Gutted Labor Department Offices Spark Fears of Unspent Funds

Kate Miceli helped launch a national campaign to end gender-based violence at work and oversaw two grants totaling $6.4 million during her time at the Department of Labor’s Women’s Bureau.

While the DOL’s funding has remained largely flat over the past year, the Trump administration canceled both grants and sidelined the subagency where Miceli worked, halting projects like the campaign. Most of last year Miceli’s workload instead consisted of removing website pages on gender equity and reorganizing the office.

“We were not allowed to do the work we were doing anymore. We were not allowed to email people anymore, everything got cut,” said Micelli, who resigned in August. “It’s painful when you go from running an agency that was punching way above its weight to having to come into the office five days a week and just sit there.”

Miceli’s diminished workload is emblematic of the reduced responsibilities for DOL staff in the offices the Trump administration has sought to cut, but Congress still continued to send funding. The jobs and the office exist, but there’s little effort to complete tasks or fill empty positions.

Across the Women’s Bureau, Office of Federal Contract Compliance Programs, and Bureau of International Labor Affairs, the administration slashed staff sizes and cut core functions, leaving the subagencies with tens of millions of dollars to fund work now performed by few employees with little to do.

It’s part of a burgeoning battle between a Congress approving funds to keep these offices afloat and an administration intent on closing them anyway.

“This really demonstrates the separation of powers issues that are just sort of extraordinary in this current situation,” said Debra D’Agostino, a founding partner representing workers for the Federal Practice Group. “I’m surprised that Congress hasn’t acted more in lockstep with the President and that issue is going to come to a head sooner rather than later.”

The DOL isn’t alone: the administration is actively fighting orders to spend billions in foreign aid funding it sought to block.

Labor Cuts

The White House’s proposed fiscal year 2027 budget again recommends cutting funding for several parts of the DOL, indicating a lack of renewed priorities.

The bulk of OFCCP’s responsibilities were cut last year when President Donald Trump revoked the executive order establishing the agency’s core functions to require affirmative action plans and audit companies for race and sex bias. Still, Congress approved $100 million for the OFCCP this fiscal year.

One OFCCP employee said agency staff are essentially sitting and waiting, especially as remaining powers are limited during the ongoing rulemaking.

What remains is a smaller workload of statutory functions to police contractors for bias against disabled workers and veterans under the Vietnam Veterans Readjustment Act and Section 503 of the Rehabilitation Act. As the agency considers rule changes under those regulations, it paused all audits, leaving OFCCP functions only for complaints under Section 503 and VEVRAA.

Those amount to a couple of hundred cases a year, and fielding complaints isn’t the intent of those statutes which grant OFCCP unique auditing power, said David Cohen, founder and president of DCI Consulting.

Most of OFCCP’s funding historically went toward staff, Cohen said.

OFCCP’s staff was significantly cut, down to 138 full time employees in fiscal year 2026 from the 474 in fiscal year 2025, according to the DOL’s most recent budget justification.

The Women’s Bureau also had a significant staff decrease, as one of four DOL agencies where workers were offered buyouts first. According to the Office of Personnel Management, there are 21 workers left in 2026, compared to 55 in 2024.

Despite the decrease, the Congress approved $23 million for the Women’s Bureau in fiscal year 2026.

Staffing at the International Labor Affairs Bureau was slashed by more than a third through buyouts and retirement incentives. Its grant programs supporting international workers rights organizations were also cut off early in the administration, prompting lawsuits.

The office’s enacted budget for the past year, though, was $116 million. The White House proposed slashing the fiscal year 2027 budget to $70 million.

A DOL spokesperson didn’t immediately respond to requests for comment on the agencies’ operations.

Not Receiving Funds

While Congress appropriates funds, the Office of Management and Budget is charged with disbursing it and, according to attorneys and legal scholars, it’s been gumming up the process under agency head Russell Vought.

The OMB under Vought is asking more agencies to produce spending plans before agreeing to give out money. Spending plans were formerly a rare requirement reserved for agencies with a pattern of blowing through their budgets, said Georgetown Administrative Law Professor David Super. But now the OMB will require the plan and holding the disbursement up for an indefinite period.

“It all comes back to this fundamental disagreement about whether the administration is bound by statute to spend money on particular things,” he said.

Cerin Lindgrensavage, an attorney at Protect Democracy, said the OMB is also withholding funding from some agencies until the final quarter of the fiscal year.

According to documents for the OFCCP, the OMB is withholding $57 million—over half of its yearly budget—until the fourth quarter, meaning the agency won’t have that money until at least July 1.

“That is a hostile apportionment and, on its face, is a potential impoundment offense,” Lindgrensavage said.

While the Women’s Bureau isn’t included in apportionment documents, $2 million was released to ILAB in December. Funding for programs, including Job Corps., Dislocated Worker Training, Unemployment Insurance Integrity, and Registered Apprenticeships, are all tied up in spending plans with OMB.

That’s alarmed some lawmakers.

“The Women’s Bureau does a lot of important work,” Sen. Brian Schatz (D-Hawaii), a member of the Senate Appropriations Committee, told Bloomberg Law.

Schatz said the Trump administration has been “defying the law” in reorganizing some parts of the government and not spending funds approved by Congress.

“We’re going to keep appropriating money and others we’ll keep litigating to make sure they spend it as appropriated,” he said.