U.S. Department of Labor’s proposed 2011 budgets reflects an increased emphasis on enforcement

Lexology
USA February 9 2010
Morgan Lewis & Bokius LLP

On February 1, Secretary of Labor Hilda Solis released the Obama administration’s proposed fiscal year 2011 budget for the U.S. Department of Labor (DOL or the Department). Adopting a theme of “good jobs for everyone,” the DOL’s FY2011 budget reshuffles the Department’s discretionary funds to support new policy, program, and enforcement priorities for the DOL.
Employers should be mindful of the programmatic and policy themes underlying the more technical “dollars and cents” of the budget process. These themes give invaluable insights into the direction the Department intends to move labor and employment law in the coming months.
Summary of Budget Proposal
The DOL’s budget proposal is only one step in a longer funding process that will carry through over the next few years. With that said, however, employers can expect the policies and priorities identified in the Department’s budget to move forward—whether Congress approves the funding or not.
A number of themes emerge that should assist employers in this new regulatory environment:
The DOL prefers corporatewide solutions, not site-specific fixes to a problem, be it an Occupational Safety and Health Administration (OSHA) violation or an Office of Federal Contracts Compliance Programs (OFCCP) audit. Employers should think broadly when problems emerge, and question whether the “band-aid” approach is always appropriate for any given situation.
The DOL will continue to target repeat offenders, and will up the ante significantly when an employer is labeled as a “persistent” problem. Employers need to ensure that any “fixes” made in response to DOL complaints or audits completely fix the problem, and do so in a timely manner— companywide.
The DOL (and the administration as a whole) values open access, making investigations less than confidential, and making press releases the norm of doing business. Employers need to be prepared for external pressure—from the press, from the community, and from the Department—to move in the directions the DOL has identified.
The DOL’s expanded enforcement will be accompanied by a substantial increase in regulatory activity, creating new obligations for employers.
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Office of Federal Contractor Compliance Programs Budget
In his State of the Union address last month, President Obama announced, “We are going to crack down on violations of equal pay laws—so that women get equal pay for an equal day’s work.” The FY2011 budget proposal for the Department of Labor implements this part of the president’s agenda. Secretary Solis described this initiative in her budget presentation as “narrow[ing] the wage gap” and requiring employers to “offer fair compensation.”
The OFCCP currently investigates whether federal contractors’ pay and employment practices are discriminatory, and it will play a key role in the Administration’s expanded enforcement agenda. The OFCCP received a 33% budget increase in FY2010 to $105 million, and “has embarked on an unprecedented initiative” to hire 213 new compliance officers. The FY2011 budget proposal maintains these high funding levels: the OFCCP would therefore receive an increase to $113 million (788 full-time equivalents) for FY2011.

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