployment insurance systems.
Rail unions, employers, OMB and the RRB should also develop a
plan for a privately administered pension fund.
NPR OBJECTIVES
To eliminate duplication between RRB and other government
organizations (Social security, Medicare (HCFA), state
unemployment).
To get government out of administering a private pension plan.
STATUS OF NPR RECOMMENDATIONS
Following several months of meetings with representatives from rail labor we agreed to exclude
this recommendation from the 1995 budget on the grounds that RRB had only begun to make the
operational improvements that OMB asked for in 1990. We have had discussions with the rail
unions about management improvements dictated by the OMB study. They promised to make
progress on the following issues:
significant backlogs in claims processing, high error rates in claims
calculations and subsequent routine claims adjustments, incorrect
payments resulting in over $100 million of uncollected debt;
incorrect federal income tax calculations and reports due to
inaccurate records and noncompliance with laws and IRS
regulations,
lack of controls against fraud, waste and abuse resulting in a fraud
caseload in the IG office of between 3500 and 4,000, 732 criminal
convictions since 1986 and projected increases in both statistics;
lack of automation;
paper- and manual-labor intensive processes characterized by
laundry carts full of paper files.
Labor and RRB members have agreed to work towards constructive change. RRB needs
to re-engineer both management and operations. We will review the status of improvements in
one year, during which time the Administration will not pursue recommendations for
administrative change ->-provided management improvement gets priority and has visible results
at RRB.
POLITICAL IMPLICATIONS
Labor has historically supported maintaining the status quo. They
perceived the NPRrecommendations as a continuation of the
Reagan/Bush administrations' efforts to discontinue RRB and get
government out the role of underwriter for the private pension and
other benefits. Congress has acted numerous times since the mid-
fifties to rescue the retirement fund, ensure it stays financially
soluble.
We received more mail on this recommendation than on any other
item in the NPR. However, we were able to convince rail labor
after some months that if they did not cooperate aggressively to fix
some of the mismanagement that has plagued the RRB --
subsequent Administrations would continue to find the same
problems and come to the same conclusions.
POSSIBLE Q & A
Question: Do you plan to get rid of the Railroad Retirement Board?
Answer:
No. The 1995 budget has no such recommendation.
Let me also state that at no time did we recommend any action
which threatened to decrease benefits to retired railroad workers.
We did look at the administrative apparatus of the RRB and
suggest that some functions should move to the government.
However, after extensive discussions with rail labor we have
deferred any action so that they can have a chance to reinvent the
RRB and bring down their error rates and level of uncollected debt.
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Japan Trade Sanctions
Divider Title:
U.S. SANCTIONS ON JAPAN
On February 15, USTR announced a determination under section 1377 of the
Omnibus Trade and Competitiveness Act of 1988 that Japan had not complied with a
1989 agreement to open its cellular telephone market to U.S. manufacturers. This
action resulted from what USTR considered a clear-cut failure of Japan to live up to a
series of commitments in this area spanning almost ten years, of which the 1989
agreement was merely the most recent example.
The market access barriers erected against the highly competitive U.S. industry
amounted to an exclusion of U.S. manufacturers from the crucial Tokyo-Nagoya
market, a market the size of the Washington-Boston corridor. USTR considers its
determination is a measured response to a clear instance of non-compliance with the
bilateral trade agreement.
The next step under the 1377 review of this agreement took place largely
outside of the U.S. - Japan Framework Japan's behavior in this sector, however, is,
according to USTR, an excellent example of why we need to pursue results orientation
in our trade agreements with Japan. The 1989 agreement was primarily procedural in
focus, and lent itself to delay and lack of clarity in its implementation. Use of criteria
such as that proposed with the Framework may have averted this latest episode of
frustration in our trade relationship with Japan.
Leon Feurth will be briefing you on the plane regarding the trade sanctions
imposed on Japan. A BNA article on the history of Motorola's relationship with Japan
is attached.
BNA INTERNATIONAL TRADE DAILY
February 16. 1994
Japan: USTR initiates Japan sanctions,
chaiging breach of cell phone accord
WASHINGTON (BNA) -- The Clinton administration will begin the process of imposing
trade sanctions against Japan because of violation of a 1989 trade agreement governing
access to Japanese cellular telephone markets, U.S. Trade Representative Mickey Kantor said
Feb. 15.
Kantor's determination that Japan has failed to live up to the terms of the 1989 Third
Party Radio and Cellular Telephone Agreement could result in up to $300 million worth of
retaliatory sanctions, according to U.S. and industry sources.
Kantor told an unusually crowded press conference that U.S. sanctions, if imposed, would
reflect an assessment of damage to U.S. companies affected by the dispute. The chief
operating officer of Motorola, the company whose cell phone sales have allegedly been
curtailed by Japanese action, said the company estimates it would earn $250 million to $350
million annually if not restricted by Japanese government action or inaction.
The U.S. determination, made under Section 1377 of the Omnibus Trade and
Competitiveness Act of 1988, comes four days after the two countries failed to reach any
agreement on economic framework talks aimed at opening Japanese markets for automobiles
and auto parts, insurance, and government procurement of medical equipment and
telecommunications goods and services. U.S. officials said Feb. 11 the collapse of the talks
signified "the end of business as usual with Japan, and indicated the administration would
actively consider forms of unilateral trade action.
The threat of sanctions over cell phone trade, however, is only coincidental to the failure of
the framework talks, Kantor and other U.S. officials stressed Feb. 15 and in the days since
Feb. 11. The decision was being considered separately, he said.
"Classic Example" Of Problem
But Kantor called the cell phone dispute "a classic case of the determination of Japan to
keep its markets closed, particularly to leading-edge U.S. products," and said it was an
example of why the U.S. insistence on "objective criteria" in trade agreements was so
important.
"On one hand, this would have happened regardless of what happened Friday," he said,
referring to the Feb. 11 stalemate. "On the other hand, let me make it clear: this is an
example of what we're talking about in terms of closed markets in Japan.
"
The United States will take 30 days to draw up a list of products that could be subject to
punitive tariffs if U.S. demands are not met, Kantor said. The list would then be subject to
public hearings or written comments, or both, he said. U.S. law does not specify a deadline
after that for imposing the sanctions, he added.
The U.S. move follows a decade of efforts by Motorola to sell cell phones in Japan,
Kantor said.
"After nine years of negotiations and three agreements, it clearly is long past time for
results in this issue," he said. "U.S. firms must be given the same opportunities to the major
Japanese market of Tokyo-Nagoya as Japanese companies are given."
Motorola's efforts to enter the Japanese market began in the early 1980s, according to
Kantor and Motorola's president and chief operating officer, Christopher B. Galvin.
At first, technical standards that reflected only Japanese equipment blocked Motorola's
access, according Kantor and fact sheets prepared by USTR and Motorola. However, as part
of the bilateral market-oriented, sector-selective trade talks initiated during the Reagan
administration, Japan's Ministry of Posts and Telecommunications ruled in March 1986 that
Motorola's cellular network system, called total access communication system, or TACS, was
acceptable for use in Japan.
The next hurdle for Motorola came from limitations to the range of its system, Kantor
said.
Motorola joined forces with a Japanese company, Daini Denden, or DDI. But DDI was
allocated frequency spectrum that permitted it only to operate outside the densely populated
Tokyo-Nagoya market, he said. This market represents about 60 percent to 70 percent of the
total cellular phone demand in Japan, according to USTR.
Meanwhile, Nippon Telegraph and Telephone was allowed to operate all over Japan,
USTR said.
The Japanese government agreed through a series of letters exchanged under the MOSS
talks in 1986 and 1987 to allow subscribers to Motorola's TACS system to roam through the
Tokyo-Nagoya area, enabling them to use their phones throughout that region.
But in April 1989, the United States determined also under Section 1377 -- that Japan
had failed to make enough progress in allowing the establishment of a Motorola TACS
system that would allow its subscribers to roam through the Tokyo-Nagoya region. USTR
published a sanctions list, but the two sides reached an agreement in June.
" Japan committed for the second time to the building of a Motorola technology system
in the Tokyo-Nagoya region to allow roaming and to provide comparable market access for
the Motorola TACS system," Kantor said.
After the 1989 agreement, Motorola was paired, against its wishes, with the operator of a
competing system in the region, IDO, or Nippon Idou Tsushin, Kantor said.
"The Japanese government forced a shotgun marriage in which a Motorola competitor that
had spent millions installing its own system in Tokyo-Nagoya was supposed to also install a
Motorola TACS system," he said.
IDO refused for two years to take delivery of Motorola cellular equipment, which
effectively canceled out Motorola's advantage over Japanese companies in technology,
Kantor charged. But in March of 1992, IDO agreed to install the TACS system and develop
the network, he said.
"In the 15 months following this commitment, IDO made only token progress in installing
the system," Kantor said. The system now covers only 40 percent of the Tokyo-Nagoya area,
he said.
The system should have been complete in 18 months, Kantor charged.
Success Outside Tokyo-Nagoya
Outside the Tokyo-Nagoya region, where Motorola and its Japanese joint venture partner,
DDI, were allowed to operate freely, the U.S. firm has 438,500 subscribers, he said. There
are 449,820 subscribers to the Japanese system in that area, he added.
However, within the Tokyo-Nagoya region, the NTT system and the IDO system have
signed up 1.2 million subscribers, Kantor said. Yet Motorola has signed up only 12,881
subscribers in that area, he said.
"The U.S. side time and again has accepted Japanese commitments to remove market
access barriers to competitive foreign companies," Kantor said. "Each barrier has been
removed only to be replaced by another, and there are no meaningful results that we can point
to."
Motorola's Galvin said his company would seek to have the system built out to cover
more than its current 40 percent of the Tokyo-Nagoya area. The goal should be to cover at
least 93 percent to 95 percent of the region, he said. This should be accomplished within the
next 18 months, instead of the three years currently envisioned, he added.
In addition, Motorola wants a "reasonably aggressive" marketing of phones that would go
on the system, Galvin said. And it also wants some separation of the conflict of interest
present by IDO's operation of NTT's system alongside Motorola's system, he said.
Kantor's announcement drew bipartisan support from Congress. House Majority Leader
Richard A. Gephardt (D-Mo) said the move demonstrated the administration's willingness to
fight for fair market access. Senate Minority Leader Bob Dole (R-Kan) expressed support for
Kantor, but cautioned against entering into a tit-for-tat trade war.
"I hope the Japanese will realize that the cost of trade sanctions will be far higher than
leveling the playing field of international trade," he said in a written statement. "They should
also realize that Congress will very likely act unless Japan's markets become more
accessible."
Japanese Officials Plan Market-Opening Moves
In Tokyo, meanwhile, officials are considering implementation of market-opening measures
that already have been tentatively agreed, Japanese government sources said Feb. 15.
At a Cabinet meeting Feb. 15, Prime Minister Morihiro Hosokawa directed ministers to
prepare emergency measures to reduce Japan's $60 billion merchandise trade surplus with.
the United States, according to separate government officials. Foreign Minister Tsutomu Hata
said at the same meeting that surplus-cutting efforts should be given top priority regardless of
the framework developments, they said.
The measures likely to be implemented are those related to two of the three priority areas
of the framework being demanded by Washington: government procurement of medical
equipment and telecommunications, government sources said. Steps on automobiles and auto
parts would not be carried out, they suggested.
The measures being contemplated include the lowering of the minimum threshold for
foreign suppliers of government procurement of telecommunications and medical equipment
and establishment of a system to hear foreign insurers' opinions about access to the Japanese
insurance market, the sources said.
Describing the post-summit period as a "reflection period," the official said it is
"premature" to conclude that the Clinton administration will take retaliatory measures as a
result of the framework impasse.
Asked about reports that the Clinton administration would be announcing retaliation against
Japan for failing to increase the cellular phone market share for Motorola, the official
termed it "private-sector business" and said the Japanese government has no intention of
taking action.
As both sides evaluated the situation in the aftermath of the failed framework talks, the
prime minister's office Feb. 13 released a public opinion poll which showed 75.5 percent of
respondents support efforts to reduce Japan's merchandise trade surplus and that 36.8 percent
accepted the U.S. rationale in demanding that Japan reduce the surplus. The latter figure was
up 6.3 percentage points from the previous survey.
It was the first time that those backing the U.S. position exceeded those who felt that
Washington was acting emotionally, a category which totaled 35.2 percent, down from 42.4
percent. The survey, taken over September and October last year, said, however, only 5.8
percent supported reducing the Japanese surplus with managed trade means. The survey is
taken annually.
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Malaysia (GSP)
Divider Title:
MALAYSIAN AND INDONESIAN LABOR
PRACTICES AND GSP
ISSUE
Last year, the AFL-CIO petitioned the U.S. Trade Representative to review Malaysian
worker rights practices under the Generalized System of Preferences (GSP), which
waives duties on selected imports from developing countries. The GSP law requires
that beneficiary countries be taking steps to meet international labor standards. The
primary issue in the AFL-CIO petition is Malaysia's ban on a national electronics
union. A decision on whether to initiate an investigation of Malaysia is still pending.
STATUS OF THE PETITION.
In October of last year, USTR announced that is was deferring a decision on whether
to accept the AFL-CIO petition for review until early 1994. At that time, we wished
to avoid a bilateral confrontation with Malaysia on the eve of the Seattle APEC
Summit (which Malaysian Prime Minister Mahanthir refused to attend, in any event)
Currently, the petition is under consideration, with agencies split on whether it should
be accepted for review. Acceptance of the petition would trigger a 6 month review of
Malaysia's compliance with the GSP law's labor requirement. The AFL-CIO argues
that the Administration should at least agree to conduct such a review, without
prejudice as to the outcome (a negative outcome could result in Malaysia's loss of
GSP benefits). Others argue that even initiating a review will damage our bilateral
relationship with Malaysia, and could hinder the chances of U.S. companies competing
for contracts from the Malaysian government.
The decision on whether to review the Malaysia petition could also have a bearing on
the Congressional reauthorization of the GSP program, which expires in September of
this year. The perception that the worker rights provisions are not being adequately
enforced should lead to pressure to make the labor requirements in the GSP program
more onerous. Finally, the Malaysia decision comes in the wake of a related decision
on GSP for Indonesia. USTR has been conducting a GSP worker rights review of
Indonesia for two years. On February 16, it was announced that the labor review of
Indonesia was being suspended for six months, to allow that country to make follow
up on recent actions to expand labor rights. The AFL-CIO had urged for a formal
continuance of the review instead of suspension.
MAYALSIAN POSITION
In its defense, the government of Malaysia has noted that its electronics workers are
among the best treated and best paid in the country, and have little incentive to
unionize. It notes also that generally, unions are independent and active in Malaysia.
Finally, it points to some recent actions that expand workers rights generally (e.g., a
proposal to make collective bargaining more effective.) On the other hand, the
Malaysian argument is belied by the fact that electronics workers did try to organize a
national union in 1988, only to be suppressed by the government (with the at least
implicit support of U.S. electronics companies in Malaysia). The high volumes of
Malaysian electronics exports to the U.S. combined with the Malaysian government's
heavy-handed approach toward labor have made this on important issue to the AFL-
CIO.
BACKGROUND
The United States GSP program allows 145 eligible developing countries to export
over 4000 items to the United States duty-free. Since 1984, the GSP program requires
that beneficiary countries be "taking steps to afford internationally recognized worker
rights" to retain their eligibility for these tariff preferences. Each year, the AFL-CIO
and other labor groups are entitled to petition the USTR to review the compliance of
beneficiary countries with this provision.
In mid-1993, the AFL-CIO petitioned USTR to review Malaysian labor practices under
the GSP law. Malaysia is the top GSP beneficiary country, shipping $2.8 billion in
products duty-free in 1993. Over half of Malaysian GSP imports (about $1.8 billion)
were electronics items. The key issue identified by the AFL-CIO was the government
of Malaysia's explicit ban on the formation of a national electronics union.
The AFL-CIO's identification of labor problems in Malaysia's electronics sector is not
a new issue. In 1988-89, the Reagan/Bush Administrations accepted a similar AFL-
CIO petition on Malaysia, and found Malaysia to be "taking steps" on worker rights,
after the Malaysian government agreed to allow electronics unions at the plant level.
However, in April 1989, then USTR Carla Hills took the unusual step of following-up
this decision with a letter to the Malaysian government urging it to take further actions
to allow for unionization in the electronics sector. Five years later, the Malaysian
government has still not lifted its ban on a national electronics union, which has given
rise to the new AFL-CIO petition.
INDONESIA
A petition was filed in 1992 (by Asia Watch, not the AFL-CIO -- however, the AFL-
CIO has strongly supported the petition) alleging worker rights violations in Indonesia.
Because of the clear problems in Indonesia, and the lack of adequate steps being taken
to address them, a decision was made in early 1993 by the Administration to continue
the review until February 15, 1994.
Although some small steps have been taken in Indonesia, including inviting ILO
experts to come to Indonesia to provide technical advice, it is pretty well agreed that
serious violations remain -- including military control of all unions. However, on
Wednesday, Mickey Kantor announced a decision (copy attached) to suspend the
review of Indonesia for six months. This seems to have been a compromise between
those in the Administration who wanted to terminate the investigation and find
Indonesia has taken sufficient steps, and those (including Kantor), who thought there
had been inadequate progress to do so. Another consideration seems to be that
Indonesia is host of the APEC Summit in November 1994.
Normally, such a decision is considered in an inter-agency process, which would have
involved the Department of Labor, and would have had the possibility of being
considered at the cabinet level. This decision wasn't. The public understanding is that
it was made between USTR and the NSC. There will be some bad feelings with the
AFL-CIO both on the result and the process.
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GATT Workers Rights
Provision
Divider Title:
WORKER RIGHTS - NEW ISSUES FOR GATT
ISSUE
This background memo discusses the history of the Worker's Rights issue in GATT
and the status of its designation as a "new issue" for negotiation once the World Trade
Organization comes into effect.
PRESIDENTS STATEMENT
In his January 11 press conference after meeting with EU officials in Brussels,
President Clinton declared that the "successor agenda to the Uraguay Round should
include such issues as labor standards." This is the only "commitment" made by the
President (or any member of the Administration) on the issue.
GATT PROCESS
Among the actions taken by the trade ministers on April 15, when countries formally
sign the Uraguay Round agreement, will be a decision establishing an "Interim
Committee" to operate from that moment until the entry into force of the World Trade
Organization (either on January I or July 1, 1995). That committee, in turn, will be
tasked to develop a Work Program on "such new issues as Members may agree" to
negotiate.
There will be no identification of any such issues in this April 15 declaration (except
for Trade and the Environment on which countries have already agreed to negotiate).
This is because it is clear that there is no consensus as to what should be on the list of
issues, and all countries (including the U.S.) wish to avoid any potential for unraveling
formal completion of the Uraguay Round.
Effectively, agreement to task the Interim Committee with the duty of discussing new
issues defers the battling on what issues to negotiate next. The trade policy agencies
in the Government are now considering questions of substance and timing regarding
worker rights and other items the U.S. seeks to include on this agenda.
HISTORY
GATT contains no explicit provisions on workers rights. The U.S. tried as far back as
1953 without success to interest the GATT in taking up the issue. The legislation
providing negotiating authority for both the Tokyo Round and the Uraguay Round
directed the President to seek an agreement on worker rights as part of the
negotiations. The United States had no success during either of these two negotiating
rounds in getting GATT agreement to address worker rights.
The U.S. delegation to the GATT has made repeated requests (actively from 1987-91,
less actively in 1992) at sessions of the GATT Council and through other diplomatic
channels to secure establishment of a working party on the "relationship of
internationally-recognized worker rights to trade." We indicated a willingness to
consider a number of alternative formulations, including the possibility of a joint
ILO/GATT staff study. Developed countries generally supported, or at least did not
oppose, the U.S. request. However, developing countries each time blocked
establishment of_such a working party. Their principal arguments are that (1) our
intentions are prötectionist, and (2) the issue belongs in the ILO, not the GATT.
(When the issue was discussed at the ILO, some developing countries said it belonged
in the GATT).
NAFTA IMPLEMENTATION UPDATE
FOR MEETING WITH AFL-CIO
ENTRY INTO FORCE
Implementation of the NAFTA is off to an excellent start. The Agreement
entered into force as scheduled on January 1, 1994. Fifty percent of U.S.
exports to Mexico are now duty-free. Early operation of the NAFTA has been
smooth, with relatively few problems reported. Technical problems that do
arise are being quickly addressed by all three governments.
We have also initiated an expedited negotiation to further accelerate the tariff
reductions for some NAFTA products. This should provide real benefits for
our exporters, notably in the manufacturing sector. We will be consulting with
our labor advisors as we proceed.
NAFTA SUPPLEMENTAL AGREEMENTS ON LABOR AND THE ENVIRONMENT
Our NAFTA Transitional Adjustment Assistance Program is also up and
running. To date we have received 30 petitions from a broad spectrum of
industries. Decisions have been made on 5 petitions, with assistance provided
in 4 cases to approximately 355 workers.
The Commissions on Environment and Labor established in the NAFTA
Supplemental Agreements are also off to a good start. The three government's
National Administrative Offices (NAOs) have been open for business since
January 3 within their labor departments. I understand Bob Reich plans to
meet with his counterparts on March 21 in Washington.
We have received two submissions regarding violations of Mexican Labor law
on February 14, one from the Teamsters and the second from the United
Electrical Workers. Both concern Mexican subsidiaries of U.S. firms. We are
now analyzing the submissions and will contact the petitioners within 60 days
regarding next steps.
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NAFTA
Divider Title:
NAFTA IMPLEMENTATION UPDATE
FOR MEETING WITH AFL-CIO
ENTRY INTO FORCE
Implementation of the NAFTA is off to an excellent start. The Agreement
entered into force as scheduled on January 1, 1994. Fifty percent of U.S.
exports to Mexico are now duty-free. Early operation of the NAFTA has been
smooth, with relatively few problems reported. Technical problems that do
arise are being quickly addressed by all three governments.
We have also initiated an expedited negotiation to further accelerate the tariff
reductions for some NAFTA products. This should provide real benefits for
our exporters, notably in the manufacturing sector. We will be consulting with
our labor advisors as we proceed
NAFTA SUPPLEMENTAL AGREEMENTS ON LABOR AND THE ENVIRONMENT
Our NAFTA Transitional Adjustment Assistance Program is also up and
running. To date we have received 30 petitions from a broad spectrum of
industries. Decisions have been made on 5 petitions, with assistance provided
in 4 cases to approximately 355 workers.
The Commissions on Environment and Labor established in the NAFTA
Supplemental Agreements are also off to a good start. The three government's
National Administrative Offices (NAOs) have been open for business since
January 3 within their labor departments. I understand Bob Reich plans to
meet with his counterparts on March 21 in Washington.
We have received two submissions regarding violations of Mexican Labor law
on February 14, one from the Teamsters and the second from the United
Electrical Workers. Both concern Mexican subsidiaries of U.S. firms. We are
now analyzing the submissions and will contact the petitioners within 60 days
regarding next steps.
QUESTION: What is the status of the implementation of the labor side agreement of the
NAFTA?
ANSWER:
We are making good progress in implementing the agreement.
First, our National Administrative Office (NAO) has been up and running since
January 3, 1994. We have been staffing the office temporarily with staff on
loan from their regular jobs within the Department. Canada and Mexico have
also established their NAOs.
Second, senior officials of the three countries have had two meetings -- the
most recent on February 7-8 in Ottawa -- to discuss the steps that are necessary
to get the Secretariat and the Commission going.
And third, we have tentatively scheduled the first meeting of the Ministerial
Council of the Commission for March 21 in Washington.
QUESTION: What is the status of the two complaints filed by the Teamsters and the
Electrical Workers regarding violations of labor law in Mexico?
ANSWER:
We received the first two submissions to our national administrative office on
February 14
The first submission, filed by the International Brotherhood of Teamsters,
alleges violations of labor law in Mexico by a subsidiary of Honeywell located
in Chihuahua. The specific complaint is that 21 workers were dismissed
because of their efforts to establish an independent union.
The second submission, filed by the United Electrical, Radio and Machine
Workers of America, alleges violations of labor law by a GE subsidiary in
Ciudad Juarez known as Compania Armadora. The specific complaints
addressed the rights of association, employment standards, and safety and
health
The staff of our NAO is currently analyzing the submissions. We will make a
decision on how to proceed and inform the petitioners within the 60-day period
that we have allowed for this purpose in the notice of establishment published
in the Federal Register.
Clinton Presidential Records
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Poland & AFL-CIO
Divider Title:
POLAND AND THE AFL-CIO
February 21. 1994
Since World War II, the American labor movement has actively supported the development of
democratic trade unions around the world. At the same time, it has bitterly opposed labor
organizations that it has viewed as mouthpieces or "transmission belts" for
authoritarian/totalitarian regimes.
The Workers Protest Movement -- The AFL-CIO enthusiastically welcomed the
workers' protest movement in Poland and the founding of Solidarity in 1980.
Solidarity Suspension -- That support remained strong after the imposition of martial
law and Solidarity's suspension in 1981. During the mid-80s, when even U.S.
government support for the democratic forces in Poland appeared to waiver, the AFL-
CIO was not deterred. It brought pressure on the U.S. government to hold the course.
It worked with other democratic trade union organizations abroad to provide moral and
material assistance to the Solidarity underground within Poland and to Solidarity's
representatives abroad (for example, it helped to fund Solidarity's offices in Brussels).
AFL-CIO and Solidarity Movement -- Since the reinstatement of Solidarity and the
collapse of the Communist Party, the AFL-CIO has continued to be a staunch friend to
the democratic labor organization. It has an office in Warsaw. Through its Free
Trade Union Institute, the AFL-CIO continues to provide substantial technical
assistance to Polish labor. In providing that assistance, the AFL-CIO utilizes its own
resources as well as funds provided by the National Endowment for Democracy.
Lane Kirkland -- AFL-CIO President Lane Kirkland has been a, if not the, major
force behind the Federation's unswerving support for Solidarity. He closely follows
developments in Poland and has frequently visited the country. For example, he plans
to be in Poland two or three times this year.
Kirkland has had a long and close relationship with Lech Walesa. Recognizing that
relationship, the White House, prior to the President's recent trip to Europe, asked
Kirkland to contact Walesa to urge him to moderate his views regarding the
Partnership for Peace
AFL-CIO's Building and Construction Trades Dept. and Solidarity -- In June 1991,
the U.S. Department of Labor in conjunction with the AFL-CIO's Building and
Construction Trades Department and Solidarity opened a model construction skills
training center in Warsaw. The purpose of this program is to provide training in
modern U.S. building technology to Polish construction workers. To date, over 600
trainees have graduated and have been placed in new jobs or have returned to existing
jobs with upgraded skills. A second construction skills training center was opened in
Gdynia in September 1993.
AGJ Note: When you were in Poland last April, you met at the Belvedere
with Lech Walesa. AFL-CIO leaders Lane Kirkland also attended this meeting.
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Immigration
Divider Title:
IMMIGRATION
February 21. 1994
The AFL-CIO's interest in immigration focuses on concerns about displacement of U.S.
workers both by legal and illegal (undocumented) immigrant workers. For example, the AFL-
CIO supported the establishment of employer sanctions in 1986, as part of the Immigration
Reform and Control Act, and continues to support that sanctions be maintained.
QUESTION
Is the Department or the Administration going to be taking any action to
ensure that our jobs go to American and not illegal immigrant workers?
ANSWER:
We want to assure that our economy is creating high skilled jobs in
high performance work places to enhance U.S. competitiveness in the
global marketplace and provide a bright future for our children and
theirs. While we are committed to maintaining a generous
humanitarian-based immigration policy in this nation of immigrants, the
President has already announced a number of actions to help prevent the
use of immigrant workers -- both legal and illegal -- from frustrating
these goals.
The President has, for example, named the distinguished Barbara Jordan to chair the
Commission on Immigration Reform which is examining many of these issues. The
President, Attorney General, and INS Commissioner Doris Meissner have announced policies
to tighten asylum and deportation procedures, and to strengthen border security. We have
sought to bolster these efforts by reviewing and tightening up some of the employment-based
immigration programs for which we have responsibility within the Labor Department. For
example, we have been reviewing and have or are in the process of proposing tighter
regulations for the H-visa programs' we administer and enforce. And, we have been working
with other Cabinet agencies to tighten up other nonimmigrant temporary visa programs that
are not intended primarily for employment to help assure that they are not so abused.
Immigration is and may become an increasingly important workforce and competitive
issue; DOL is committed to dealing with it as such to assure that our workforce and economic
growth goals are not stymied by insensitive immigration policies.
H-1A for nonimmigrant registered nurses; H-2A for
nonimmigrant farmworkers; H-1B for nonimmigrant "professionals"
and fashion models; and, H-2B for unskilled nonimmigrant workers.
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indicated below.
Transportation Issues
Divider Title:
TRANSPORTATION ISSUES: ISTEA LEVELS AND MASS
TRANSIT FORMULA GRANTS
ISTEA
As you know the Administration has demonstrated his special commitment to our
nation's infrastructure by fully funding key programs at ISTEA Levels.
When we're talking about full funding, there has always been a definitional
problem about what is meant by this. We're talking about the primary formula
programs of ISTEA that affect every State and transit agency, and are the
major areas of State and local decision-making: Please note that his budget
funds a larger percent of ISTEA than ever before-- 94 percent, versus 81
percent in FY 1993. This means that States and local governments will have
$3.6 billion more to spend on highways and transit than they did in FY 1993.
Core categorical Federal-aid highway grants at $18.332 billion, up 4 percent
over FY 1994.
MASS TRANSIT FORMULA GRANTS
Mass Transit Formula Grants at $2.865 billion (An Increase of 19% of over
1994.)
The budget does cut operating assistance 25 percent, but the capital portion of
formula grants increases by 40 percent, to almost $2.3 billion. Every transit
agency in America will receive more dollars for transit in this budget. Our
focus IS on capital assistance because we think it is a more strategic
investment.
The average age of the U.S. bus fleet is 8 years, which in effect
presumes a useful life of 16 years. However, based on recognized
useful bus life of 12 years, average age should be reduced to 6 years.
Transit capital assistance will allow more replacement of over-age
vehicles.
Newer vehicles are more efficient and require less maintenance, which
in turn lowers operating costs, and are also more accessible and
comfortable, which can help increase ridership. We also believe that
with low inflation and interest rates, transit authorities are experiencing
more stable fuel and labor costs and lower debt service. All of these
factors should help local areas to accommodate the reduction in
operating assistance.
Just to give you an example of the impact of this reduction in operating
assistance, Atlanta will receive 18 percent more in formula funds and have to
pick up only an additional one percent of its operating costs. The federal share
will drop from 3.5 percent to 2.6 percent. In New York City, it is estimated
that the reduction in operating assistance equates to a two-cent fare increase.
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Health Care & Labor
Divider Title:
HEALTH REFORM
Attached is a series of memoranda providing an overview of the Health Security Act,
which, as you know, the AFL-CIO will likely want to discuss. Included are the following:
o
A set of general Q & As;
A discussion of the 7.9% payroll cap (with Q & As);
o
"Additional Talking Points that Went to George Stephanopolous as well"; and
A Statement by Lane Kirkland, stating AFL-CIO's strong support of the Health
Security Act, specifically raising the concerns of retirees.
POTENTIAL HEATLH CARE Q & A AND REASONS FOR
REFORM
THE BASICS
Why should I support the Health Security Act?
Everyone agrees that the U.S. health care system needs to be changed. As introduced,
the Health Security Act HR3600, S1757 -- reforms our nation's health care system
in a way that would benefit all American families. For example, the legislation
provides a guarantee of comprehensive health care coverage to everyone, whenever
they need it. People would never again have to fear losing health care coverage. The
plan also controls health care costs and gives people a choice of doctors and plans.
Best of all, it makes health care affordable.
Who would pay the premiums for health insurance coverage under the proposal?
Under the legislation, all employers would be responsible for 80 to 100 percent of the
premium costs. On average, workers would be responsible for no more than 20
percent of the premium costs. The unemployed and low-wage workers would receive
government subsidies.
Under my union contract. the employer now pays the full premium for me and my family.
Would / have to pay more under the Health Security Act?
No. Organized labor fought for and won the option, to negotiate for employers to pay
the full premium. Employers that cover everything now can still do so in the future.
THE BENEFITS
/ have excellent health benefits that my union negotiated. Will the new plan be as good?
For an overwhelming number of union members and Americans, the answer is yes.
The Health Security Act is modeled on the benefit packages offered by the nation's
largest companies which are some of the best plans negotiated by our unions. And,
most importantly, because these benefits would be guaranteed by law, your employer
and insurance company can't cut your benefits in the future.
Would my health benefits be taxed?
No. The basic package of guaranteed comprehensive benefits would not be taxed and
workers would not be taxed if their companies pick up all, or part, of the employee's
share of the premium. Also, other forms of cost-sharing, such as employer
contributions towards deductibles, won't be taxed. Benefits that exceed what is in the
comprehensive package (so-called "supplemental benefits") would not be taxed for ten
years.
Which benefits are likely to be improved under the reform proposal?
The plan's prescription drug and preventive-care benefits are better than those in many
union plans. Preventive services, such as annual physicals and mammograms, would
be fully covered. There would be no lifetime limits on any benefits. Many people
may see their out-of-pocket costs drop. Workers with minimum "bare-bones" health
benefits would see many improvements in their coverage.
What happens to my health benefits if I change jobs?
Under HR3600/S1757 health care coverage is portable. In other words, when you
change jobs your health plan goes with you. There would be no break in your
coverage because your new employer would start paying your premium from your first
day on the job. And every health plan must take all comers, regardless of their
medical conditions.
What if I get hurt on the job? Will / still be covered by workers' compensation?
Yes. You will go to your own doctor for treatment, except in an emergency when you
can go to any doctor. The workers' comp insurer will reimburse your health plan for
your treatment. Workers' compensation premiums will continue to be experienced-
rated to provide an incentive to employers to maintain safe and healthy work places.
Also, workers will continue to have first-dollar coverage for work-related injuries.
REASONS FOR REFORM
Health care costs too much, but those of us who have given up pay raises to
cover health expenses are paying a hidden cost as well. In some industries, as
much as 20 percent of payroll goes to health care costs, and the average is 12
percent. Union workers and others with insurance also are paying for the 37
million Americans who have no coverage in the form of higher premiums and
charges from medical providers.
Improved competitiveness for U.S. industry. When U.S. products compete with
products from Japan, Germany, or Canada, we suffer an automatic disadvantage
to make up for the lopsided cost of health care for U.S. employers. Other
industrial nations have national plans and don't leave the cost solely up to
employers.
Health care costs are poisoning labor relations. A disproportionate number of
recent strikes have been sparked by health care; it is a key issue in 75 percent
of all current contract disputes.
The outrageous increase in health care is the single most important reason that
Americans' buying power had been declining. Some U.S. families spend as
much as 20 percent of their income on health care premiums and medical bills.
The longer we wait, the more powerful opponents of health care become.
Health insurance companies and other profiteers and chislers benefiting from
the current system already are barraging the public with scare campaigns about
higher taxes, loss of physician choice, and the horrors of government
involvement in the health system.
Nobody is in charge of overall health care planning for either quality or costs.
Some 1,500 health insurance companies write their own rules for covering (or
not covering) an illness or a condition. There is no consumer voice in the way
fees are set.
Insurance companies make the final decision on how they will apply their
rules. Some workers can't get any coverage because they have "pre-existing"
conditions. So-called "experience rating" drives up rates for all if one worker
files a claim. That can prompt employers to drop a policy altogether when
costs rise too fast.
$250 billion -- 25 percent of the $1 TRILLION we spend every year on health
care -- actually goes to pay administrative costs, not for improved health.
Without reform, that figure would grow to one-third of all health related
spending.
The current system is just not fair. Employers who provide health care
coverage pay the tab for those who don't AND have to compete in the
marketplace with employers who stiff their workers.
If reform provided a savings of only 10 percent of 1993 spending on health
care, we'd have about $100 billion available to cover the one-third of
Americans currently uninsured and underinsured.
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Welfare Reform & Public
Divider Title:
Private and Public employers and the 7.9
payroll cap issue
As you know, the AFL-CIO has been a strong ally of Clinton - Gore from the campaign and
generally throughout the administration. Although NAFTA put a strain on our relationship,
the healing process has"almost completed and they have re-committed to work with us to
achieve health reform. Attached are talking points on the 7.9% of payroll cap on employer
contributions for health care. The issue is that the cap is phased in over a longer period of
time for public employers (by 2002) than it is for private employers ( immediately). The
financing of this is tricky, and it has been a point of contention for some time. The best
thing to do if asked is to focus on the positive.
If you are asked about the 7.9 payroll cap as it relates to public and private
contributions, here are several responses.
Possible Response:
Each public employer needs to initially assess whether under Health Security
Act comprehensive benefits package, their provision of employee insurance
premiums would exceed 7.9% of their total payroll. If not, the distinction
between public and private does not apply.
If the costs exceed 7.9%, the employer will qualify for federal assistance in
2001
Furthermore, we recognize the need for transition assistance by creating a
transition fund for public employers.
As the process continues to move forward on the hill, you should continue to
stay involved in the legislative process with issues about which you are
concerned.
ADDITIONAL TALKING POINTS on (financing of health care private employer and public
employers regarding the 7.9 Percent cap)
The Health Security Act IS designed to make the financing of Heath Care more
fair for All American Families and employers, public and private.
Private Employers
Private employers with more than 5,000 employees have the option to form
their own "corporate alliance." But:
If a large employer chooses to form a corporate alliance, it must pay
1% of payroll assessment to share in community-wide responsibilities
and is not eligible for the 7.9% of payroll cap.
If a large employer chooses to join the regional alliances, discounts
(based on the 7.9% cap) are phased in over a period of 7 years. The
earliest a large employer could receive the full benefit of the 7.9 % cap
would be 2003 (assuming a state began implementation in 1996).
Community rating is phased -in over the same period.
Public Employers
Public employers do not have the option of forming corporate alliances -- based
on the principle that public employees should be a part of the system as the
majority of Americans -- but:
Public employers are not responsible for paying the 1% of payroll
corporate alliance assessment.
Discounts are phased in for public employers as they are for large,
private employers. Public employers receive the full benefit of the
7.9% of payroll cap beginning in 2002.
Public employer benefits immediately upon implementation from the
stability of community rating.
Both public and private employers see immediate fiscal relief from federally-
financed coverage of early retirees under the Health Security Act.
Upon implementation of reform in a state, public employees are eligible for all
the same discounts as all other families.
The Health Security Act preserves choice and flexibility. A state now offering
benefits more comprehensive than what the Act guarantees all americans could
choose to offer supplemental benefits to its employees.
THE FOLLOWING ARE ADDITIONAL TALKING POINTS THAT WENT
TO GEORGE STEPHANOPOLOUS AS WELL:
The labor movement is owed a great debt of gratitude for fighting for health
care reform for the last sixty years. Now achieving health security is finally
within our grasp. But we have a long, tough road ahead of us, and we'll need
you fighting hard along our side every step of the way.
Contrary to the way the press likes to report things, we are going to fight hard
for our plan and will not compromise on our principles. We've always said: if
somebody can show us they have a better way to achieve the goals we have set
out, we'll listen. But we will not compromise on our bottom line goals. And
with our close allies, especially labor, we will make sure you are at the table
when the deal is being done.
The linch-pin for universal coverage is the employer mandate. We need you to
give an especially strong push in your lobbying on that provision.
In general, we really need our friends to kick their pro-health reform campaigns
into gear in a very big way. The insurance companies and agents, the NFIB,
the drug companies they are all beating us up full tilt. Congress needs to
hear from our supporters, especially those on the key committees.
It is the people who fight hard by our side that we will fight the hardest for in
terms of the things they care about the most. This will be a long, tough battle,
but fighting together we can win.
Statement of Lane Kirkland, President
American Federation of Labor and Congress
of Industrial Organizations
February 17, 1994
While the AFL-CIO strongly supports the Health Security Act on behalf
of our 13.5 million active members, the concerns of more than three million
retired union members have played a critical role in the federation's
endorsement of the plan.
Like the vast majority of working union members, union retirees want to
see a solution to the health care crisis. They know that this crisis is
damaging our society, our economy and millions of working American
families. They want to see an end to the soaring costs that threaten to deny
their loved ones the health security that they had enjoyed during their working
lives.
They also know that this crisis poses a direct threat to their own health
security. Employers are constantly trying to lower their costs by reducing or
eliminating retiree health benefits for those who have not yet reached the age
of 65, when they are old enough to qualify for Medicare. Meanwhile, those
who have reached that age have been shocked to find out how much
Medicare doesn't cover -- not to mention the more than $400 annual premium
they must pay, along with hefty deductibles and co-payments.
The Health Security Act would alleviate many of the problems older
Americans now confront when they attempt to provide for their own health
security. The Act would create a new health care program for retired
individuals between the ages of 55 and 65, with the national health system
covering 80 percent of their average health plan premiums. If the retiree's
employer was providing health care coverage, that employer would continue
to pick up the remaining 20 percent of the premium.
For those on Medicare, which currently does not provide prescription
drug or long term care coverage, the Health Security Act contains provisions
to sharply limit the amount older Americans will have to pay for these critical
necessities.
By expanding Medicare and helping employers cover their early
retirees, the Health Security Act builds on the strengths of the current system
while eliminating its glaring weaknesses. It will give older Americans the
peace of mind that their own health care costs will never become a crushing
burden to themselves or to their families. In the meantime, they will rest
assured that all of their family members have health coverage that can never
be taken away.
2
TREATMENT OF MULTIEMPLOYER PLANS
PRESIDENT'S HEALTH PROPOSAL
Q & A
Question:
How does the President's health reform plan treat Taft-Hartley collectively
bargained multiemployer funds providing health benefits?
Answer:
In general, multiemployer funds will have the option of operating on the same
terms as corporate alliance, independent of the regional alliance system.
Alternatively, multiemployer plans may join the regional alliance.
SUPPLEMENTAL BENEFIT FUNDS
PRESIDENT'S HEALTH PROPOSAL
Q & A
Question:
Will Unions be able to negotiate benefits beyond the basic benefit package?
Answer:
Unions will be able to negotiate for the provision of supplemental benefit
plans. These plans may provide for coverage for services and items not
included in the comprehensive benefit package. After the year 2004, however,
employers will be taxed on their contributions to supplemental benefit
packages
WELFARE REFORM AND PUBLIC SECTOR DISPLACEMENT
February 21. 1994
The welfare reform proposal includes a provision for public service employment (PSE) for
some welfare recipients who reach the two year time limit without finding a private sector
job. This has caused great concern among public employee unions, who fear that welfare
recipients on PSE may displace public sector employees. This displacement can happen in
two ways:
1).
governments may replace current public sector employees with ex-welfare
recipients in PSE positions.
2).
when faced with a new need for public services, governments may choose to
expand PSE positions instead of hiring new public sector employees.
The extent of labor union concerns is dependent on the number of PSE jobs that will be
created
Possible response to question on displacement
We are aware of potential problems that a PSE program raises for the displacement of current
public sector workers. However, for several reasons we think this problem can be addressed:
Legal prohibitions will impede displacement. We have strong displacement
language in our draft proposal and further legal protections against
displacement can be negotiated with the help of public sector unions.
The quality of the employees available in the PSE program will be low.
AFDC recipients tend to have low levels of education and employability
generally, and those who reach the two year time limit without finding private
sector employment will likely be the least skilled of all. Thus, governments
will probably not be tempted to replace their employees with long-term AFDC
recipients, and displacement should be low for that reason.
We will not create an exorbitant number of PSE jobs. The 2.3 million figure
mentioned in the New York Times recently is way out of the ballpark; the
actual number will be a small fraction of this level. Also, the PSE component
of our program will be phased in gradually.
We have learned from our experience with CETA. Under CETA, once changes
were made that targeted PSE on less advantaged participants, displacement
dropped substantially. After the early CETA experience led to some
displacement, additional legal protections against displacement were written
into the law. All public employment programs since then have had extensive
legal protections against displacement, and this new program will be no
exception
MULTIPLE EMPLOYER WELFARE ARRANGEMENTS
Q & A
BACKGROUND
MEWAs or multiple employer welfare arrangements are entities that offer health benefits to
the employees of two or more employers. Under current law, some unscrupulous actors have
formed bogus unions or associations in order to sell insurance to smaller employers. They
claim to be exempt from state insurance regulations due to ERISA preemption. Many of
these MEWAs have not been sufficiently capitalized and have gone bankrupt leaving
participants without coverage. They have bilked participants and employers out of hundreds
of millions of dollars in premiums and unpaid claims. The March 1992 GAO Report to
Congress reports that for the period 1988 to 1991, unpaid MEWA claims totaled $123 million
and affected 398,000 workers and dependents.
Question:
In the past some MEWAs have masqueraded as union-sponsored plans so as to
avoid state health insurance requirements. What are you doing about this?
Answer:
The Labor Department is vigorously enforcing ERISA's requirement together
with the states to put these fraudulent MEWAs out of business. The enactment
of the President's Health Security Act would eliminate the problem.
Clinton Presidential Records
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Reemployment Act of 1994
Divider Title:
THE REEMPLOYMENT ACT OF 1994
February 21. 1994
We are close to announcing the Administration's new Reemployment Act, which moves
further in transforming the unemployment system into a comprehensive, universal, high
quality reemployment system. It consolidates separate programs into an integrated service
system that focuses on what customers need to get their next job -- regardless of the cause of
dislocation. It offers dislocated workers quality reemployment services. It will improve labor
market information and provide workers who need and want long-term training access to
education and training services along with income support to help them complete their
programs. It will provide states with the opportunity to create One-Stop Career Centers.
Centers and services will be evaluated on the basis of customer-oriented measures.
AFL-CIO Note We need to work on getting AFL-CIO support for the Reemployment
Act of 1994. We have asked the Vice President, George Stephanopoulos and the
congressional leaders who are speaking to the Council to stress the importance of this
legislation.
THE PROPOSED REEMPLOYMENT ACT OF 1994
CONCEPT
The Reemployment Act of 1994 is designed to begin the transformation of the current
unemployment system into a comprehensive, universal, high quality reemployment
system. The Act embodies six fundamental principles:
Universal access
Quality reemployment services
Quality Labor Market Information
One - Stop shopping
Long-term training
Accountability
Streamlining
THE CURRENT SYSTEM VS. OUR PROPOSAL FOR WORKER SECURITY
Current system:
There are currently six categorical programs which may or may
not serve select groups of people based on confusing criteria.
Our Proposal: Comprehensive Program -- The proposal consolidates all services
now available at the state and federal levels.
Current system:
Only 6% of workers who have exhausted their unemployment
insurance (UI) benefits have attended job search assistance
classes, and only 1.4% have received training.
Our Proposal: Universal Access: Every permanently laid off worker who wants
and needs help, gets help, regardless of the reason why they lost
their job
Current system:
The vast majority of unemployment insurance recipients,
including those on permanent lay-off do not receive
reemployment services.
Our Proposal: "Profiling" Systems: Early identification of those unlikely to get
their old jobs back, when individuals register for unemployment
insurance benefits, will speed entry into reemployment benefits
and job-retraining services.
Current system
There is no nation-wide date system or quality information for
workers to use in making their career, job and training choices.
Our Proposal: Quality Information: The new system will provide better labor
market information about job openings and relevant training,
quickly.
Current System:
Only workers affected adversely by trade are eligible for
intensive longterm training and career counseling.
Our Proposal: Long -Term Training: Dislocated workers requiring and wanting
more intensive or long-term assistance are eligible for education
and training.
Current System:
Most people use up their UI benefits before they can complete a
job training program. Few states provide income support for
long-term training.
Our Proposal: Income Support for Displaced Workers: Eligible workers
continue to receive income support in order to enable them to
complete a retraining program.
Current System:
In most states, UI benefits can only be received while workers
look for a new job.
Our Proposal: Unemployment Insurance Flexibility: UI will have some added
flexibility to allow states more options in pay benefits. For
example, workers can use UI benefits to help establish their own
business, or to do part-time work while searching for full-time
work. Also, some workers will receive bonuses for becoming
reemployed before the termination of their unemployment
insurance.
Current System:
Workers must go to several locations to get all of the basic
services and must navigate a confusing maze of categorical
programs to find a program that will serve them.
Our Proposal: One-Stop Career Centers:
The new system promotes locally-run One-Stop Career Centers
to provide workers with job assistance services, information and
access to training in one location, and that will speed the hiring
process for firms seeking high quality workers.
QUESTIONS & ANSWERS: THE PROPOSED REEMPLOYMENT ACT OF 1994
BAL HARBOUR, FEBRUARY 21, 1994
Q.
How does the proposed Reemployment Act of 1994 benefit American workers?
A.
The proposed Reemployment Act of 1994 builds on what we've learned about what
works: universal access; quality reemployment services; quality labor market
information; one-stop shopping; long-term training; streamlining; and accountability.
The bill represents a substantial investment in services for dislocated workers and in
improved access to quality labor market information.
Q.
Why have you eliminated the Trade Adjustment Assistance (TAA)?
A.
The TAA program will be absorbed into the proposed Reemployment Act of 1994.
However, no workers certified as eligible under TAA will lose services or benefits to
which they are entitled. The Reemployment Act is designed to serve a much larger
number of workers, to provide a broader range of services, and to dispense with the
lengthy certification process currently required under TAA.
Q.
Why doesn't the Administration's proposal strengthen the Worker Adjustment and
Retraining Notification Act (WARN) provisions, which require employers to notify
workers of an impending lay-off?
A.
The proposed Reemployment Act of 1994 builds in early and rapid response to
dislocation, by requiring States to provide rapid response for any plant closing or
large-scale layoff -- whether they receive WARN notification or learn of such an event
through other sources. The bill also requires States to provide on-site services to
workers within 5 days of learning about such dislocations. In addition, the bill
provides that Governors must use some State funds to educate the business community
and workers about their rights and responsibilities under current WARN law.
Q.
Why doesn't organized labor have membership parity with business on the new local
Workforce Investment Boards? And what happens to the current Private Industry
Councils (PIC's)?
A.
The Workforce Investment Board gives the local community a forum for carrying out
comprehensive strategic planning, policy development, budget approval, and
performance oversight for all Labor Department job training and employment
programs. It will review and approve the budgets of programs required to provide
services through One-Stop Centers -- but cannot serve as the JTPA Title II
administrative entity or operate any other programs.
Business will be a majority on the local Workforce Investment Boards because active,
high-level business involvement is a prerequisite for ensuring that dislocated workers
find new, good jobs There will also be substantial representation from labor and
community-based organizations. PIC's which currently have business majority
representation under JTPA --will be eligible to become Workforce Investment Boards
with the approval of the chief elected official(s) if they meet certain eligibility
requirements.
Q.
What is worker profiling and why is it important?
A.
Profiling is an outreach mechanism for early identification and referral of those
claimants who are likely to exhaust their UI benefits and who may need special
assistance to make a successful transition to new employment. Profiling would be
used in conjunction with reemployment services provided by the Career or One-Stop
Career Centers outlined in the Reemployment Act legislation. The combination of
profiling plus early job search assistance can produce a real impact in assisting
dislocated workers to make the transition to new jobs. For workers who need longer-
term services, the profiling will ensure that they become involved in such services
early in their spell of unemployment, thereby ensuring their return to productive
employment as early as possible.
The most recent Emergency Unemployment Compensation (EUC) legislation (H.R.
3167), the fifth iteration of the EUC program, includes a profiling provision that would
expand opportunities for dislocated workers by linking worker profiling to the
provision of early reemployment services -- particularly job search assistance.
24
TALKING POINTS: THE PROPOSED REEMPLOYMENT ACT OF 1994
BAL HARBOUR, FEBRUARY 21, 1994
The accomplishments of the first year. In the past year, we have made enormous strides
toward economic recovery. Nearly two million jobs were created over 1.6 million in the
private sector. In the previous four years combined, only one million new private sector jobs
were created. Accompanying this job growth has been a significant decline in unemployment.
And there is a clear downward trend in budget deficits.
The challenges ahead. As you know all too well, enormous social and economic challenges
remain. Even as overall unemployment is down, the problem of long-term unemployment
remains acute. Despite the recovery, the extent of long-term unemployment and the average
length of a jobless spell both hit their third highest annual levels since the end of World War
II. More than seventy-five percent of those losing jobs in 1993 were permanently laid-off.
This represents the highest percentage of permanent job loss since 1967, when the statistics
were first collected
As our nation moves into an increasingly global economy, it is more critical than ever that we
maintain our commitment to building a national workforce strategy that includes all our
citizens. More than ever in this country, what you earn depends on what you learn. If you
have the skills that come with a college degree or other training beyond high school, you'll
probably find a good job and earn a good wage. But if you don't have the skills, you're more
likely to be without a job or stuck in a job that goes nowhere.
As the President made clear in this year's State of the Union address: "The only way to get a
real job with a growing income is to have real skills and the ability to learn new ones. We
must streamline today's patchwork of training programs and make them a source of new skills
for people who lose their jobs Reemployment, not unemployment, will be the centerpiece of
our economic renewal."
The Reemployment Act of 1994. We believe that an important and necessary first step
towards giving people access to more jobs, and better jobs, is the Reemployment Act of 1994.
We need to work towards a re-employment system because our current unemployment system
no longer delivers what American workers need. The current system just isn't set up to help
workers find new jobs and to build new skills. That's why the Clinton Administration is
committed to passing the Reemployment Act of 1994, which embodies the fundamental
principles of universal access; quality reemployment services; quality labor market
information; one-stop shopping; long-term training; streamlining; and accountability. The
recent passage of the Administration's School-to-Work Opportunities Act and the Goals 2000:
Educate America Act will complement the proposed Reemployment Act by bringing
America's youth a giant step closer to economic security.
We need your help. Passing the Reemployment Act of 1994 will mean that all workers who
have been permanently laid off can gain access to a comprehensive array of services,
designed to help them find new and better jobs quickly and to get the training they want and
need. The Reemployment Act represents a substantial investment in services for dislocated
workers -- please continue to work with us to ensure passage before the end of the year.
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Reinventing Unemploy. Insur.
Divider Title:
REINVENTING UNEMPLOYMENT INSURANCE
February 21. 1994
The Federal-State Unemployment Compensation Program, under provisions of the Social
Security Act of 1935, is the basic program of income support for the nation's unemployed
workers.
The Federal Unemployment Insurance Service provides leadership and policy guidance to
State employment security agencies for the development, improvement, and operation of the
Federal-State unemployment insurance system. It also provides assistance in areas related to
wage-loss, worker dislocation, and adjustment assistance compensation programs.
We have made the first step toward redirecting the unemployment insurance system to a re
employment insurance system by implementing the new UI Profiling program signed into law
by President Clinton on March 4. Profiling authority allows the states to identify dislocated
workers early, and move them quickly into re-employment programs.
UI PROFILING
Worker profiling is important because it is an outreach mechanism for early
identification and referral of those claimants who are likely to exhaust their UI
benefits and who may need special assistance to make a successful transition to
new employment.
Profiling would be used in conjunction with reemployment services provided
by the Career or One-Stop Career Centers outlined in the Reemployment Act
legislation. The combination of profiling plus early job search assistance can
produce a real impact in assisting dislocated workers to make the transition to
new jobs
For workers who need longer-term services, the profiling will ensure that they
become involved in such services early in their spell of unemployment, thereby
ensuring their return to productive employment as early as possible.
The most recent Emergency Unemployment Compensation (EUC) legislation
(H.R. 3167), the fifth iteration of the EUC program, includes a profiling
provision that would expand opportunities for dislocated workers by linking
worker profiling to the provision of early reemployment services -- particularly
job search assistance.
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scan such dividers. The title from the original document is
indicated below.
Strike Replacement
Divider Title:
STRIKER REPLACEMENT
February 21. 1994
The Administration supports legislation to ban employers from permanently replacing striking
workers. Secretary Reich testified in support of legislation before both the House and the
Senate. The House passed the H.R. 5 (Clay D-MO) Cesar Chavez Workplace Fairness Act
on June 15 on a vote of 239-190. All Administration opposed amendments were rejected.
On the Senate side, there is not enough support to pass the bill, S.55 (Metzenbaum D-OH)
As of late January, Metzenbaum's staff reports no new news and White House Legislative
Office reports that 60 votes appear unreachable at this point. A decision will have to be
made on whether or not a symbolic vote should be taken.
AFL-CIO position. This is a top priority of the AFL-CIO. The AFL has undertaken a
massive grassroots campaign for passage of the bill. The AFL-CIO Legislative Fact
Sheet on striker replacement IS entitled, "One Strike and You're Out--The Battle for
Workplace Fairness."
AFL-CIO Note: Some in the Labor Movement believe that the President could use his
influence to secure the remaining 4 votes they need to reach 60. Lane Kirkland has
publicly called for a vote and suggested that if the Republicans want to filibuster, that
it be a "good, old fashioned filibuster" that they bring in the cots. Others are
worried about putting this up for a vote without assurances that there are 60 votes.
Their argument is that Labor cannot afford to suffer another legislative defeat. We
should state that if the bill comes to the floor for a vote we will do whatever we can
to help pass it and that Secretary Reich will be talking to Senator Mitchell to see what
he is planning.
BACKGROUND
The National Labor Relations Act, enacted in 1935, sought to promote collective
bargaining as the preferred method of resolving labor-management disputes and
preserving economic stability in the private sector. A key feature in this collective
bargaining process is the right for employees to withhold their labor when all other
means have failed. An effective right to strike is critical in providing the balance that
makes the process work.
Under the judicially created Mackay doctrine, it is unlawful for employers to discharge
employees for engaging in a lawful economic strike, but it is lawful for the employer
to "permanently replace" such employees.
28
In the last decade, employers have increasingly availed themselves of the right to hire
permanent replacements. This new reality has severely impaired collective bargaining.
With the power to hire permanent replacements, employers have diminished incentives
to negotiate in good faith. Permanent replacement loophole threatens the integrity of
the entire collective bargaining process.
Enactment of H.R. 5/S.55 will close the chapter on the last twelve years and outline a
new, more productive, more cooperative chapter in the history of worker-management
relations.
President Clinton has indicated that he will sign the bill when it crosses his desk, but
at present there are not enough votes to pass the bill in the Senate.
29
STRIKER REPLACEMENT
Q & A
QUESTION: (almost certain to be asked in some form) What will the Administration do to
see this bill is passed? Will it be given the same priority as NAFTA?
ANSWER:
When the bill comes to the floor, we will do whatever we can to ensure its
passage. We will be talking with Senator Mitchell to see what the best strategy
will be
QUESTION: Why Do We Need This Legislation?
ANSWER:
We cannot afford to limit American competitiveness by laws or structures that
inspire workers and managers to work at cross purposes. Management doesn't
win when workers lose--and workers don't win when management loses. The
permanent replacement of strikers exemplifies practices and attitudes that make
real cooperation between labor and management impossible, because giving one
side of the power to destroy the other undermines the real trust necessary for
full dialogue.
The rehiring of strikers and the fate of their replacements add highly-charged,
problematic issues that can replace and obscure the original dispute, actually
prolonging the strike and making its consequences much more bitter. Also,
employers have to balance unclear obligations to more than one group of
workers. Barring permanent replacement as a matter of Federal law clarifies
their contractual obligations and removes this entire issue and its complicating
and delaying effects on the labor negotiation process.
QUESTION: What will the economic impact of H.R. 5/S. 55 be?
ANSWER:
Our ability to be competitive in an increasingly global and technological
economy will depend on how well we invest in developing a skilled and
motivated workforce. To compete effectively on a world-class basis, we need
more than a high-skill, high wage workforce. We also need a new framework
for labor/management relations. At the center of this new framework is the
understanding that we simply cannot afford to waste any of our resources --
especially our people, their ideas, their education and their skills.
The Clinton Administration is committed to fostering practices that improve
productivity. Good will between labor and management makes for good
business and a healthy economy. It is in no one's interest to continue a
practice that stifles American competitiveness by inspiring workers and
managers to work at cross purposes. It is the aim of H.R. 5/S. 55 to close the
30
chapter on the last twelve years of labor/management relations by restoring the
balance in the collective bargaining process and laying the groundwork for a
new chapter--one based on teamwork and mutual respect.
QUESTION: How will H.R. 5/S. 55 affect economic competitiveness?
ANSWER:
Key to the new framework for labor/management relations is the commitment
to invest in our human resources. When workers have a meaningful voice in
workplace decision-making, their companies and the entire economy will
benefit from increased productivity and profitability. H.R. 5/S.55 will
strengthen our competitiveness by making high-performance, cooperative
worker-management relationships more likely. By removing the use or threat
of permanent replacements, we signal to employees that we have learned the
lesson from the last twelve years--that the permanent replacement of strikers
exemplifies a practice and attitude that makes real cooperation between labor
and management impossible
QUESTION: What is the practice of our principal foreign competitors with respect to the
lawfulness of hiring permanent replacements?
ANSWER:
The United States lags behind the rest of the world, including our major
competitors, when it comes to the basic democratic rights of workers.
Our number one trading partner, Canada, does not authorize permanent
replacements for strikers. Other major economic competitors like Japan, France
and Germany, categorically prohibit the dismissal of striking workers.
Employers in these nations recognize the importance of investing in human
resources, and have no desire to rid themselves of the skilled and loyal
workforces they have assembled.
Even in the nations of Eastern Europe, which we applaud for their emerging
democratic unionism, workers who strike do not lose their jobs. What
happened to the machinist at Eastern Airlines did not happen to the shipyard
workers in Gdansk What happened to the coal miners at the Massey Coal
Company did not happen to the coal miners in the Soviet Union. If we are
prepared to extol the virtues of trade unionism abroad, we also should be
willing to restore a level playing field for collective bargaining at home.
31
Clinton Presidential Records
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Enforcement
Divider Title:
ENFORCEMENT
February 21. 1994
Making good on our commitment to better jobs means enforcing laws that block the "low
road" of competition through inferior wages and working conditions. After years of non-
enforcement, we have begun to hold companies accountable to the law.
The Office of Federal Contract Compliance Programs obtained a $600,000
settlement for 52 women at Fairfax Hospital in the first ever "glass ceiling"
review to result in this type of settlement. OFCCP also secured $2.2 million
for the University of Wisconsin - Milwaukee, the largest amount ever from a
university, for 15 women who were alleged victims of sex discrimination and
harassment.
DOL obtained the first conviction for civil rights and labor law infractions
under RICO in September 1993 when the owner of a flower nursery received
three years in prison for violating immigration and labor laws.
We negotiated the first ever settlements of violations of the Immigration Act to
include increased training as well as civil money penalties and temporary
debarment from the H-1B program.
The Justice Department filed what we believe is the first Davis-Bacon
collection action in the federal district court.
DOL instituted the first debarment proceedings to collect unpaid civil penalties
under the Mine Safety and Health Act. MSHA also issued a $3.75 million
against Pyro Mining Co., the largest award ever, and nine individual agents of
the company received terms of home confinement.
DOL promulgated regulations under the Family Medical Leave Act two full
months before the law took place.
AFL-CIO Note: On February 10, all of our Assistant Secretaries with enforcement
responsibility and the Solicitor conducted a half-day briefing for AFL-CIO, and its
affiliated unions, staff and officers at the George Meany Center in Silver Spring. The
unions were pleased to have had the opportunity to hear where we are going, recap of
past year's enforcement accomplishments and that we were able to answer their
questions and address their concerns.
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OSHA
Divider Title:
LEAD EXPOSURE
February 21. 1994
We have issued a long awaited rule protecting over 930,000 workers in the construction
industry from lead contamination. The following are lead standards for construction.
The Housing and Community Development Act of 1992 (P.L. 102-550) which
was signed into law on October 26, 1992, required several federal agencies to
implement programs and issue regulations to reduce the public and workers'
exposure to lead.
{Section 1031 of the Act required the Secretary of Labor to issue interim final
regulations governing occupational exposure to lead in the construction industry
by April 26, 1993 }
OSHA issued an interim final regulation, as directed by Congress, on April 29,
1993 to protect more than 900,000 construction workers against lead. The
interim standard has the legal effect of an OSHA standard until a final standard
for lead in construction is issued under Section 6 of the OSH Act.
The stand reduces the permissible exposure limit (PEL) for lead in construction
from 200 micrograms per cubic meter of air to an eight-hour TWA of 50 ug/m
-- the same PEL already in effect for general industry. It also sets an action
level, which triggers various requirements of the standard, at 30 ug/m, as in
general industry.
Other provisions of the interim standard cover exposure assessment, methods of
compliance, respiratory protection, protective clothing and equipment, hygiene
facilities and practices, medical surveillance, medical removal protection,
employee information and training, signs, record keeping and observation of
monitoring.
OSHA estimates that about 936,000 employees in 147,000 establishments in
construction will be protected by the interim final rule. Included are those
employed in highway and street construction; bridge, tunnel and elevated
highway construction and repair; painting; structural steel erection; wrecking
and demolition; and commercial and residential remodeling.
27
DOL-10
ENSURING WORKPLACE
SAFETY AND HEALTH
NPR RECOMMENDATION
The Occupational Safety and Health Act was passed to protect 60 million
workers in 1970 -- 55 of whom were dying on the job each working day.
Twenty-three years after the passage of this act 40 workers are dying on the
job daily and estimates of the number of workers suffering occupational
injuries is as high as 60,000 annually at a cost of $83 billion.
Department of Labor's Occupational Safety and Health Administration (OSHA) is
responsible for enforcing the provisions of the Act and currently oversees 2,400
inspectors (includes some state approved inspectors) to enforce safety and
health standards for 93 million workers at more than 6.2 million work sites.
NPR concluded that a new approach is needed that refocuses the responsibility
for ensuring work site safety and health at the workplace.
The NPR recommends that the Secretary of Labor issue regulations
requiring employers to develop work site safety and health programs
and to conduct inspections for safety and health. This program should
require one of two options for conducting work site inspections.
One option is that employers could be authorized
to use certified, private companies to audit their
safety and health programs. A second option
authorizes employers to use non-managerial
employees of a workplace to audit program
operations.
NPR also recommends that the Labor Department establish a
sliding scale of incentives and penalties for ensuring workplace
safety and health.
This scale would go into effect in approximately
one-two years and would include incentives such
as reduced penalties and frequency of audits.
Penalties might include increased penalties and
increased frequency of audits.
DOL-10
STATUS OF THE RECOMMENDATIONS
The Administration has been working with Senator Kennedy and Congressman
Ford of Michigan on legislation (HR1280) (S375) titled Comprehensive
Occupational Safety and Health Act. Both the Administration and the
Congress will look to creating a "worksite-based approach to workplace health
and safety."
POLITICAL ISSUES
The President promised Administration support of the Kennedy
bill to Lane Kirkland at their December meeting. Subsequently
the NEC has had criticisms of it but the politics have pretty
much taken Administration input off the table at least for the
time being
!
The Kennedy bill deals with workplace sites but it
does not go as far the NPR recommendations on
this and it IS silent on the issue of third party
inspectors.
You may be confronted with one left over misimpression. The
way the September 7 Report characterized this issue caused
some in the labor community to think we meant to hand safety
issues at the workplace over to management alone. Until we
circulated the Accompanying Report draft which made clear that
we viewed workplace safety inspections as having to include
workers and management we were called "Reaganesque."
We never meant that We were and are happy with the Kennedy
bill as far as it goes.
POSSIBLE Q & A
Question: What kind of OSHA reform do you support?
Answer:
We support the bill that Senator Kennedy and the
Department of Labor have been working on and
we are very encouraged by all the management
improvements that are underway at OSHA.
Question:
Please explain the concept behind the recommendation contained
DOL-10
in your National Performance Review (NPR) which proposes the
issuance of new regulations for workplace safety and health, relying
on private inspection companies or non-management employees.
Answer:
The premise behind the NPR recommendation is that the Federal
Government alone cannot efficiently provide a safe and healthful
work environment for everyone. NPR recommended that the Occupational
Safety and Health Administration (OSHA) issue regulations requiring
employers to develop safety and health programs. OSHA has begun work
on a rule requiring safety and health programs and expects to issue
a proposal in Fiscal Year 1995.
Let me assure you that there is no intention on the part of the NPR that
OSHA reduce its enforcement resources or its inspection effort. The audits
recommended by NPR would be audits of the employer's safety and health
programs, not an inspection of the workplace. They would supplement
rather than substitute for OSHA inspections. I firmly believe that
enforcement of safety and health is properly a governmental responsibility
that can be supplemented by efforts of the private sector.
Additionally, Title I of the Comprehensive Occupational Safety and Health
Reform Act is consistent with the goals of the NPR. It addresses the
requirement for programs and for participation by employees, share
responsibility with the government in removing hazards from the workplace
of this Nation. The Administration has come forward to support rapid
enactment of this legislation
Question: Does the Administration support the entire bill, every provision?
Answer:
We believe the reform bills will give OSHA the tools needed to remove
hazards from American work places in a more effective and efficient way.
We know that safety and health programs and employer-employee
committees work and we think they should be required by law. We also
support stronger enforcement, including criminal penalties where necessary,
extension of coverage for public employees is important and overdue.
We agree with the need for the standards as well as most other
features of the bills. We are working with the Congress to achieve rapid
legislative action on the bills.
DOL-10
In addition, we are prepared to suggest some changes, particularly
in the provisions on the jurisdiction of OSHA, other federal agencies,
standards-setting timeframes, informal complaints, and the role of the
Review Commission in approving settlements.
Question:
Construction is one of the nation's most dangerous industries. Do you
support the provisions of OSHA reform which would strengthen OSHA's
enforcement efforts in that industry.
Answer:
Under Present law, OSHA has not been able to address fully the unique
hazards found in the construction industry. Unlike fixed-site
manufacturing firms, the work done at construction sites is construction
is constantly changing. When OSHA arrives at a site, the most
dangerous work may have been completed.
There may also be dozens of different employers on a single large
construction site. Finding out who is responsible for which hazards
can be a daunting task.
The reform bills would help OSHA identify the most dangerous
sites by requiring stricter reporting of the starting dates and locations
of projects. If stricter reporting had been in effect in 1987 the tragic
accident at the L'Ambience Plaza in Bridgeport Connecticut might not have
occurred and 28 workers would still be alive. A similar accident several
months earlier had not come to OSHA's attention since no one was killed
We also support provisions requiring employers to designate
individuals with overall responsibility for safety and health at the site.
We also support the requirement that construction employees have
programs and plans tailored to the unique hazards of their work.
Question:
Concerns have been expressed about the cost of the bill. Won't this
be expensive for the economy?
Answer:
The cost of this bill is a valid concern. We should not impose
unnecessary costs or regulations on any sector of the economy. However,
the costs of workplace safety and health are investments in prevention.
DOL-10
The critics of OSHA reform fail to consider the benefits of prevention.
The National Safety Council estimates the costs of work-related accidents
at $115.9 billion in 1992. If OSHA reform prevented even a fraction of these
costs it would save the economy billions of dollars. OSHA is working
on more detailed cost estimates which should be available shortly.
Question:
What is the status of OSHA reform now that the Secretary and Assistant
Secretary have testified?
Answer:
The Senate Labor and Human Resources Committee and the House
Education and Labor Committee have concluded their hearings
on OSHA reform legislation.
Chairman William Ford (D. Mich.) has stated that he intends to bring
H.R. 1280 before the House Education and Labor Committee on March 2
and to have the bill on the floor of the House of Representatives by
summer. Senator Edward Kennedy (D. Mass.) also expressed strong
support for quick enactment of the legislation.
Question: Will Congress pass the reform?
Answer:
We hope and expect that Congress will act as expeditiously as possible
on the reform bills. We will follow the legislative process closely but
at this point there is no way to predict what will happen.
Question:
What about public employee coverage? Can the states and cities afford
to come under OSHA so quickly.
Answer:
It is essential to close the gap in public employee coverage. Unfortunately,
for 7 million public employees in states without an OSHA-approved program
there is widely varying protection. Yet these workers handle some of the
most dangerous tasks in our society such as firefighting, hazardous waste
cleanup, and sanitation work.
Public employee coverage is not an unfunded mandate for the states
and localities. It would only require governments, in their duty as
employers, to protect their own workers just as private sector employers do
DOL - 10
an just as 25 states have done through an OSHA program.
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Sec. Reich Testimony --
OSHA
Divider Title:
STATEMENT OF
ROBERT B. REICH
SECRETARY OF LABOR
BEFORE THE COMMITTEE ON LABOR AND HUMAN RESOURCES
U.S. SENATE
February 9, 1994
Thank you, Mr. Chairman. I'm pleased to appear before your
committee today to announce the Administration's support for your
efforts to reform the Occupational Safety and Health Act of 1970.
I'd like to submit my full written testimony into the record, and
here briefly summarize my main points.
It's been nearly a quarter of a century since Congress
passed the Occupational Safety and Health Act -- and in that
time, America's workplaces have become safer and more humane.
OSHA rules have reduced hazards like lead and cotton dust,
preventing illnesses and keeping workers productive. Since 1974,
workplace fatalities have dropped by half. Thanks to this law,
countless American workers have avoided harm, injury, and even
death, on the job.
Yet, amid this progress, workplace illness and injury --
sometimes in new forms -- have persisted. Each year, about one
out of every nine workers suffers illness or injury from work-
related causes. In 1992, according to the Bureau of Labor
Statistics, more than 6,000 Americans were killed at the
workplace -- an average of 17 deaths per day. And these deaths
were often gruesome, almost unimaginable to those of us who spend
our workdays in hearing rooms and cabinet offices. Men and women
1
were electrocuted, killed by flying debris, and crushed by heavy
equipment.
In addition, thousands more workers die each year from
illnesses that resulted from being exposed to harmful substances
like asbestos, silica, chromium, and carbon monoxide. The Office
of Technology Assessment has reported that about 20,000 cancer
deaths per year can be traced to workplace hazards. And hundreds
of thousands of other workers who avoid these tragic consequences
still experience chronic pains, or become disabled from work-
related disorders.
In every instance, the statistics and studies have a human
face. I have met with Lisa Eilar, who appeared before this
committee last October. She described to me her brother's tragic
death when he and a co-worker were crushed in a stamping press
after just five days on the job at a small auto parts plant. I
also talked to Amy Delguzzo who had a tragic story to tell about
her father's accident in 1992. Her father, a public employee in
Ohio, was critically hurt in a trench cave-in while fixing an
underground pipe. If he had been an employee of a private firm,
he would have been protected by an OSHA standard. But because he
was a public employee in a "non-OSHA plan" state, he was not
covered by OSHA.
Stories like these are hard to fathom in an advanced nation
like ours -- a nation that is supposed to be moving into the
information age and outgrowing the physically threatening work of
another era. Nonetheless, even in America's advanced economy,
2
workplace illness and injury are imposing heavy costs. The Rand
Institute of Civil Justice estimated that in 1989 the cost of
accidents occurring during work time was $83 billion. The
National Safety Council says that in 1992 the total cost of work-
related accidents was $115.9 billion. If some other factor --
say, unfair trading practices or crumbling highways -- were
producing costs like these, employers and taxpayers would
justifiably sound the alarm. At the same time, workplace illness
and injury also burden an already beleaguered health care system,
saddling employers with needless costs and making it harder to
extend coverage to all.
Illnesses barely recognized when OSHA was created --
cumulative trauma disorders, for example -- have also raised new
challenges. Other health concerns like indoor air pollutants,
HIV, and tuberculosis have entered the workplace in ways OSHA's
drafters never imagined.
To evaluate how effective this bill would be in addressing
the problems I've just outlined, my staff at OSHA and from other
parts of the Labor Department spent most of last summer listening
to the parties most concerned with worker safety and health --
employers, labor unions and workers, state and local officials,
insurers, doctors, public health officials, and scientists. I
held discussions with key groups, spent several months with
Department staff evaluating the results of these consultations,
and discussed many issues within the Administration. Nobody
3
held identical views on the issue, but most agreed that the OSH
Act needed to be revised.
with these discussions in mind, we have concluded that the
main elements of this bill will reduce workplace hazards -- and
boost the health of both the American worker and the American
economy. Experience in States that adopted elements of this
bill, shows the significant safety and health improvements that
can be realized. Oregon's experience is particularly
instructive. In 1990, Oregon made the kind of public commitment
to workplace safety and health that S. 575 would make for the
nation. Oregon enacted a committee requirement similar to that
in S. 575 but with broader application, raised its penalties for
OSHA violations to Federal levels, and added seventy-three
enforcement and consultation staff. The state also strengthened
its requirement for a written loss control program. From 1989
(the year before reform) to 1992 Oregon's fatality rate dropped
from 6.2 to 4.9 per 100,000 workers, and the total case incidence
rate fell from 10.3 to 8.8 per 100 full-time workers. The rates
of work related injuries and illnesses in Oregon construction and
manufacturing are now at all-time lows.
Workplace safety and health improvements need not create
meaningless divisions or unleash bitter either-or arguments. A
healthy workplace benefits everyone. Indeed, many of our best
companies -- firms like the Xerox Corporation -- already devote
much time and attention to ensuring that their workplaces are
healthy and safe. Their commitment to provide comprehensive
4
programs in safety and quality control reflects their belief that
healthy workplaces protect workers and enhance the bottom line.
I have analyzed in my written testimony those provisions of
the bill that would more effectively address workplace injuries,
illnesses, and deaths. Here, let me briefly outline the six key
concepts in the bill that I believe will make it work.
The first is prevention. This legislation requires
employers to establish and carry out health and safety programs
to identify and fix hazards before workers become sick or
injured. OSHA's experience over the last 20 years demonstrates
that most workplace accidents are not truly accidental -- that
with sufficient preventive steps, many of these accidents could
have been avoided entirely. In workplace safety, as in health
care generally, prevention is the wisest and least expensive
strategy.
As is frequently the case, the states, in their role as the
"laboratories of democracy," have shown us the way. For example,
because employers' workers' compensation premiums increased by
over 400 percent in a single decade, the Colorado legislature
passed a law designed to encourage employers to adopt-well-
planned safety and health programs. Employers who did so were
eligible for up-front automatic reductions of 5 to 10 percent of
their workers' compensation premiums. Employers enrolled in the
program have reduced their accident frequency by 23 percent and
their compensation costs 62 percent. Total first year cost
savings were $24 million.
5
The second concept is flexibility. In a nation of almost
six million employers, there can be no "one size fits all"
approach to workplace safety. This legislation provides OSHA the
administrative flexibility to modify requirements for workplace
and safety programs. We envision that each workplace will
fashion a program that contains basic elements found in all
programs, but that is tailored to meet that workplace's special
needs. In addition, the bill's technical assistance provisions
target special help to small businesses and businesses with
significant hazards to help them design programs fine-tuned to
fit their circumstances.
The third concept is cooperation. We cannot improve
workplace health and safety without including those who actually
spend their days in the workplace. This bill sensibly requires
employers to establish joint labor-management safety and health
committees. But in keeping with the second principle, the
committee provisions in the bill provide flexibility in how
members are selected and what size these committees must be.
Many major companies have instituted health and safety committees
comprised of workers, and their success -- coupled with successes
in twelve states that already require such committees -- shows
the idea can work.
Oregon's experience in mandating committees is particularly
instructive. The business community in Oregon has not been
hampered by the committee requirement--far from it. In fact, the
Vice-President and Director of Legislation of Associated Oregon
6
Industries has said: "the creation of a program involving
mandatory safety committees is a vital ingredient of loss
prevention."
The fourth concept is expanded coverage. Public workers
handle some of the most hazardous tasks in our society --
cleaning up toxic waste, collecting garbage, and fighting fires.
One public employee union--AFSCME-- reports that over 200 of its
members were killed on the job between 1983 and 1993. Yet, in
states without an OSHA-approved program, some seven million
workers receive only spotty health and safety coverage. This
bill addresses the coverage gap for public employees.
In addition, the reform bill would increase protection for
workers in the construction industry, whose rate of injury and
illness is about 50% greater than in other private industries.
Although the construction industry employs only five percent of
all private employees, it accounts for some fifteen percent of
all fatalities. Title XII of the bill contains several
provisions to help reduce injuries and illnesses on construction
sites, which because of the nature of the industry, have been
difficult to address under present law. These ideas have proven
to be effective. The U.S. Corps of Engineers imposes
requirements on its contractors for written safety and health
programs, worksite analyses, hazard prevention and control
measures and safety and health training. Between 1984 and 1988,
the Corps of Engineers' contractors registered an average lost
workday case rate of about 1.5 per 100 full time workers, while
7
the national construction industry average was almost 7 per 100
workers.
The fifth concept is streamlining standards. Setting
standards is one of OSHA's most important functions, and this
bill streamlines that process. It also establishes uniform
criteria for both health and safety standards. One important
aspect of the bill is that it would require OSHA to issue its
standard on hundreds of chemical exposure limits that was struck
down by a court in 1992. This rule would have prevented about
55,000 occupational illnesses and approximately 520,000 lost
workdays each year.
The sixth concept is enforcement. Professors Wayne B. Gray
and John T. Scholz studied almost 7000 manufacturing plants.
They found that when OSHA inspects and imposes penalties for
violations, there is measurable injury reduction in those
workplaces following the inspection.
Having tough standards on the books is meaningless unless
we are prepared to enforce them. If an employee is seriously
injured on the job, and an employer's willful health and safety
violations are to blame, that employer must be prosecuted. This
bill contains provisions, supported by the Justice Department,
that increase penalties for willful violations that cause death
or serious bodily injury and that provide the government
authority to prosecute the officials with the power to bring a
company into compliance. Ideally, we will never be forced to
impose these provisions; their mere existence, we hope, will
8
deter the most egregious violations.
***
This bill, of course, is not without its opponents. We
respect their right to disagree, but let me assure you that our
position is the product of careful study and thought.
In today's economy -- where capital and information cross
national borders instantly -- a nation's comparative advantage
comes from the only resource that stays more or less fixed within
its borders: its workers. That is why the centerpiece of this
Administration's economic strategy is investing in our workers --
their skills, their abilities, and their capacity to innovate.
Investing in their health and safety is a part of this strategy,
for healthy workers are productive workers.
The OSH Act has improved many American workplaces over the
last two decades. But some enduring problems, along with a new
set of workplace hazards, demand that the statute be revised.
This bill makes those revisions in a strategic and sensible way.
By emphasizing prevention, flexibility, cooperation, expanded
coverage, streamlined standards, and tough enforcement, the bill
ensures that tomorrow's workplace will reach new levels of
health, safety, and productivity.
Mr. Chairman, you have taken an important step in presenting
this comprehensive reform bill. It not only provides OSHA with
new technique for accomplishing its goals; it also empowers both
employers and employees to jointly undertake new ways of
preventing injuries and illness in the American workplace.
9
I commend you for your efforts and look forward to taking
your questions. Thank you.
10
Clinton Presidential Records
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Worker Management Relations
Divider Title:
THE COMMISSION ON THE FUTURE OF
WORKER-MANAGEMENT RELATIONS
February 21, 1994
A bipartisan panel of labor, business and academic leaders, chaired by former Secretary of
Labor John Dunlop, has been appointed and is looking at the nation's labor laws and labor
management relations. Dunlop requested, and Secretary Reich agreed, that the life of the
Commission be extended another 6 months. On February 7, GSA concurred with Secretary
Reich's request to extend the Commission. Dunlop's current plan is to release the
Commission's findings in May, to "shop them around for a few months" and for the
Commission to make its final recommendations in November.
AFL-CIO Note: The Federation supported the extension of the Commission. Tom
Donahue has indicated that the AFL-CIO would like a Labor Law Reform bill
introduced at the beginning of the 1995 session, and acted on by the full House and
Senate within a few months of its introduction.
BACKGROUND
On March 24, 1993 Secretary of Labor Robert B. Reich and Commerce Secretary Ron
Brown announced the appointment, at the President's direction, of a Commission on
the Future of Worker-Management Relations to examine the current state of worker-
management relations in the U.S. and make recommendations on enhancing workplace
productivity through labor-management cooperation and employee participation.
The Commission is charged with examining three questions concerning private sector worker-
management relations
1.
What (if any) new methods or institutions should be encouraged, or required, to
enhance workplace productivity through labor-management cooperation and
employee participation?
2
What (if any) changes should be made in the present legal framework and
practices of collective bargaining to enhance cooperative behavior, improve
productivity, and reduce conflict and delay?
3.
What (if anything) should be done to increase the extent to which workplace
problems are directly resolved by the parties themselves, rather than through
recourse to state and federal courts and government regulatory bodies?
32
The Commission has scheduled eleven hearings in Washington, DC and six regional hearings
around the country, in Louisville, East Lansing, Boston, Atlanta, San Jose and Houston. The
Commission plans to issue a fact-finding report on May 23, hold hearings and conferences
with representatives of business, labor and the public, and submit a final report including
recommendations within six months after May 23.
Hearings thus far have addressed issues such as workforce characteristics and the impact of
technology, the web of governmental regulation of the workplace, the philosophy and
procedures underpinning the framework for labor-management relations, and the structure and
operation of and legal issues raised by employee committees. Testimony has been received
from union and management representatives, academics, and rank-and- file workers. Among
those testifying were Lane Kirkland, president of the AFL-CIO, Al Shanker of the American
Federation of Teachers. Robert Georgine of the Building and Construction Trades Department,
John Sweeney of the Service Employees International Union, Morty Bahr of the
Communications Workers, Wayne Glenn of the United Paperworkers and Lynn Williams of
the Steelworkers -- all members of the AFL-CIO Executive Council.
The Commission is chaired by former labor secretary John Dunlop and includes former
secretaries Ray Marshall and W.J. Usery, former commerce secretary Juanita Kreps, former
UAW president Doug Fraser, Xerox chairman and CEO Paul Allaire, Kathryn Turner, a
representative of minority small business, and professors Richard Freeman, Tom Kochan and
Paula Voos. Professor William Gould assumed an inactive status after his nomination to the
NLRB and will resign upon his confirmation.
33
Clinton Presidential Records
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Task Force on Excellence
Divider Title:
THE SECRETARY'S TASK FORCE ON EXCELLENCE IN
STATE AND LOCAL GOVERNMENT
February 21. 1994
The Secretary's Task Force on Excellence in State and Local Government has not yet been
named. Secretary Reich should be announcing it within the next few weeks. This is a state
and local government counterpart to the Dunlop Commission, examining labor and
management relations in the state and local government. DOL has lined up the Task Force
members, are vetting the names now and are awaiting OMB and GSA approval.
AFL-CIO Note: This is extremely important to AFSCME President Gerry McEntee
and other public sector unions. In His address to the AFL-CIO Convention in
October, the President asked Secretary Reich to establish this Task Force.
Note: Attached is the mission statement for the Public Sector Task Force. Most of the AFL
council should know about the mission statement, and you can indicate that the Task Force
will be announced in a few weeks. However, because it has not yet been announced, you
should not mention it in open press nor should you mention it in anything other than a private
meeting.
34
THE SECRETARY OF LABOR'S TASK FORCE
ON EXCELLENCE IN STATE AND LOCAL GOVERNMENT
THROUGH LABOR-MANAGEMENT COOPERATION
Mission Statement
The economic success of our nation, as well as the social well-being of its citizens, depend, in
large measure, on the essential services and infrastructure provided by state and local
government. The imperative to complete in a increasingly worldwide economy and to
respond to increasing societal demands requires that governments at all levels perform in a
timely and cost-effective manner. It is essential that public management and organizations of
their employees work together in order to respond effectively to these fundamental needs.
To this end, the Secretary of Labor has established a Task Force on Excellence in State and
Local Government through Labor-Management Cooperation. The task force will investigate
the current state of labor-management cooperation in government and report back to the
Secretary in response to the following questions:
1.
What, if any, new methods or institutions should be encouraged or required to enhance
the quality, productivity, and cost-effectiveness of public sector services through labor-
management cooperation and employee participation, recognizing the broad variety of
functions performed by different levels of government and various other agencies and
public organizations?
2.
What, if any, changes should be made in the present legal frameworks which impact
on labor-management relations, including collective bargaining and civil service
legislation, to enhance cooperative behaviors and improve the delivery of services by
reducing conflict, duplication and delays?
3
What, if anything. should be done to increase the extent to which workplace problems
are resolved directly by the parties themselves rather than through recourse to
administrative bodies and the courts?
4
What, if anything, can be done to improve the coordination between appropriate
executive and legislative bodies to enhance labor-management relations in the public
sector and to create a climate where productivity improvement, innovation and risk
taking are encouraged and rewarded?
5
What conditions are necessary to assure that elected political leaders, public managers,
public employees and labor organizations work together to achieve excellence in state
and local government? What are the obstacles, and how can they be overcome?
6.
What examples of successful cooperative efforts are appropriate to serve as public
sector models? Why have some initially successful efforts failed, and what can be
done to enhance prospects for success?
35
Clinton Presidential Records
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National Conference on HPW
Divider Title:
NATIONAL CONFERENCE ON
HIGH PERFORMANCE WORKPLACES
February 21. 1994
A National Conference on High Performance Workplaces, with President Clinton as the key
note speaker, highlighted how new workplace strategies can help workers, employers and the
economy. A number of union-led programs were spot-lighted.
QUESTION: What is a "High-Performance Workplace"?
ANSWER:
America's best-run public and private organizations recognize the bottom-line
value of a skilled, dedicated workforce in a flexible, innovative workplace.
These organizations, often referred to as "high-performance work
organizations," integrate their business, human resource, and technology
strategies in a way that benefits workers and improves business results.
Typically, these businesses push responsibility down to front-line employees,
often by organizing work into self-managing teams, and provide workers with
the information necessary to exercise a high level of autonomy and discretion.
They give workers a stake in the performance of the organization through
employee ownership and gainsharing, and they encourage workers to learn new
skills through skill-based pay and pay-for-performance compensation systems.
They focus on satisfying customers, not simply shareholders; on improving
quality, not simply reducing cost; and on building organizations that adapt
easily to market change. They create employment security strategies that
recognize the value of workers to long-term economic performance. They
invest in training and retraining to develop their workers as critical business
assets, rather than treating them as costs to be minimized. And they provide
workers with safe and supportive work environments.
QUESTION: Why do we care about this?
ANSWER:
High performance work strategies provide better jobs for workers and enhance
the competitiveness of businesses. Workers have more autonomy and
responsibility, enjoy safer working conditions, learn new skills, and have the
opportunity to share in the company's financial success. High performance
companies tend to be more flexible and responsive to their customer's
preferences, produce higher quality goods and services at a lower cost, and tend
to have superior operating results in a variety of other areas.
36
QUESTION: Why is this good for labor and management?
ANSWER:
High performance work strategies offer a win-win opportunity for both
management and labor. One of the key premises of such strategies is that
management and labor work together as allies, not adversaries. In many high
performance workplaces, labor plays a meaningful role in business and
management decisions. Management benefits both through better business
results and avoidance of costly labor grievances and disruptions.
QUESTION: What is DOL doing to promote high performance work practices?
ANSWER: Last July, President Clinton, Labor Secretary Reich, and Commerce Secretary
Brown convened a Conference on the Future of the American Workplace in
Chicago. The purpose of the conference was to spotlight companies that have
successfully transformed themselves into high performance work organizations,
or are in the process of doing so. The attendees were leaders from business,
labor, academia, and government, as well as front-line workers. A report and
video of the conference have been prepared.
Following the conference, Secretary Reich created the Office of the American
Workplace to carry on the momentum established in Chicago. OAW, in
partnership with business, labor, and government, encourages companies and
public agencies to adopt high-performance work practices and cooperative
labor-management relations. As the new home of the Office of
Labor-Management Standards, OAW also safeguards the financial integrity and
internal democracy of American labor unions. Among other things, OAW will
create a national clearinghouse on best workplace practices; develop better
measures of workplace practices; research the correlation between
high-performance work practices and corporate financial results; develop and
disseminate tools to help small and medium-size businesses assess and improve
their performance; promote increased employee ownership and participation;
and develop a Union Leadership Institute, in partnership with four international
unions, to train union leaders how to design and manage workplace programs
that give employees a voice in operating and business decisions.
37
Clinton Presidential Records
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Task Force on Excellence
Divider Title:
Clinton Presidential Records
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Office of Labor Management
Divider Title:
OFFICE OF LABOR MANAGEMENT STANDARDS
February 21. 1994
The Department of Labor's Office of the New American Workplace, was established to
encourage more productive worker-management relationships and has begun to follow up on
the work of the Conference. The Office of Labor Management Standards (OLMS), as part of
the newly established Office of the American Workplace, has responsibility for administering
the Labor-Management Reporting and Disclosure Act of 1959, as Amended (LMRDA) and
related statutes. The primary goal of OLMS is to ensure union democracy and fiscal integrity
in 39,000 covered labor organizations through civil and criminal enforcement efforts.
The following three activities affect the AFL-CIO and their member unions.
Labor-Management Forms Revision and Special Briefings
Under the LMRDA, labor organizations must file annual financial reports and other
related documents with OLMS Under the Bush administration, a rule was
promulgated which changed the filing requirements to include functional reporting and
the use of accrual accounting methods. Unions objected to these changes on the basis
of increased administrative burden and perceived governmental harassment.
Subsequent to the Clinton Administration taking office, the implementation of these
changes was stayed and eventually reversed in December of 1993.
One of the highlights of the reporting requirements adopted by the Clinton
Administration was the creation of a new abbreviated form (LM-4) for small unions
with total annual receipts of less than $10,000 and raising the threshold for the LM-2
report from $100,000 to $200,000. The unions' reaction to these changes are generally
very favorable The overall effect is that the reporting forms are more effective, less
burdensome and more easily enforced.
OLMS has initiated a briefing program to acquaint International Unions with the
changes and to improve working relations. To date OLMS has completed special
briefings for Secretary-Treasurers and other officials at 44 international unions; an
additional 18 have been scheduled. OLMS has targeted 66 unions for these briefings.
In addition to familiarizing international union officials with revised LMRDA reporting
requirements, OLMS also offers to assist the Internationals in educating officers of
their affiliated locals, and promoting voluntary compliance. The briefings are being
very well received by union officials. Many have remarked that they view them as
representing a "new direction" by the Department. Another result has been a
significant increase in requests for OLMS participation in union officer training
programs. Other ways in which international unions and OLMS can cooperate to
promote more efficient enforcement of the LMRDA are also being discussed.
AFL-CIO Survey of OLMS Financial Audit Programs
The AFL-CIO conducted a survey of their member unions' experience with OLMS
audit programs. The results were shared with the OLMS leadership who have
undertaken several initiatives to make the program more effective and address the
criticisms raised by the specific feedback OLMS plans to partner with the AFL-CIO,
possibly through a follow-up survey, to see if the initiatives have improved the
program.
Pending Criminal Cases Which May be of Interest to the AFL-CIO
Due to the sensitive nature of current criminal investigations, we cannot comment on
the pendency of any actions against International officers in the immediate future.
However, we have criminal cases awaiting or currently at trial involving local
affiliates' officers. There is a high probability that this issue will not be raised.