The President’s Budget: Creating Jobs Through Increased Enforcement?

President Obama has made it very clear that he wishes to work with employers to help ensure they have an environment to creating jobs. We appreciate this commitment and look forward to see how his recent Executive Order on federal rulemaking is implemented. The Obama Administration has sent many signals that they’re going to be carefully reviewing regulations that may hinder job creation.

However, as analysis of the President’s budget continues it appears that the Administration is sending mixed signals. Specifically, the Department of Labor’s budget request does trim $1.1 billion dollars for FY 2012, it would still increase spending for agencies that regulate employers. Looking specifically at OSHA, there are increases for “safety and health standards” for the agency to develop new rules and spending on whistleblower programs. We should note that this request does slightly increase funding for compliance assistance programs, but the agency has proposed rules that would gut many employer outreach efforts like the on-site consultation program. A half a step forward, a full step back.

Looking beyond OSHA, the President’s budget would increase spending to “combat” employee misclassification. The Administration has often stated that they perceive a problem a widespread misclassification of employees as independent contractors by employers to skirt obligations associated with employees. The President’s request would increase spending for the Wage and Hour Division of the Department of Labor to beef up federal employees to investigate misclassification. This comes on the heels of the Department’s fall regulatory agenda that indicates that the Department is still in the process of developing “Right to Know” regulations that would likely impose a new burden on employers to perform extensive employee audits of each worker – independent contractor and employee alike.

Also troubling is the Department’s proposal to lure states into launching paid-leave programs. The Department is looking to increase spending to encourage states to start programs that would create new entitlements, which inevitably lead further funding down the road.

If the President is serious about assisting employers to create jobs, the Administration needs to do more than simply sign executive orders calling for a review of regulations; he needs to focus on supporting an environment that allows employers to create jobs.

Joe Trauger is the NAM’s vice president for human resources policy.

Leave a Reply