As President-elect Trump and his advisers mull contenders for the incoming administration’s cabinet, the employee benefits industry is awaiting word on who will head the Department of Labor.
A potential frontrunner for Labor Secretary is Victoria Lipnic, a Republican commissioner of the Equal Employment Opportunity Commission who has served since 2010. She has extensive experience and a reputation for appearing even-handed.
Lipnic is considered a more moderate choice than two other potential picks whose names have surfaced in published reports. One is Andrew Puzder, CEO of CKE Restaurants, which owns the fast-food chains Carl’s Jr. and Hardees, and the other is Wisconsin Gov. Scott Walker, who ran for the Republican presidential nomination.
Puzder has defended Trump’s opposition to a higher minimum wage, which he argues, along with paid leaves of absence and employer-provided health insurance, are detrimental to the restaurant industry.
Appointing Walker would clearly rattle the nation’s organized labor movement, considering his aggressive stance as governor to limit collective-bargaining rights for public employees and successful attempt to make Wisconsin a right-to-work state. But it’s seen as unlikely because Walker has expressed an interest in running the Republican Governors’ Association.
Strong policy background
If Lipnic gets the nod, she would bring a strong policy background to this role, according to a long-time employee benefits Washington, D.C., insider. “Commissioner Lipnic very thoughtfully examines each issue on its merits, as she did when the EEOC considered wellness regulations,” observes Jim Klein, president of the American Benefits Council, a trade group that represents employers whose benefit plans cover more than 100 million Americans.
However, there’s at least one area that has raised a red flag with employers and their advisers. Christopher Condeluci, a principal with CC Law & Policy and former counsel to the Senate Finance Committee, believes employers would be somewhat “guarded” about a Lipnic appointment based on how the EEOC cracked down on wellness program incentives several years ago. The EEOC ruled that employees could not be penalized for refusing medical testing, arguing that it should be voluntary. It also filed a series of lawsuits against employers over this issue, including Honeywell.
While he’s unsure of her role in eventually aligning the EEOC’s policy with both the Affordable Care Act and Americans with Disabilities Act and encouraging stronger financial incentives to boost wellness program participation, Condeluci is willing to give Lipnic the benefit of the doubt. He surmises that the initial stance on wellness incentives could have been “an isolated incident” relative to Lipnic’s position on other benefits-related matters.
Lipnic, who did not return requests for comment, served as an assistant secretary of labor for employment standards from 2002 to 2009, as well as an attorney for Seyfarth Shaw LLP and labor counsel at the U.S. Postal Service. She also advised House Republicans as their workforce policy counsel.
Stance on issues
Although willing to cross party lines as an EEOC commissioner, her voting record reflects a preference for less regulation, which could influence her thinking on the DOL’s final fiduciary rule. She was one of two GOP commissioners who opposed requiring employers to provide the federal government with detailed pay data for their employees. The issue is seen as an opportunity for more transparency about pay gaps for women and minorities.
While Lipnic has expressed concern about the gender wage gap, she believes it’s better to shift the focus from the Obama administration’s proposed data requirement to addressing why there’s a revolving door of women in and out of the workforce and gravitation to lower paying positions. One solution she suggested at a conference over the summer was for employers to support onsite child care rather than invest in new systems to collect more pay data.
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Like Puzder, Lipnic is on record as saying paid leave under the Family and Medical Leave Act isn’t prudent in a struggling economy. On the other hand, she has supported accommodations for pregnant workers that mirror safeguards for injured or disabled employees.
Since the Senate has already confirmed Lipnic for other positions, political reporter Connor Wolf opined in an InsideSources blog that she’d likely sail through as Labor Secretary. He also lauded her policy initiatives for not always running along party lines, referencing her work on reforming overtime regulations, family leave and union financial disclosure requirements.
Referencing Puzder’s low-wage, high-churn workforce, Condeluci believes the CEO’s heightened awareness of wage and benefit challenges in the service sector could be a plus. “He’s uniquely qualified, at least from understanding the practical side of labor law and issues,” he adds. In that regard, Condeluci argues that a practical track record in business would more than make up for not having any government experience — just like Donald Trump and some of his advisers.
A Walker appointment “would arguably concern the labor community,” as well as multi-employer pension and/or Taft-Hartley related plans, according to Condeluci. But he also describes the governor as “an articulate executive [who] was successful in an almost purple state.”
Whoever will be chosen to head the DOL, Klein says it’s perfectly reasonable to expect the unexpected, given the way the presidential race transpired. “Donald Trump has been full of surprises throughout the campaign,” he explains, “so it seems likely he will surprise us by picking an unlikely candidate for at least one cabinet post.”
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