Trump administration's rollback of worker protection rules is under investigation

The Labor Department's inspector general is examining how the department made decisions to roll back regulations.
Image: Alexander Acosta
Labor Secretary Alexander Acosta testified before the House Ways and Means Committee last year. Win McNamee / Getty Images

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By Suzy Khimm

The federal watchdog for the Department of Labor is conducting a broad investigation into the Trump administration's process for making regulatory changes, following allegations that officials are undoing worker protections without following the proper procedures, according to a letter obtained by NBC News.

The investigation will include the Labor Department’s effort to undo a child labor regulation affecting teenagers who work in hospitals and nursing homes, according to the Jan. 25 letter by the department's inspector general, Scott Dahl.

Dahl sent the letter in response to congressional Democrats who had asked him to audit the administration’s move, and who provided NBC News with the letter.

Dahl wrote that his office would be incorporating its investigation of the child-labor rollback into “a broader review of the rule-making process at DOL."

“The objective of this review is to determine how well DOL manages the issuance of regulations,” Dahl said in the letter, which also cited the independent watchdog’s efforts to examine “the integrity of the rule-making process” in the department’s worker health and safety division.

Dahl is already investigating the Labor Department's handling of a proposal to allow restaurant managers and owners to take workers’ tips and place them in a tip-sharing pool that includes bosses. Bloomberg Law reported last year that the administration hid its own projection that the change would allow management to skim $640 million in gratuities. (The administration later backed off the change.)

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The Labor Department is facing legal challenges over other deregulatory actions affecting workers. Last week, the department undid an Obama-era regulation requiring certain employers to submit detailed reports of workplace injuries electronically, arguing that it risked violating workers' privacy. Last year, the department made it easier for small businesses and self-employed people to buy health insurance that does not comply with the Affordable Care Act. Both changes have spurred lawsuits alleging that officials failed to follow legally required procedures for rule-making.

Congressional Democrats who had asked the inspector general to investigate the child-labor rollback said they welcomed the watchdog's more expansive probe.

"Inspector General Dahl’s response is a welcome step toward ensuring that the Department of Labor is truly acting in the interests of young workers in hospitals and nursing homes,” said Sen. Elizabeth Warren, D-Mass. “This is not the first time in recent memory that the department has tried to roll back workers’ rights on the basis of questionable or hidden evidence, so I am glad that the inspector general is taking a broad look at the department’s rule-making processes as well."

Federal agencies must explain why the benefits of regulatory changes justify the costs when going through the formal rule-making process. They are prohibited from making “arbitrary and capricious” policy changes or risk facing legal challenges under the Administrative Procedure Act. The White House's critics have regularly used such challenges to blunt the president's deregulatory agenda in the courts.

"The office of inspector general’s decision to do a broader review of the Department’s entire rule-making process is an important step towards shedding light on this approach and restoring workers’ faith in the department charged with protecting their rights,” said Rep. Bobby Scott, D-Va., chairman of the House Committee on Education and Labor.

The Labor Department declined to comment on an open investigation, and referred questions about the injury-reporting lawsuit to the Justice Department, which also declined to comment. The administration is seeking to have the lawsuit over small-business health plans dismissed.

For months, worker-safety advocates have criticized the Labor Department for providing shoddy evidence to lift an Obama-era rule prohibiting 16- and 17-year-olds from operating power-driven patient lifts without supervision. They fear that allowing teenagers to operate the lifts on their own could endanger both young workers and vulnerable patients in nursing homes and hospitals.

The advocates, together with congressional Democrats, say the Trump administration officials relied on unscientific data to support the rollback, potentially violating the department’s own data quality guidelines and running afoul of federal rule-making laws. In its proposal to scrap the rule, the Trump administration referred to a 2012 survey of vocational schools, which said the regulation was imposing burdens on employers and forcing students to change jobs.

The National Employment Law Project, a left-leaning think tank in New York, obtained the underlying data for the survey, which had been collected through online tool SurveyMonkey. The group, along with Scott and other Democrats, says that the survey was flawed and that the findings cited by the Labor Department only reflected the views of a small handful of schools.

In a Dec. 4 letter to Scott, the Labor Department said it was not relying on the data in question "as part of any quantitative economic analysis" and drew information from many other stakeholders to support its child-labor rollback, including the Bureau of Labor Statistics. In its proposal to make the change, the administration said it would add more than 23,000 young workers to the health care system without endangering them.

Deborah Berkowitz, program director for worker health and safety for the National Employment Law Project, says the administration's approach toward the child-labor rule reflects a broader problem.

"This is not a one-off situation — this is how they are conducting rollbacks of really important worker protections, and doing it with misleading information at best," said Berkowitz, a former Labor Department official under President Barack Obama. "There’s clearly a pattern of the Department of Labor hiding information that is inconvenient and does not support the department’s position, in violation of well-known and established laws."