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Walsh Lonely at Top Without Deputies to Advance Labor Agenda

May 12, 2021, 9:30 AM

The U.S. Labor Department lacks a single Senate-confirmed leader other than Labor Secretary Marty Walsh, posing challenges for the Biden administration as it attempts to advance a robust agenda geared toward a post-pandemic workforce.

Six nominees are in varying stages of the confirmation process, and the White House has yet to announce a nomination for the seven other DOL leadership positions requiring Senate signoff.

Any new administration confronts delays in getting sub-Cabinet nominees confirmed, a reality President Joe Biden‘s transition team tried to circumvent by appointing experienced individuals to serve in “acting” leadership roles at DOL. Those interim political leaders have begun the work of reversing Trump-era workforce regulations and forging ahead in new policy areas to address the pandemic-fueled workforce crisis.

But Walsh will need a full complement of Senate-confirmed leaders to advance a four-year policy vision for the department, including an emphasis on job creation, correcting problems in the federal-state unemployment insurance system, and potentially introducing new regulations on overtime pay eligibility and to permit retirement investments in socially conscious funds.

“You’ve just got to get the team in place, especially in this economy—there’s no time to waste,” said Eric Seleznow, a former Obama-era deputy and acting assistant secretary at DOL’s Employment and Training Administration.

Biden has yet to nominate someone to lead ETA, a subagency with an annual budget that amounts to roughly three-quarters of Labor Department appropriations. ETA wields immense authority in executing Biden’s mission to repair a labor market reeling from layoffs and structural damage, and the subagency is also under pressure to prepare the unemployment system for the next recession.

Graphic by Cordelia Gaffney/Bloomberg Law

Waiting for No. 2

Walsh’s arrival in late March helped DOL sharpen its focus on job training and worker safety, said Seleznow, now a senior adviser at Jobs for the Future. The department, however, is in the minority among the 15 Cabinet departments: Only DOL and three others lack either a second Senate-confirmed leader below secretary or a nominee for such a role who’s been teed up for consideration by the full Senate.

Senate Majority Leader Chuck Schumer (D-N.Y.) bypassed Biden’s choice for No. 2 at DOL, Julie Su, on two occasions recently, choosing to devote floor time to the deputy selections for the Education and Commerce departments, among other nominees.

Schumer has yet to move toward a procedural vote to cut off debate on Su’s nomination, and passing her over is a sign he’s anticipating a close result. Su, the California labor secretary, has drawn criticism for her oversight of the state’s widespread processing of fraudulent jobless benefits claims.

Biden’s nominee for labor solicitor, Seema Nanda, is slated for a committee vote May 12, while Doug Parker, the pick to head the Occupational Safety and Health Administration, has yet to receive a hearing.

Nominees may linger for weeks or longer until the Senate finds space for them amid a jammed legislative calendar—a situation that can create delays at the committee level and in gaining access to the floor.

Delayed OSHA Rule

“It can be difficult during a transition time to get major priorities done when you don’t have everyone who’s been fully confirmed,” said Christopher Wilkinson, who was a senior career attorney at DOL under three different presidents. “When I looked at OSHA, for example, and the anticipated emergency temporary standard, that’s something that you want to have your permanent people in place so that they can be on the frontlines of selling the priority.”

OSHA’s Covid-19 workplace safety rule, now being reviewed by the White House regulatory office, has been the department’s highest-profile and most complex initiative of the Biden administration, involving the coordination of multiple acting subagency leaders.

Biden had set a March 15 deadline for its release, if OSHA deemed an emergency rule was needed to protect workers from getting infected on the job. Part of the delay stemmed from Walsh ordering an update of a scientific analysis underlying the rule.

Wilkinson, now a senior counsel at Perkins Coie in Washington, said the absence of Senate-confirmed leaders in an administration’s initial months can stall policy decisions.

“It’s on the policy front where there’s much greater deliberation and things just tend to move much more slowly,” Wilkinson added.

Marty Walsh speaks during a White House press briefing on April 2.
Photographer: Drew Angerer/Getty Images

Regulatory Rollbacks

The Employee Benefits Security Administration, the DOL subagency tasked with regulating private-sector employee benefits, pumped the brakes earlier this year on a series of late-term Trump regulations—all under the control of Ali Khawar, a veteran DOL career official appointed to an acting political leadership post under Biden.

Now, decisions on whether to advance new regulations to replace rules affecting fiduciary guidance, sustainable investing, and other policy areas likely depend on a Senate-confirmed assistant secretary, industry observers said. A nomination hasn’t been announced.

Lori Lucas, president and CEO of the Employee Benefit Research Institute, predicted an active year for retirement policy once leadership is in place, saying, “there does seem to be some pent-up demand.”

Fred Reish, a partner at Faegre Drinker Biddle & Reath LLP in Los Angeles, said that while it’s “not unusual” for EBSA to be without a confirmed head at this point, “it is more difficult to make major decisions without the assistant secretary.”

A similar scenario is playing out at the Wage and Hour Division, which is being led on an interim basis by Jessica Looman, another political appointee. She’s pulled back significant Trump regulations on independent contractor classification and joint employment, and jettisoned enforcement policies on liquidated damages and allowing businesses to self-report violations.

But the division has yet to issue replacement rules or guidance that would delineate new interpretations of the law on employee status and joint liability—two of the most urgent issues in employment policy.

Walsh’s choice for WHD administrator, Obama-era head David Weil, is pending White House clearance before he’s nominated, Bloomberg Law reported in April.

“Particularly with the lack of a Wage and Hour administrator, it is tougher to go forward with proactive things,” said Heidi Shierholz, a former chief economist at DOL and now a senior economist and policy director at the left-leaning Economic Policy Institute. “It’s going into new territory, and it makes sense—they need a wage and hour administrator in there to lead on that.”

To contact the reporters on this story: Austin R. Ramsey in Washington at aramsey@bloombergindustry.com; Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editors responsible for this story: John Lauinger at jlauinger@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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