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Minimal DOL Budget Boost in 2022 May Be Blunted by Rescue Cash

March 22, 2022, 9:30 AM

The U.S. Labor Department is sitting on $135 million of leftover emergency funding from the pandemic rescue packages, providing a small lifeline for the agency’s enforcement arms after subagencies saw meager funding increases for fiscal 2022.

The Senate passed a full year $1.5 trillion federal funding bill earlier this month that provided the Labor Department with $13.2 billion in discretionary funding for the current fiscal year, which officially started on Oct. 1. Beneath the topline, most subagencies saw increases of 3% or less.

The relatively paltry increases amid rising inflation have already triggered calls for more funding ahead of the planned release of the White House budget request for next year. The amount appropriated for this year has also raised questions about how the DOL will meet the new oversight demands created by the bipartisan infrastructure law, reverse staff attrition caused by the Trump administration, and achieve the Biden administration’s aggressive enforcement goals.

“We are really happy that we are not stuck in the fiscal year 2021 funding levels. That being said, we would like to see larger investments, and we’re really interested in what comes out when President Biden releases a budget for fiscal year 2023,” said Charlotte Dodge, government affairs manager at the National Employment Law Project. “We’re hoping that when the budget comes out for 2023, that we can continue to advocate for larger investments.”

Dodge said labor agencies’ budgets and staff have failed to keep up with the growth of the nation’s workforce for years. She noted that workers have difficulty accessing agency resources to begin with, particularly those with disabilities, those who lack transportation, or those in rural areas without broadband.

“This lack of investment really continues to put at risk the health, safety, and the rights of workers across the country,” she said. “So we know that agencies really need significantly more resources to reach all workers and to assist the businesses with compliance.”

Tight Budget

The Labor Department subagencies—several of which have been heavily involved in the federal government’s Covid-19 response—mostly saw increases of less than 5%. The National Labor Relations Board saw no increase.

The slight raises, however, haven’t stopped the White House from issuing new workplace mandates.

For example, the Labor Department’s Wage and Hour Division, which will be in charge of ensuring that federal contractors pay “prevailing wages” on many of the new projects expected to be created by the new infrastructure law (Public Law 117-58), only received $251 million, just above a 2% increase from fiscal 2021. The division is also facing historically low staffing numbers, a trend it was hoping to reverse based on how much funding it was granted by Congress.

The Occupational Safety and Health Administration received approximately 3% more in funding, a boost from $591.8 million to $612 million. The workplace safety agency has been on the front line of pandemic response and deserves more than it received, some say.

That increase “does not even keep up with inflation,” according to David Michaels, a senior OSHA official during the Obama administration. He’s now a professor at George Washington University.

“Congress has underfunded OSHA since its inception, and as result, the agency has never been unable to fulfill its mission to save workers’ limbs, lungs and lives,” he said in an emailed statement. “This year’s budget appropriation literally adds insult to injury.”

NELP’s Dodge said staffing challenges were exasperated by the Trump administration but also noted that budgeting shortfalls have persisted for decades. “We know that we really need meaningful staff increases, an increase in accessibility, and strategic enforcement efforts,” she said.

Michael Lotito, a shareholder with the management-side law firm Littler Mendelson P.C., said the return-on-investment for taxpayers hasn’t worked out very well in the workforce training arena.

“Everyone has to work within a budget; the real issue is what is the ROI gained for the spend?” Lotito said in an email. In his view, while workforce training money is spent, the resulting benefit is less than clear. “I hope DOL is happy with the appropriation,” he said. “The taxpayer needs to be happy with the ROI in return.”

Emergency Savings

Even though some are critical of the DOL appropriation, the agency still has a nest egg of nearly $135 million from the $200 million in extra funding it received under the March 2021 American Rescue Plan Act (Public Law 117-2), which it can use through the end of fiscal year 2023. According to the department’s website, the agency plans to use $96 million of that for its worker protection agencies this year.

“The extra money they got from the rescue plan, I think will help in terms of their work on infectious diseases,” said Debbie Berkowitz, a former senior OSHA official who is now a fellow at Georgetown University’s Kalmanovitz Initiative for Labor and the Working Poor.

“Should there be new outbreaks or different variations of Covid, the agency would be much more prepared to mitigate the exposures that exist in the workplace,” she said.

That leftover money, while a fraction of DOL’s overall budget, represents a 5% addition to the $1.8 billion DOL’s worker protection subagencies received for this fiscal year.

The department lost out on a proposed $2.117 billion in extra funding for its enforcement agencies that would have been included in Democrat’s Build Back Better proposal, which is now defunct after moderate Sen. Joe Manchin (D-W.Va.) declined to support it. Efforts to revive portions of that package, which so far amount to closed-door conversations among senators, don’t appear to include additional DOL funds.

Lawmaker Outcry

Sen. Sherrod Brown (D-Ohio) asked the Office of Management and Budget to increase next year’s appropriations for the NLRB “as it performs the critical work of enforcing U.S. labor law and addressing the way misclassification undermines workers’ rights,” he said in a March 10 letter.

“Independent contractor classification is increasingly used to circumvent U.S. labor law, but the NLRB lacks the resources to adequately close this loophole and fully enforce the NLRA’s labor protections,” he said.

Brown’s concerns were echoed by NLRB General Counsel Jennifer Abruzzo.

“Congress’ flat funding of the NLRB for the past eight years undermines our ability to fully protect workers’ rights to freely associate, organize and collectively bargain for improved working conditions,” she told Bloomberg Law in a statement. “A surge in labor activity nationwide, which has caused a significant increase in our caseload, means that the Agency needs critical staffing increases in order to effectively serve the public.”

To contact the reporters on this story: Paige Smith in Washington at psmith@bloomberglaw.com; Rebecca Rainey at rrainey@bloombergindustry.com

To contact the editors responsible for this story: Andrew Harris at aharris@bloomberglaw.com; Fawn Johnson at fjohnson@bloombergindustry.com