EMPLOYMENT STANDARDS ADMINISTRATION

STATEMENT OF ROBERT B. COLLYER, DEPUTY UNDER SECRETARY FOR EMPLOYMENT STANDARDS

ACCOMPANIED BY:

LAWRENCE W. ROGERS, DIRECTOR, OFFICE OF PROGRAM DEVELOP MENT AND ACCOUNTABILITY

KAREN S. SEVERN, DIRECTOR, DIVISION OF BUDGET AND FINANCE FOR EMPLOYMENT STANDARDS

MARY ANN WYRSCH, DIRECTOR, OFFICE OF BUDGET

SUBCOMMITTEE PROCEDURE

Senator ABDNOR. Next, we will hear from Robert Collyer, the Deputy Under Secretary for Employment Standards.

Mr. Secretary, we welcome you to the committee, too, this morning. We are moving right along here.

I see you have some people with you, so if you will introduce them, we will let you proceed as you wish.

As you heard me say earlier, the entire statement will be placed in the record. You can proceed any way you wish.

INTRODUCTION OF ASSOCIATES

Mr. COLLYER. Thank you and good morning, Mr. Chairman.

I would like to introduce Karen Severn, on my left, Director of our Division of Budget and Finance.

Larry Rogers, to my immediate right, is Director of the Office of Program Development and Accountability.

And Mary Ann Wyrsch, is Director of the Office of Budget for the entire Department.

Mr. Chairman, I will not read the statement. I will visit with you for a few minutes about the Employment Standards Administration and what we are doing and what we plan to do in the future.

OVERVIEW OF FISCAL YEAR 1983 REQUEST

Our overall request of $1.93 billion is up from $1.878 billion in 1982, an increase of 3.2 percent. S. & E., salaries and expenses, for 1982 was $182 million, and we are asking for almost $191 million, an increase of 4.8 percent.

I have to point out that two-thirds of that increase in salary and expense is mandatory current services. It is not discretionary. It is pay increases and that sort of thing. We have to have the funds for current cperations.

The other third or about $3 million is virtually all for the continuation of our 5-year automatic data processing plan. We are trying to get off the manual systems, get the numerous details of the Employment

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Standards Administration, onto the computer so we can have much, much better and more accurate records, and we will need fewer people to handle the clerical process.

Even though our request is a barebones request and we have cut many things to preserve this 5-year continuum, if we lose 1 year within the 5, we could lose more than 1 year's funding because we could lose people, lose the contractors, and the momentum we have built up in this 5-year plan.

I am very impressed with what we see in the future in terms of capabilities through our computer systems.

Last year, I established an internal control unit because one of my highest priorities throughout ESA is the control of fraud, waste, and abuse. And this internal control unit is composed of people who have varied backgrounds, Ph. D., CPA, people of this sort, who have access to all of ESA's records. They report directly to me on matters of fraud. They are looking for, not just evidence of fraud, but gaps in our control systems that might allow for fraud at some future date and recommending to us changes that might be made in our programs to prevent waste, abuse, and certainly fraud.

WORKERS' COMPENSATION PROGRAMS

In the Office of Workers' Compensation Programs, we have three separate workers' compensation programs that we handle. The black lung program was in desperate need of change statutorily. We accomplished that last year, just 4 months ago. We passed our black lung bill.

The black lung program was in debt to the Federal Treasury to the tune of $1.5 billion. We have doubled the tax on coal. This was agreed in the bill. All the interested parties contributed to the compromise.

We tightened eligibility so only those people with black lung who are disabled can get into the program. Such was not the case prior to the time we passed that legislation.

As a result, the debt, the advances we were having to take from the Federal Treasury, are dropping. The number of claims is dropping. The program is coming down to something more like a reasonable workers' compensation program, a major advance.

We also administer the Longshoremen's and Harborworkers' Act. It does not rely on Federal money. The benefits are paid by the employers through either self-insurance or insurance. That act is badly in need of revision.

Senator Nickles has a bill in his committee at this time, S.1182, and we support major changes and many of the recommendations that they

have in that bill.

We have other things we have suggested to the committee. And we are going to urge the passage of longshore reform this year. Many things need to be done.

The Federal Employees Compensation Act is the act that covers the 3 million Federal civilian employees. We pay the benefits out of Treasury dollars and are reimbursed from the agencies for whom the people

work.

We have a bill that was sent up to the Hill last week. That act also needs major revisions and has needed them since 1974, which was the last time it was amended.

OFFICE OF FEDERAL CONTRACT COMPLIANCE

Next is the Office of Federal Contract Compliance Programs. We are suggesting again major changes in the regulations under Executive Order 11246. We are trying to turn around that program in terms of direction. We are trying to reduce the onerous paperwork burdens on employers and help that program create job opportunities for minorities and women and improve their chances of getting better jobs.

WAGE AND HOUR DIVISION

The Wage and Hour Division is our third major component. We are proposing major regulatory changes in both the Davis-Bacon Act and Service Contract Act. We will also be proposing legislation that will be coming to the Hill shortly in the Fair Labor Standards Act and Farm Labor Contractor Registration Act. The latter act is sorely in need of change; it is completely out of control as far as I am concerned.

That bill should be up here within 3 weeks to 1 month. And again, we have consulted with the interest groups. We think we have a compromise. We will have hearings on it, and I think it will be an act the Congress can approve.

So we think we are doing a better job of running our programs. We are doing it with fewer resources, and at the same time, we are making an extra effort that it takes to change the programs, change the statutes and change the regulations.

That is it, Mr. Chairman. I would be glad to respond to any questions you might have.

Senator ABDNOR. Thank you, Mr. Secretary. It sounds like you have taken a lot of initiatives here. And I am sure you are keeping the committee busy with all of that. That is fine. We commend the Department for that.

AUTOMATIC DATA PROCESSING INCREASE

The 1983 budget contains an increase of nearly $4 million for various automatic data processing which you mentioned.

Mr. COLLYER. Yes; that is correct.

Senator ABDNOR. What specific savings do you project as a result of those increased expenditures? I guess you have touched on that, too. Mr. COLLYER. Regarding the specific dollar savings, sir, in 1983, I think there are some savings that will be gained through the elimination of overpayments. When we make payments under benefit programs using the manual budget system, there is the potential for duplication. I know the Inspector General and the General Accounting Office has gone through some of the black lung files and found there have been overpayments of several million dollars that we are trying to recapture right now. This was mainly because the program was run at that time through five separate computer contracts with manual, literally manual, carrying of files in between these contract clients.

It was just an emergency system put together to accommodate the changes in 1977. And some claims slipped through the system. And they were overpaid. And we are trying to clean that up.

BLACK LUNG

The integrated ADP system will prevent this sort of thing.

Certainly, in the Federal Employees Compensation Act, we plan by 1984 to have not just a case tracking management information system, but actually a case adjudication system on the computer. It will dictate to those who make adjudicatory decisions what the next step is so that nothing is left out in that process.

The employer gets a fair shake, and the Government gets a fair shake because the full extent of the statute is tested against that claim through the ADP process.

Mr. Rogers tells me that we will spend more in 1983 developing these programs, and later on, the cost will decline. But we see some major savings although we can't identify them dollar by dollar; but we know we will need fewer people to perform clerical tasks as the computer does the work rather than people trying to push a pencil.

Senator ABDNOR. In other words, in the first year, the real efficiency of the expenditure won't show up as much as down the road; is that it? Mr. COLLYER. Down the road, we will see major savings. Right now, it is probably a cost item, although we have some of the programs in place. We are able to put our black lung claims on one tape. We are trying to purify that tape to remove the redundancy, such as duplicated claims.

So we are making use of the system as we go along. But we are continuing to develop it as well.

BLACK LUNG ADMINISTRATION

Senator ABDNOR. You are talking about the black lung program here. There are two separate programs for providing benefits to workers with black lung disease. One is administered by the Social Security Administration; the other by the Department of Labor.

Mr. COLLYER. Yes.

Senator ABDNOR. How much administrative overhead could be saved if the two programs were consolidated? Have you given any thought to that?

Mr. COLLYER. In terms of dollars, I am told that administrative expenses are $7 million for SSA, and $21.2 million for DOL. It is possible that consolidation may achieve some administrative savings.

Senator ABDNOR. By bringing the two together?

Mr. COLLYER. Yes.

I would suggest that if we did bring the two together, let me point out why. The Black Lung Law passed in 1969. The Labor Department wasn't geared up to handle claims that would be generated through this law. Federal dollars were being paid out in terms of benefits. So we used the Social Security Administration to make payments.

The law was changed in 1972 to transfer the claims' adjudication process and payment as of the end of 1973 to the Labor Department. At that point, we geared up and paid the claims.

At the same time, responsible operators, the coal operators, were asked to make the claims payments on cases that we found and adjudicated as being proper for operator liability. A trust fund then was set up to pay claims where a responsible operator could not be found or to pay interim benefits when there was dispute as to whether or not the responsible operator should pay the claim.

That is the system we have in place today. The Social Security Administration is not geared up today to make adjudication. We are the input side of it for making decisions on claims. They are simply paying the old claims, the benefits that come from the old claims.

So it would be, I suspect, easier to transfer the tapes on the old claims for payment to us rather than transfer to them this new process of handling the workers' compensation program which they are not really geared to do.

Senator ABDNOR. Then, you would say that consolidating the two programs would certainly eliminate the duplication in processing of the claims?

Mr. COLLYER. There is no duplication of claims processing, but in terms of saving money I guess I would start with the number of Xerox machines and work up or down from that, sir.

FEDERAL EMPLOYEES' COMPENSATION ACT

Senator ABDNOR. Very good.

Although Federal employment has been declining, the number of injuries reported and the claims received under the Federal Employees Compensation Act is still projected to increase in fiscal year 1983 by your figures. Also over the last decade, the number of injuries reported and the claims received have increased by over 60 percent.

Why are you projecting an increase in Federal employee claims in injuries when supposedly employment is on the decline?

Mr. COLLYER. That's correct, Mr. Chairman. Employment for the past 10 years has been hovering right around or just below 3 million civilian Federal employees. I think it began with the Pay Comparability Act that was passed in the early seventies, I guess it was. I think it was the early seventies anyway.

And then, in 1974, the Federal Employees Compensation Act itself was amended. And at that time, they instituted a provision called continuation of pay because, lacking computer ADP systems, the Department was unable to process the claims fast enough to get the checks out to people.

So they said, "For 45 days, the Agency will continue to pay full salary to someone who is injured."

This became in my view an extension of sick pay, extension of annual leave, just another thing to use to reserve annual leave and sick pay, where there is very little control over these people while they were receiving this continuation of pay.