U.S. Department of Labor Fiscal Year 2005 Budget

Department of Labor
Budget Overview
Fiscal Year 2005

Introduction

The 21^st century workplace demands a competitive workforce. And in Fiscal Year (FY) 2005, the Department of Labor (DOL) is poised to deliver. With enhanced Employment and Training initiatives and strengthened worker protection efforts, DOL will continue to play a lead role in accomplishing the President’s domestic agenda.

FY 2005 Budget

As referenced in the above chart, the total request for the Department in FY 2005 is $57.3 billion in budget authority and 17,419 full-time equivalents (FTE). The request for the Department’s discretionary programs is $11.9 billion.

As demonstrated in these highlights and in the agency sections to follow, the Department’s FY 2005 budget builds upon the Department’s three strategic goals of A Prepared Workforce; A Secure Workforce; and Quality Workplaces. In this FY 2005 budget, DOL addresses a newly-developed fourth Departmental strategic goal: A Competitive Workforce. This fourth goal focuses on equipping workers to adapt to rapidly-evolving challenges while promoting job flexibility and minimizing regulatory burden.

The Department’s FY 2005 budget was developed around four major themes designed to make a difference in the lives of America’s working families: Innovative Programs to Help Workers Find Jobs; Protecting Workers with Stronger Enforcement and Accountability; Protecting America’s Immigrant Workforce; and Building a 21^st Century Department of Labor.

Innovative Programs to Help Workers Find Jobs

Community Colleges Initiative

The FY 2005 request for the Department’s Employment and Training Administration (ETA) is $9.4 billion and 1,253 FTE. A cornerstone of the Department’s goal of A Competitive Workforce is the President’s new Community College initiative. Every American worker who wants a job should be able to find one – and this budget provides $250 million for a new, employer-focused competitive grant program that will leverage the expertise of the Nation’s many community and technical colleges so workers can be trained for new jobs in high-growth industries. This will help workers to retool, refine, and broaden their skills.

Workforce Training Reform

The Department will also strive to enact workforce training reforms which would combine training programs into a single stream – and better serve both workers and job seekers. In doing so, we will focus on unused and untapped training resources and apply them to areas of greatest need, with a priority on funding those programs and projects that can show real, measurable results for workers.

Personal Reemployment Accounts

The President’s FY 2005 budget for ETA includes $50 million for Personal Reemployment Accounts. This pilot effort will provide job seekers more choice and control over their return-to-work efforts and will reward them when they succeed. Under the plan, States would offer up to $3,000 to eligible unemployed workers – resources that can be applied to whatever training and services best benefit each individual. This program would allow the recipients to keep the balance of the account as a cash bonus if they find a job within 13 weeks.

Prisoner Reentry Initiative

Beginning in FY 2005, the Department of Labor teams with the Departments of Justice and Housing and Urban Development and faith-based and community organizations on a four-year, $300 million program to help individuals leaving prison make a successful transition to community life and long-term employment. In FY 2005, DOL requests $35 million for its new Prisoner Reentry initiative, supplemented by existing resources in DOL’s budget for prisoner reentry activities. This initiative will tap the unique contributions and capacities of America’s faith-based and community organizations.

Protecting Workers with Stronger Enforcement and Accountability

With its FY 2005 budget, the Department is proposing a $23 million increase in worker protection and retirement security. These increases will better protect workers’ retirement savings; ensure worker safety and health; protect union member rights; and reform existing civil monetary penalties.

The budget includes $132.3 million and 960 FTE for the Employee Benefits Security Administration (EBSA) – an $8.3 million, 30 FTE increase. EBSA protects the integrity of pensions, health plans, and other employee benefits for more than 150 million people. To complement this increase, the Administration will continue to press for enactment of the President’s retirement security plan, which would give workers more and better information on their retirement savings; increase access to investment advice; and strengthen workers’ abilities to manage their future by providing more freedom to diversify investments.

In the 2005 budget, the Department is also building upon a solid record of achievement in labor law enforcement. This includes a $10.8 million increase in the Department’s Occupational and Mine Safety and Health efforts. Detailed information is included in the OSHA and MSHA sections that follow.

An additional worker protection aspect of the Department’s 2005 budget is a $5.8 million increase in funding to expand the Wage and Hour Divisions targeted enforcement initiatives to other low-wage industries that typically employ the most vulnerable workers. A $4.9 million increase is provided for the Department’s Office of Labor-Management Standards (OLMS). This increase will restore OLMS staffing to better protect union members’ rights and financial interests. It will also incorporate electronic filing to reduce administrative burdens on unions. An additional $4.3 million increase for the Office of Inspector General will better prevent organized crime in union matters, safeguard union members’ funds, and fight labor racketeering.

The President’s Budget also provides DOL with $5 million to help working families by promoting innovative, flexible work arrangements to help families balance the needs of work and home through telework and new technologies.

In FY 2005, DOL will also seek to increase civil monetary penalties. While the vast majority of employers want to provide safe and fair workplaces, the DOL will target those who put workers at risk with tougher sanctions. Reforming the Department’s civil monetary penalties will strengthen our ongoing enforcement and compliance assistance efforts.

Protecting America’s Immigrant Workforce

In FY 2005, the Department will continue to work to better serve America’s immigrant workers. We will accomplish this through better and faster labor certification – and we will work to create a better way of linking willing employers with willing workers.

We will also intensify the Department’s Compliance Assistance and Enforcement efforts directed at protecting immigrant workers. And in OSHA and MSHA, we will further expand our outreach to immigrant workers to better ensure their safety and protection in the Nation’s workplaces and mines.

Building a 21^st Century Department of Labor

And the President’s FY 2005 budget will allow us to continue to modernize the management systems of the U.S. Department of Labor.

The budget provides $25 million for acquiring a new core Financial Management System to better serve our internal and external clients. We will also build upon our proven successes of the Department’s Information Technology cross-cut – for which we will apply $33.6 million. We are also requesting $10.1 million for the Department’s Management cross-cut initiatives. Both of these initiatives strengthen the Department’s ability to serve its customers and allow the Department to operate more efficiently by reducing duplicative agency requests and implementing Department-wide management strategies.

President’s Management Agenda and Department-wide Management Initiatives

As of December 31, 2003, the Department of Labor continues to make significant progress in its ongoing implementation of the President’s Management Agenda. The President's Management Agenda, announced in the summer of 2001, is an aggressive strategy for improving the management of the Federal government by focusing on five areas of management across the government where the most progress can be made. The five government-wide areas are: Strategic Management of Human Capital; Competitive Sourcing; Improved Financial Performance; Expanded Electronic Government; and Budget and Performance Integration. In addition, the Department is one of a few agencies responsible for implementing a sixth Agenda component: Faith-Based and Community Initiatives.

Program Assessment Rating Tool

At the core of the Budget and Performance Integration component of the President’s Management Agenda is the need to improve government programs by focusing on results. As such, the Program Assessment Rating Tool (PART) has been used to assess approximately 40 percent of Federal programs. As part of this process, DOL programs that were first reviewed in calendar year 2003 included the Mine Safety and Health Administration; the Employment and Training Administration’s Unemployment Insurance and Migrant and Seasonal Farmworkers programs; and the Employment Standards Administration’s Wage Determination and Black Lung programs. Each program was rated on overall effectiveness. Highlights and results of the PART reviews can be found in the agency-specific sections of this document.

Employment and Training Administration

1/ TES includes advance appropriations of $2.448 billion in FY 2004 appropriated in FY 2003 for obligation in FY 2004, and $2.463 billion in FY 2005 appropriated in FY 2004 for obligation in FY 2005. The FY 2005 amount reflects a rescission of $100 million in unobligated balances of funding from fees for H-1B Technical Skill Training Grants. The fee authorization expired September 30, 2003. In addition, the FY 2004 level is made comparable to FY 2005 for Consolidated Adult and Dislocated Worker State Grants.
2/ Non-add item, see Black Lung Disability Trust Fund (BLDTF).
3/ Mandatory funding, non-add, included in Unemployment Trust Fund benefits.

The 2005 budget reflects the President’s goal of assuring that every worker who is looking for a job can find one.

This budget provides $50.7 billion for the Department of Labor (DOL) Employment and Training Administration, which is $5.4 below 2004 largely due to the expectation of a decreased need for unemployment benefits.

To accomplish the President’s goal, the Administration proposes a five-pronged strategy:

Promoting Full Potential: Community Colleges Train Workers for High-Growth Jobs

$250 million for a new, employer-focused State grant program for training in community and technical colleges.

Jobs, Not Red Tape

$50 million in State grants to provide up to $3,000 for Personal Reemployment Accounts for unemployment insurance recipients to choose their own training.

Focusing on Success: Reform Of Federal Job Training And Employment Programs

Using the Workforce Investment Act reauthorization as a vehicle, the Administration will continue to propose training reforms including eliminating redundancies, strengthening resource allocation, improving accountability, enhancing the role of employers, and increasing State flexibility.

Better, Faster Labor Certification

This budget addresses employers’ urgent and specialized needs for employees when domestic workers are not available, through improvements to the Foreign Labor Certification program. The proposal will reduce the existing backlog of petitions, prevent future backlogs, and strengthen anti-fraud protections.

Strengthening The Unemployment Insurance Safety Net

Building on reforms in this area proposed by the Administration in the past to fortify the Unemployment Insurance System and reduce erroneous UI payments, the budget proposes a $20 million increase in beneficiary eligibility reviews, which is projected to save up to $400 million; and legislation to reduce income tax refunds to individuals receiving wasteful and fraudulent unemployment benefit overpayments, saving an estimated $281 million in the first year.

Employment and Training Programs

¹ The FY 2004 amount reflects a rescission of $100 million in unobligated balances of funding from fees for H-1B Technical Skill Training Grants. The fee authorization expired September 30, 2003.

The 2005 budget request for Employment and Training Programs requests $6.544 billion, slightly more than 2004.

Youth Programs

A total of $2.558 billion is requested for employment and training programs for Youth. This investment, which will help young people make a successful transition to the world of work and family responsibility, is funded at approximately the 2004 level. The proposal reflects a reformed youth program that will be authorized by an amendment to the Workforce Investment Act (WIA).

The reformed Youth Grants program will be funded at $1.001 billion, slightly more than the level at which Youth Activities is funded in 2004. The new program, part of the WIA reauthorization proposal, will include Targeted Formula Grants and National Challenge Grants. The proposal will minimize overlap between the Department of Labor (DOL) and the Department of Education by targeting all of DOL’s formula resources to out-of-school youth programs and national grant resources to non-school and out-of-school youth programs that have proven effective. DOL’s youth investments will focus on providing young people with a strong, core academic foundation in conjunction with appropriate post-secondary skills certifications or degrees.

The budget authority requested, together with unexpended carryover, is expected to support 337,000 participants in 2005. For 2005, it is expected that 65 percent of youth not in post-secondary education, employment, or the military at registration will enter employment or enroll in post-secondary education, the military, or advanced training/occupational skills training, in the first quarter after exit; 40 percent of youth enrolled in education will attain a diploma, GED, or certificate by the end of the third quarter after exit; 40 percent of youth deficient in basic skills will achieve a gain in either literacy or numeracy skills; and the cost per participant in the program will be $2,966.

The effective Job Corps program will provide intensive skill training, academic and social education, and support to an estimated 68,400 participants at 122 centers in 2005. The budget request is $1.557 billion. This is a net increase of $20.2 million above 2004. For 2005, 85 percent of Job Corps graduates will enter employment or enroll in post-secondary education, the military, or advanced training/occupational skills training in the first quarter after exit from the program; 61 percent of students will attain a GED, high school diploma, or certificate by the end of the third quarter after exit from the program; 40 percent of students will achieve literacy or numeracy gains of one Adult Basic Education level, equivalent to two grade levels; and the average cost per participant will be no higher than $22,766.

Consolidated Adult Programs

A total of $3.279 billion is requested for employment and training programs for Adults, an increase of $149.3 million above 2004. The net increase is largely the result of several new program proposals offered in conjunction with the new Consolidated Adult and Dislocated Worker State Grant, to be authorized by an amended Workforce Investment Act.

The new Consolidated Adult and Dislocated Worker State Grants program combines WIA Adult and Dislocated Worker programs with Employment Service grants. The new program includes Formula Grants and a National Reserve, and will give States and the Secretary of Labor the ability to target resources where needed, facilitate coordination, and eliminate duplication in the provision of services to adults. The budget authority requested, together with unexpended carryover, is expected to support 18,345,800 participants.

For 2005, it is expected that 70 percent of individuals unemployed at the time of registration in the program will be employed in the first quarter after program exit; that 80 percent of those employed in the first quarter after program exit will still be employed in both the second and third quarters after program exit; and the cost per participant will be $184.

In 2005, the budget includes $250 million for a new Community College Initiative. Because of their close connection to local labor markets, community colleges are well positioned to prepared workers for high-demand occupations. New employer-focused grants for training will be awarded to States that can certify that the training will be focused on industries with demonstrated labor shortages, such as health care and high-tech manufacturing. The request is expected to result in training and subsequent employment or an opportunity for enhanced employment for up to 100,000 individuals.

The budget also includes $50 million for Personal Reemployment Accounts. The proposal would award grants to States to provide eligible unemployment insurance recipients with up to $3,000 to choose whatever training and supportive services they believe will help them get back to work. It is anticipated that approximately 15,000 more dislocated workers will be served as a result of the request.

Other Employment and Training

The 2005 budget requests $711.8 million for Other Employment and Training Programs, a decrease of $165.5 million below FY 2004. The net change is largely due to the proposal to rescind unused H-1B training funds, elimination of earmarks and the Migrant and Seasonal Farmworker program.

The 2005 budget includes $99.4 million for new methods of providing employment and related information through One Stop Career Centers and its America’s Labor Market Information System (ALMIS), approximately the same level as 2004. The program will serve as a key component in the President’s guest worker proposal that provides for a new temporary worker program and significantly reforms the current immigration system. Building upon an improved America’s Job Bank, the Department will develop a quick and simple system for employers to search for American workers and otherwise facilitate the implementation of the new program.

The budget includes $35 million for DOL’s portion of a new four year Prisoner Reentry Initiative, administered jointly with the Departments of Justice and Housing and Urban Development. This funding will supplement resources available under the existing Responsible Reintegration of Young Offenders program. With a goal of reducing recidivism among ex-offenders, the Prisoner Reentry Initiative will call upon faith-based and community organizations, to help individuals exiting prison make a successful transition to community life and long-term employment through mentorship, job training, and transitional housing assistance. It is expected that 17,000 will participate.

In 2005, $46 million is requested for grants to States for foreign labor certification activity, an increase of $5.5 million, to address the backlog in the program. The budget proposes legislation to finance $5.5 million of this amount through a new fee for applications under the permanent labor certification program. In 2005, it is expected that the program will reduce the average processing time for new applications filed by employers for the permanent program under the new Permanent Electronic Review Management system so that 90 percent of applications are processed within six months of their filing date; process H-1B applications within seven days of the filing date; and process H-2B applications within 60 days of receipt.

In 2005, the budget includes $19.9 million for Work Incentive Grants, about the same level provided in 2004, to enhance the prospects of employment for individuals with disabilities. This effort is undertaken in conjunction with the Department’s Office of Disability Employment Policy to increase the participation of individuals with disabilities in DOL programs and services. This program provides competitive grants to partnerships or consortia in States to provide incentives for coordinated service delivery through, and linkages across, the One Stop Career Center system established under Title I of WIA of 1998. In 2005, for the workforce investment areas served by the program, 8 percent of participants served will be persons with disabilities; and the entered employment rate for participants with disabilities that exit the WIA Consolidated Adult and Dislocated Worker State Grants program and the Youth Grants program will be 70 percent.

WIA National Programs are funded at $95 million in 2005, a decrease of $111.2 million below 2004. These programs provide employment and training assistance to Native Americans; as well as pilots, demonstrations, and research; evaluation; and technical assistance in support of the employment and training system. A $100 million rescission of unobligated balances remaining in the H-1B Technical Skill Training Grants program is proposed for 2005. The authorization of the fee that financed these grants expired September 30, 2003. In addition, WIA earmarks are eliminated.

In 2005 $440.2 million is requested for the Community Service Employment for Older Americans program, about the same level as the 2004 request, serving a participant level of 92,300. In 2005, it is expected that 40 percent of participants leaving the program will be employed in the first quarter after program exit; that 45 percent of those employed in the first quarter after program exit will be employed in both the second and third quarters after program exit; that 37 percent of participants will be placed in unsubsidized employment program wide; and the cost per participant will be approximately $4,769.

Employment and Training Participant Data

¹The 2005 Budget and WIA reauthorization proposal consolidate grants to states for adult services into a single grant program.

Selected ETA Performance Goals and Indicators

• 65 percent of youth not in post-secondary education, employment, or the military at registration in the Youth Grants program will enter employment or enroll in post-secondary education, the military, or advanced training/occupational skills training in the first quarter after exit.
• 85 percent of Job Corps graduates will enter employment or enroll in post-secondary education, the military, or advanced training/occupational skills training in the first quarter after exit.
• 70 percent of individuals unemployed at the time of registration in the Consolidated Adult and Dislocated State Grant program will be employed in the first quarter after program exit.
• 40 percent of Community Service Employment for Older Americans program participants leaving the program will be employed in the first quarter after program exit.
• 70 percent of Work Incentive Grants program participants that exit the WIA Consolidated Adult and Dislocated Worker State Grants program and the Youth Grants program will enter employment.

Income Maintenance

1 FY 2004 includes $68.6 for contingency funding, resulting from projected workload increase (AWIU trigger).
2 Non-add, see Black Lung Disability Trust Fund (BLDTF) section.

The FY 2005 request for Income Maintenance includes $42.9 billion in spending from the Unemployment Trust Fund. Of the FY 2005 Income Maintenance total, $2.7 billion is the discretionary amount requested for State administration of the Unemployment Insurance (UI) Program. In addition, approximately $1.1 billion is being requested for the Federal Unemployment Benefits and Allowances (FUBA) account. The FY 2005 request for Advances to the Unemployment Trust Fund (UTF) and Other Funds (Advances) account is $517.0 million, which is for the Black Lung Disability Trust Fund.

The balance of Income Maintenance ($40.2 billion) includes the State unemployment benefits payments to claimants, and benefits paid to former Federal employees and ex-service members.

The Administration has a three-pronged proposal to strengthen the financial integrity of the UI system. This includes the following: 1) require states to amend their UI tax laws to deter schemes to avoid UI taxes through such means as transfers from businesses to shell companies; 2) reduce UI benefit overpayments by providing state UI agencies with access to information for the quick detection of individuals who illegally collect unemployment benefits after returning to work and; 3) improve the collection of past overpayments through offsets of individuals’ federal income tax refunds.

Unemployment Insurance Program

Under the State Unemployment Insurance and Employment Service Operations (SUIESO) account, discretionary funds are provided to the States for the administration of the Unemployment Insurance (UI) and Employment Service (ES) programs. The ES program is discussed in the Employment and Training Programs section of this publication. For UI, the FY 2005 budget includes a request for $2.7 billion, which is $24.0 million over the FY 2004 enacted level, including projected contingency funding. This request funds projected workloads and includes a program increase of $20 million to increase the number of eligibility reviews conducted at One-Stop Career Centers.

The FY 2005 funding level requested for the UI program will provide for approximately 51,860 State staff years of service. State staff will handle 7.2 million employer tax accounts, 22.3 million initial unemployment claims, a total of 170.0 million weeks claimed and 1.5 million appeals. In addition, to finance any workload increase over an AWIU rate of 3.327 million, $28.6 million shall be available for every 100,000 increase over the AWIU, with a pro rata amount for any increase less than 100,000. The unemployment insurance request also includes $10.5 million for National activities, which are interstate or multi-state in nature. A program increase of $0.6 million for processing an increased amount of separation documents and UI claims for former military service members is included.

Federal Unemployment Benefits and Allowances (FUBA)

This appropriation covers payments of weekly trade readjustment allowances, training, job search and relocation costs of workers adversely affected by increased imports or shifts in production to other countries.

For FY 2005, $1.1 billion is requested for FUBA. In August 2002, the Congress passed, and President Bush signed, the Trade Adjustment Assistance Reform Act of 2002. This Act amended the Trade Act of 1974 to consolidate the previous Trade Adjustment Assistance (TAA) and NAFTA Transitional Adjustment Assistance (NAFTA-TAA) programs into a single, enhanced TAA program with expanded eligibility, services, and benefits. The Act provides for a program of Alternative Trade Adjustment Assistance for older workers. Additionally, the law provides for continuing an increased emphasis on the integration of the TAA program into the One-Stop Career Center system.

Advances to the Unemployment Trust Fund and Other Funds

This appropriation provides general fund advances to several trust and general fund accounts. In FY 2005 the requested amount includes $517.0 million which will provide for advances to the Black Lung Disability Trust Fund (BLDTF) account administered by the Employment Standards Administration, and which is repayable with interest to the General Fund in Treasury.

Unemployment Trust Fund Benefits

The Unemployment Trust Fund includes amounts for both the administration of Federal and State unemployment compensation, and for unemployment compensation benefits which provide income support to those temporarily out of work while they search for employment. This budget proposal is based on estimates that the insured unemployment rate for FY 2005 will be 2.5 percent. This translates to an average of approximately 3 million beneficiaries per week receiving unemployment assistance under Federal and State programs in FY 2005. The average weekly benefit amount is estimated at $263 in FY 2005, while the average number of weeks of benefits per recipient is expected to be 15.3 weeks. The total amount paid for unemployment compensation benefits from the Trust Fund is estimated at $40.2 billion.

Selected ETA Performance Goal and Indicators for
Income Maintenance

• Make timely and accurate benefit payments to unemployed workers, facilitate the reemployment of unemployment insurance claimants, and set up unemployment tax accounts promptly for new employers.
  • 89.9% of all intrastate first payments will be made within 14 to 21 days.
  • 82.4% of determinations of tax liability of new employers will be made within 90 days after the first quarter of tax liability.

ETA Program Administration

¹ FY 2004 includes 36 FTE funded through H-1B fees and 3 reimbursable FTE and FY 2005 includes 3 reimbursable FTE.

ETA’s Program Administration account provides for Federal administration of its employment and training programs. These programs include those authorized by the following legislation: Workforce Investment Act (WIA) of 1998; the Older Americans Act of 1965, as amended; the Trade Act of 1974, as amended; the National Apprenticeship Act of 1937; Title III of the Social Security Act of 1935, as amended; the Wagner-Peyser Act of 1933, as amended; and Title 4 of the Social Security Act, as amended (Welfare-to-Work).

The FY 2005 budget provides 1,253 full-time equivalent (FTE) staff and $181.0 million for Program Administration, an $8.7 million increase. This number includes 1,250 FTE financed from direct appropriations and 3 FTE from reimbursements. The Budget proposes legislation to finance $17 million and 143 FTE through a new fee for applications under the Permanent Labor Certification program.

The FY 2005 includes increases of $5.7 million and 59 FTE to continue the operation of the permanent Foreign Labor Certification processing centers, a regional reorganization costing $1 million and inflationary increases totaling $4.1 million. In addition, 36 staff funded in FY 2004 through H1B fees will be funded through direct appropriation in FY 2005. Partially offsetting these increases is a $2 million, 23 FTE, reduction in the Welfare-to-Work activity, due to decreased workloads resulting from the continuing phase out of the program. It is anticipated that all necessary work on the program will be concluded by the end of FY 2005.

Adult Services

The Adult Services activity provides staff for leadership, policy direction, and administration for a decentralized system of grants to States and localities for job training and employment assistance for low income and dislocated workers; training and employment services to those with significant barriers to employment including migrant and seasonal farmworkers, older workers, individuals with disabilities, homeless individuals and individuals with limited English proficiency: the settlement of trade adjustment assistance petitions: and activities related to program administration.

Youth Services

Youth Services provides staff for:leadership, policy direction, and administration for a decentralized system of grants to States for job training and employment assistance for youth programs, including the Job Corps and related program administration activities.

Workforce Security

Under this activity the staff provides leadership and policy direction for the administration of the comprehensive nationwide public employment service system; unemployment insurance programs in each State; a One Stop Center system, including a comprehensive system of collecting, analyzing, and disseminating labor market information; and related program administration activities. Increased funding is requested for foreign labor certification programs, to continue existing operations, a portion of which is funded through fees, and for additional funding to reduce the permanent program applications backlog.

Apprenticeship Training, Employer and Labor Services

Funding for this activity finances staff who promote and provide leadership and policy direction for the administration of apprenticeship as a method of skill acquisition through a Federal-State apprenticeship structure. Employer and labor services facilitate the understanding and responsiveness of workforce development systems to the training needs of employers and the interest of labor organizations in training programs.

Executive Direction

The Executive Direction staff promote and provide leadership and policy direction for ETA training and employment service programs and activities and provides for related program operations support. Support activities include research, evaluations, demonstrations, and performance standards.

Welfare to Work

Funding for this activity finances staff who administer WTW grants to states and local communities to help the hardest-to-employ recipients of Temporary Assistance for Needy Families (TANF). Decreased funding is proposed as staff is reduced in conjunction with the phase out of this program.

Employee Benefits Security Administration

The Employee Benefits Security Administration (EBSA) is responsible for the administration and enforcement of Title I of the Employee Retirement Income Security Act of 1974 (ERISA) and the Federal Employees' Retirement System Act of 1986 (FERSA). The primary mission of EBSA is to protect the pension, health and other benefits of participants in private sector employee benefit plans. EBSA directly affects the livelihood of over 150 million people who participate in ERISA-covered plans, and protects the U.S. economy’s single largest source of capital for investment -- pension funds. EBSA promotes a secure retirement and greater access to health benefits for the nation’s workforce through a combination of legislative changes, aggressive enforcement and compliance assistance. In FY 2005, the total request for this program is $132.3 million and 960 FTE and provides additional enforcement resources to safeguard workers’ retirement savings, health coverage, and other employee benefits.

Enforcement and Participant Assistance

This activity conducts criminal and civil investigations, performs reviews to ensure compliance with the fiduciary provisions of ERISA and FERSA, and assures compliance with applicable reporting requirements, as well as accounting, auditing and actuarial standards. The 2005 estimates include an initiative to establish additional groups of investigators in the agency’s regions to conduct civil and criminal investigations and to establish a criminal case coordinator position in each region who, working with the national criminal coordinator, will provide expert advice on regional criminal enforcement matters. In FY 2005, the budget request for this activity is $110.3 million and 830 FTE. All of EBSA was evaluated with the Program Assessment Rating Tool (PART). As a result of issues derived from PART findings, EBSA is implementing initiatives in response to PART recommendations.

Policy and Compliance Assistance

This activity conducts policy, research and legislative analyses on pension, health and other employee benefit issues. It provides compliance assistance, especially to employers and plan officials, writes regulations and interpretations, and issues individual and class exemptions from regulations. In FY 2005, the budget request for this activity totals $17.5 million and 108 FTE.

Executive Leadership, Program Oversight and Administration

This activity provides leadership, policy direction, strategic planning, and administrative guidance in the management of employee benefits security programs. It provides analytical and administrative support for financial and human capital management and other administrative functions related to coordination and implementation of government-wide management initiatives. This activity also manages the technical program training for enforcement, policy, legislative and regulatory functions. In FY 2005, the budget request for this activity totals $4.5 million and 22 FTE.

Selected EBSA Performance Goal and Indicators

• Achieve greater than 50% ratio of closed civil cases with corrected violations to civil closed cases.
• Achieve greater than 25% ratio of criminal cases referred for prosecution to total criminal cases.
• Achieve a Customer Satisfaction Index of 65, or comparable measurement for Participants and Beneficiaries who have contacted EBSA for Assistance.

Pension Benefit Guaranty Corporation

The Pension Benefit Guaranty Corporation (PBGC) is a wholly-owned Government Corporation, guided by a board of directors chaired by the Secretary of Labor, which guarantees the payments of pension plan benefits to participants in the event that covered plans fail or go out of existence. PBGC protects the pension benefits of about 44 million workers and retirees who earned traditional pensions.

Single Employer Benefit Payments

Monthly pension payments are made to plan participants and other beneficiaries of plans which have been trusteed by PBGC. The FY 2005 request totals $3.3 billion for this activity.

Multi-Employer Financial Assistance

Financial assistance provides for repayable loans to insolvent multi-employer sponsored plans to enable these plans to continue paying benefits if a series of prescribed steps is taken to place the plan on a sound financial basis. The FY 2005 request totals $39 million for this activity.

Pension Insurance

Pension Insurance includes pension plan premium collections, premium investments, technical assistance, and new pension plan promotion activities. The FY 2005 request totals $12.2 million and 44 FTE for this activity.

Pension Plan Terminations

Pension Plan Terminations include all activities related to plan termination and trusteeship; plan asset management, investment and accounting; and administration services. The FY 2005 request totals $169.7 million and 466 FTE for this activity.

Operational Support

Includes the administrative, information technology infrastructure, and other shared program support for both PBGC’s insurance and plan termination activities. The FY 2005 request totals $84.4 million and 291 FTE for this activity.

Selected PBGC Performance Goals and Indicators

• Achieve a customer satisfaction index for practitioner callers: 72 in FY 2005.
  • The level of practitioner satisfaction regarding inquiries handled.
• Achieve a customer satisfaction index for participant callers: 78 in FY 2005.
  • The level of practitioner satisfaction regarding inquiries handled.

Employment Standards Administration

In total, funds for the Employment Standards Administration (ESA) in FY 2005 will increase by $73.4 million or about 1.8 percent compared with FY 2004. New funding ($6.5 million) will finance initiatives to improve Wage and Hour enforcement and compliance assistance, ESA-wide data systems support, and enhance enforcement and outreach assistance under the Labor-Management Reporting and Disclosure Act. Funding of $2.7 million is continued for electronic filing and Internet posting of union financial statements, and ongoing replacement of outdated computer systems. Funding for the Energy Employees’ Occupational Illness Compensation program is reduced by $10.9 million. Dose reconstruction activity has been slower than anticipated, leaving prior year balances available for obligation in FY 2005. The budget re-proposes legislative changes to improve FECA, including changes that allow DOL to adopt best State practices; improve program fairness; and speed claims processing. These proposals would result in 10-year cost savings to the Government of more than $573 million. ESA’s request also includes a proposal to restructure the mounting Black Lung Disability Trust Fund debt to ensure the long-term solvency of the Trust Fund.

The budget also includes a proposal to increase the civil money penalties (CMPs) for violations of laws administered by ESA.

For example, the CMPs for violations of Wage Hour laws causing death or serious injuries to youths in the workplace would increase from $11,000 to $50,000, and $100,000 for repeat and willful violations. The budget also supports proposals to authorize OLMS to impose CMPs on unions and others that fail to file their required financial reports on a timely basis. CMPs for OLMS is intended to improve compliance, not penalize inadvertent lapses in filing reports.

ESA Staffing

ESA administers and enforces a variety of laws designed to enhance the welfare and protect the rights of American workers. The budget request to conduct these programs in FY 2005 is $527.6 million and 4,306 FTE, of which $441.9 million and 3,856 FTE is in the Salaries and Expenses account, $39.7 million and 133 FTE is for the Fair Share portion of the Special Benefits account, 300 FTE and $40.8 million is for the Energy Employees’ Occupational Illness Compensation Act program, and $5.2 million and 17 FTE is for Special Benefits for the Disabled Coal Miners program recently transferred from the Social Security Administration. In total, this is an increase of $6.5 million and 51 FTE over FY 2004. ESA’s budget request includes legislative proposals to promote benefit equity and to adopt best state practices. Specifically, the budget proposes to amend FECA to move the waiting period before the continuation-of-pay period, and conform the benefits of future retirement-age beneficiaries to a benefit level typical to what they would receive under Federal retirement programs, and make a number of other changes to improve and update the FECA program.

Wage and Hour Standards

The FY 2005 budget request for the Wage and Hour Division is $165.9 million and 1,458 FTE. The Wage and Hour Division is responsible for the administration and enforcement of a wide range of laws which collectively cover virtually all private and state and local government employment. Wage and Hour Division activities include obtaining compliance with the minimum wage, overtime, child labor, and other employment standards under the Fair Labor Standards Act, Migrant and Seasonal Agricultural Worker Protection Act, certain provisions of the Immigration and Nationality Act, Employee Polygraph Protection Act, the Immigration Nursing Relief Act, the wage garnishment provisions of the Consumer Credit Protection Act, and the Family and Medical Leave Act. Prevailing wages are determined and employment standards enforced under various government contract wage standards. Wage and Hour will continue to use its multi-pronged approach of compliance assistance, partnerships, and enforcement to further its goals to promote high quality workplaces, a secure workforce and increase customer satisfaction. The budget includes $1.1 million and 12 FTE for low-wage industry enforcement to protect the most vulnerable workers, $0.3 million and 2 FTE for compliance assistance to reaching out to small business employers and underserved communities to encourage voluntary compliance, and $0.4 million and 2 FTE for regulatory responsibilities to modernize workplace rules. The budget also includes a proposal to increase the civil Wage Hour Civil Money Penalties (CMPs). For example, the CMPs for violations causing death or serious injuries to youths in the workplace would increase from $11,000 to $50,000, and $100,000 for repeat and willful violations.

Contractor EEO Enforcement

The FY 2005 budget request for the Office of Federal Contract Compliance Programs (OFCCP) is $82.1 million and 749 FTE. OFCCP is responsible for ensuring equal employment opportunity and non-discrimination in employment based on race, sex, religion, color, national origin, disability or veteran status for businesses contracting with the Federal government. These requirements are contained in Executive Order 11246, as amended; Section 503 of the Rehabilitation Act of 1973, as amended; 38 USC 4212, and Section 402 of the Vietnam Era Veterans' Readjustment Assistance Act of 1974, as amended. OFCCP shares authority with the Immigration and Naturalization Service (INS) of the U.S. Department of Justice regarding the Immigration Reform and Control Act of 1986 and the ESA Wage and Hour Division regarding the Family and Medical Leave Act of 1993. OFCCP also shares authority with the Equal Employment Opportunity Commission (EEOC) in the enforcement of Title I of the Americans with Disabilities Act of 1990. The budget request includes $0.4 million to startup the redesign of the program’s database system.

Federal Programs for Workers' Compensation

The FY 2005 budget request for the Office of Workers' Compensation Programs (OWCP) is $133.9 million and 1,160 FTE for the Federal Employees’ Compensation Act (FECA), Longshore and Harbor Workers’ Compensation, and Black Lung Benefits programs.

Other funding for OWCP includes $39.7 million and 133 FTE in the Special Benefits account using “Fair Share” funds. These funds are used for the operation and enhancement of OWCP’s automated data processing, as well as for periodic roll review activities. OWCP also requests $40.8 million and 300 FTE to administer the Energy Employees’ Occupational Illness Compensation Program Act (EEOICPA).

OWCP administers disability compensation programs, which mitigate hardship imposed by work-related injuries or disease, through the provision of wage replacement and cash benefits, medical treatment, vocational rehabilitation, and other benefits to certain workers (or their dependents or survivors). The FECA program provides income and medical benefits to civilian employees of the Federal government injured at work and to certain other designated groups. The Longshore and Harbor Workers' Compensation Act program provides similar protection to private sector workers in certain maritime and related employment. The Black Lung Benefits program provides wage replacement and medical benefits to the Nation's coal miners suffering from pneumoconiosis and cash benefits to their eligible survivors.

EEOICPA and Executive Order 13179 led to the establishment of a fourth OWCP program in FY 2001 to adjudicate claims and make awards of compensation and medical benefits to employees or survivors of employees of the Department of Energy (DOE) and its contractors who suffer from a radiation-related cancer, beryllium-related disease, or chronic silicosis as a result of their work in producing or testing nuclear weapons.

The President signed into law the Black Lung Consolidation of Administrative Responsibilities Act on November 2, 2002. This law permanently transferred the responsibility of the Social Security Administration’s (SSA) program to administer Black Lung Part B claims to the Department of Labor. These claims were already being handled by ESA through a reimbursement agreement with SSA. The law consolidates all Black Lung claims handled by the Federal government in the Department of Labor, improving administrative efficiency. This change was implemented at the beginning of FY 2004.

This budget includes a legislative proposal to restructure the debt of the Black Lung Disability Trust Fund (BLDTF), a debt that is estimated to exceed $9 billion by FY 2005 absent legislative action. This proposal would (1) restructure the outstanding BLDTF debt, (2) extend at current rates BLDTF excise taxes set to decline in January 2014, and (3) provide a $3.3 billion appropriation to compensate the General Fund for forgone interest.

Office of Labor-Management Standards

The FY 2005 budget request for the Office of Labor-Management Standards (OLMS) is $43.5 million and 382 FTE. OLMS enforces provisions of Federal law that require reports from unions and others and establishes certain standards for union democracy and financial integrity. OLMS conducts criminal investigations (primarily union funds embezzlement) and investigative audits of unions; conducts civil investigations (primarily concerning union officer elections); supervises remedial union officer elections, as required; administers statutory reporting requirements; and provides for public disclosure of filed reports. The budget request includes an additional $3.9 million and 35 FTE for enhanced enforcement and outreach assistance activities to ensure compliance with the Labor-Management Reporting and Disclosure Act. OLMS, through its Division of Statutory Programs, also certifies protective arrangements for transit employees when Federal transit grant funds are used to acquire, improve, or operate a transit system. The budget also includes a proposal to authorize OLMS to impose Civil Money Penalties on unions and others that fail to file their required financial reports on a timely basis. The intent is to improve compliance, not penalize inadvertent lapses in filing reports.

Program Direction and Support

The FY 2005 budget request for Program Direction and Support is $16.5 million and 107 FTE. This activity supports ESA's operating programs and ensures effective management by providing planning, personnel management, financial management, Federal/state liaison programs, management systems implementation, and data processing. The budget request includes $0.5 million for support ESA’s information systems.

Selected ESA Performance Goals and Indicators

• Ensure continual customer satisfaction by maintaining the average number of days to conclude a complaint at the FY 2003 level.
• Reduce employer recidivism by increasing by 2 percent, the prior violators who achieve and maintain FLSA compliance following a full FLSA investigation.
• Reduce the incidence of discrimination among Federal contractors to 8%.
• Through use of the Periodic Roll Management program, produce $17 million in cumulative first-year savings in the Federal Employees’ Compensation program.
• Increase union transparency. The percentage of union reports meeting standards of acceptablility for public disclosure will increase to 77%.

ESA Income Maintenance Programs (Mandatory)

The budget includes a total of $1.958 billion for income maintenance programs in ESA in FY 2005, an increase of $66.9 million from FY 2004. The budget re-proposes a number of FECA legislative reforms, including changes to reflect best practices of State workers’ compensation systems, improve program fairness, and speed claims processing. The budget also includes a legislative proposal to improve the Black Lung program by restructuring the program’s growing debt. The budget also reflects the transfer of the Social Security Administration’s “Special Benefits for Disabled Coal Miners” account to the Department of Labor.

Special Benefits

The request of $233 million for Special Benefits in FY 2005 includes $230 million for Federal Employees' Compensation Act benefits, and $3 million for Longshore and Harbor Workers' Compensation benefits. This account also includes a request for $39.7 million from Fair Share funding to finance 133 FTE for administration of the FECA program, as described in the ESA Staffing Section.

Federal Employees' Compensation Act Benefits

FECA provides long-term compensation benefits and certain medical payments for job-related injuries, diseases, or deaths of civilian employees of the Federal government and certain other designated groups. The Administration is re-proposing a number of legislative changes to improve FECA. These changes are expected to generate a 10-year Government-wide savings of more than $573 million. DOL will also continue to address the findings of the Administration’s Program Assessment Rating Tool (PART).

Longshore and Harbor Workers' Compensation Act Benefits

This program funds one-half of the increased benefits provided by the 1972 amendments for persons receiving compensation for permanent total disability or death which commenced or occurred prior to the amendments. Long-term compensation benefits and medical payments are provided for job-related injuries, diseases, or deaths of private sector workers in certain maritime and related employment.

Energy Employees Occupational Illness Compensation Benefits

The budget request for FY 2005 includes $261.8 million for EEOICPA. Of that amount, $221.0 million will provide compensation and medical benefits to eligible workers or their survivors. The request for program administration is $40.8 million and 300 FTE, including funding for the Department of Health and Human Services. This amount is reflected in the ESA Staffing section.

Black Lung Disability Trust Fund

The budget request provides a total of $1.059 billion from the Black Lung Disability Trust Fund (BLDTF) in FY 2005 for benefits, interest payments and administrative expenses. This total includes $330 million for benefits, $57 million for administrative expenses, and $672 million for interest payments. These figures do not include the estimated costs of the refinancing proposal (described below).

The Black Lung Disability Trust Fund (BLDTF) is facing a growing debt, which in FY 2005 will exceed $9 billion. BLDTF revenues, which consist primarily of excise taxes on coal, are insufficient to repay this debt or the interest on that debt. Under current conditions, this indebtedness will continue to grow, with the BLDTF never becoming solvent, even when benefit outlays have declined to a level approaching zero. To solve this problem, the Administration will propose legislation that will: (1) authorize a restructuring of the BLDTF debt, (2) extend, at current rates, BLDTF excise taxes set to decline in January 2014, and (3) provide a one-time $3.2 billion appropriation to compensate the General Fund of the Treasury for forgone interest payments.

DOL will address the findings in the Administration’s PART assessment of the Black Lung Benefits Program by developing performance measures for key claims adjudication agencies (e.g. the Benefits Review Board), including productivity data in the Budget, and conducting a performance evaluation.

Disabled Coal Miner Benefits
Part C Claims

Under this program, all black lung compensation/medical and survivor benefit expenses are provided when no responsible mine operator can be assigned liability for such benefits, or when coal mine employment ceased prior to 1970.

Administrative Expenses

This provides for all administrative costs incurred by the Department of Labor in the operation of the Black Lung program, including reimbursements to the Departments of Health and Human Services, and Treasury.

Interest on Advances

This appropriation funds payment of interest on advances to the BLDTF from the General Fund of the Treasury. In FY 2005, the amount of interest on advances is estimated to be $672 million.

Special Benefits/Disabled Coal Miners
Part B Claims

The FY 2005 budget reflects the permanent transfer of the Black Lung Part B program from the Social Security Administration (SSA) to the Department of Labor. Legislation to authorize this transfer was enacted on November 2, 2002. ESA was already handling SSA’s Black Lung Part B claims through a reimbursement agreement with SSA. This transfer consolidates all Black Lung claims handled by the Federal government in the Department of Labor’s Black Lung program. DOL now handles all claims for compensation under the Black Lung Benefits Act. The transfer was completed at the beginning of FY 2004.

Other Income Maintenance Programs

The budget requests $6.5 million for the Panama Canal Commission Fund and $147 million for the Special Workers' Compensation Expenses program.

Panama Canal Commission Fund

This provides for the accumulation of funds to meet the Panama Canal Commission's obligations to defray costs of workers' compensation which will accrue pursuant to FECA.

Special Workers' Compensation Expenses Payments from the Special Fund

Under the Longshore and Harbor Workers' Compensation Act, as amended, trust funds in this program consist of amounts received from employers for the death of an employee where no person is entitled to compensation for such death, for fines and penalty payments, and pursuant to an annual assessment of the industry, for the general expenses of the funds. From these funds, certain long-term compensation benefits and medical payments are provided for job-related injuries, diseases, or deaths of private sector workers in certain maritime and related employment.

Occupational Safety & Health Administration