What Is the Department of Labor?

The Department of Labor (DOL) enforces federal labor standards, promotes workers’ rights and reports on various economic data. Investors rely on DOL reports to strategize investments and safeguard against current or projected economic conditions. 

The Department of Labor, explained

The U.S. Department of Labor is a federal agency responsible for protecting workers’ rights, safety and benefits by enforcing labor standards. The cabinet-level agency was first formed in 1913 and is headed by the Secretary of Labor. 

Department of Labor duties

The DOL states that its multi-part mission is: “To foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.”

Under this mission, the DOL administers federal labor laws and handles violation complaints. Among other duties, the agency:

• Promotes employment opportunities and encourages collective bargaining (unions)
• Guarantees workers’ rights to “fair, safe and healthy” working conditions
• Enforces minimum hourly wage and overtime pay requirements
• Ensures protected classes of employees remain free from discrimination
• Manages the unemployment insurance system

Under this umbrella, the Department of Labor enforces over 180 federal labor laws. These include workers’ compensation and benefits, workplace safety, unions, veterans’ rights and parental and medical leave (FMLA). 

Department of Labor daughter agencies

The Department of Labor heads several “daughter” agencies that carry out specific tasks. These include the:

• Employee Benefits Security Administration (EBSA): Educates and assists workers, retirees, families and plan sponsors regarding benefits plans 
• Bureau of International Labor Affairs (ILAB): Enforces trade commitments and labor standards and combats human trafficking, forced labor and child labor
• Occupational Safety and Health Administration (OSHA): Regulates health and safety conditions in various working conditions
• Bureau of Labor Statistics (BLS): Provides important market data that helps government agencies, economists and investors make informed decisions

How does the Department of Labor affect you?

The Department of Labor also plays a unique – and vital – role for investors. 

Due to its wide-reaching oversight, the DOL’s BLS is well-positioned to collect, analyze and report on employment-related trends and data. It regularly releases reports like the:

• Consumer Price Index (CPI): Measures price changes (inflation) nationally, regionally and categorically
• Producer Price Index (PPI): Measures changes in the prices producers pay for crude (raw), intermediate and finished materials and goods
• Employment situation report: Details economic conditions related to employment, earnings and work hours
• U.S. Import and Export Price Indexes report: Measures price, volume and term changes in internationally traded products
• Monthly Real Earnings report: Provides data regarding workers’ average inflation-adjusted hourly and weekly earnings
• Quarterly Employment Cost Index (ECI) report: Measures changes in employers’ costs for wages, salaries and employee benefits
• Quarterly Productivity and Costs report: Details changes in worker efficiency and the cost to produce various goods and services

Investors can use this information to make investment decisions, follow trends or adjust portfolios for predicted future conditions. As such, it’s common for financial markets to jump or slump when the BLS releases a particularly shocking report. 

Long-term, these insights – alongside essential workplace policy decisions – can greatly impact your portfolio’s performance and wealth-building plans.