[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
      
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                    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.]

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