The Paycheck Fairness Act, introduced by Rep. Rosa DeLauro (D-CT) and approved by the House in January 2009, would have strengthened the Equal Pay Act and closed loopholes that allow many employers to avoid responsibility for discriminatory pay. Today, it received only 58 of the 60 votes needed to break a filibuster with all Senate Republicans voting to block the bill from being considered.

“Senate Republicans dealt a blow to all working mothers, wives, and daughters today by blocking a bill to help women win equal pay for equal work. Because of loopholes in current law, women who are paid less than men doing the same work don’t have the same rights to bring employers to justice as with other forms of discrimination,” said Miller. “It is outrageous that Senate Republicans continue to allow women to be treated as second-class citizens.”

“Wage discrimination against women continues to be a persistent problem, and it is deeply frustrating that a partisan minority has prevented this important bill from coming to debate and vote,” said Woolsey.  

Specifically, the Paycheck Fairness Act would:

•    Require that employers seeking to justify unequal pay bear the burden of proving that its actions are job-related and consistent with a business necessity;
•    Prohibit employers from retaliating against employees who share salary information with their co-workers;
•    Put gender-based equal pay discrimination sanctions on the same footing as other forms of discrimination – such as race or disability – by allowing women to sue for compensatory and punitive damages;
•    Require the Department of Labor to enhance outreach and training efforts to work with employers in order to eliminate pay disparities;
•    Require the Department of Labor to continue to collect and disseminate wage information based on gender; and
•    Create a new grant program to help strengthen the negotiation skills of girls and women.

“Plan participants often face substantial hardship when employers fail to live up to their promises and terminate their pension plans.  It is critical that PBGC exercise due professional care in administering a terminated plan,” Miller said in a letter to Joshua Gotbaum, the new director of the pension agency. “I urge you to work with the OIG to determine the scope and severity of the problem and to properly hold accountable any contractor (including suspension of such contractor) or employee who failed to execute their duties in the manner consistent with the requirements of the law.”

The inspector general concluded that PBGC and a contractor performing the plan asset audits during the termination process did not exercise due professional care in the validation of plan assets, which may distort the plan’s health and how much pensioners receive.

In addition, the PBGC hired Integrated Management Resources Group, the contractor highlighted by the OIG for failing to exercise due diligence, to perform retiree plan audits despite allegations of contracting irregularities contained in a 2000 Government Accountability Office investigation.

PBGC Inspector General Letter to Rep. Miller

Rep. Miller 2009 Request to the Inspector General

Text of the letter to Director Gotbaum appears below.


July 23, 2010


VIA FACISIMILE (202) XXX-XXXX
Mr. Joshua Gotbaum
Director
Pension Benefit Guaranty Corporation
1200 K Street, NW
Washington, DC  20005-4026

Dear Mr. Gotbaum:

As you begin your effort to lead the Pension Benefit Guaranty Corporation (PBGC) in these economically challenging times, I write to urge your swift action to address troubling findings described in a letter I recently received from the Office of the Inspector General (OIG) of the PBGC.  

On December 14, 2009, I asked the OIG to review the design and implementation of PBGC’s protocols in relation to the United Airlines’ (UAL) pension plan terminations. As part of the review, the OIG looked at plan asset audits for four UAL plans.  As you know, the value of a plan’s assets at termination is crucial to accurately calculating the benefits to which plan participants are entitled.  

In the report, the OIG concluded that PBGC and the contractor performing the plan asset audits did not exercise due professional care and that “the issues surrounding the inadequate plan asset audits were so significant that additional, more detailed evaluation is warranted.”  Further, in discussions with my staff, the OIG indicated that the contractor PBGC hired to perform the UAL plan asset audits (Integrated Management Resources Group, Inc.) was the sole contractor to perform such audits for a number of years, despite past criticisms of its work.  

Plan participants often face substantial hardship when employers fail to live up to their promises and terminate their pension plans.  It is critical that PBGC exercise due professional care in administering a terminated plan.  I urge you to work with the OIG to determine the scope and severity of the problem and to properly hold accountable any contractor (including suspension of such contractor) or employee who failed to execute their duties in the manner consistent with the requirements of the law.

I respectfully request your prompt attention to this matter and that your staff keep me informed of your progress.  Please contact me or the Committee’s Senior Investigator, Ryan Holden, at (202) XXX-XXXX if you have any questions.

Sincerely,



GEORGE MILLER
Chairman

cc:        The Honorable John Kline
Senior Republican, Committee on Education and Labor

The Honorable Robert Andrews
Chairman, Subcommittee on Health, Employment, Labor, Pensions

The Honorable Tom Price
Ranking Member, Subcommittee on Health, Employment, Labor, Pensions

The Honorable Hilda Solis
Secretary, U.S. Department of Labor


Enclosure

There is currently no requirement for Wall Street to disclose how much in fees it takes out of Americans’ 401(k)-style accounts. With more than 50 million Americans relying on these plans to finance their retirements, hidden fees can make a big difference in families’ retirement security. According to the Department of Labor, a one-percentage point difference in fees would reduce overall retirement income by 28 percent over a lifetime of saving.  

The 401(k) fee disclosure provisions were part of legislation approved by the House of Representatives in May.

“We are disappointed that Republicans fail to understand the importance of recognizing businesses that offer family-friendly policies,” Woolsey and Miller said. “Encouraging workplaces to develop these policies go to the heart of how we value our nation’s families and our economic competitiveness. Employers that recognize the value of helping their employees achieve a work-life balance should be recognized and copied. It’s a shame Republicans don’t agree.”

The Work-Life Balance Award Act of 2010 (H.R. 4855) would establish an award at the U.S. Department of Labor to recognize workplaces with exemplary work-life practices, such as paid family leave and assistance with child care.  Criteria for the award would have been developed by a bipartisan advisory board consisting of representatives from the public, state and local government, industry and industry organizations, not-for-profit employers, labor, and advocates for children and families.  

It is supported by: The National Partnership for Women & Families; 9to5, National Association of Working Women; A Better Balance: The Work and Family Legal Center; Business and Professional Women’s Foundation; Center for Law and Social Policy (CLASP); Coalition of Labor Union Women; Labor Project for Working Families; Legal Momentum; National Association of Mothers’ Centers and its MOTHERS Initiative; OWL—The Voice of Midlife and Older Women; Society for Human Resource Management (SHRM); and WorldatWork.

“Guaranteeing the disclosure of hidden 401(k) fees will give Americans a fighting chance to strengthen their retirement and increase our nation’s future economic security,” said Miller. “We need to ensure that 401(k)s are run in the best interests of accountholders, not for the sake of boosting Wall Street’s bottom line. I would like to thank Chairman Levin and Congressmen Rangel and Neal for working with the Education and Labor Committee on these important provisions.”

Federal law does not require the disclosure of fees taken out of workers’ 401(k)-style accounts. With more than 50 million Americans relying on these plans to finance their retirements, hidden fees can make a big difference in families’ retirement security. The Government Accountably Office found that a one-percentage point difference in fees could cut retirement assets by nearly 20 percent.

Provisions included in H.R. 4213 regarding fee disclosure are based on the 401(k) Fair Disclosure and Pension Security Act, which was authored by Miller and approved by the Education and Labor Committee last year. H.R. 4213 also includes provisions to make modest adjustments to funding requirements so plan sponsors will not have to choose between making forced cash contributions, freezing plans or cutting jobs.

More information on the 401(k) and pension provisions in H.R. 4213

The Protecting Older Workers Against Discrimination Act, introduced in October 2009, would restore vital workplace protections under the Age Discrimination in Employment Act (ADEA) of 1967 to what they were before the Gross v. FBL Financial Supreme Court decision. The 5 to 4 ruling has resulted in victims of age discrimination facing a higher legal burden of proof than those alleging race, sex, national origin or religious discrimination.

“Today we heard testimony calling on Congress to reject the Supreme Court’s misguided decision in the Gross case and restore justice for American workers of all ages,” said U.S. Rep. Rob Andrews, chair of the subcommittee. “Older workers, who are already struggling enough to keep their jobs in this economy, deserve the same protections as those discriminated against on the basis of race, ethnicity or religion. The Supreme Court turned decades of well-established law on its head when it held that age discrimination is permissible if it is merely a motivating factor in an adverse employment decision. H.R. 3721 prevents claims like Mr. Gross’ from being dismissed based on sheer semantics  and guarantees that all legitimate victims of age discrimination will not be shut out of the courthouse.”

In 2003, Jack Gross was demoted by FBL Financial with lower pay and his duties were reassigned to a younger colleague. Gross claimed that the demotion was because of his age. A jury agreed that the company unlawfully demoted him and awarded him $46,945 in back pay. However, an appeals court overturned the verdict, which was reaffirmed in a June 2009 Supreme Court decision written by Justice Clarence Thomas.

 “The court essentially hijacked my case and used it as a vehicle to water down the ADEA, a law written by the branch of government closest to the people,” said Gross. “Editorials and bloggers dubbed me this year’s Lilly Ledbetter. I take that as a compliment.”

Last year, President Obama signed the Lilly Ledbetter Fair Pay Act, which overturned a 2007 Supreme Court decision that severely restricted the rights of employees to challenge unlawful pay discrimination based on gender.  

In Gross’s case, a narrow Supreme Court majority said that it was not enough to show that age was a motivating factor of the employer’s discriminatory action, but a plaintiff must show that age was the ‘but-for’ reason to win a case. The new standard made it more difficult for older workers to hold employers accountable than those alleging race, sex, national origin or religious discrimination. In his dissent, Justice John Paul Stevens wrote that the majority of the court had “engaged in unnecessary lawmaking.”

“[The Supreme Court decision] undermined Congress’s legislative intent and immediately impacted older workers, relegating them to second-class status among victims of discrimination,” said Michael Foreman, director of the civil rights appellate clinic at Penn State’s Dickenson School of Law. “Congress should take positive steps to ensure that our civil rights and employment laws protect all American workers.”

Witnesses testified that these protections are especially important for older workers because they often face an uphill battle of holding onto jobs in a struggling economy and can have a harder time finding new employment opportunities – often at lower pay than their previous jobs.

“Once out of work, older job seekers face a prolonged and often discouraging job search,” said Gail Aldrich, member of the board of directors of the AARP. “Once out of work, older persons are more likely than the younger unemployed to stop looking for work and drop out of the labor force.  If they do find work, they are more likely than younger job finders to earn less than they did in their previous employment.”

More information on the Protecting Older Workers Against Discrimination Act

“As we continue working to rebuild our economy and get every American who has lost a job back to work, we must also work to restore the promise of equal pay for equal work. Equal pay for equal work isn’t just a matter of basic fairness, but a smart strategy for economic growth: Paying women the higher incomes they have rightfully earned will boost families’ purchasing power and consumer spending. In the year 2010 there simply is no moral or economic justification for paying women less than men for doing the same job.  

“There are two steps that can finally put an end to this injustice. The Democratic Congress and the Obama administration took the first step last year by enacting the Lilly Ledbetter Fair Pay Act. It’s time for the Senate to join the House in taking the second step by passing the Paycheck Fairness Act. If we’re serious about restoring the American Dream, then we have to ensure that every American who works hard for a living can earn a fair and decent wage.”

Equal Pay Day commemorates how far into the year a woman must work in order for her wages to equal those of a man in the previous year.

During the first few weeks of the 111th Congress, the House passed both the Ledbetter Fair Pay Act and the Paycheck Fairness Act, but the Senate passed only the Ledbetter legislation. The Lilly Ledbetter Fair Pay Act became the first major bill signed by President Obama.

Learn more about the Lilly Ledbetter Fair Pay Act

Learn more about the Paycheck Fairness Act

“In an especially difficult economy, a responsive Department of Labor is essential to assisting and standing up for workers,” said U.S. Rep. George Miller (D-CA), chairman of the House Education and Labor Committee. “Thanks to Secretary Solis, the Department of Labor is playing a central role in our nation’s economic recovery and laying the groundwork for a stronger middle class.”

More than seven million jobs have been cut over the past two years as the result of the financial collapse. From day one of the new Obama administration, Congress worked with the administration on a recovery plan to save the economy from total devastation. Economist from left to right agree that the Recovery Act added real growth to the economy and predicted that without these investments, more than a million more Americans would be out of work.

 “While I came to lead the Department of Labor at a tumultuous and challenging time, I know that we have already made a real difference in the lives of America’s workers and their families,” said Solis. “We successfully implemented the Recovery Act and have seen how these investments have saved and created jobs in communities across the country.”

The American Recovery and Reinvestment Act made historic investments in American workers and provided vital resources to families deal with the financial collapse. Among other things, the Department of Labor is responsible for administering increased unemployment benefits, health care premium support for laid off workers and significant investments made in workforce development programs including more than 300,000 summer youth jobs. 

While the Department of Labor has been working on an ambitious agenda to promote economic recovery and train workers for the careers of the future, Solis’ department has also revamped agencies suffering from years of neglect.

“In a labor market where jobs are difficult to find and workers are glad to have the jobs they hold, it is too easy for workers to be exploited,” Solis continued. “We are strengthening our efforts to be vigilant in protecting the rights and safety of workers by hiring additional enforcement personnel and reviewing and improving our regulatory efforts.”

The Recovery Act and the department’s new priorities have allowed agencies to increase their capacity to protect workers’ health and safety, pay, and benefits after nearly a decade of cuts. For example, additional resources have allowed the department to hire an additional 250 investigators to ensure compliance with our nation’s wage and child labor laws.

“Especially in this economy, every dollar an employer steals from a worker is a dollar a family loses to pay for basic necessities,” Miller said.

Solis outlined five key priorities for her department:

(1)        Significantly reduce fatalities resulting from the most common causes at workplaces covered by the Occupational Safety and Health Administration and mining sites.
(2)        Reduce the number of repeat violators of minimum wage, overtime, and workplace safety laws.
(3)        Raise labor standards low-wage trading partners in order to create a more balanced playing field for American manufacturing employees. Create a program to help workers injured on the job return to work so that they can continue to be productive members of America’s workforce.
(4)        Increase opportunities for America’s workers to acquire the skills and knowledge to succeed in a knowledge-based economy.

“The Department has outlined these high-priority goals to focus our agencies on the most critical needs affecting the safety, health, and economic security of workers,” Solis said.

“President Obama’s ‘Jobs and Economic Growth Summit’ was an important step in advancing additional strategies to help Americans get back to work. I agree with the president that while the Recovery Act is helping to dig our country out of an unprecedented financial and economic crisis – as the non-partisan Congressional Budget Office highlighted – this recession is severe and more needs to be done.

“Congress will continue to work with President Obama to provide relief to those who have lost their jobs and are struggling to get by, to help prevent additional layoffs, and to get our nation’s economic engine working for every American.”

The Congressional Budget Office released a report earlier this week on the American Recovery and Reinvestment Act’s impact on the economy and employment. The GAO found that in the third quarter of 2009, because of recovery dollars, 600,000 to 1.6 million more U.S. workers had jobs; Gross Domestic Product was 1.2 percent to 3.2 percent higher; and the unemployment rate was 0.3 to 0.9 percentage points lower than it would have been if no action had been taken.

To view the report, click here.

Airline pilots and flight attendants currently face unexpected hurdles to qualify for FMLA. These hurdles are unique to airline employees since their non-flying hours are not counted toward their total hours of service. To remedy this situation, Bishop introduced the Airline Flight Crew Family and Medical Leave Act to clarify the original FMLA 1993 law. Senator Patty Murray introduced a companion bill, which was passed by the Senate last month and came before the House for a final vote today. 

“Because of the unique way that airline personnel’s hours of work are counted, many workers have been unable to take advantage of the leave under the Family Medical Leave Act,” said Rep. Lynn Woolsey, Chairwoman of the Committee on Education and Labor’s Workforce Protections Subcommittee.  “This legislation which the House has passed today, changes that, and airline workers will now be able to take much needed time to care for a sick child, parent or spouse.”

“When airline crewmembers need to take time away from serving passengers in order to care for themselves or family members, they face unexpected hurdles. This bill would prevent crewmembers from being losing out on their FMLA benefits, which have helped so many working families in this country,” said Bishop, a member of the House Education and Labor Committee.

"We are very pleased at the passage of Congressman Bishop's FMLA bill, which finally addresses loopholes in the current language that have denied many flight attendants from qualifying for coverage," said Patricia Friend, President of the Association of Flight Attendants-CWA. "Every flight attendant in this country is so grateful to Tim Bishop for passing this legislation on such a strong bipartisan basis."

The FMLA requires most employers to provide job-protected unpaid leave to employees who have worked 60 percent of a full-time schedule over the course of a year. However for flight crews, non-flight hours on the job, between flights or on mandatory stand-by do not count toward their FMLA credit. The Airline Flight Crew FMLA would correct this unintended oversight of the original legislation.

“When you’re struggling to make ends meet you’re going to do everything possible to not miss a day’s pay,” said U.S. Rep. George Miller (D-CA), chairman of the committee. “The lack of paid sick leave encourages workers who may have H1N1 to hide their symptoms and come to work sick – risking the health of their co-workers, customers and the public.”

On November 3, Rep. Miller and Rep. Lynn Woolsey (D-CA), chair of the Workforce Protections Subcommittee, introduced the Emergency Influenza Containment Act (H.R. 3991). The temporary legislation will guarantee up to five paid sick days for a worker sent home or directed to stay home by an employer for a contagious illness, such as the H1N1 flu virus.

The Centers for Disease Control reports that the flu’s spread is very unusual this early in the season. They estimate that 22 million Americans have already become ill in the last six months with H1N1 and 3,900 have died. The CDC issued guidance in August that said, in part, that workers feeling symptoms of the flu should stay home and employers should not penalize them for staying home.

“Visits to doctors for influenza-like illness as well as flu-related hospitalizations and deaths among children and young adults…are higher than expected for this time of the year,” said Assistant Surgeon General Anne Schuchat, who is also the director of the National Center for Immunization and Respiratory Diseases at the CDC. “Some ways to combat the spread of respiratory infections include staying home when you are sick and keeping sick children at home.”

Public health officials say that isolating the virus is important to slow the infection rate of the H1N1 flu virus. They recommend strong measures to ensure that those with the infection stay away from others and that mandatory sick leave policies can be helpful to not only slow the spread, but also to improve businesses’ productivity.

“This is particularly a plus for small employers where preventable losses of even a small number of workers can have a devastating effect on the business,” said Dr. Georges Benjamin, the executive director of the American Public Health Association. “Mandatory sick leave encourages employees to stay out of the workplace when appropriate, protecting the business and I believe hastens the employees return to productive work.”    

While public health officials have advised employers to show flexibility in allowing workers to stay home without taking punitive actions, some workers have reported that employers are not providing needed time off. 

At least 50 million American workers currently do not have access to paid sick leave, many in lower-wage industries that have direct contact with the public such as food-service, hospitality industry, schools and health care fields.

“Our nation’s failure to provide a minimum standard of paid sick leave is putting our public health at risk. More than two-thirds of flu cases are transmitted in schools and workplaces,” said Debra Ness, president of the National Partnership for Women and Families. “Workers in child care centers and nursing homes, and retail clerks disproportionately lack paid sick days. Because the lack of paid sick days forces employees to work when they are ill, their coworkers and the general public are at risk of contagion.” 

Studies also show that businesses stand to lose billions in productivity when workers come in sick. Ness said when sick employees come into work and infect co-workers, they lower productivity by as much as $180 billion a year and have the potential to cripple vital business operations.

For more information on the Emergency Influenza Containment Act, click here.

To read the testimony of the hearing, click here.

“Sick workers advised to stay home by their employers shouldn’t have to choose between their livelihood, and their coworkers’ or customer’s health,” said Miller. “This will not only protect employees, but it will save employers money by ensuring that sick employees don’t spread infection to co-workers and customers, and will relieve the financial burden on our health system swamped by those suffering from H1N1.”

“To help control the spread of the H1N1 flu virus, workers who are sick should stay at home,” said Woolsey. “This bill will ensure that workers who are directed to stay home by their employers can do so without paying a financial penalty.”

The Centers for Disease Control estimates that a sick worker will infect one in ten co-workers. As a result, the CDC and other public health officials have advised employers to be flexible when dealing with sick employees and to develop leave policies that will not punish workers for being ill.

At least 50 million American workers do not have access to paid sick leave, many in lower-wage jobs that have direct contact with the public such as the food-service and hospitality industry, schools and health care fields. The National Partnership for Women and Families estimates that the economy loses $180 billion in productivity a year when sick employees show up to work, also known as “presenteeism.”

Among other provisions, the Emergency Influenza Containment Act:

• Guarantees a sick worker up to five paid sick leave days a year if an employer ‘directs’ or ‘advises’ a sick employee to stay home or go home.
• Covers both full-time and part-time workers (on a pro-rated basis) in businesses with 15 or more workers. Employers that already provide at least 5 days’ paid sick leave are exempt.
• An employer can end paid sick leave at any time by informing the employee that the employer believes they’re well enough to return to work. Employees may continue on unpaid leave under the Family Medical Leave Act or other existing sick leave policies.
• Employees who follow their employer’s direction to stay home because of contagious illness cannot be fired, disciplined or made subject to retaliation for following directions. 
• Takes effect 15 days after being signed into law and sunsets after two years.

"Today's news is another important indicator that the Recovery Act is beginning to repair our economy and get our nation back on its feet. While it will take time for all these investments to kick in, we know that the Recovery Act has already helped to stave off hundreds of thousands of pink slips being planned. 

“While saving and creating jobs must be a central concern, we also must ensure that Americans still looking for work have the temporary support they need to get by and that displaced workers have access to the education and training they need to succeed in the jobs of the future. We won't rest until the millions who lost their jobs during this economic crisis have an opportunity to work and are ready to help shape a new era of economic growth and innovation.”

“This pay increase is about helping workers provide for their families. The increase in the minimum wage comes at a very important time for Americans struggling to make ends meet,” said Miller. “Friday’s increase will help millions of Americans who work hard, play by the rules and urgently need a pay raise. Families will have additional income to cover their weekly grocery bills, fill up their cars, and purchase goods and service from local businesses.

“Sadly, there are still some who argue that workers should not get this pay raise. Unlike tax cuts for the wealthy, a higher minimum wage increases consumer spending on local businesses, which is good for everyone. In the wealthiest country in the world, it is an outrage that anyone who works full-time still winds up in poverty. Congress will continue to look at solutions that will help all Americans build a better life for themselves and their families.”

BACKGROUND

• From 1997 to 2006, the Republican-controlled Congress consistently blocked Democratic efforts to raise the minimum wage. As a result, the purchasing power of the minimum wage reached a 51-year low in 2006. Miller’s legislation, the Fair Minimum Wage Act of 2007, raised the minimum wage from $5.15 per hour to $7.25 per hour in three equal steps. For more information, click here.
• A recent study by economists at the Federal Reserve Bank of Chicago found that every dollar increase in the minimum wage leads to an $800 increase in spending per quarter by families with minimum wage workers.
• The Economic Policy Institute estimated that this increased purchasing power will boost consumer spending by more than $5.5 billion over the next 12 months.
• Workers in 31 states will see an increase in the minimum wage Friday. Those states are: Alabama, Alaska, Arkansas, Delaware, Florida, Georgia, Idaho, Indiana, Kansas, Louisiana, Maryland, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, New York, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin, and Wyoming.  The remaining states already have state minimum wage rates the same or higher than Friday’s new federal rate.

“The provisions in this bill will drive energy costs down for consumers and families in the long run and will create millions of clean energy jobs that cannot be shipped overseas,” Miller added. “And, in a very important step, under our bill American workers will be able to take advantage of opportunities that will help them transition into the new sustainable careers of the future.”
 
As chairman of the Education and Labor Committee, Miller wrote into the bill significant provisions to ensure workers affected by climate change policy have access to health care coverage, income support, and employment services so they can transition into green economy jobs.

Among other provisions to assist workers in transition, eligible workers impacted by the new energy policy would:

•    Receive income support equal to 70 percent of their income for up to 156 weeks;
•    Receive an 80 percent credit toward their monthly health care premiums;
•    Have access to job training opportunities, including on-the-job training programs, as well as other support services; and
•    Receive job search allowances and relocation assistance, up to $1,500 for each.

“It is unacceptable that this country, which is the number one economy in the world, can barely compete with developing nations when it comes to paid leave and sick days,” said Rep. Lynn Woolsey (D-CA), chair of the Workforce Protections subcommittee and sponsor of H.R. 2339, the Family Income to Respond to Significant Transitions (FIRST) Act. “Leave has been taken more than 100 million times under the FMLA, most workers can’t take advantage of its provisions because they cannot afford to take unpaid leave. This is not only bad for workers and their families, but also for employers.”

The FIRST Act authorizes $1.5 billion in grants to states so they can implement and improve their paid family leave programs. Under the bill, the leave can be used for several purposes, including the birth or adoption of a child, for a serious illness, or to take care of an ill family member.  

“Almost half of all private sector workers do not have a single paid day off that they can use to care for themselves or a sick family member,” said Rep. Rosa DeLauro (D-CT), author of H.R. 2460, the Health Families Act, which would require businesses with 15 or more employees to provide up to seven paid sick days a year to employees. “These workers put their jobs on the line every time they take a day off.”

Many workers lack of paid sick days was highlighted during the spring outbreak of the H1N1 flu virus. While public health officials warned workers to stay home from work if they were sick or had symptoms, many employees went to work anyway because they simply could not afford to stay home.

“Our failure to guarantee a minimum standard of paid sick days is a significant public health concern, as we witnessed during the H1N1 virus outbreak,” said Debra Ness, president of the National Partnership for Women. “Many of the workers who interact with the public every day are among the least likely to have paid sick days.”

Sick leave and paid family leave policies especially benefit women who are likely to be the primary caregivers of their children. Half of all working women have reported that they have missed work to care for a sick child; and nearly half of those workers say that they have to take unpaid leave to care for a family member. Witnesses emphasized that providing paid family leave and paid sick leave would be a major step toward creating workplaces that respect and empower work-family balance.



Created with flickrSLiDR.


"Achieving a sustainable work-life balance is of paramount concern for working women and their families,” said Deborah Frett, president of Business and Professional Women. “One-third of women believe that the difficulty of combining work and family is their biggest work-related problem, and nearly three-fourths think the government should do more to help.”

California’s Paid Family Leave insurance program, the first of its kind, provides workers with six weeks of paid leave for the birth, adoption, or foster care of a child. It also entitles workers to wage reimbursement to care for seriously ill children and family members. The FIRST Act would provide funds that could be used to raise awareness and improve the administration of programs such as California’s.

“Despite the barriers California’s PFL program has faced, it is a very successful program that helps workers balance work and family,” said Sandra Poole, the deputy director of the California Employment Development Department Disability Insurance Branch.  “I hope other states follow California’s lead, and the grants provided under the FIRST Act will be of invaluable assistance to them as they implement their programs.”

Witnesses also pointed out that what is good for the employee is also good for the employer.

Allowing workers time to take sick leave reduces the risk of spreading disease to other workers or customers. It also can be done at little to no expense. Some studies say that the implementation of paid sick leave legislation in San Francisco came at minimal to moderate cost to employers according to Rajiv Bahtia, MD, the director of Occupational and Environmental Health for the San Francisco Department of Public Health. The same program did not result in any job losses or have an impact on business. The District of Columbia and Milwaukee also have similar sick leave laws.

“One key way to reduce costs in our health care system is to eliminate loopholes in the system that increases profits for insurers by shifting costs to hardworking Americans,” said U.S. Rep. Rob Andrews (D-NJ), chairman of the subcommittee.  “We need to create real competition between insurers in the health care market in order to further reduce costs for consumers.”

Working Americans and employers have seen these rising costs reflected in the increases in their health insurance premiums each year. According to government statistics, health insurance premiums for employees more than doubled in the last 9 years, a rate 6 times faster than wage increases.




Created with flickrSLiDR.


“Guaranteeing adequate, affordable coverage for all Americans regardless of where they obtain their health insurance is a key component of health reform,” said Karen Davenport, director of health policy at the Center for American Progress Action fund. “Reforming our nation’s health care system is a challenging task but the results will be worth the effort – lower costs and better coverage.”

Rising costs have led to millions of Americans without any health coverage and millions more who have inadequate health insurance. Witnesses also said that ensuring a more efficient delivery of care will help drive down waste and costs within the health care system.

“The American health care system can be fixed, but consumers need tools to help drive the system toward quality and cost savings,” said William Vaughan, health policy analyst for the Consumers Union. “Consumers are both paying more in premiums, and shouldering a higher burden for out-of-pocket expenses, including deductibles, co-payments and other expenses not covered by their health insurance.”

Guaranteeing health care coverage for all Americans, regardless of an individual’s health, will create larger pools of risk where costs could be spread more efficiently throughout system than in smaller pools. Smaller pools of risk lead to more expensive coverage for individuals and small businesses. 

“Generally speaking, small businesses lack economies of both scale and expertise via-a-vis larger employers in providing health, retirement, and other employee benefits to their workers,” said Bill Oemichen, president and CEO of the Cooperative Network, a Minnesota and Wisconsin association of businesses that provide employee benefits to 600 businesses. “For this reason, millions of small business employees do not receive health care and benefits coverage, and small business employers that do provide benefits often struggle to maintain these programs.”

Another strategy is to ensure that everyone will be covered regardless of preexisting conditions. Loopholes in current law force many individuals with preexisting conditions to go without coverage and drive up costs when they do have to seek health care treatment.

“[Current law] does allow insurers to exclude coverage for a preexisting condition for up to one year for employees who previously had less than 12 months of continuous coverage,” said Ron Pollack, executive director of Families USA. “These exclusions cause employees to postpone or forgo treatment for serious illnesses such as cancer.”

Congress is currently working on a proposal to provide comprehensive health care reform. On March 11, the chairs of the three House committees of jurisdiction sent a letter to President Obama pledging that they will work together to deliver a comprehensive reform package to the floor before the August recess. To read the letter, click here.

“When a worker spends most of their lifetime investing their hard-earned dollars into an account for their retirement and later discover that they were being charged fees that contributed to a significant loss of their nest egg, they understandably lose trust and confidence in the system,” said U.S. Rep. Rob Andrews (D-NJ), chairman of the subcommittee. “The lack of transparency in the 401(k) system is unacceptable and must end now.”

The 401(k) Fair Disclosure for Retirement Security Act (H.R. 1984), introduced yesterday by Reps. George Miller (D-CA) and Andrews, will help workers shop around for the best retirement options by requiring simple fee disclosure on the investment options contained in their employer’s 401(k) plan.

“It is an especially difficult time for our country. Families are running their budgets and cutting back just to survive including, as evidence suggests, their retirement savings,” said Miller, chairman of the full committee. “As a result, it is more important than ever that Americans are armed with simple and complete information so they can get the best bang for their retirement buck.”

Current law does not require all fees workers pay to be disclosed; and even for information that is available, it can be difficult for workers to find. According to the Government Accountability Office, these hidden fees can greatly reduce workers’ retirement account balances. In fact, just a 1-percentage-point in excessive fees can reduce a worker’s 401(k) account balance by as much as 20 percent or more over a career.



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“Achieving financial security in retirement is a significant challenge for most Americans,” said Kristi Mitchem, managing director and head of U.S. defined contribution plans at Barclays Global Investors. “Providing plan fiduciaries and individual plan participants with additional targeted information about fees and expenses…will promote better investment decisions and help 401(k) plans to better deliver retirement security for American workers.

The legislation would require financial service providers to disclose all the costs and fees associated with each investment option to both employers who sponsor the 401(k) plan and employees who direct choose investments.

“The retirement security of employees is completely dependent upon the business owner’s choice of retirement plan service providers,” said Julian Onorato, CEO of ExpertPlan, Inc. “If the fees are unnecessarily high, the workers’ retirement income will be severely impacted. It is imperative that the business owner have the best information to make the best choice.”

H.R. 1984 would also require service providers to disclose any financial relationships or potential conflicts of interest to plan sponsors.

“Plan sponsors must understand the incentives that may exist for service providers to encourage participant behaviors that may not be in their best interest because they do not contribute to great retirement security,” said Alison Borland, retirement strategy leader of Hewitt Associates LLC, a company that advises employers on retirement plans. “Identifying these potential conflicts of interest requires more detailed disclosure than is available today.”

The 401(k) Fair Disclosure for Retirement Security Act would also require plans to offer at least one low-cost index fund that tracks a broad market index to plan participants in order to receive protection against liability for participants’ investment losses. Because index funds are not actively managed, they carry lower costs and generally outperform the vast majority of other investment options over time.

“The 401(k) Fee Disclosure Act takes the long overdue step of prohibiting pension plans from limiting investment options to actively managed portfolios and thereby forcing participants to pay higher fees and assume active management risk,” said Mercer E. Bullard, founder of the investor rights group Fund Democracy and assistant professor of law at the University of Mississippi. “It is widely accepted that actively managed funds cannot, as a group, outperform the marketplace after taking fees into account.”

For more information on the 401(k) Fair Disclosure for Retirement Security Act (H.R. 1984), click here.

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The GAO found that the Wage and Hour Division’s complaint intake, complaint resolution, and investigation processes were ineffective and discouraged workers from lodging wage theft complaints. In several of the division’s regional offices, staff were directed to only record successful complaint resolutions in its database, making the Wage and Hour Division statistics appear better than they were. In addition, the GAO found that because of the lack of resources and staff, investigations on wage theft and child labor violations were frequently delayed by months or years.  

“This investigation clearly shows that the Department of Labor has left thousands of actual victims of wage theft who sought federal government assistance with nowhere to turn,” said Gregory Kutz, GAO’s managing director of forensic audits and special investigations, “Far too often many of America’s most vulnerable workers find themselves dealing with an agency concerned about resource limitations, with ineffective processes, and without certain tools necessary to perform timely and effective investigations of wage theft complaints. Unfortunately, far too often the result is unscrupulous employers taking advantage of our country’s low wage workers.”

Over a period of several months, GAO investigators filed ten fictitious complaints with agency district offices across the country, posing as both the employee and the employer. Of the ten complaints that were made, only one was successfully resolved. The GAO also reported that after reviewing the agency’s complaint database, only five of ten fictitious complaints were logged into the system weeks later.

In one case, an undercover investigator called the agency to complain about children working with saws and meat grinders, illegal under child labor laws, during the school day. Although the agency states that investigating child labor violations is a top priority, the call was never investigated or logged into the complaint database.

To listen to this call, click here.

In another undercover call, a Wage and Hour employee told the GAO investigator that they could not follow up on the complaint because the IRS said that his employer was not big enough to be covered under the law. As the GAO testified, though the company was a fictitious and had never filed a tax return, Wage and Hour employees do not have access to IRS data. The Wage and Hour employee was referred to the Department of Labor Office of Inspector General for administrative action.

To listen to this call, click here.

In addition, the GAO audited Wage and Hour Division’s database and sampled several dozen cases to determine whether they were properly handled. Just as the undercover calls highlighted, many times, when employers declined to pay back wages – even if employers admit wages were owed – the division was likely to drop the investigation and inform the complainant the right to sue in court.  

Also, the GAO found that Wage and Hour employees often took the word of employers that they paid workers back wages owed, even if the employee never got paid.

“While some investigators wait for proof of payment before closing the conciliation, others told us that they close conciliations as soon as the employer agrees to pay,” said Kutz. “Even if the employee later tells the investigator that he has not been paid, investigators told us they do not change the outcome of a closed case in the WHD database.”

Today’s hearing follows a July 2008 Education and Labor hearing on wage theft where the GAO presented 15 case studies where the Wage and Hour Division ineffectively enforced the law. The GAO reported then that actions initiated by the Department on wage and hour violations dropped from approximately 47,000 in 1997 to fewer than 30,000 in 2007. And, the use of fines that punish repeat or egregious offenders declined by nearly 50 percent from 2001 to 2007.

To read more about the July 2008 hearing, click here.

To read the GAO’s testimony, click here.

The proposal, finalized on Jan. 20, 2009, would largely remove the prohibition of pension plan investment advisors in giving self-interested financial advice to their plan participants. Consumer advocates and lawmakers are concerned that the regulation would allow financial advisors to charge higher fees and allow them to give conflicted investment advice on products they have a financial interest.

“If workers receive investment advice, it should be independent and free of conflicts of interest,” said U.S. Rep. Rob Andrews (D-NJ), chairman of the subcommittee. “During a time where American workers have already lost $2 trillion in assets due to last year’s market downturn, exposing their hard-earned retirement savings to greater risk by allowing advisers to offer them conflicted advice is irresponsible and imprudent.”

Several members of Congress objected to the proposal last summer because they said it was contrary to provisions in the Pension Protection Act of 2006 that allows limited investment advice by pension providers based on independent computer models. The regulation has been put on hold by the Obama administration.


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“The effect of legal protections for conflicted advice is quite predictable,” said Mercer Bullard, president and founder of Fund Democracy and associate professor at the University of Mississippi School of Law. “Rather than promote the providing of independent financial advice to participants, the [new regulation] will promote conflicted advice, higher fees and lower investment returns.”

Ken Baker, the corporate director of human resources for Applied Extrusion Technologies in Terre Haute, Ind., said that after his company hired an independent pension consultant to examine the company’s program, they grew uncomfortable with their 401(k) plan because of hidden fees and the close relationship between their advisor and the service provider.

After the company switched service providers, in addition to providing workers access to an independent investment advice firm, participation and contributions by employees to the new 401(k) plan jumped. Baker testified that employees better understood the fees they paid and were able to choose from straightforward, low-cost investment options.

“The employees know what the investment advisor fees are and they know they do not change when the plan assets grow,” said Baker. “In fact, even though employees could now see that they would be paying the fees for our new independent advisor, they did not object because they could see that it was worth it.”

The U.S. Government Accountability Office examined Security and Exchange Commission data on pension plans and found that undisclosed conflicts of interest could lead to low returns than those plans that properly documented any financial interests.

More problems may arise because of the prevalence of 401(k)-type plans. Instead of traditional pension plans that are operated by professional managers, 401(k) account holders pick investment options provided by their employer on their own and therefore assume greater risk. In addition, any seemingly small fees, many that are not required to be disclosed to participants, could significantly reduce long-term retirement security of the account holders.  

“The threat posed to participants in account based retirement plans like 401(k)s, now the primary plan design in the United States, is quite direct,” said Charles Jeszeck, acting director of education, workforce, and income security of the GAO. “Since workers largely bear the risk of investment under this plan design, any factor, and decision that reduces the account’s rate of return can have potentially irreversible consequences for the participant’s retirement income.”

For more information, click here. 

“Passing the President’s economic recovery plan was only the first step in our efforts to restore our nation’s economic and fiscal health,” said Miller. “Eight years of reckless fiscal policies and the ongoing economic crisis have left our country in a sea of red ink. President Obama and Speaker Pelosi have made it clear that they are committed to using the resources of the federal government to rescue our economy but that they also are committed to operating our government in a fiscally responsible manner. Whether it is our health care system, our tax policy, or other issues, I look forward to working with the president and the speaker to make our nation more efficient while raising the quality of services Americans receive. Doing so will strengthen our middle class and our nation."

Improving workers’ access to quality, affordable health care is a top priority for the Education and Labor Committee in the 111th Congress. As chairman of the committee, Miller shares jurisdiction on health care reform with the House Ways and Means and Energy and Commerce Committees.

“It is not surprising that, in its waning days, this administration is possessed with an urgency to undo basic worker protections,” said U.S. Rep. John Conyers Jr. (D-MI), chairman of the House Judiciary Committee.  “This regulation will hurt American workers and make foreign guestworkers even more subject to abuse. I will work with my colleagues and the new administration to right the wrongs undertaken in the issuance of these midnight regulations.”

"Once again the Bush Administration has shown that it is no friend to working people," noted U.S. Rep. Zoe Lofgren (D-CA). "In this last minute maneuver the administration has slashed protections that agricultural guest workers have secured. These changes not only hurt foreign agricultural workers, but also undercut standards for American workers, as the new rules lower pay and working conditions for temporary foreign agricultural employees. My colleagues and I will work with the incoming Obama administration to ensure that these ill-conceived changes are undone."

“Given today’s economic crisis,” U.S. Rep. Howard L. Berman (D-CA) said, “it is stunning that on their way out the door, the Bush Administration would take this eleventh-hour swipe at farm workers who are already paid some of the lowest wages in the United States.”

The rule affects workers in the U.S. Department of Labor’s H-2A guest worker program, which has become rife with fraud and abuse under the Bush administration’s watch. Under this program, employers are allowed to hire foreign workers only if they can’t first find American workers, and only if the wages and working conditions they provide don’t have a negative impact on U.S. workers.

Among other things, yesterday’s rule weakens these requirements, making it much easier for employers to simply hire foreign workers over available American workers.  These changes would also, for the first time ever, allow employers to pay American workers lower wages and benefits than H-2A workers for performing the same job.

The regulation came just one day after Congress approved legislation that creates new criminal penalties for foreign labor recruiters and U.S. employers that lure foreign guest workers to this country under materially false pretenses. Miller, Conyers, Lofgren and Berman championed these provisions, which were passed as part of a larger bipartisan measure to combat human trafficking. For more information on the bill, click here.

The Bush administration is also expected to issue new regulations next week that would lead to further exploitation of non-agricultural foreign guest-workers in the Department of Labor’s H-2B program and would fuel greater unemployment among U.S. workers in construction and service industries.