LOS ANGELES—New Labor Secretary Tom Perez pledged a vigorous defense of workers' rights in his first major speech to organized labor Tuesday, sketching out an agenda that hit on the movement's core issues but raised some concerns among the business community.

Mr. Perez, addressing the AFL-CIO's quadrennial conference here, said the Labor Department would help restore the middle class by defending collective-bargaining rights, aggressively enforcing wage laws and taking steps to improve workplace safety.
Labor Secretary Tom Perez says his department would try to secureabetter bargain for the middle class. He also said he would crack down on employers who unlawfully misclassify workers as contractors instead of as employees—calling the practice "workplace fraud" because it deprives those workers of benefits such as unemployment insurance.

Mr. Perez, a former Maryland labor secretary and Justice Department civil-rights official who took office in July, also said he wouldn't hesitate to use the department's regulatory authority to fully extend wage protections—such as overtime pay—to groups like home health-care workers who have limited protections now.

And he reiterated his support for a boost in the federal minimum wage, countering "the naysayers who claim a higher minimum wage stifles job growth." The Labor Department "must, does and will play" a key role in confronting the challenge of income inequality, securing a better bargain for the middle class and building "ladders of opportunity with sturdy rungs" that all people can reach, Mr. Perez told the crowd of 1,600. He added that workers' right to form a union remains essential to a thriving middle class, and the right must be defended.

The speech provided an early glimpse into what Mr. Perez is promising to organized labor, one of President Barack Obama's most loyal and expectant constituencies. It also offered a look into how he plans to balance unions' demands with employers' concerns that certain initiatives would hurt job creation. Mr. Perez said there doesn't have to be a choice, and that he plans to enforce the law fairly. He also suggested that labor must work with responsible businesses. "The notion that a company must choose between its shareholders or its workers is just nonsense," he said, adding that he's spoken to many business owners who pay a living wage to their employees and still profit.

The U.S. Chamber of Commerce expressed some concerns over the speech. "We don't agree with the approach that he seems to be promoting," said Marc Freedman, executive director of labor-law policy for the group. "If he's laying out his views to organized labor in these ways, we would hope that, in keeping with his earlier remarks about bringing all parties to the table, he'll be interested in considering our concerns before he makes any decisions." Mr. Freedman said Mr. Perez's comment about extending wage protections to groups such as home health-care workers seems to signal that the department plans to finalize rules on so-called companionship services. Broadening coverage to these workers will make home health care unaffordable and go against Congress's will to exempt this group of workers from the Fair Labor Standards Act, Mr. Freedman said. Raising the minimum wage, Mr. Freedman said, "hurts low-skilled workers in their attempt to find jobs, and small businesses, in particular, which operate on very tight margins." Indexing the minimum wage to the cost of living, he added, increases labor costs without any guarantee of increasing revenue. Apart from regulation, Mr. Perez said job-training skills will also be a department focus, and he called the agency the "Department of Opportunity."

The National Association of Manufacturers took issue with that characterization. "The Department of Labor can hardly claim to be the "Department of Opportunity" given its pursuit of unnecessary rules and regulations that continue to burden employers at every turn," said Joe Trauger, the trade group's vice president of human-resources policy. Mr. Perez also mentioned health care. Apparently acknowledging labor's requests to the Obama administration to change parts of the Affordable Care Act that it says threaten coverage for many union members in multi-employer health plans, Mr. Perez said the administration is committed to continuing to look for solutions.

Behind the scenes at the convention, some union leaders were pushing Tuesday for a convention-wide health-care resolution that would detail unions' concerns about the law and threaten to back its repeal if the administration can't meet labor's demands for changes in the law through rule-making, according to people familiar with the discussions. But that group, which included some building-trades officials, appeared to be in the minority, leaving it unclear whether any such health-care resolution would be introduced on Wednesday, or any toned-down version of it.

Meanwhile, Senate Finance Committee Ranking Member Orrin Hatch (R., Utah) and House Ways and Means Chairman Dave Camp (R., Mich.) wrote to Treasury Secretary Jack Lew Tuesday questioning the legality of what they said are "reports that the Obama Administration is considering new regulations to give unions' multi-employer health plans a special ObamaCare deal that other Americans wouldn't be eligible for."

In the letter, they urged the administration to reverse course and said they would do "whatever is within our power to ensure" the Administration does not "provide a special exemption to unions at the expense of American taxpayers."

By Melanie Trottman WSG

A version of this article appeared September 11, 2013, on page A4 in the U.S. edition of The Wall Street Journal, with the headline: Secretary Stands With Labor.

 

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