[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
EXAMINING THE POLICIES AND PRIORITIES
OF THE LABOR DEPARTMENT'S
APPRENTICESHIP PROGRAM
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HIGHER EDUCATION AND WORKFORCE INVESTMENT
COMMITTEE ON EDUCATION
AND LABOR
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, NOVEMBER 20, 2019
__________
Serial No. 116-46
__________
Printed for the use of the Committee on Education and Labor
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: www.govinfo.gov
or
Committee address: https://edlabor.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
39-489 PDF WASHINGTON : 2021
-----------------------------------------------------------------------------------
COMMITTEE ON EDUCATION AND LABOR
ROBERT C. ``BOBBY'' SCOTT, Virginia, Chairman
Susan A. Davis, California Virginia Foxx, North Carolina,
Raul M. Grijalva, Arizona Ranking Member
Joe Courtney, Connecticut David P. Roe, Tennessee
Marcia L. Fudge, Ohio Glenn Thompson, Pennsylvania
Gregorio Kilili Camacho Sablan, Tim Walberg, Michigan
Northern Mariana Islands Brett Guthrie, Kentucky
Frederica S. Wilson, Florida Bradley Byrne, Alabama
Suzanne Bonamici, Oregon Glenn Grothman, Wisconsin
Mark Takano, California Elise M. Stefanik, New York
Alma S. Adams, North Carolina Rick W. Allen, Georgia
Mark DeSaulnier, California Lloyd Smucker, Pennsylvania
Donald Norcross, New Jersey Jim Banks, Indiana
Pramila Jayapal, Washington Mark Walker, North Carolina
Joseph D. Morelle, New York James Comer, Kentucky
Susan Wild, Pennsylvania Ben Cline, Virginia
Josh Harder, California Russ Fulcher, Idaho
Lucy McBath, Georgia Van Taylor, Texas
Kim Schrier, Washington Steve Watkins, Kansas
Lauren Underwood, Illinois Ron Wright, Texas
Jahana Hayes, Connecticut Daniel Meuser, Pennsylvania
Donna E. Shalala, Florida Dusty Johnson, South Dakota
Andy Levin, Michigan* Fred Keller, Pennsylvania
Ilhan Omar, Minnesota Gregory F. Murphy, North Carolina
David J. Trone, Maryland
Haley M. Stevens, Michigan
Susie Lee, Nevada
Lori Trahan, Massachusetts
Joaquin Castro, Texas
* Vice-Chair
Veronique Pluviose, Staff Director
Brandon Renz, Minority Staff Director
------
SUBCOMMITTEE ON HIGHER EDUCATION AND WORKFORCE INVESTMENT
SUSAN A. DAVIS, California, Chairwoman
Joe Courtney, Connecticut Lloyd Smucker, Pennsylvania,
Mark Takano, California Ranking Member
Pramila Jayapal, Washington Brett Guthrie, Kentucky
Josh Harder, California Glenn Grothman, Wisconsin
Andy Levin, Michigan Elise Stefanik, New York
Ilhan Omar, Minnesota Jim Banks, Indiana
David Trone, Maryland Mark Walker, North Carolina
Susie Lee, Nevada James Comer, Kentucky
Lori Trahan, Massachusetts Ben Cline, Virginia
Joaquin Castro, Texas Russ Fulcher, Idaho
Raul M. Grijalva, Arizona Steve C. Watkins, Jr., Kansas
Gregorio Kilili Camacho Sablan, Dan Meuser, Pennsylvania
Northern Mariana Islands Gregory F. Murphy, North Carolina
Suzanne Bonamici, Oregon
Alma S. Adams, North Carolina
Donald Norcross, New Jersey
C O N T E N T S
----------
Page
Hearing held on November 20, 2019................................ 1
Statement of Members:
Davis, Hon. Susan A., Chairwoman, Subcommittee on Higher
Education and Workforce Investment......................... 1
Prepared statement of.................................... 4
Smucker, Hon. Lloyd, Ranking Member, Subcommittee on Higher
Education and Workforce Investment......................... 5
Prepared statement of.................................... 6
Statement of Witnesses:
Pallasch, Mr. John,.......................................... 8
Prepared statement of.................................... 10
Additional Submissions:
Jayapal, Hon. Pramila, a Representative in Congress from the
State of Washington:
Letter dated August 26, 2019 from the Attorney General of
Washington............................................. 48
Letter dated November 18, 2019 from the Western Governors
Association............................................ 54
Norcross, Hon. Donald, a Representative in Congress from the
State of New Jersey:
Letter from Victor Rodeia................................ 63
Letter from Steven Vellegas.............................. 64
Letter from Brent Brockley............................... 65
Letter from Dennis Smith................................. 66
Letter from Joshua Sherrard.............................. 67
Letter from Benjamin Stilson............................. 69
Letter from Christian Gailardo........................... 70
Letter from Larry Gibertson.............................. 72
Letter from Wesley Anderson.............................. 74
Letter from Raymond A. Smith III......................... 75
Letter from Jarett Dziarkowski........................... 77
Questions submitted for the record by:
Chairwoman Davis......................................... 83
Fulcher, Hon. Russ, a Representative in Congress from the
State of Idaho......................................... 89
Foxx, Hon. Virginia, a Representative in Congress from
the State of North Carolina............................ 87
Harder, Hon. Josh, a Representative in Congress from the
State of California.................................... 86
Levin, Hon. Andy, a Representative in Congress from the
State of Minnesota..................................... 86
Norcross, Hon. Donald, a Representative in Congress from
the State of New Jersey................................ 85
Scott, Hon. Robert C. ``Bobby'', a Representative in
Congress from the State of Virginia.................... 79
Stefanik, Hon. Elise M., a Representative in Congress
from the State of New York............................. 88
Trone, Hon. David, a Representative in Congress from the
State of Maryland...................................... 87
Mr. Pallasch response to questions submitted for the record.. 90
EXAMINING THE POLICIES AND PRIORITIES
OF THE LABOR DEPARTMENT'S APPRENTICESHIP PROGRAM
----------
Wednesday, November 20, 2019
House of Representatives,
Subcommittee on Higher Education and Workforce Investment,
Committee on Education and Labor
Washington, D.C.
----------
The subcommittee met, pursuant to call, at 1:05 p.m., in
Room 2175, Rayburn House Office Building. Hon. Susan A. Davis
(Chairwoman of the committee) presiding.
Present: Representatives Davis, Takano, Jayapal, Harder,
Levin, Trone, Bonamici, Adams, Norcross, Smucker, Guthrie,
Grothman, Walker, Comer, Watkins, and Murphy.
Also Present: Representatives Scott, Foxx, Hayes, and Wild.
Staff Present: Christian Haines, General Counsel -; Eli
Hovland, Staff Assistant; Stephanie Lalle, Deputy
Communications Director; Andre Lindsay, Staff Assistant; Jaria
Martin, Clerk/Special Assistant to the Staff Director; Katie
McClelland, Professional Staff; Kevin McDermott, Senior Labor
Policy Advisor; Richard Miller, Director of Labor Policy; Max
Moore, Office Aide; Janice Nsor, Oversight Counsel; Udochi
Onwubiko, Labor Policy Counsel; Veronique Pluviose, Staff
Director; Jonathan Walter, Labor Policy Fellow; Joshua Weisz,
Communications Director; Cyrus Artz, Minority Parliamentarian;
Courtney Butcher, Minority Director of Member Services and
Coalitions; Dean Johnson, Minority Staff Assistant; Amy Raaf
Jones, Minority Director of Education and Human Resources
Policy; Audra McGeorge, Minority Communications Director; Jake
Middlebrooks, Minority Professional Staff Member; Carlton
Norwood, Minority Press Secretary; Chance Russell, Minority
Legislative Assistant; and Mandy Schaumburg, Minority Chief
Counsel and Deputy Director of Education Policy.
Chairwoman Davis. Good afternoon. The Committee on
Education and Labor will come to order and I welcome everybody.
I note that a quorum is present. The committee is meeting today
for an oversight hearing on the policies and priorities of the
Labor Department's apprenticeship program.
Pursuant to Committee Rule 7(c) opening statements are
limited to the Chair and the Ranking Member, and this allows us
to hear from our witnesses or from our witness sooner and
provides all members with adequate time to ask questions.
I recognize myself now for the purpose of making an opening
statement.
Today, we will examine the Department of Labor's policies
and actions regarding our Nation's apprenticeship system. I
want to welcome Assistant Secretary Pallasch to the committee.
Thank you for being with us today, sir.
The national apprenticeship system is, simply put, our
Nation's most successful job training program. First authorized
by the 1937 National Apprenticeship Act, Registered
Apprenticeships provide hundreds of thousands of workers each
year with access to paid, on-the-job learning opportunities in
high-demand fields. These programs place workers in
apprenticeships that offer wages that increase as apprentices
build their skills and competencies. It offers nationally
portable and stackable credentials that are widely recognized
and valued by employers and offers advancement in a rewarding
career path. In fact, according to the most DOL data, and I
would say also cited in our witness' prepared statement, 94
percent of apprentices in Registered Apprenticeship programs
successfully retain employment with an average starting salary
of roughly 70,000 annually.
At the same time, these programs help employers address the
skills gap by building a pipeline of productive and talented
workers who are more likely to remain at their jobs long term.
The Registered Apprenticeship system has experienced tremendous
growth with more than 600,000 new apprentices since 2017,
showing that employers trust the strong quality standards that
have made the Registered Apprenticeship system the gold
standard in workforce training. Clearly, we should be building
on the nationwide and bipartisan support for the Registered
Apprenticeship, a system that has the public's trust.
Unfortunately, under this administration, the Department of
Labor is instead disregarding its core responsibility to
support Registered Apprenticeships while irresponsibly moving
forward on creating a separate and untested new program known
as Industry-Recognized Apprenticeship Programs, or what has
been referred to as IRAPs. The National Apprenticeship Act
makes clear that the Labor Secretary alone has the authority to
set quality standards for apprenticeship programs that
safeguard the welfare of apprentices. And the act further
requires the Secretary to cooperate with state apprenticeship
agencies in doing so.
Yet the IRAP model, which has been developed with little
input from states, employers, or the public, actually
eliminates the Secretary's responsibility to protect the
welfare of apprentices through quality standards and
safeguards. And IRAPs leave the 27 states and territories with
their own apprenticeship agencies vulnerable to having multiple
apprenticeship standards within their boundaries. And as a
result, the apprenticeship may be subject to one set of
standards for Registered Apprenticeship programs within a
state, but also numerous different standards set by third
parties, all under the name of apprenticeship.
The Department has claimed that this new I-RAP system will
not harm Registered Apprenticeships. On several occasions, the
Department assured Congress that IRAPs would not divert funding
away from Registered Apprenticeships to promote IRAPs. However,
when the committee sought to clarify details, the Department
provided inconsistent and contradictory answers.
And then just recently, the Department admitted to taking
at least $1.1 million that Congress specifically appropriated
for high-quality Registered Apprenticeship programs to fund
IRAPs. Press reports suggest that amount could actually be far
higher, and we are looking to the Department for transparency
that is long overdue. I am disappointed that the Department
repeatedly misled this committee about its misuse of RA funds
for IRAPs, Registered Apprenticeship funds. However, I am
hopeful that the DOL Inspector General, who is investigating
these discrepancies, will determine whether the Department
violated the law by funding a program without appropriations
from Congress.
What we do know is that the reallocation of resources from
the Registered Apprenticeship program has left state
apprenticeship offices across the country without state
directors. In fact, 6 out of the DOL's 25 offices of
Apprenticeship in states across the country had no leadership
for most of the past year, including in Alabama, Tennessee,
Nevada, Oklahoma, Idaho, and Texas. Vacancies within the
federal Office of Apprenticeship have also prohibited crucial
operations, like streamlining the registration process and even
ensuring implementation of nondiscrimination apprenticeship
regulations.
Despite all the resources expended to start this new I-RAP
model, DOL itself admits that there is not one I-RAP currently
in existence and has cancelled any guidance to describe what an
IRAP might be. As I have said, the Registered Apprenticeship
system has the potential, the great potential, to provide
hundreds of thousands, if not millions, of Americans access to
high-quality pathways that lead to the middle class and beyond.
Yet to do so, the Department must fulfill its responsibility
outlined in the National Apprenticeship Act to protect workers
and provide high-quality apprenticeship opportunities that can
empower them with the skills and credentials needed to be
competitive in today's economy.
Mr. Pallasch, before I close, I also wanted to acknowledge
that this committee has been asking for more clarity on the
Department's actions all year. But despite requests made in
letters this February, hearings in May, more letters in June,
briefings in August, September, and October, your agency waited
until 9:30 last night to provide documentation responding to
some, but not all, of our outstanding questions. And I would
add an additional letter this morning. These actions show a
lack of cooperation with Congress and a lack of transparency on
the part of the department. And from my experience, this type
of behavior typically means there is something to hide. These
actions also show a lack of respect for this committee from the
department and the Employment and Training Administration.
So I hope this hearing will bring to light the many missing
details of the department's actions, including the details that
are still missing from the information provided to our
committee last night. I hope that today's discussions will help
both the Department of Labor and this committee refocus on what
should be our common goal: strengthening the quality and
variety of Registered Apprenticeship opportunities for all
Americans.
I now yield to Mr. Smucker for his opening statement. We
are still looking for--we will be introducing you in just a
moment, sir. Thank you. Mr. Smucker.
[The statement of Chairwoman Davis follows:]
Prepared Statement of Hon. Susan A. Davis, Chairwoman, Subcommittee on
Higher Education and Workforce Investment
Today, we will examine the Department of Labor's policies and
actions regarding our nation's apprenticeship system.
I want to welcome Assistant Secretary Pallasch to the Committee.
Thank you for being with us today.
The national apprenticeship system is, simply put, our nation's
most successful job training program. First authorized by the 1937
National Apprenticeship Act, Registered Apprenticeships provide
hundreds of thousands of workers each year with access to paid, on-the-
job learning opportunities in high-demand fields. These programs place
workers in apprenticeships that offer:
* Wages that increase as apprentices build their skills and
competencies;
* Nationally portable and stackable credentials that are widely
recognized and valued by employers; and,
* Advancement in a rewarding career path.
In fact, according to the most recent DOL data, 94 percent of
apprentices in Registered Apprenticeship programs successfully retain
employment, with an average starting salary of roughly $70,000
annually.
At the same time, these programs help employers address the skills
gap by building a pipeline of productive and talented workers who are
more likely to remain at their jobs long-term.
The Registered Apprenticeship system has experienced tremendous
growth, with more than 600,0000 new apprentices since 2017, showing
that employers trust the strong quality standards that have made the
Registered Apprenticeship system the gold-standard in workforce
training.
Clearly, we should be building on the nationwide and bipartisan
support for the Registered Apprenticeship, a system that has the
public's trust.
Unfortunately, under this Administration, the Department of Labor
is instead disregarding its core responsibility to support Registered
Apprenticeships, while irresponsibly moving forward on creating a
separate and untested new program, known as Industry-Recognized
Apprenticeship Programs, or I-RAPs.
The National Apprenticeship Act makes clear that the Labor
Secretary, alone, has the authority to set quality standards for
apprenticeship programs that safeguard the welfare of apprentices. The
Act further requires the Secretary to cooperate with state
apprenticeship agencies in doing so.
Yet, the I-RAP model, which has been developed with little input
from states, employers, or the public, eliminates the Secretary's
responsibility to protect the welfare of apprentices through quality
standards and safeguards.
And I-RAPs leave the 27 states and territories with their own
apprenticeship agencies vulnerable to having multiple apprenticeship
standards within their boundaries. As a result, an apprenticeship may
be subject to one set of standards for Registered Apprenticeship
Programs within a state, but also numerous different standards set by
third parties - all under the name of apprenticeship.
The Department has claimed that this new I-RAP system will not harm
Registered Apprenticeships. On several occasions, the Department
assured Congress that I-RAPs would not divert funding away from
Registered Apprenticeships to promote I-RAPs. However, when the
Committee sought to clarify details, the Department provided
inconsistent and contradictory answers.
Then, just recently, the Department admitted to taking at least
$1.1 million dollars that Congress specifically appropriated for high-
quality Registered Apprenticeship programs to fund I-RAPs. Press
reports suggest that amount could actually be far higher, and we are
looking to the Department for transparency that is long overdue. I am
disappointed that the Department repeatedly misled this Committee about
its misuse of RA funds for I- RAPs.
However, I am hopeful that the DOL Inspector General, who is
investigating these discrepancies, will determine whether the
Department violated the law by funding a program without appropriations
from Congress.
What we do know is that the reallocation of resources from the
Registered Apprenticeship program has left state apprenticeships
offices across the country without State directors. In fact, six out of
DOL's 25 offices of Apprenticeship in states across the country had no
leadership for much of the past year, including Alabama, Tennessee,
Nevada, Oklahoma, Idaho, and Texas.
Vacancies within the federal Office of Apprenticeship have also
prohibited crucial operations, like streamlining the registration
process and even ensuring implementation of non-discrimination
apprenticeship regulations.
And despite all the resources expended to start this new I-RAP
model, DOL itself admits there is not one I-RAP currently in existence
and has canceled any guidance to describe what an I-RAP might be.
As I have said, the Registered Apprenticeship system has the
potential to provide hundreds of thousands--if not millions--of
Americans access high-quality pathways that lead to the middle class
and beyond.
Yet, to do so, the Department must fulfill its responsibility--
outlined in the National Apprenticeship Act--to protect workers and
provide high-quality apprenticeship opportunities that can empower them
with the skills and credentials needed to be competitive in today's
economy.
Mr. Pallasch, before I close, I also want to acknowledge that this
Committee has been asking for more clarity on the Department's actions
all year. But despite requests made in letters this February, hearings
in May, more letters in June, and briefings in August, September and
October, your agency waited until 9:30 last night to provide
documentation responding to some, but not all, of our outstanding
questions. These actions show a lack of cooperation with Congress and a
lack transparency on the part of the Department, and from my
experience, this type of behavior typically means there is something to
hide. These actions also show a lack of respect for this Committee from
the Department and the Employment and Training Administration.
I hope this hearing will bring to light the many missing details of
the Department's actions, including the details that are still missing
from the information provided to our Committee last night. I hope that
today's discussions will help both the Department of Labor and this
Committee refocus on what should be our common goal: strengthening the
quality and variety of Registered Apprenticeship opportunities for all
Americans.
I now yield to the Ranking Member, Mr. Smucker, for his opening
statement.
______
Mr. Smucker. I would like to thank the Chair for yielding.
Secretary Pallasch, good to see you. I believe we just spent
some time together at one of the state prisons in Chester near
my district in Pennsylvania. I appreciated you being part of
what really was quite an amazing event there, talking about
what we can do to ensure that those who are incarcerated, when
they leave the prisons, have the skills to enter the workforce.
And so you were a significant part of that event and I
appreciate it, and it is good to see you here again.
On the heels of National Apprenticeship Week, today we will
hear from the Secretary from the Labor Department on their
apprenticeship programs, which I think we agree can help to
energize the U.S. workforce. By supporting apprenticeships and
other earn-as-you-learn programs, we can help change the too
often held misconception that a baccalaureate degree is the
only pathway to a successful life.
Thanks to some of the pro-growth policies that have been
ushered in by Republican leadership in Congress and the White
House, our economy is booming. Unemployment is at historic
lows. And, in fact, we now have 7 million jobs that remain
unfilled across the country. Apprenticeships offer one of the
strongest solutions to closing this skills gap and
strengthening the American workforce.
Nothing can prepare a student quite like on-the-job
experience and apprenticeships are a tried and true method to
help students enter the workforce with the skills they need to
succeed and to achieve their own American dream. In fact,
according to the Department of Labor, 94 percent of apprentices
retain employment after completing their apprenticeship program
and the average starting salary after completion is around
$70,000.
Regrettably, a 2018 survey of U.S. employers showed that
nearly half of all job creators struggle to hire employees with
the right skills for the job and for the sixth year running
skilled trade jobs continue to be the hardest position to fill
all over the world really. Registered apprenticeships are one
tool that we can use to strengthen the workforce, but it is
important to give recognition to increasingly innovative and
growing employer-led apprenticeship programs. Employer-led
apprenticeship programs account for more than 80 percent of all
apprenticeship programs nationwide.
Employers know best what skills their employees need to
excel in the workplace, and Congress should encourage employer-
led innovation in the apprenticeship space. That is why I
certainly support efforts to cut the regulatory red tape that
prevents so many employers from revolutionizing the way that we
integrate the education system with the workforce development
system.
We recently had a bipartisan roundtable in regards to
apprenticeship and heard from employers about the need to be
able to respond quickly and bring employees up to speed quickly
and the flexibility that is required for them to be able to do
that effectively.
So I would like to thank the Trump administration, the Task
Force on Apprenticeship Expansion, which was created to address
this very issue. Among other suggestions the final report of
the task force recommended reducing the regulatory burden faced
by businesses, allowing them to be flexible in the program
requirements to meet the varying needs of different industries.
So I applaud you and the Trump administration for this
commendable effort to close our widening skills gap with
commonsense solutions.
I also do look forward to pursuing a productive dialogue
today about apprenticeships and taking time to address recent
reports of misappropriated funds. I want to first and foremost
go on the record that Congress must ensure that hard-earned
taxpayer dollars are used efficiently and effectively. So I
look forward to hearing from the Department today about the
steps that they have taken to conduct a thorough review of its
accounts.
I know that we would all like to be reassured that the
Department has been able to correct any issues discovered in
that review so that they will not be repeated. But I hope that
this committee can also take on its responsibility to work
towards solutions that will increase access to career-changing
opportunities. Workforce programs like apprenticeships will aid
in closing the skills gaps and putting more Americans to work.
So I look forward to hearing from today's witness and
learning more about the innovative ways that we can help
provide students with skills-based education and in-demand jobs
through apprenticeship programs. Thank you, Madam Chair.
[The statement of Mr. Smucker follows:]
Prepared Statement of Hon. Lloyd Smucker, Ranking Member, Subcommittee
on Higher Education and Workforce Investment
On the heels of National Apprenticeship week, today we will hear
from the Labor Department on their apprenticeship programs, which can
help energize the U.S. workforce. By supporting apprenticeships and
other earn as you learn programs, we can help change the misconception
that a baccalaureate degree is the only pathway to a successful life.
Thanks to pro-growth policies ushered in by Republican leadership
in Congress and the White House, our economy is booming and
unemployment is at historic lows. However, more than seven million jobs
remain unfilled across the country.
Apprenticeships offer one of the strongest solutions to closing
this skills gap and strengthening the American workforce. Nothing can
prepare a student quite like on-the-job experience, and apprenticeships
are a tried-and-true method to help students enter the workforce with
the skills they need to succeed and achieve the American Dream. In
fact, according to the Department of Labor, 94 percent of apprentices
retain employment after completing an apprenticeship program and the
average starting salary after completion is $70,000.
Regrettably, a 2018 survey of U.S. employers showed that nearly
half of all job creators struggle to hire employees with the right
skills for the job, and for the sixth year running, skilled trade jobs
continue to be the hardest positions to fill all over the world.
Registered apprenticeships are one tool we can use to strengthen the
workforce, but it's important to give recognition to increasingly
innovative and growing employer-led apprenticeship programs. Employer-
led apprenticeship programs account for more than 80 percent of all
apprenticeship programs nationwide.
Employers know what skills their employees need to excel in the
workplace, and Congress should encourage employer-led innovation in the
apprenticeship space. That's why I support efforts to cut the
regulatory red tape that prevents so many employers from
revolutionizing the way we integrate the education system with the
workforce development system.
Thanks to the Trump administration, the Task Force on
Apprenticeship Expansion was created to address this very issue. Among
other suggestions, the final report of the task force recommended
reducing the regulatory burden faced by businesses, allowing them to be
flexible in their program requirements to meet the varying needs of
different industries. I applaud the Trump Administration for this
commendable effort to close our widening skills gap with commonsense
solutions.
Instead of pursuing a productive dialogue today about
apprenticeship programs, many of my Democratic colleagues will spend
their time talking about recent reports of misappropriated funds. I
want to first and foremost go on the record that Congress must ensure
that hard-earned taxpayer dollars are used efficiently and effectively.
I look forward to hearing from the Department about the steps they have
taken to conduct a thorough review of its accounts. I know that we
would all like to be reassured that the Department has been able to
correct the issues discovered in that review so that they will not be
repeated.
This committee has a responsibility to work towards solutions that
will increase access to career-changing opportunities. Workforce
programs like apprenticeships will aid in closing the skills gap and
putting more Americans to work. I look forward to hearing from today's
witness and learning more about the innovative ways that we can help
provide students with skills-based education and in-demand jobs through
apprenticeship programs.
______
Chairwoman Davis. Thank you, Mr. Smucker. Without
objection, all other members who wish to insert written
statements into the record may do so by submitting them to the
Committee Clerk electronically in Microsoft Word format by 5
p.m. on December 4, 2019.
I will now go on to introduce our witness. I wanted to
check, Mr. Guthrie, did you want to--
Mr. Guthrie. Thanks. I just welcome Assistant Secretary
Pallasch here. He worked in Kentucky and appreciating all the
good effort that he did in Kentucky. And I appreciate being
here to hear his testimony and ask questions today, so thank
you.
Chairwoman Davis. Thank you very much. And I will just
formally, Assistant Secretary John Pallasch is responsible for
overseeing the policies and priorities of the Employment and
Training Administration, which administers federal government
job training and worker dislocation programs, including the
Office of Apprenticeship, federal grants to states for public
employment service programs, and unemployment insurance
benefits.
And I want to administer the oath to him pursuant to
Committee Rule 7(d). The witness will please stand and raise
your right hand.
[Witness sworn.]
Chairwoman Davis. Let the record show that the witness
answered in the affirmative.
Assistant Secretary Pallasch, we appreciate your being here
today and look forward to your testimony. I wanted to just
remind you that we have read your written statement and it will
appear in full in the hearing record.
Pursuant to Committee Rule 7(d) and committee practice you
are asked to limit your oral presentation to a 5-minute summary
of your written statement. Before you begin your testimony,
please remember to press the button on the microphone in front
of you so that it will turn on and the members can hear you.
As you begin to speak the light in front of you will turn
green and after 4 minutes the light will turn yellow to signal
that you have 1-minute remaining. When the light turns red,
your 5 minutes have expired and we ask that you please wrap up.
We will let Mr. Pallasch provide his testimony before we
move to member questions. And when answering a question please
remember, again, to turn your microphone on.
I now recognize Assistant Secretary Pallasch. Welcome.
TESTIMONY OF JOHN PALLASCH, ASSISTANT SECRETARY FOR EMPLOYMENT
AND TRAINING, UNITED STATES DEPARTMENT OF LABOR[NJ1]
Mr. Pallasch. Chairwoman Davis, Ranking Member Smucker,
Chair Scott, members of the subcommittee, thank you for the
invitation to testify today. As the Assistant Secretary of the
Employment and Training Administration, I'm keenly aware of
both the challenges we face and the promise our agency has to
help grow America's workforce. Successfully helping people find
a job is only possible because of the strong economy created by
this administration's focus on removing barriers to opportunity
for all Americans.
Since January 2017, more than 6 million jobs have been
added to the economy. The unemployment rate has remained at or
below 4 percent for 20 straight months. The African American
and Hispanic unemployment rate have reached historic lows. The
unemployment for adult women has hit its lowest rate since
1953. And the unemployment rate for those without a high school
diploma has also fallen to historic lows. And in a remarkable
achievement, for 19 months there have been more job openings in
the United States than there are job seekers, a testament to
this administration's pro-growth agenda.
The mission of ETA is to contribute to the more efficient
functioning of the U.S. labor market by providing high-quality
workforce development, labor market information, income
maintenance services, primarily through state and local
workforce development systems. As with many of the programs at
ETA, our mission in apprenticeships is to help develop the next
generation of worker skills.
Around the world and especially in Europe, apprenticeships
serve as a strong foundation of the economy. In Austria,
Germany, and Switzerland, for instance, 55 to 70 percent of
young people begin their career with an apprenticeship. In
contrast, apprenticeships make up only a third of a percent of
the overall workforce in America.
There are several ways that our agency is aggressively
working towards expanding apprenticeships. We've invested in
states, industry partners, and intermediaries to help fuel
historic growth in apprenticeships.
This year the department also launched efforts to expand
apprenticeship pathways to equip workers with the skills needed
for our--the next generation economy by committing $100 million
for our Closing the Skills Gap grant opportunity. We emphasize
skill-building because, as Ranking Member Smucker mentioned,
after the completion of a registered apprenticeship, the
average starting salary is $70,000 and 94 percent of
apprentices will retain employment.
These investments are paying dividends. Since January 2017,
we've added more than 650,000 new apprentices. In FY '18 alone,
we added an all-time high of 238,000 new apprentices, only to
be surpassed in 2019, with more than 250,000 new apprentices
added, including more than 80,000 in the last quarter alone,
both record highs.
This administration's commitment to growing the
apprenticeship model cannot be disputed. As I conclude my
testimony, I want to emphasize the important work being done by
ETA and the importance of carrying out this mission in a way
that is faithful to the American taxpayer.
Shortly after arriving at the Department, I was made aware
of a possible misapplication of training and employment
services, or TES, appropriated funds. TES funds are
appropriated to expand opportunities related to the Registered
Apprenticeship Program. Upon my arrival on July 23rd of this
year, it was brought to my attention that between mid-2018 and
early 2019, TES funds may have been expended to directly
support activities related to Industry-Recognized
Apprenticeship Programs. Immediately upon receiving this
information, I directed ETA to ascertain the facts and take
appropriate corrective action.
ETA, in consultation with career and noncareer staff from
the Solicitor's Office, the departmental budget center, the
Office of Apprenticeship, and the ETA front office reviewed the
work that had been performed under three existing
apprenticeship contracts. Working closely with a capable team
from the Office of the Solicitor, the Departmental Budget
Center, and the Office of Apprenticeship, we ensured that
expenditures for this work were obligated against the proper
appropriation accounts. Based on the facts known to us at this
time, we believe the issue has now been corrected.
While this particular use of test funds predated my arrival
at the department, as head of ETA I can assure the members of
this subcommittee that this is not an issue that I take
lightly. Following referral requests from both Congress and
ETA, the Office of the Inspector General's investigating this
matter. And ETA intends to fully cooperate with the OIG to
ensure full transparency and identify corrective measures that
would avoid a similar situation in the future.
As we move forward, I'm committed to ensuring funding is
used appropriately at all times to support ETA's programs. As
the Assistant Secretary of Employment and Training, it is an
honor to serve the American people alongside the hardworking
staff at the Department of Labor.
I look forward to working with Congress to lift up all
Americans through the dignity of work. Thank you.
[The statement of Mr. Pallasch follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairwoman Davis. Thank you. Thank you very much.
Under Committee Rule 8(a) we will now question our witness
under the 5-minute rule. And as Chair I will ask the first
question and then yield to the Ranking Member. We will then
alternate between the parties.
I want to recognize myself now for 5 minutes.
Mr. Pallasch, as you know, the department has made clear to
our committee through congressional testimony and questions for
the record and responses to letters that the appropriations
language is clear. Funds appropriated for apprenticeships are
meant to expand opportunities related to Registered
Apprenticeships and that DOL was not using funds for I-RAP
establishment.
Congressional intent was made even more clear this spring
when over 20 Republicans joined Democrats in voting down an
appropriations amendment aimed at opening up apprenticeship
funding for IRAPs. And yet, we now know that the DOL has
publicly admitted that they have used at least $1.1 million in
Registered Apprenticeship funds on IRAPs and the DOL Inspector
General is now auditing these actions, as you have mentioned.
I am sure you know that knowingly and willingly making
false statements or representations to Congress is a violation
of Title 18. And I would like to state for the record that DOL
has yet to correct misinformation previously provided to this
committee, including communications to me in response to
letters and questions for the record.
As I mentioned in my opening statement, your agency
provided our committee late last night documents attempting to
demonstrate that actions have been fixed--have been taken to
fix this misuse of funds, but, honestly, I am having difficulty
believing that these actions have actually been fixed.
The documents provided to our committee last night admitted
that there are no IRAPs actually in existence. So I am having a
hard time understanding how this administration is defining
apprenticeship generally. Where is the cutoff line between what
is and is not an apprenticeship? Could you answer that, sir?
Mr. Pallasch. Yes. Thank you very much for your question,
Chairwoman Davis.
As head of ETA, I am tasked with increasing opportunities
across all of our job-training programs. That includes the
Registered Apprenticeship Program as well as any of the other
job-training programs. The IRAP NPRM, the Notice of Proposed
Rulemaking, intended to increase additional opportunities
within the apprenticeship scope.
As we've all discussed here today, the apprenticeship model
is one that's recognized by all as a successful model. So in an
attempt to grow opportunities within the apprenticeship space,
in order to better closely match the performance that we see in
our European colleagues, we've tried to create a new model.
We've tried to create a new pathway, if you will, for
individuals to enter the workforce.
Chairwoman Davis. Could you--well, I will go on here, but I
still am not hearing quite where you set that line in terms of
apprenticeships, but I will go on. Because I am wondering if it
concerns you that the millions of dollars that are being used
by the contractors for Registered Apprenticeships results in
only 41 referrals for programs to become Registered
Apprenticeships.
So, you know, the question here is whether DOL is somehow
now prioritizing IRAPs over Registered Apprenticeships even
with Registered Apprenticeship funds. What do we know about the
Office of IRAPs? How is it being staffed? How many people are
there? And where do potential applicants go? If somebody is
interested and expressing an interest and wanting to move
forward, there is a sense here that they could be directed to a
newly created and apparently fully staffed Office of IRAPs.
Could you explain that to us?
Mr. Pallasch. Yes. Chairwoman Davis, I'm not familiar with
the stat that you referenced, the 41 new Registered
Apprenticeship programs. Currently, there are 23,000 Registered
Apprenticeship programs and the Department added 3,000 in 2018
alone. So we continue to aggressively pursue Registered
Apprenticeships.
I've worked very closely with the head of the Office of
Apprenticeship to further streamline and increase the awareness
of the Registered program. We have taken a number of steps in
order to release the--reduce the burdens on employers who are
looking to establish Registered Apprenticeship programs. So our
commitment to that is very clear.
With regards to the IRAP office that you mentioned, within
the Office of Apprenticeship there is a division of Industry-
Recognized Apprenticeship Program. There are a handful of staff
in that office who work somewhat on the IRAP Program, but also
on the Registered program, as well. Obviously, as we're in an
active Notice and Comment Rulemaking, there are individuals who
need to be working through the comments that we receive, so
that's the majority of what that office is currently doing, is
working on that NPRM with the hopes of publishing a final rule
in the very near future.
Chairwoman Davis. Do you have confidence? Because I think
you mentioned that you really don't have any idea how all this
happened. And I am just wondering do you think that there are
clear lines now that you are going to be able to distinguish
between how those funds are appropriately used?
Mr. Pallasch. Yes, I think the lines are very clear. I have
made those lines known to our staff. We have made those lines
known to our contractor. There's a very clear distinction
between what I referred to in my opening statement as the TES
funds, the Training and Employment Services funds--
Chairwoman Davis. We will look--
Mr. Pallasch. I'm sorry?
Chairwoman Davis. I am sorry. My time is running out, so I
just wanted to clarify that I would look forward to your
responses by the end of the next week to the questions that we
have already asked. That would be helpful. And just be sure
that we know that the standards that are being set are clear
and that are being utilized.
The whole idea, of course, of the National Apprenticeship
Act is to be sure that we are protecting the welfare of
apprentices. And is that something that you have a clear
understanding of?
Mr. Pallasch. Yes.
Chairwoman Davis. Okay. Thank you very much. I appreciate
your responses and want to go on to the Ranking Member. And in
this case Mr. Comer is going to be first. Thank you.
Mr. Comer. Thank you, Madam Chairman, and good to have a
fellow Kentuckian here today. You mentioned in your opening
statement that 55 to 70 percent of European countries take
advantage of apprenticeships in the first step of their
careers. Here in the U.S. that figure is much, much lower than
that. It seems to me that for whatever reason there is a stigma
in the United States attached with apprenticeships versus going
to the old route of going to get a regular 4-year bachelor's
degree in a regional university. What benefits do you see from
youth apprenticeship programs that help them add value, you
know, in the workplace versus a regular 4-year bachelor's
degree?
Mr. Pallasch. I believe that there is huge value in both
youth apprenticeships or pre-apprenticeships and in the
apprenticeship model in general. In the FY 2019 spending plan
for the Office of the--or Office of Apprenticeship we've
committed $42-1/2 million to just that, to explore and expand
youth apprenticeships across the country. We've been very
aggressive with the Registered Apprenticeship Program.
You indicated that there was a stigma, that there is a
misconception about the Registered program. Most folks think of
it very much as a construction-only program. Construction does
represent about 65 percent of the Registered program, but
there's an additional 35 percent in other industries. And what
we are working with the Office of Apprenticeship to do is to
identify those states who have expanded outside of the
construction world to see if we can't use those models and
replicate them across the country.
Mr. Comer. What can we do to change the minds of parents
and some educators that apprenticeships is a better path for I
would say most young Americans? Any time I go to a school or
talk to parents or talk to different groups, you know, I tell
the story that I am sure the majority of those of us in
Congress hear from our employers every day is that their
biggest challenge in business today is finding workers. They
can grow their business, they can invest and make--invest
additional capital, which is what we want to grow the economy.
But the one thing holding them back more than anything is the
hardship of finding skilled, qualified workers.
But when you talk to students about their futures and you
say, well, you know, you can go to college and you can get a 4-
year degree and have a lot of student loan debt and you may or
may not have a lot of value in that degree when you graduate
versus you can go and do apprenticeships and get certifications
and you can, you know, through a lot of communities get through
with little to no debt and you have immediate quality job
offers.
What can we do to change the stigma to help parents realize
that this is, in many cases, a better opportunity to go the
apprenticeship route and the certification route versus a
regular traditional 4-year degree?
Mr. Pallasch. I appreciate your question because that's one
of the largest challenges we have at the Department of Labor is
trying to create, as I referenced earlier, this idea of
multiple pathways, that there are any number of pathways that
an individual can follow into the workforce, whether that's an
apprenticeship model, whether that's a 2-year degree, whether
that's a certificate program, whether that's a 4-year degree.
That's very much going to be based on the individual and the
resources and the skills that they have, but we need to make
sure that we are creating those opportunities, so should a high
school student want to begin a pre-apprenticeship program even
before graduating high school, we need to help to foster that.
We need to allow them to pursue that if they've decided for one
reason or another that a 4-year degree is not in their future
and not something they're interested in.
We've got to make sure that they understand the benefits of
the $70,000 starting salary that we talked about earlier and
the 94 percent retention rate. And share that with not just
students, but with their parents to say that there's a viable
path forward to family-sustaining wages through any number of
pathways.
Mr. Comer. Well, I appreciate the work that the Trump
administration is doing in focusing on this and trying to
develop more apprenticeships. And really, we in Congress need
to all work together in a unified voice to educate today's
parents and school administrators that this is, in many cases,
a better path to go for the future of those students. So I
appreciate what you are doing and look forward to working with
you in the future.
And, Madam Chair, I yield the balance of my time back.
Chairwoman Davis. Thank you. Ms. Jayapal.
Ms. Jayapal. Thank you, Madam Chair. Apprenticeship
programs are proven to help workers move into skilled middle-
class jobs and we know that these programs work better than the
alternative. In my home state of Washington these Registered
Apprenticeship programs outperform nonunion apprenticeship
programs across the board, including the inclusion and
performance of women and people of color. But the Trump
Department of Labor has proposed hasty and sweeping changes
that lower the protections in place for these very successful
apprenticeship programs.
Mr. Pallasch, the bipartisan Western Governors Association
issued a formal letter to the DOL in response to this proposal.
Among many other objections, they expressed concerns that the
Trump DOL's proposal has, and I quote, ``no strong requirements
that employers abide by current regulations, including
apprentice wage progressions and working conditions, program
length, and equal employment opportunity requirements.''
In two sentences, how do you respond to the association's
concerns?
Mr. Pallasch. Thank you, Representative, for your question.
Unfortunately, because we're in Notice and Comment Rulemaking,
I can't respond to specific questions and specific issues
within the rule. But what I can share with you is a commitment
that we have to serve and to bring underrepresented populations
into not just traditional, but nontraditional apprenticeship
programs, as well.
Ms. Jayapal. Madam Chair, I seek unanimous consent to enter
the following reports into the record, both of which express
similar concerns about the Trump DOL's proposal. That is the
Western Governors Association comments and the Attorney General
of Washington comments regarding the apprenticeship programs.
Chairwoman Davis. So ordered.
Ms. Jayapal. Thank you. I also have concerns with the fact
that DOL is not implementing Registered Apprenticeships
according to the regulations currently in place. Right now
states create affirmative action plans for their apprenticeship
programs, programs that DOL must then approve.
Mr. Pallasch, how many of the 27 state apprenticeship
agency plans have gotten review from your office and how many
have been approved?
Mr. Pallasch. I apologize, I don't have that information
with me today, but I'm happy to provide that information to
you.
Ms. Jayapal. I would appreciate that. It seems like a very
important thing for the Assistant Secretary of Labor for
Employment and Training to have.
It is my understanding that the DOL is understaffing the
Registered Apprenticeship department, which is in charge of
ensuring protections for Registered Apprenticeships. Instead,
your department has diverted resources to work on unregistered,
nonunion industry apprenticeship programs even though these
programs are unauthorized and unappropriated for. How many
staff are dedicated to oversight of the Equal Opportunity
requirements? And how many staff would be needed to complete
the reviews that your department is required to perform by the
end of this year?
Mr. Pallasch. So the current staffing level,
Representative, within Office of Apprenticeship is 122. The
ceiling, the FTE ceiling, for that office is 141. Since I began
with ETA back in July, I've been very aggressive not just with
the Office of Apprenticeship, but with all the programs to
ensure that we are backfilling any and all vacancies. So I can
assure you, we are working aggressively to fill not only any
vacancies within Office of Apprenticeship, but across ETA.
With regards to your specific questions, as I mentioned
earlier, there is a Division of Industry-Recognized
Apprenticeship Program within the Office of Apprenticeship,
which, I believe, has nine staff who part-time are working on
the I-RAP program, part-time working on the Registered program.
The rest of the staff within the Office of Apprenticeship are
dedicated to the Registered Apprenticeship Program.
Ms. Jayapal. And so the oversight of the Equal Opportunity
requirements, what is the total number there? You gave me a lot
of numbers and I am trying to figure out which one answers my
question.
Mr. Pallasch. Understood. I don't know that I have a
specific staff breakdown for the EEO requirements, but I can
certainly get that for you.
Ms. Jayapal. Okay. And in terms of the oversight of the
entire Registered Apprenticeship Program how many staff are
dedicated to those activities?
Mr. Pallasch. Again, so if we work under our current
onboard strength of 121 and we remove out partial staff from
the Division of Industry-Recognized Apprenticeship Program,
somewhere around 112, 115 would be dedicated specifically to
the Registered program.
Ms. Jayapal. And what exactly are you doing to conduct
oversight of the entire Registered Apprenticeship system?
Mr. Pallasch. So within the Office of Apprenticeship, as
you may know, at the state level there's both Office of
Apprenticeship Registered programs and then there are what are
called state apprenticeship agency programs. So in roughly half
the states around the country ETA has a state director, an
Office of Apprenticeship state director, who's responsible for
the Registered program within that state; responsible for
working with employers; standing up programs; working on
competency frameworks. And the other half of the country,
that's handled by the state through the state apprenticeship
agency.
Ms. Jayapal. Okay. I just want to get in one question. I
only have 5 seconds. Will you commit to providing to me and
this committee in the next week a detailed explanation and plan
for how your department will comply with its responsibilities
to conduct oversight of the Registered Apprenticeship system,
including prompt review of all affirmative action plans?
Mr. Pallasch. I can commit that we will work with you on
this issue. This appears to be of great importance to you, so I
commit to working with you on that, yes.
Ms. Jayapal. So within a week you will provide me with
updated information and we can begin that conversation?
Mr. Pallasch. It wouldn't be fair for me to--I don't know
the time that it will take us to pull that information
together, but I certainly will work with you and your staff.
Ms. Jayapal. Thank you, Mr. Pallasch. Yield back.
Chairwoman Davis. Mr. Guthrie.
Mr. Guthrie. Thank you very much. Hey, it is great to have
you here. It is great to have you here in Washington. I know
you did, as I said before, a good job back home as executive
director of Kentucky's Department of Labor and appreciate your
public service.
And I will start with like every day hardworking Americans
search for good-paying jobs. Many Americans find a pathway to
good-paying jobs through apprenticeship programs that provide
real earn-and-learn opportunities that often turn into careers.
For workers, apprenticeships are a chance to learn technical
skills alongside seasoned industry professionals.
That is why I helped introduce, along with many members of
this committee, several members of this committee, the Partners
Act, which will allow small and medium-sized businesses to join
together to support apprenticeship programs. I am also
currently working on a bill to create a Registered
Apprenticeship Program to help address the shortage of
educators across the country.
So the questions for you, Mr. Secretary, we know that
apprenticeships work for students and employers. Therefore, I
strongly believe Congress must find ways to best facilitate the
apprenticeship system. During your time serving as executive
director of Kentucky's Department of Labor's Office of
Employment and Training, what feedback did you receive from
employers participating in the Registered Apprenticeship
system? And how are you using that information to improve
apprenticeships broadly speaking?
Mr. Pallasch. Thank you very much for your question,
Representative Guthrie. Two of the major complaints that I
heard while in Kentucky was the burden, the paperwork burden in
the application process itself. And then the other issue that
was consistently raised with me was the idea of how do we
transition from a time-based model to a competency-based model
within the apprenticeship program?
Traditionally, the Registered Apprenticeship application
was around 65 pages. Since coming to Washington, working with
the Office of Apprenticeship we've reduced that down to 12
pages, so a 70 percent reduction in the size of the
application.
With regards to the transition from time-based competency
to a--I'm sorry, from time-based models to a competency-based
model we've reduced that time from around 90 days down to 14.
What we were learning was that if an individual wanted to
change a registered program from time-based to competency-
based, they would essentially have to go back to the beginning
and start over. And what we've done is we've created a fast
track that allows them to more easily do that. So that just
creates more apprenticeable occupations that are available for
any employer to take advantage of.
Mr. Guthrie. Okay. Thank you very much. And also, I know we
are looking at criminal justice reform and it is important that
when people have the opportunity to leave the justice system
that they have opportunities before them. And so I know in your
testimony you mentioned that the department is committed to
supporting second chances for those transitioning back into
society from the criminal justice system. I believe it is
important to support collaboration among state leaders to
create smooth transitions for these individuals, and Kentucky
has already begun these efforts.
Given your experiences, what have been the most successful
methods for ensuring that these individuals are able to
reintegrate into the workforce in their communities? And what
can Congress do to support these efforts?
Mr. Pallasch. So one of the things that we were able to do
in Kentucky was working with the warden of the North Point
Prison in Lexington, and he allowed us, as the Employment and
Training Administration, to come in and provide training, job
training, workforce training to the inmates while in the
prison. This is an issue, as Ranking Member Smucker mentioned,
we discussed with the folks up at the Chester State
Correctional Facility earlier this month.
Seeing how we can help get folks from either the
Pennsylvania workforce system or the local workforce system
into the prisons to begin working with the incarcerated
population while they're still in prison. So being as proactive
as we can rather than waiting for them to achieve reentry, can
we not work with them while they're incarcerated? So that to me
is one way that we can be far more proactive and far more
effective is if we're able to get in and work with the inmates
in their facilities.
Mr. Guthrie. How can Congress help with that?
Mr. Pallasch. So there's--
Mr. Guthrie. There is a lot of at state. There is a lot at
state prisons, but there are Federal prisons, as well.
Mr. Pallasch. Yeah. So it's a little bit trickier with the
state and the Federal split. As you may know, with state
prisons most of the inmates are somewhat local, whereas Federal
prisons you may be coming from another state, you may be coming
from the other side of the country. But with the state prisons
it's very much usually local individuals, so there's a local
tie to that community. And that local workforce board has a
vested interest in making sure that those individuals, when
they come out and reenter that local community, are prepared to
work.
So as with most of the workforce system, I think this is
very much a local issue and a local-driven issue of how can
local workforce boards and state workforce boards work with
state Offices of Correction to ensure that there's a linkage
between workforce training and inmates while in prison.
Mr. Guthrie. Okay, thank you. My time just expired, so I
appreciate your answers and appreciate you being here. I yield
back.
Chairwoman Davis. Thank you. Ms. Bonamici.
Ms. Bonamici. Thank you, Chairwoman Davis and Ranking
Member Smucker, and thank you to our witness for being here.
Thank you, also, to Mr. Guthrie for mentioning the Partners
Act. I have enjoyed working with you on that.
I have heard from many people across Oregon who have told
me that Registered Apprenticeships have changed their lives for
the past several years. I have led more than 100 of my
colleagues in urging the Appropriations Committee to increase
Federal investments for these programs. So I am extremely
concerned about reports showing that the department of Labor
disregarded congressional intent when spending these dollars.
And I align myself with the remarks of Chairwoman Davis
regarding our disappointment with receiving responses late last
night and early this morning. I still have some questions.
In a recent call with Committee Staff, the department
admitted to using $1.1 million of funds appropriated for
Registered Apprenticeships to support IRAPs. And this was
confirmed by a Department of Labor spokesperson in a November
6, 2019, article in Bloomberg Law. Chairwoman Davis, I request
unanimous consent to enter this article into the record.
Chairwoman Davis. So ordered.
Ms. Bonamici. Thank you. This suggests that the department
knowingly violated the purpose statue which requires that
agencies apply appropriations only to the purposes for which
they were made.
So, Assistant Secretary Pallasch, the department did use
$1.1 million for IRAPs that was appropriated for Registered
Apprenticeships, is that correct?
Mr. Pallasch. Representative Bonamici, what happened was is
there was a misapplication of that funding. As I mentioned--
Ms. Bonamici. So I want to reclaim my time and just ask is
it correct that the department used $1.1 million for IRAPs that
was appropriated for Registered Apprenticeships?
Mr. Pallasch. There was $1.1 million in funding misapplied
to the TES account.
Ms. Bonamici. And was that amount that was misappropriated
limited to $1.1 million?
Mr. Pallasch. Yes.
Ms. Bonamici. What is the total amount of money that the
department has spent or obligated to be spent on IRAPs, and
that includes grants, personnel, funding that was provided by
incidental benefit? And just to clarify, I am not just talking
about the $1.1 million that was misused. What is the total
amount of Department of Labor dollars that have been spent on
IRAPs?
Mr. Pallasch. So, Representative, that's a difficult number
to come up with because of the nature of the program
administration appropriation. There's broad discretion for
agency and agency direction to use that PA funding, so it's
very difficult for us to disaggregate out the I-RAP from that
program administration account because it serves not only the
Office of Apprenticeship, but all of the ETA programs.
Ms. Bonamici. Well, I would submit, Mr. Assistant
Secretary, that if it is--just because it is difficult doesn't
mean that you shouldn't do it. And we need to know how much of
that appropriated funding has gone to IRAPs. It is my
understanding that there is a separate office to create IRAPs.
Is the department--with nine staff assigned. Is the department
tracking all of the costs associated with creating IRAPs?
Mr. Pallasch. Again, Representative, it's difficult from a
budgetary standpoint, not from a programmatic standpoint. It's
difficult from a budgetary standpoint for the department or ETA
to track spending within the program administration account
because of the flexible nature of that account.
Ms. Bonamici. And, again, just because it is difficult
doesn't mean that it shouldn't be done. And it is my
understanding that the department has admitted to using PA
funds to replace the misappropriated money that was spent on
IRAPs. Of that amount how much of the program administration,
or PA, funds has the department spent on IRAPs?
Mr. Pallasch. Again, if you're asking how much of the
program administration funds was used for the misapplied TES
account, that's the $1.1 million.
Ms. Bonamici. I am asking how much the department has spent
of PA funds on IRAPs.
Mr. Pallasch. Again, that's a figure that budgetarily we
just--we can't disaggregate.
Ms. Bonamici. Has the department accounted for all of the
appropriated funds that were misused?
Mr. Pallasch. Yes. To my knowledge, the TES account has
been made whole.
Ms. Bonamici. Thank you. I remain concerned about how the
department has used funding that was appropriated by Congress
for Registered Apprenticeship programs for IRAPs, and I hope we
can get some more complete answers from you on the record.
But there are a few initiatives created by the Obama
administration and continued under this administration that
have supported Registered Apprenticeships. For example, the
Industry and Equity Intermediary Partnership supported more
than 20,000 Registered Apprentices in Fiscal Year 2019 alone,
including intermediaries that created new apprenticeship
programs.
So does providing funding to intermediaries help scale up
and expand existing apprenticeship initiatives and increase the
number of apprentices across the country?
Mr. Pallasch. Yes. We believe the use of intermediaries not
only scales up apprentices, but it also helps us with the
underrepresented populations that I referred to earlier,
bringing more women into apprenticeships, more underrepresented
populations.
Ms. Bonamici. Thank you. We have in Oregon, Oregon
Tradeswomen which is doing a great job of diversifying the
workforce. And I just had a roundtable conversation with
several apprentices and they have very compelling stories.
So, again, I will be submitting questions for the record to
see if we can get more detailed answers on the questions that I
asked. And I yield back the balance of my time.
Chairwoman Davis. Thank you. Mr. Watkins.
Mr. Watkins. Thank you, ma'am. Sir, I often hear from
employers that the most successful workforce development system
is one that works well with the local education system. Part of
integrating these systems is encouraging students to be
lifelong learners and expose them to multiple pathways for
career success, such as apprenticeship programs. However, we
must also ensure that there is a better coordination among
state agencies and the Federal agencies working on all these
issues in order to accomplish that goal.
What work does ETA do to help states better coordinate with
their employment-focused agencies, with their education
agencies? And what are you doing to work with the U.S.
Department of Education to help achieve that goal?
Mr. Pallasch. Thank you, Representatives Watkins. This
issue was of paramount concern to me while working in Kentucky.
It was very challenging as the head of the Office of Employment
and Training to administer a workforce program while I received
guidance from the Department of Labor that may have been
inconsistent or even conflicting with guidance that was
received by my fellow workforce partners from the Department of
Education.
So as soon as I arrived in Washington, one of the first
things that I did was reach out to my colleagues at the
Department of Education: the assistant secretary who handles
their K through 12 programs, the assistant secretary who
handles their adult and career technical ed, and the assistant
secretary who handles vocational rehab. And I shared with them,
as well as the assistant secretary at HHS, who handles the TANF
program, and the assistant secretary at USDA, who handles the
SNAP E&T, or the SNAP Employment and Training Program. And I
shared with them that it's imperative that the Federal
community speak with one voice.
To your point, if states are going to be able to take
advantage of the flexibility, if states are going to be able to
work across programs, then we as a Federal community, as the
oversight community, need to speak with one voice. And we need
to empower states and locals to work together in education and
workforce and vocational rehab and adult education and
community colleges to create a holistic approach to workforce
at a local level.
So that's what I'm trying to facilitate is that cooperation
amongst the Department of Education, USDA, HHS, and the
Department of Labor.
Mr. Watkins. Thank you. Not a day goes by when I don't hear
about the skills gap between the 7 million unfilled jobs in our
country. You mentioned in your testimony that the Department
recently committed $100 million to your Closing the Skills Gap
grant solicitation. You also mentioned that there were 238,000
new apprentices in Fiscal Year 2018 alone.
How would you reconcile this growing number of apprentices
with a skills gap that seems to be growing? And what reforms do
we need to make to our workforce development system, including
apprenticeships, in order to meet this need?
Mr. Pallasch. Thank you. Yes, in addition to the $100
million for the Closing the Skills Gap, there was an additional
$183 million for scaling of apprenticeships. So the department
has been very committed to trying to close that skills gap
while, at the same time, continuing to aggressively push the
Registered program.
As I mentioned, there's not only 250,000 new apprentices in
2019, but there's 3,000 new Registered Apprenticeship programs
in 2018. So the program continues to grow as we are
simultaneously working to close that skills gap. And that's
probably the biggest challenge facing the department right now
is we hear about earn-and-learn and we hear about lifelong
learning and stackable credentials.
How is ETA able to facilitate so that state and local
workforce boards can address the skills gap that exists in
their local area? They have the labor market information. They
know where jobs are going in their local communities. How do we
provide them the support so that they can address those skills
gaps?
Mr. Watkins. I want to return to a statistic you mentioned
that 55 to 70 percent of youth in a number of European
countries take advantage of apprenticeships as a first step in
their career. Here in the United States it seems that there's a
stigma attached to pursuing any route other than a bachelor's
degree. For some reason we have come to think that anyone who
does not go down this path is less valuable of a member to
society. I believe that part of changing that dehumanizing and
discriminatory mindset is exposing youth to alternative career
paths early on in life.
What benefits do you see from programs like youth
apprenticeships that show these young people the value of other
forms of workforce development?
Mr. Pallasch. Thank you. I think that early exposure to a
pre-apprenticeship program or any type of job skills, job
training, job education program that allows an individual as
they're maturing through school and shortly after school to
identify a career pathway that works for them. That's really
what we're after.
As I mentioned, $42 million in the Office of
Apprenticeship's budget in FY '19 is dedicated to just that:
youth apprentices. How do we grow those youth apprentices?
Also within the Office of Apprenticeship we're trying to
expand the scope of the Registered programs. I mentioned
earlier that there's a stigma that Registered Apprentices are
simply construction workers. We know, for example, that--
Chairwoman Davis. Thank you. Mr. Pallasch, I am sorry, I
just have to intervene because the gentleman's time is up, but
we'd like to get back to that. Okay?
Mr. Pallasch. Thank you.
Chairwoman Davis. Mr. Norcross.
Mr. Norcross. Thank you. Appreciate it. Standards count, we
understand that. And certainly, when we look at the Registered
Apprenticeship programs, and you have mentioned it several
times now, people think of the trades which have been around
for almost 100 years. It is a proven way of educating. And a
pre-apprentice program in high school is what most people in
this room absolutely know, it is called shop. They are taught
firsthand in high school; been doing it since you went to
school and I went to school. But you talked about that
successful program and you compared it to the European model,
and we have looked at that.
The European model outside of the construction program is
where they excel. The construction programs in this country are
equal to any in the world. And, in fact, the Taft-Hartley
programs in this country are not funded by government virtually
at all. They are all self-funded. They have graduation rates at
approximately 90 percent-plus versus those who are non-Taft-
Hartley, which are less than 40 percent.
So when we look at graduation rates of apprenticeship
programs I think it is a great indicator of whether that
program actually works.
The point I am trying to make here is the construction
industry is one that works extremely well, costs the government
virtually nothing for the Taft-Hartley plans. Why would you
want to interject a non-Registered program into something that
works so well? Why wouldn't you exclude those construction
industries that have worked for close to a hundred years?
Mr. Pallasch. Representative Norcross, again, I appreciate
your question. I can't comment specifically on the IRAP rule
because it's in Notice and Comment Rulemaking.
Mr. Norcross. I am not asking about the rule. Why would you
want to change a program that has worked for a hundred years,
that continues to work today? Forget the rule.
Mr. Pallasch. So to answer your question, I don't want to
change the Registered program. I want to enhance the Registered
program.
As you indicated, the construction--and as I indicated
earlier, construction represents 65 percent of the Registered
program. So how can we grow the Registered program in other
industries? That's what we're asking.
Mr. Norcross. That is what I want to hear, outside of the
industries.
Mr. Pallasch. Correct.
Mr. Norcross. Because this is when it works. I spoke to you
earlier, I went to that other 4-year school. I went to the
apprenticeship. I have here letters from apprentices and
journeymen that I would like to enter into the record with
unanimous consent.
Chairwoman Davis. So ordered.
Mr. Norcross. That they are talking about those standards
and how well they work. So, as you know, the construction
industry is a transient where the work is. We follow it. You
don't want somebody on the West Coast teaching one set of
standards and somebody on the East Coast the other. This is a
program that works.
And you know what? When you talk about spending $42
million, there is--you don't have to spend it in that industry.
So what I want to leave us with is that the IRAP proposals
do not follow the model that works, where the apprentices are
given incremental increases in wages as their skills expand.
That is something that they love in the industry. They know as
they come in as a first-year apprentice that second year, as
their skills improve, their wages will improve. Yet, in the I-
RAP program, that is not involved in it.
Why, without commenting on the rule, would you want not the
apprentices to know what they are going to make over the course
of their apprenticeship?
Mr. Pallasch. Representative, there's certain hallmarks
that we would look for in any apprenticeship program, whether a
Registered Apprenticeship Program or an un-Registered
Apprenticeship Program. And at the crux of that is the skill-
based learning, the credential, the mentoring that exists
within an apprenticeship program. Again, whether--
Mr. Norcross. So why wouldn't you include wages?
Mr. Pallasch. Pardon me?
Mr. Norcross. Why wouldn't you include wages for those
years of the apprenticeship? Why are you excluding that? Why
would you not want them to know that?
Mr. Pallasch. Again, under advice of our attorneys, I can't
comment on the rule.
Mr. Norcross. I am not asking about the IRAP rules. In an
apprenticeship program, wouldn't you want the apprentices to
know that with their skills increasing, their wages would
increase?
Mr. Pallasch. So that exists within the Registered program
today.
Mr. Norcross. So you approve of that and you think that is
a good idea?
Mr. Pallasch. As I mentioned earlier, yeah, my
responsibility is to grow apprentices in any and all models.
Mr. Norcross. Do you think having wage increases as part of
those programs is a good idea or a bad idea?
Mr. Pallasch. I think the Registered model is a good model
and every--
Mr. Norcross. Will you answer the question, please, with
all due respect?
Mr. Pallasch. I don't think it's appropriate given the
Notice and Comment Rulemaking for me to weigh in on--
Mr. Norcross. I was not asking about the rulemaking.
Also, do you look at graduation rates of programs that say
they are more successful or less successful? Do you have any
standard when it comes to graduation rates?
Mr. Pallasch. Graduation rates form Registered programs?
Mr. Norcross. Yes.
Mr. Pallasch. Do we look at the graduation rates?
Mr. Norcross. Yes.
Mr. Pallasch. Yes. So some of the measures that we look at
are successful completion and earning the credential, yes.
Mr. Norcross. Do you make that information public?
Mr. Pallasch. Yes.
Mr. Norcross. So every apprenticeship program reports back
to you, those 23,000, to let you know what the graduation rates
are?
Mr. Pallasch. They--we track the number of credentials
attained.
Mr. Norcross. Graduation rates. I defer back.
Chairwoman Davis. The gentleman's time is up.
Mr. Norcross. I would like the answer to my question
submitted to me, graduation rates of the 23,000 programs. I
yield back.
Chairwoman Davis. Thank you. Next is Mr. Grothman.
Mr. Grothman. Thank you. First of all, I think we have an
obvious problem here in that we don't have enough people
getting involved in these apprenticeship programs, what I will
call skills-based education. Part of it is attitude appearance.
A lot of it, I think, is, quite frankly, bad advice from school
counselors.
Do you have any general suggestions--and as a result, we
have way too many people getting degrees that are not of value
to them or starting on a path to degrees that aren't going to
be valuable to them and they drop out. And in addition to
getting a degree that is not increasing their earning
potential, a lot--frequently they have a lot of student debt to
boot.
What can we do to get around these attitude problems, get
around sometimes bad advice people are getting from their
schools?
Mr. Pallasch. Representative, I thank you for your
question. As I mentioned earlier, I think the way that I can
address that or at least start to deal with that issue is by
working with the Department of Education. Working with our
elementary and secondary education office that's responsible
for K through 12 education across the country and making sure
that they understand the vital role that they play in
workforce. And when I talk about workforce, I talk about the
broader workforce, not just ETA's workforce, but the broader
workforce. And how does the education system play into that?
How are they preparing students upon graduation to enter the
workforce?
Mr. Grothman. Can we specifically talk about salary or wage
compensation nor number of job openings? Is that something you
could make available to the public?
Mr. Pallasch. Absolutely. And we've talked not only about
the 7.1 million open jobs, but the other number that keeps me
awake at night are the 34 million Americans who aren't part of
the labor force.
Mr. Grothman. Okay.
Mr. Pallasch. Not just the unemployment rate, but the
forgotten men and women of the workforce.
Mr. Grothman. We have also had even people in this
committee talk about getting a college degree like it is
somehow superior to getting an apprenticeship. And from what I
can see, there is a lot more necessity for maintenance people,
for people in manufacturing. So it kind of offends me when
people imply like somehow they have accomplished something
better than apprenticeship. And we have people talk that way
here.
Is there anything specific we can do to prevent that
attitude from spreading, I mean, given that we do have people,
including congressmen, who kind of talk that way? Can you--do
you have any other suggestions how we can change the attitude?
Mr. Pallasch. Again, I think hearings such as this where we
shine a spotlight on the success of the apprenticeship model
and what it means. And when we talk about 94 percent retention
rate and we talk about $70,000 starting salary, those are real-
world numbers. And that does not include the assumption of any
debt, so individuals who are entering the workforce through an
apprenticeship program, $70,000 debt-free. We need to make sure
that individuals understand that apprenticeship is a viable
option, that it is one of those multiple pathways that we
talked about.
Mr. Grothman. Okay. Right now there is some restrictions to
employment, age-based restrictions on ability to use certain
equipment, which maybe delays people entries into these fields.
Do you have any plans to look into that or see whether some of
these restrictions are perhaps too extreme and perhaps we could
get people working in a manufacturing setting at a younger age?
Mr. Pallasch. I'm not familiar with the specific
restriction you talk about. I'm not sure if that's at the state
or the Federal level, but I'm happy to work with you or your
staff to look into that issue.
Mr. Grothman. Okay. I yield the remainder of my time.
Chairwoman Davis. Thank you. Thank you for yielding. Mr.
Levin.
Mr. Levin. Thank you, Madam Chairwoman. So, Assistant
Secretary Pallasch, the data you were referring to, 70 percent
or 94 percent employed, that is Registered Apprenticeship data,
right?
Mr. Pallasch. That's correct.
Mr. Levin. Seventy thousand dollars a year, Registered
Apprenticeship data, right?
Mr. Pallasch. Correct.
Mr. Levin. Growing fast, Registered Apprenticeships?
Mr. Pallasch. Correct.
Mr. Levin. Unbelievable data from the department, huge
success?
Mr. Pallasch. Correct.
Mr. Levin. All right. So let us talk about this other
enterprise you have going on.
In a letter to the committee this past July, the department
stated that IRAPs may receive ``incidental benefit'' from funds
appropriated solely for Registered Apprenticeships. Will you
please explain to the committee how the department is
justifying the use of RA funds on the premise that this is
permissible if it provides incidental benefit to IRAPs? And
please explain the Solicitor's role in determining what
constitutes an incidental benefit.
Mr. Pallasch. Thank you very much for your question,
Representative Levin. So this was one of the issues that we
attempted to address in the letter that we delivered earlier
today.
Mr. Levin. Yes, so if you could just quickly explain it in
simple terms, that is the point of the hearing.
Mr. Pallasch. Understood. Yes, and the overarching doctrine
that applies is the necessary expense doctrine that talks about
any expense that is reasonably related to accomplish the stated
purpose of the appropriation. Now, within that, there is an
incidental benefit clause that says if another program were to
receive an incidental benefit, that would be allowed. In an
abundance--
Mr. Levin. So let me just ask you, did the Solicitor's
Office tell the department, tell ETA, that you can use
Registered Apprenticeship funds if it can be shown that there
is incidental benefit to IRAPs?
Mr. Pallasch. Not to my knowledge.
Mr. Levin. They didn't do that?
Mr. Pallasch. Not to my knowledge. So, again, the
controlling legal--
Mr. Levin. Well, the information that has been made
available to the committee says they did precisely that.
Mr. Pallasch. The controlling legal document is the
necessary expense rule. Within the necessary expense rule there
is an incidental benefit that is allowed.
Mr. Levin. And the Solicitor's Office didn't give you this
information?
Mr. Pallasch. Give me--I'm sorry, give me what information?
Mr. Levin. My question to you is whether the Solicitor's
Office told the department or ETA that you can use Registered
Apprenticeship funds if it can be shown that there are
incidental benefits to IRAPs. It is a simple yes or no
question.
Mr. Pallasch. I'm not familiar with that.
Mr. Levin. Is the administration saying that as long as the
money promotes both Registered Apprenticeships and IRAPs,
appropriated funds can be used for IRAPs?
Mr. Pallasch. When you say ``appropriated funds,'' are you
talking about TES appropriated funds or PA?
Mr. Levin. That is the only funds you have, sir, the funds
we appropriate for your department.
Mr. Pallasch. We also have program administration funds, or
PA funds, which would be allowed to be used for both Registered
and any industry-recognized work program.
Mr. Levin. So you are saying that the program
administration funds can be used without limit for IRAPs?
Mr. Pallasch. It is my understanding that after talking
with our departmental budget center and the Office of the
Solicitor and the appropriations attorneys, yes, there's
broad--
Mr. Levin. And how much of those program administration
funds have you used for IRAPs?
Mr. Pallasch. As I discussed earlier, that's a number that
we can't disaggregate. We're not able to--
Mr. Levin. What did you think you would be asked, sir, when
you came here today?
Mr. Pallasch. Oh--
Mr. Levin. What is going on where there has been
misappropriated funds, where the Secretary repeatedly came here
and he said he would not use RA funds for IRAPs, and now we
found out that was not true, and that you have been using our
appropriated funds for IRAPs? What do you think the topic of
conversation would be here, sir?
Mr. Pallasch. We thought that this would be a topic of
conversation.
Mr. Levin. And you are not prepared to give us the basic
data on the funds expended?
Mr. Pallasch. Again--
Mr. Levin. I used to work--I used to run a state department
in Michigan that only used your funds along with some funds
from other Federal--you know, I ran the workforce system in
Michigan. And I would not have dared to come to a hearing
unprepared to explain the expenditure of funds.
Mr. Pallasch. Again, I'm prepared to explain the
expenditures of TES, Training and Employment Services, funding
as that was the subject of the request from Congress.
Mr. Levin. I am asking you about program administration
funds right now.
Mr. Pallasch. Again, program administration funds, as I
mentioned, there's broad discretion for the agency.
Mr. Levin. Too complicated, too hard to say how much have
been used for IRAPs.
Mr. Pallasch. Yeah, as I'm told by our departmental budget
center, it's--I don't want to say impossible. It is extremely
difficult to disaggregate the funding because program
administration funding is used for all ETA programs.
Mr. Levin. Right. My time is limited. Under the legal
theory that apparently was proffered by the Solicitor's Office
at DOL, would it not be the case that if Federal funds were
appropriated for women's health, say, that they could also be
used for abortion services on the grounds that they are
expanding opportunities to receive services related to women's
health?
Mr. Pallasch. I'm--
Mr. Levin. That would seem logical, wouldn't it?
Mr. Pallasch. I'm not familiar with the instance you're
referring to, so I'm not comfortable--
Mr. Levin. I just told you what the instance is.
Mr. Pallasch. Again, that's not my area of expertise. I
wouldn't be comfortable commenting on whether that's an
appropriate use or not.
Mr. Levin. All right. Well, sir, my time has expired. I am
extremely concerned about this department creating a new
program for which we explicitly told you we are not
appropriating funds and you are using funds made for--you are
using funds for programs that you have proudly told us are
extremely successful, are growing fast, lead to real middle
class jobs for Americans, on your own unproven theory.
Chairwoman Davis. Mr. Levin, I'm sorry, your time is up.
Mr. Levin. Thank you.
Chairwoman Davis. Thank you.
Mr. Levin. I yield back.
Chairwoman Davis. Thank you. Mr. Takano.
Mr. Takano. Thank you, Chairwoman Davis, for this critical
hearing on the Department of Labor's improper--improper--
handling of the Registered Apprenticeship Program and the money
appropriated by Congress.
Mr. Pallasch, it is my understanding that DOL allowed a
contractor to use Registered Apprenticeship funds to create a
group called Apprenticeship Powered by Industry, known as API.
Additionally, one of its three stated goals was to ``support
the establishment of the I-RAP model.'' It is also my
understanding that this API initiative was also used for
recruiting and developing potential I-RAP accreditors, or SREs,
despite DOL telling this committee that they have not convened
any meetings or working groups on IRAPS.
My first question to you, was API created with Registered
Apprenticeship funds? And was it a major part of this
initiative to support IRAPs?
Mr. Pallasch. Thank you for your question, Representative.
Just so we're clear, the committee that you're referring to
both existed and was disbanded prior to my joining the
Department of Labor, so I cannot speak definitively to how the
committee came to be and what their work exactly was.
Mr. Takano. It is really difficult to hold accountable a
department that sends this committee people who weren't there
when these committees were formed or disbanded and they can't
answer questions. It is very frustrating. Well, so you can't
answer the question because you weren't there.
This includes finding programs to become IRAPs and
organizations also to apply to become SREs. And was this all
done using Registered Apprenticeship money?
Mr. Pallasch. Again, Representative, any--
Mr. Takano. You can't answer the question because you
weren't there.
Mr. Pallasch. So any money that was misapplied to the TES
account, or the Training and Employment Services account, was
discovered in the contractual review that we discussed earlier
in the letter I provided. And all of that funding was
appropriately charged to the program administration account.
Mr. Takano. Well, let me just ask you the question again.
Finding programs to become IRAPs and organizations also to
apply to become SREs, was this done using Registered
Apprenticeship money?
Mr. Pallasch. Again, any funds there were misapplied from
the TES account were appropriately charged against the program
administration account, and that was done through a working
group with career and noncareer staff from the Solicitor's
Office, the departmental budget center, the Office of
Apprenticeship, and the ETA front office. So that working
group, a very capable working group, sat down and went
deliverable by deliverable within those three contracts and
anything that was attributable to the Industry-Recognized
Apprenticeship Program was appropriately paid for out of the
program administration account.
Mr. Takano. Well, Assistant Secretary Pallasch, are you
aware that the committee first requested information in
February regarding the department's handling of apprenticeship
funding?
Mr. Pallasch. I am.
Mr. Takano. Are you also aware that those requests were
reiterated multiple times in public hearings, letters, and
staff-level briefings over the last 9 months?
Mr. Pallasch. I am.
Mr. Takano. And is it your testimony today that this
information was not available until 9:30 p.m. last night before
this hearing?
Mr. Pallasch. I was--Representative, I was attempting to,
upon my arrival, to address some of these issues. I believe
there was three briefings that I attended with Committee--or
Subcommittee Staff to try to better understand those issues,
better understand their concerns. And as I mentioned, there was
an exhaustive review done, that contract review was very
exhaustive, to ensure that we were identifying the appropriate
funding amount and the appropriate appropriation to charge
those funds against. So it was a complex issue.
Mr. Takano. Well, in fact, the department finally sent a
partial response to this committee at 9:30 last night. Are you
aware of any internal policies or practices in which the
Department of Labor collects information requested by Congress,
but decides to withhold that information in order to impede
congressional oversight?
Mr. Pallasch. No, I am not aware of such a process.
Mr. Takano. You are not aware of that, okay. Do you agree
that the department's decision to provide long-requested
information to the committee roughly 15 hours before this
hearing makes it harder for the committee to conduct proper
oversight on behalf of the American taxpayers?
Mr. Pallasch. It was important for us to deliver the
requested information as accurately and completely as we could,
and, unfortunately, that finalized with us delivering that to
you late last night.
Mr. Takano. Well, and you already answered, yes, you were
aware of the many, many times that we have requested this over
several months. And yet, it is delivered 15 hours before. It is
the intent of DOL to impede congressional oversight and
authority?
Mr. Pallasch. No, it is not.
Mr. Takano. Well, from where I sit it is increasingly
evident that the Department of Labor intentionally directed
funds that Congress intended for the Registered Apprenticeship
Program towards an untested program called IRAPs after
explicitly telling Congress the opposite. This is unacceptable,
Mr. Assistant Secretary.
Thank you and I yield back.
Chairwoman Davis. Thank you. Thank you. Your time is up. I
now turn to the Ranking Member of the committee, Dr. Foxx.
If it is the wish of the committee, we will go on to Ms.
Adams at this time.
Ms. Adams. Thank you, Chairwoman Davis and Ranking Member
Smucker, for convening the hearing. And thank you, Mr.
Secretary, for being here. I want to touch on a couple of items
that my colleagues have addressed already as it relates to the
Department of Labor's adherence to Federal law.
As you may know, my home state of North Carolina has a
state apprenticeship agency. The National Apprenticeship Act
stipulates that the Department of Labor engage with state
apprenticeship agencies when formulating and promoting labor
standards. And given the department's new I-RAP rule implicates
this law, how and when did you engage with state apprenticeship
agencies in this formation?
Mr. Pallasch. Again, Representative Adams, I appreciate
your question, but the IRAP rule is in open Notice and Comment
Rulemaking, so I'm unable to comment on the rule itself.
During that Notice and Comment Rulemaking I would inform
you that we received over 324,000 comments from states, from
trade organizations, from business associations, from
interested members of the public, which is most comments that
the department--or that ETA has ever received on a rule.
Ms. Adams. Okay. So you can't--I am not really asking about
the rule itself, but the formation of the rule. And so the
department is currently using money to develop IRAPs and has
staff in an I-RAP office. So these actions and questions are
within the scope of the committee's investigation of the
department's misuse of appropriated funds. But you don't have
any--I mean, I don't want you to comment about the proposed
rule, but the formation of it.
Mr. Pallasch. So the formation of the division of the
Industry-Recognized Apprenticeship Program Office within the
Office of Apprenticeship was done in consultation with the
department's Solicitor's Office and the departmental budget
center. So there were no appropriations issues with the
creation of that office.
Ms. Adams. Okay. So it is my understanding that you
informed the staff from the House and the Senate committees
that the Department of Labor has taken steps to streamline the
registration process for Registered Apprenticeships to make it
easier for employers to participate in the system, but those
actions have not been implemented because all of the work on
Registered Apprenticeship are on hold to create the IRAP
system. It that is not actually the case will you commit that
this streamlined registration process will be submitted to the
Office of Management and Budget for official review by the end
of this month? Can you commit to that?
Mr. Pallasch. Representative Adams, I want to make sure
that we're clear. The work on the Registered program not only
has continued, but has been more aggressive than at any point
in history. So simply, while we're going through the IRAP
Notice and Comment Rulemaking, the Registered program is
continuing to run, it's continuing to operate, we're continuing
to making improvements to it and make it more efficient.
Ms. Adams. So what about my question about the end of the
month? Are you able to submit an official review?
Mr. Pallasch. What--I'm sorry, I wasn't following?
Ms. Adams. Well, you--
Mr. Pallasch. What specifically are you asking us to
produce?
Ms. Adams. So you said that--I wanted to know if you could
make a commitment that the registration process will be
submitted to the Office of Management and Budget for review by
the end of the month.
Mr. Pallasch. Are you talking about--
Ms. Adams. Have you reviewed it? Have they reviewed it?
Mr. Pallasch. The streamlined application process for the
Registered program that I referenced earlier?
Ms. Adams. Yes. Has it been reviewed?
Mr. Pallasch. I--
Ms. Adams. So you can't commit. Okay, well, let me move on.
One of the few quarrels that I have with our Registered
Apprenticeships is the lack of diversity, particularly gender
diversity. And the last figure I saw was that only 8 percent of
all Registered Apprentices are women. So what is the department
doing to address this gap?
Mr. Pallasch. Representative Adams, that's a huge concern
of mine. I've been working with the Women's Bureau within the
Department of Labor. I spoke at their Women and Apprenticeship
event earlier this month. One of the things that we are trying
very hard to do through our intermediary contracts is improve
not only diversity, but make sure that underrepresented
populations are present in Registered Apprenticeship programs
going forward. So we are very committed to that.
Ms. Adams. Okay. So you are taking steps to address it?
Mr. Pallasch. Absolutely.
Ms. Adams. Okay. Can you specifically say, other than you
said you made some presentations, what tangible kinds of things
are you doing?
Mr. Pallasch. So a number of those organizations, those
intermediaries that I talked about, are working specifically
with underrepresented populations. Some are working with women
in trades. I'm happy to provide a breakdown of each of those
contracts and the targeted deliverables within those. But those
contracts very much speak to diversity and growing the
Registered program.
Ms. Adams. Well, thank you very much for your responses.
Chairwoman Davis. Thank you.
Ms. Adams. My office can probably help you with some of
that. Thank you very much. I yield back.
Chairwoman Davis. Thank you. I now turn to the Ranking
Member, Dr. Foxx.
Mrs. Foxx. Thank you, Madam Chairman. Mr. Pallasch, I have
some questions to begin with and I would appreciate it if you
could answer them as quickly as possible.
You have said that there were misspent funds on the I-RAP
program, is that correct?
Mr. Pallasch. There were misapplied funds, yes.
Mrs. Foxx. You are asserting today that you believe the
review conducted to determine the amount of misspent funds was
thorough and erred on the side of being overly inclusive of any
funds spent on the program that should not have been, correct?
Mr. Pallasch. Correct.
Mrs. Foxx. Are you telling us today that the accounting
issues with the spending have been addressed?
Mr. Pallasch. Yes.
Mrs. Foxx. And that means that any funds paid for out of
the wrong account have been corrected?
Mr. Pallasch. That is correct.
Mrs. Foxx. In fact, I think you said that about four times.
Mr. Pallasch, given all of this and your testimony, can you
assure us that we will not see this happen again under your
watch and that you have put in place the appropriate checks to
ensure it will not happen again?
Mr. Pallasch. Representative Foxx, I can. One of the things
that we did was actually modify all three of the contracts in
question and share those modifications with the contractors to
alert them that there were to be no I-RAP deliverables under
any of those contracts unless additional PA, or program
administration, funding was added to those contracts. In
addition, I've asked the department's chief procurement officer
to take a look at the contract administration and the policies
and procedures in place to make sure that they're as robust as
need to be.
And then, in addition, I've also asked the Inspector
General in addition to Congress' request that they look into
the ADA violation, I've asked the Inspector General to look
into the procedures, the policies, exactly how we got to where
we are, so that I can assure you that going forward that we
won't find ourselves in this situation again.
Mrs. Foxx. Mr. Pallasch, why were IRAPs created? What are
you doing to address some of those issues in the Registered
Apprenticeship space? And to be clear, are you sure you are
properly spending the available Federal funds on these
activities?
Mr. Pallasch. So the I-RAP program is an outgrowth of both
the Task Force on Apprenticeship and the executive order signed
by the President. And what the department is trying to do is
through the Notice and Comment Rulemaking with the Notice of
Proposed Rulemaking is create an additional pathway that would
allow individuals to enter the apprenticeship model. So that's
very much what we are focused on with the I-RAP rule.
Mrs. Foxx. And you said earlier you are making sure the
money is being spent correctly?
Mr. Pallasch. Yes.
Mrs. Foxx. Okay. How many contracts do you currently have
working on apprenticeships?
Mr. Pallasch. I believe there are 27 contracts in one
capacity or another that are working towards apprenticeships.
Mrs. Foxx. Is any of that work related to IRAPs?
Mr. Pallasch. Any work that is related to IRAPs will be
appropriately paid for out of the program administration
account.
Mrs. Foxx. Who oversees the accounting of that work and
ensures the contractor not has to do work that would be
inconsistent with the funding appropriated?
Mr. Pallasch. So that's the program office, the Office of
Apprenticeship, and what's called the contracting officer's
representative, or the COR.
Mrs. Foxx. With the backup of the IG, as I understood you
say earlier?
Mr. Pallasch. We're asking the IG to look into the policies
and procedures to make sure that they're as robust as needed.
Mrs. Foxx. Have you included other safeguards to ensure the
contractors will spend funds only on allowable expenses moving
forward?
Mr. Pallasch. As I mentioned earlier, those contract
modifications are a very clear message to our contractors that
there is to be no additional Industry-Recognized Apprenticeship
Program work on any of those contracts if and until they are
notified that additional appropriate funding is added to their
contract.
Mrs. Foxx. Now, Mr. Pallasch, this hearing is about
apprenticeships, but while you are here I want to ask about the
Job Corps program. This is a program that has a noble goal, but
has fallen woefully short of expectations and hopes. This
committee has had several hearings on the program, looking at
implementation and safety of the program. In fact, the DOL IG
just released its Management Challenges and Job Corps' safety
was chief among those concerns. There is a lot that needs to be
done in that program if it is ever going to achieve that noble
goal.
My question to you is whether your office is working on
these issues. And if so, when can you come and brief us on
these efforts?
Mr. Pallasch. Yes, we are. One of the primary deputies
within my office is dedicated entirely to the Job Corps
program, so he's been on board with the department for over 2-
1/2 years and been focused solely on Job Corps. And a
significant amount of his time has been focused on this
security and safety issue.
There was a comprehensive safety and security plan that was
adopted by the department in March of this year. There's been
any number of security enhancements that have taken place. I
believe that the funding is around $55 million.
So we have worked very closely with the IG to address the
concerns that they have in their Management Challenges Report
to make sure. They had a report last year that had three
recommendations. We have closed all three of those
recommendations with the IG. So we work very closely with the
IG when they come to us with issues or concerns related to the
safety of our students.
Mrs. Foxx. Madam Chairman, I think we are owed about 50
seconds. I would like to take the remainder of that time to
give Mr. Pallasch the time to clear the record about any other
questions you have received today. Are there any answers from
earlier today that you would like to expand upon at this time?
Mr. Pallasch. I appreciate that, Chairwoman Foxx. One of
the complicating issues is this idea of program administration.
And I understand the frustration from some of the members that
we're not able to articulate exactly how much money is spent
under the program administration account. A large part of that
has to do with the fact that staff, who are funded out of the
program administration account, do not track their activities
within that account.
So we have staff who work on any number of programs, paid
for out of the program administration account. So if we're
asked to attribute some percentage of that program
administration to a specific activity, we simply can't do it
because that's not the way the time and attendance system
works.
So I want to be clear that we have--
Chairwoman Davis. Thank you, Mr. Pallasch.
Mr. Pallasch. Thank you.
Chairwoman Davis. Yeah, thank you.
Mrs. Foxx. Thank you, Madam Chairman.
Chairwoman Davis. Mr. Trone.
Mr. Trone. Thank you, Chairman Davis and Ranking Member
Foxx, for holding this important hearing.
Registered Apprenticeships are by far America's most
successful workforce training program, delivering real results,
both workers and employers. On a bipartisan basis, Congress has
consistently provided for the expansion of Registered
Apprenticeships. Unfortunately, rather than doing that, the
Trump administration has improperly shifted funding from
Registered Apprenticeships to start an entirely new program,
the Trump-initiated, Industry-Recognized Apprenticeship, IRAP,
Program, and then misled Congress as to what they are doing.
I am concerned that the DOL isn't sufficiently carrying out
its statutory requirements to safeguard the welfare of
apprenticeships within the Registered Apprenticeship system.
Can you explain why the DOL guidance on apprentice to
journeyman worker ratios was pulled down in last December of
last year and has yet to be replaced?
Mr. Pallasch. So, Representative Trone, I appreciate the
question. That's one of the issues that I'm working with the
Office of Apprenticeship on. As I mentioned earlier, there are
a number of initiatives that I'm working with that office on to
try to improve the efficiency and the efficacy of the
Registered program. And that ratio circular is one of those
specific issues.
Mr. Trone. One second, let me back up. It is 11 months.
Mr. Pallasch. Understood. I was not at the department when
it came down, but shortly after I joined in July, it was
brought to my attention as something that we needed to address.
Mr. Trone. Okay. Well, sooner versus later. I would also be
interested to hear your plans for apprenticeship complaints,
the complaint form that expires in January. I saw a notice was
filed in the Federal Register soliciting comments on this form,
but it is, again, already mid-November. And why is there such a
delay in starting this process? And I am concerned the
deadline--given there is about a 60-day comment period, can you
confirm when that form will be complete and renewed, will it be
done by January 31, 2020?
Mr. Pallasch. We are aware of that deadline and we are
working diligently to meet that deadline.
Mr. Trone. Okay. We will count on that. Thank you.
I would like a detailed explanation and plan on how these
regulations can be fully implemented and approved in the coming
weeks. And we would like a clear answer on why the guidance was
pulled down and the complaint form was not addressed in a
timely manner. If you could put something to committee in
writing, that would be great. Could you get something back in
the next week or so?
Mr. Pallasch. I don't know if I can commit in the next
week, but I will commit to working with you and your staff to
get you the answers you need, yes.
Mr. Trone. The week after Thanksgiving be good?
Mr. Pallasch. We'll work as quickly as we can.
Mr. Trone. Excellent. As my colleagues discussed today, the
Department of Labor is awarded contracts supporting
apprenticeships, three firms: Meyer & Meyer, Booz Allen,
Edelman; $32 million. It is the department's position only $1.1
million of the Registered Apprenticeship funds were expended on
these contracts to support IRAP. What has been done to support
the actual Registered Apprenticeships with these millions of
dollars awarded?
Mr. Pallasch. So those are three separate contracts. The
first contract is the Edelman contract, which is an outreach
contract. There's a campaign that we're working with the
contractor to develop to promote apprenticeships. As I
mentioned, we're very interested in growing the apprenticeship
model, the uptake of the apprenticeship model, so that's--we're
working very close with Edelman on that.
Booz Allen Hamilton is responsible for creation of the
apprenticeship.gov website. We've tried to create a one-stop
shop for any--whether it's an employee, an employer, a parent,
a student who's interested in apprenticeships that they can--
Mr. Trone. I think that is important and I am glad you
brought up the website because I always look for ways my
constituents can get a better job. And I have to say that after
searching that apprenticeship.gov website for Registered
Apprenticeships in my district, I realized it is not really a
website to help find Registered Apprenticeships. When I look
for positions there is 2,526 postings on that site, but only 11
were for Registered Apprenticeships.
Can you explain to us how you justify using Registered
Apprenticeship funds when less than 1 percent of the website's
posting are for true Registered Apprenticeship positions?
Mr. Pallasch. So I'm not familiar with the data that you
refer to there, but I can assure you that in the contract
review that I referenced earlier, we worked very closely with
Booz Allen Hamilton to determine which were Registered
Apprenticeship deliverables and which were IRAP deliverables
under that very contract. And anything that was misapplied to
the TES account, or the Training and Employment Services
account, was appropriately funded out of the PA account.
Mr. Trone. Well, there were over 100,000 new apprenticeship
opportunities in Fiscal Year 2018 and I would like if we could,
get a clear explanation as to why the department is using
Registered Apprenticeship funds for a website that is clearly
not being used to promote Registered Apprenticeship
opportunities. Is that fair?
Mr. Pallasch. I'm not necessarily understanding what you're
saying. Again, the contractor, Booz Allen Hamilton, was brought
on board to create--
Mr. Trone. Twenty-five hundred jobs.
Mr. Pallasch. Correct.
Mr. Trone. Not only--versus 11 about Registered
Apprenticeships.
Mr. Pallasch. Again, I'm not familiar with that data. I'm
happy to look into that issue and get back to you because
that's something--
Mr. Trone. If you could look into it and get back the week
after Thanksgiving, that would be great.
Chairwoman Davis. Thank you, Mr. Trone. We now turn to the
Ranking Member for her closing statement. Oh, I am sorry.
Sorry. Mr. Scott, Chairman of the committee, we now turn to you
for your distinguished remarks.
Mr. Scott. Thank you. Mr. Pallasch, you mentioned that
virtually all of the students in the Registered
Apprenticeships' 94 percent end up with jobs at $70,000 a year,
is that right?
Mr. Pallasch. Yes, that's the average, correct.
Mr. Scott. Okay. And are there comparable numbers for the
IRAPs?
Mr. Pallasch. There is not an IRAP program, so there is no
data.
Mr. Scott. So you have no data at all on the IRAPs, okay.
You indicated that there are 3,000 new apprenticeship programs
in 2018 alone?
Mr. Pallasch. That is correct.
Mr. Scott. Are those Registered Apprenticeships?
Mr. Pallasch. Correct.
Mr. Scott. Now, Ms. Adams asked you about the streamlined
process, the process to streamline the process for registering
a program under the Registered Apprenticeship programs. Do you
have proposals in the works to streamline the process for
Registered Apprenticeship programs?
Mr. Pallasch. Again, I was not--when Representative Adams
referenced that, I'm not exactly sure what she's referring to.
As I mentioned, we've taken some proactive measures within the
Registered program to streamline the application process and
reduce the paperwork. That is complete, that is done. The new
application is up and active. And that showed about a, as I
mentioned earlier, 70 percent reduction in that paperwork
burden.
Mr. Scott. Okay. And did I understand you to say that you
had figured out a way to fund IRAPs with Department of Labor
money even though the appropriations said Registered
Apprenticeship programs only? How are you able to spend
Department of Labor money anyway on IRAPs?
Mr. Pallasch. So, again, there's two accounts that are the
subject of this hearing. The first is the Training and
Employment Services account, which is specifically appropriated
to further and enhance the Registered Apprenticeship Program.
There's also the program administration, or the PA account,
which the agency has broad discretion to use for any
directives, any policies as it sees fit. Any of the IRAP
funding is coming out of that program administration account,
which is an appropriate use of those funds.
Mr. Scott. Now, have you been in touch with the Solicitor's
Office on that to give you guidance on how to use appropriated
money for IRAPs?
Mr. Pallasch. Absolutely. The Solicitor's Office, the
departmental budget center, career and noncareer staff from
both of those offices have worked with us lockstep in this
process.
Mr. Scott. And is that guidance in written form so we can
see it?
Mr. Pallasch. I don't know. There was a working group
created, as I mentioned earlier. I don't know that there was
written guidance. There was membership on that group from the
Office of the Solicitor and from the appropriations office
within the Office of the Solicitor.
Mr. Scott. Well, can you go look and see if you can find
written guidance that says you can spend Department of Labor
money on funding IRAPs?
Mr. Pallasch. I will look into that issue.
Mr. Scott. Now, my reading of the IRAP regulations is that
the National Apprenticeship Act requires the DOL cooperate with
state agencies engaged in the formulation and promotion of
standards of apprenticeships. Is that requirement in IRAPs?
Mr. Pallasch. Again, because the I-RAP rule is in Notice
and Comment Rulemaking it's inappropriate for me to comment on
specific elements within that rule.
Mr. Scott. In the rule, okay. Can you tell me whether or
not my home state of Virginia has been consulted in the
development of IRAPs?
Mr. Pallasch. I cannot tell you here today if Virginia
submitted comments on that rule, but I'm certainly willing to
get back to you with that information.
Mr. Scott. Thank you. I yield back.
Chairwoman Davis. Thank you. Thank you, Mr. Scott. And we
now go to Ms. Hayes.
Mrs. Hayes. Thank you. Assistant Secretary, Pallasch, thank
you so much for being here. I am concerned that we are losing
sight of the fact that every dollar misused by the department
represents a lost opportunity for a stable, high-paying job for
one of my constituents. I support apprenticeship programs and
multiple pathways to success. I am listening and a lot of the
questions that I had--this is not my committee. I waived onto
this committee because I had lots of questions. And much of
what--many of my questions were already brought up by my
colleagues and it seems like there is this idea of either you
support apprenticeship programs or you don't, and that is not
really what is happening here.
The thing I would like to say to you is that while
assurances are great, you could have done a much better job to
help us support what you are trying to do had we been provided
with the documentation a lot sooner. The night before the
hearing, and I have seen this, and I think that is what gives
me concern hearing after hearing, whether it is the Department
of Labor, the Department of Agriculture, the Department of
Education, we are getting the information right before the
hearing and we can't help you do your job better or support
you, you know, as a collective body on both sides to say, you
know, let us give you the support that you need.
So just moving forward, we all support apprenticeship
programs. I don't think that is the argument here.
In my state, we have 4,312 Registered Apprenticeship
programs, all bolstering higher--more access to opportunities.
At my high school, I was a high school teacher, postsecondary
education is not the pathway to success for everyone, so I get
it.
You said you want to enhance apprenticeship programs, but I
don't understand if Registered Apprenticeship programs require
wage progressions consistent with skills gained through those
programs and IRAPs do not, then how could--how is IRAPs a
better program as far as apprenticeships?
Mr. Pallasch. Representative Hayes, thank you for your
comments. And I first want to share my support for the
apprenticeship model. As you mentioned, I think we all agree
that the apprenticeship model is the model that we need to
further. Again, unfortunately, I can't talk specifically about
the I-RAP rule and what is contained and what is not contained
in that rule.
Mrs. Hayes. Okay, but can you say that--okay, so can we
agree that Registered Apprenticeship programs require a salary
progression while IRAPs do not?
Mr. Pallasch. I cannot say what an I-RAP does or does not
contain because there is no final rule yet.
Mrs. Hayes. Okay. Can you say if IRAPs are required to have
an Equal Opportunity plan, like Registered Apprenticeship
programs?
Mr. Pallasch. Again, under advisement of my attorneys I
should not be speaking about specific elements within that
rule.
Mrs. Hayes. So I am assuming that you cannot say that there
is comparable data that says that IRAPs have the same salary
post-graduation as apprenticeship programs, that $70,000 a year
that you talked about?
Mr. Pallasch. Again, I can't specifically speak to the I-
RAP program because it does not exist currently.
Mrs. Hayes. Okay. So how about the fact that I think a lot
of what you have heard today and a lot of the concerns of my
colleagues are that congressionally appropriated funds, which
we had been assured over and over would not be used for
something other than they were appropriated, have now been
shifted to support programs like IRAPs? And I have heard you
say over and over that there is two accounts.
If, in fact, you have worked with Solicitor General--I mean
the Office of the Solicitor in order to implement these
programs and you knew you were coming to this hearing, why
wouldn't you just bring that information with you? We could
have gaveled out an hour ago.
Mr. Pallasch. Because, again, if you're talking about the
program administration funding and how much--
Mrs. Hayes. The program administration funding.
Mr. Pallasch. Again, as I mentioned, it's the way that fund
is tracked and the way that staff are assigned to that account
and that their activities are not tracked within that account.
Mrs. Hayes. Right.
Mr. Pallasch. So there may be budget activities, there may
be HR activities, there may be apprenticeship activities, there
may be Registered activities. There's no way to break out an
individual's time to provide you that specific number that
you're looking for, under the PA account how much was applied
to the I-RAP program.
Mrs. Hayes. But if it is as complicated as you say, then I
would--I am just imagining from in my office, if I were going
into a hearing or going into a meeting and I had to give this
complicated metrics that you are describing, there is no way to
describe it, I would make sure that I sat with my staff and
broke it down to the lowest common denominator and made it as
simple as possible, so that when I sat on the other side of
that dais in order to present this information, I would have
given the committee more than 15 hours to go through it. I
would have made the effort, you know, if we are truly trying to
enhance these programs and move them forward, to say then what
can we do to disaggregate it?
I just find it very difficult to believe that the
Department of Labor can't come up with a system by which we are
pulling this apart. To simply say we can't do it just doesn't
seem reasonable when we are talking about millions of dollars
in appropriated funds and hundreds of thousands possibly of
students on the other side of these programs that are looking
for us to get it right.
Mr. Pallasch. Real quick, I want to make sure that there
were no misappropriated funds. There were misapplied funds that
have since been corrected. So all of the Training and
Employment Services funds were spent on the Registered
Apprenticeship Program. There are challenges with the program
administration account, I will admit that. But, unfortunately,
I don't have the ability to disaggregate that data in the way
you're looking for.
Mrs. Hayes. Well, I thank you. My time is up.
Chairwoman Davis. Thank you.
Mrs. Hayes. But we could have helped you with those
challenges had we had the information.
Chairwoman Davis. Thank you. Now turn to Ms. Wild.
Ms. Wild. Thank you, Madam Chair. Mr.Pallasch, let us wrap
up this issue of money being misapplied. You do agree that to
date Congress has never appropriated any funds for IRAPs,
correct?
Mr. Pallasch. There is--the department does not have a
specific appropriation for the Industry-Recognized
Apprenticeship Program, correct.
Ms. Wild. Okay. So will you commit today, sitting here
today, going forward that no money has been dedicated to
Registered Apprenticeships will be used to fund and staff an I-
RAP office?
Mr. Pallasch. Yes.
Ms. Wild. You will make that commitment today?
Mr. Pallasch. Yes. If we're talking about TES, or Training
and Employment Services, funds appropriated for the Registered
program, yes.
Ms. Wild. Thank you. You and I agree on the apprenticeship
model and that we need to shine a spotlight on it. I, frankly,
think that contrary to some of the statements on the other side
of the aisle that everybody in this room agrees with that. But
I have major concerns about the lack of action that the
Department of Labor has taken with regard to staffing levels,
especially in the state offices of apprenticeship. We all know
that staffing is important to administration.
And back in a March hearing, my colleague Mr. Walker asked
a witness from the Dallas County Community College about his
experience with working with the Federal Government on
Registered Apprenticeships. And the witness responded about his
regional office in Dallas saying they are great, they have
terrific knowledge of apprenticeship programs. We consider them
a critical partner, but they are understaffed.
First of all, would you agree with the witness from the
Dallas County Community College about the understaffing issue?
Mr. Pallasch. Not knowing all of the facts that they were
referring to, I would be reluctant to admit to that. But I what
I would admit to is what I mentioned earlier, is that it's been
a commitment of mine from the first day in office that all of
our programs fill all of their vacancies.
Ms. Wild. And I understand that you didn't come to the
department until July, but that testimony was back in March.
And the Texas state apprenticeship director position is still
vacant along with now Alabama, Idaho, and Oklahoma directors.
And at one point, when Tennessee and Alabama were both vacant,
the director in Georgia was covering three states at once.
You have now been on the job for 5 months, but we still
have at least three state director vacancies and staffing
levels are operating below 70 percent capacity. So if these
state offices are critical to the success of the Registered
Apprenticeship system, isn't it true that the vacancies are
going to undermine the effectiveness of the system?
Mr. Pallasch. So I'm not familiar with the 70 percent
staffing level that you indicate, but I'm happy to provide a
full accounting of where the Office of Apprenticeship is on all
of the current vacancies that exist.
Ms. Wild. Well, my next question was going to be, and you
must have anticipated it, what exact steps have been taken
since you came to this position to fill these positions? And
can we expect that they will be filled by the end of this year,
2019?
Mr. Pallasch. Again, I would not commit to when they will
be filled, but what I can commit is that I've got a weekly
staff meeting with all the administrators for the programs
across ETA. And on a weekly basis I provide an update on where
we are as an agency with all of our vacancies.
Ms. Wild. So tell us what you learned at your last weekly
meeting. Where are we in terms of filling these vacancies?
Mr. Pallasch. Again, I will commit to provide you a listing
of exactly where we are in all of the Office of Apprenticeship
vacancies.
Ms. Wild. Okay. Well, that is great, but you just had a
meeting last week, right, if you have weekly meetings?
Mr. Pallasch. Correct.
Ms. Wild. Tell us what you were told at that point.
Mr. Pallasch. So it's not what I was told. Every week we
provide to the administrators a listing of all the vacancies.
For ETA-wide there's about 65 vacancies in any given week. So
our Office and Management and Support Services provides that
listing to the program administrators and I make it very clear
that they are to fill any and all vacancies that they have in
their program.
Ms. Wild. Well, we have been asking for months about a plan
for filling these offices and positions and the Department of
Labor has yet to provide one. Can you commit to providing this
plan to the committee in writing within the week after
Thanksgiving?
Mr. Pallasch. We will commit to providing you a listing of
all the current vacancies and our efforts to fill those
vacancies, yes.
Ms. Wild. You will provide us with all of the current
vacancies and your efforts to fill those vacancies by the end
of the week after Thanksgiving?
Mr. Pallasch. Again, I would be reluctant, especially given
the holidays and staff--
Ms. Wild. Well, the reason I am trying to pin you down is
because we have been asking for months and we never get
answers, so I need an answer.
Mr. Pallasch. Understood. And I will commit to providing
that information as quickly as we can to make sure that you've
got full and accurate information.
Ms. Wild. I need a deadline on that.
Mr. Pallasch. It would be unwise for me to give you a
deadline this day without talking to staff first.
Ms. Wild. So you won't give me a deadline of, say, the end
of 2019, December 31st of this year? Can we expect all of that
information?
Mr. Pallasch. Again, I--you can expect that information as
quickly as we can get it to you.
Ms. Wild. Thank you.
Chairwoman Davis. Thank you very much. I'm sorry that your
time is up.
Ms. Wild. Thank you.
Chairwoman Davis. And I want to make a point, I think, as
you could appreciate, Mr. Pallasch, that this has been very
frustrating from our end. I know it sounds like it has been
frustrating from yours, as well. But we really need to have
those responses. And what we are hoping for is that we can see
a number of responses.
And in a moment I will just remind my colleagues of the
time that they have to submit those questions, as well, that
there--really by the end of this month, but even as you receive
that information. So we need to have an ability to have that
dialogue. And it has been happening through the correspondence
and yet that has been delayed on so many different fronts, so I
wanted to bring that to your attention. Thank you.
I believe everybody who wants to address the witness at
this time has spoken. So I want to remind my colleagues that
pursuant to committee practice, materials for submission for
the hearing record must be submitted to the Committee Clerk
within 14 days following the last day of the hearing,
preferably in Microsoft Word format. The materials submitted
must address the subject matter of the hearing. Only a Member
of the committee or an invited witness may submit materials for
inclusion in the hearing record.
Documents are limited to 50 pages each. Documents longer
than 50 pages will be incorporated into the record via an
internet link that must be provided to the Committee Clerk
within the required timeframe. But please recognize that years
from now that link may no longer work.
I also want to thank you again, Mr. Pallasch, for your
participation. I think what we have heard is very valuable. I
will have a comment in just a minute, but, at the same time, it
reflects the lack--the frustration that I just mentioned in
terms of getting appropriate information.
Members of the committee may have some additional questions
and we ask you to please respond to these questions in writing.
The hearing record will be held open for 14 days in order to
receive those responses. So even though we are looking for
comments by the end of next week, at the same time we know that
could be extended by virtue of when they come in.
I remind my colleagues that pursuant to committee practice,
witness questions for the hearing record must be submitted to
the Majority Committee Staff or Committee Clerk within 7 days.
And the questions submitted must address the subject matter of
the hearing.
I now want to recognize the distinguished Ranking Member
for her closing statement.
Mrs. Foxx. Thank you, Madam Chair. I also would like to
thank Secretary Pallasch for testifying today. And I want to
address just briefly the last questions that were being asked.
We all know that there are 7.1 million vacant jobs in the
country, so it is logical to assume that there are unfilled
jobs in all of the government agencies. And demanding that the
department explain every single job that is vacant and why it
is vacant and what has been done to fill it seems a little
unreasonable to me. I think everybody if they have a legitimate
job that is vacant wants to fill it as quickly as they possibly
can. I happen to have a job in my office that we would like to
get filled. And I suspect if we talked to members, everybody
has got some jobs unfilled.
We all agree that apprenticeship programs are a tried and
true method for providing students with the skills they need to
remain competitive in today's economy. There are also tried and
true methods for providing people who are already working with
the skills they need to remain competitive. And I am, frankly,
encouraged as I talk to people who have apprenticeship programs
that they are talking more and more to existing workers about
going into apprenticeship programs to improve their skills.
There is certainly room for improvement in every--any
government program, and I talk about that a lot. But I do
appreciate the department's leadership in championing policies
that work or American families and workers.
I look forward to working with you and my colleagues here
today on strengthening the apprenticeship programs and
reversing the stigma that a baccalaureate degree is the only
path to achieve lifelong success. I am, frankly, very happy
that the world, and our country in particular, has awakened to
that issue.
We must ensure all funds are used not only efficiently and
effectively, but in full accordance with the law. I am glad to
hear that commitment from Mr. Pallasch today and I expect the
high standards he promised to be kept. For apprenticeships to
be part of solving the skills gap in the Nation, the programs
need to be flexible and meet the needs of workers and
employers, and be able to adapt to the growing needs of the
economy.
I thank you again, Mr. Pallasch, for your time. And I thank
the Chairwoman for the hearing. I look forward to continuing
the conversation and work on this issue. I yield back, Madam
Chair.
Chairwoman Davis. Thank you, Dr. Foxx. I appreciate that
and now recognize myself for the purpose of making my closing
statement.
And I would say as I look to my good friend and the Ranking
Member, I know that there are many things that we totally agree
within this. We want this to succeed. We want--we know we have
a depth of programs in our country, but we can do better than
that. And we know that many, many more students throughout this
country and adults can benefit from these programs, but we need
to be sure that we are communicating honestly and clearly.
Thank you, Mr. Pallasch, for being with us today. We know
that this raises a number of serious issues with the Department
of Labor's handling of the U.S. apprenticeship system. Despite
your testimony, the fact remains that the department improperly
spent over a million dollars, though likely much more, that
should have been invested in expanding Registered
Apprenticeships, which guarantee apprentices decent wages,
valuable credentials, and a pathway to the middle class.
As I said at the beginning of the hearing, the
apprenticeship programs are experiencing record levels of
participation and interest. We are very excited about that. We
have a rare chance to strengthen Registered Apprenticeships so
that more American workers can experience the benefits of high-
quality apprenticeship programs. But we also know that we can't
accomplish that in a bipartisan manner if the department
continues to resist transparency, divert resources to
unaccountable and unproven apprenticeship programs, and violate
the clear intent of Congress to invest taxpayer money in
Registered Apprenticeship programs that have a long record of
success.
I urge you, the Employment and Training Administration and
the Department of Labor, to recommit to the core purpose of our
apprenticeship system: to ensure access, opportunities that
provide well-paying jobs and benefits, valuable skills, and a
credential that can set apprentices on a path to a rewarding
career. And I strongly urge you to reconsider your actions on
supporting IRAPs.
And think that today's hearing makes clear that stronger
language and protections need to be included in our
appropriation laws to protect from these unacceptable actions
happening in the future. Our oversight in to the department's
actions will only continue from here, but we also look forward
to working with you and each of our colleagues to expand the
high-quality Registered Apprenticeship opportunities that have
helped so many Americans succeed in the modern economy.
I urge my colleagues to send in their questions as we have
talked about. And if there is no further business, without
objection the committee stands adjourned. Thank you.
[Additional submissions by Ms. Jayapal follow:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
[Whereupon, at 2:59 p.m., the subcommittee was adjourned.]
[all]