HB 6861 would transfer specific veterans-focused employment programs now run by the Department of Labor (DOL) into the Department of Veterans Affairs (VA), move related personnel and assets, and make the VA responsible for administering those programs beginning October 1, 2027. The bill also renames and expands an internal VA leadership post — establishing a Deputy Under Secretary for Veterans Economic Opportunity and Transition — and consolidates several state-facing roles into a single veteran employment specialist position.
For practitioners: the measure changes which federal agency signs contracts and MOUs with states, shifts responsibility for funding those programs to the VA budget request starting FY2028, preserves existing legal instruments and ongoing proceedings, and requires a joint DOL–VA study and report with a detailed implementation plan. If enacted, it will redesign workflows, personnel assignments, and reporting lines across multiple statutes in title 38 USC and affect state workforce and veteran service delivery systems.
At a Glance
What It Does
The bill transfers four DOL-administered veterans programs to the VA (job counseling/training/placement under chapter 41; federal employment services under section 4214; USERRA administration under chapter 43; and homeless veterans reintegration under chapter 20), moves associated personnel/assets/liabilities, and requires the President to include funding for those functions in the VA budget beginning FY2028. It also creates within VA a Deputy Under Secretary for Veterans Economic Opportunity and Transition to run these programs and consolidates local outreach roles into a single veteran employment specialist.
Who It Affects
The Department of Labor (losing specific veterans functions), the Department of Veterans Affairs (gaining programs, staff, and funding responsibility), State workforce agencies and their MOUs, veteran employment specialists (new consolidated role), and veterans — particularly disabled and homeless veterans who use these services. Employers and federal agencies that interact with USERRA and federal hiring services will also be affected.
Why It Matters
The bill reshapes federal accountability for veteran employment services by centering them in VA rather than DOL, placing program delivery and funding decisions within a medical-and-benefits-focused agency. That shift could change service design, performance metrics, employer outreach, and where responsibility sits for reemployment rights and federal hiring preferences.
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What This Bill Actually Does
HB 6861 picks four categories of veterans employment work currently housed at DOL and moves the whole package — the duties, people, contracts, and related assets and liabilities — into the VA effective October 1, 2027. The transfer list is specific: chapter 41 job counseling, training, and placement services; section 4214 federal employment services; chapter 43 (employment and reemployment rights for uniformed service members, i.e., USERRA administration); and homeless veterans reintegration programs under chapter 20.
The bill requires the VA to sign memorandums of agreement with DOL and states as needed to effect the transition.
To give the VA internal authority to run the expanded mission, the bill creates (and positions in the VA organization chart) a Deputy Under Secretary for Veterans Economic Opportunity and Transition and assigns that official responsibility for chapter 20, chapter 41, and chapter 43 authorities. It also consolidates what used to be separate state roles — disabled veterans’ outreach specialists and local veterans’ employment representatives — into a single state-facing veteran employment specialist position with statutory hiring preferences for veterans and reporting requirements back to VA and state managers.The statute takes pains to preserve legal continuity: existing orders, grants, contracts, pending claims, lawsuits, and administrative proceedings remain in effect and can continue, with the VA stepping into DOL’s shoes for references and obligations.
The Director of OMB is authorized to sort out incidental transfers of personnel, property, and funds, and the bill instructs the President to include funding for the transferred functions in the VA’s budget request beginning in FY2028. Finally, DOL and VA must jointly conduct a detailed study and deliver a report within one year that maps personnel, costs, organizational placement of the new deputy role, training needs, IT interoperability, and a timeline for implementation.
The Five Things You Need to Know
Effective date: the bill makes the transfer effective October 1, 2027, moving functions, personnel, assets, and liabilities from DOL to VA on that date.
Program list: the transfer explicitly covers job counseling/training/placement (chapter 41), federal employment services under section 4214, USERRA administration (chapter 43), and homeless veterans reintegration programs (chapter 20).
Budget shift: the President must include funding for the transferred functions in the VA budget request beginning with the FY2028 submission under 31 U.S.C. §1105.
New VA leadership role: the bill establishes a Deputy Under Secretary for Veterans Economic Opportunity and Transition with responsibility for implementing policy for chapters 20, 41, and 43.
Implementation study: DOL and VA must jointly study the transfer and submit a report within one year detailing personnel/assets/liabilities analysis, training plans, regulatory changes needed, cost estimates, IT interoperability, and a recommended implementation timeline.
Section-by-Section Breakdown
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Short title
Gives the Act the name 'Consolidating Veteran Employment Services for Improved Performance Act.' This is a technical provision but signals the bill’s policy aim—centralizing veteran employment services under VA.
Transfers DOL veteran employment programs to VA
Specifies the exact DOL programs transferred and requires transfer of associated personnel, assets, and liabilities. The provision names four discrete program buckets (chapter 41 job services, section 4214 federal employment services, chapter 43 USERRA administration, and chapter 20 homeless-veteran reintegration), which minimizes interpretive ambiguity about scope but creates a concentrated operational task for VA to absorb functions designed and historically run by DOL.
Transition mechanics, legal continuity, and OMB role
Contains the nuts-and-bolts language that preserves existing orders, grants, contracts, permits, pending proceedings, and lawsuits after the transfer and provides that references to former DOL offices now refer to VA. It empowers OMB to make determinations about incidental transfers of personnel, property, funds, and to effect dispositions necessary to implement the transfer — a common mechanism in statutory transfers but one that places heavy practical authority in OMB to smooth the transition.
Creates Deputy Under Secretary for Veterans Economic Opportunity and Transition
Amends 38 U.S.C. §4102A to establish a Deputy Under Secretary within VA who will formulate and implement policy for chapters 20, 41, and 43. The statutory text folds responsibilities formerly associated with DOL leadership into this VA position and requires clerical amendments to conform chapter headings and cross-references; the bill leaves the exact organizational placement to VA but statute requires the role to be the departmental lead for the transferred functions.
Consolidates state outreach and local employment representatives
Overhauls the state-facing workforce roles by replacing disabled veterans’ outreach specialists and local veterans’ employment representatives with a single state-employed 'veteran employment specialist' role. The provision sets hiring preferences for veterans (with emphasis for service-connected disabled veterans), mandates state reporting on qualifications and salaries, and obliges VA to ensure adequate training for these specialists. That consolidation shifts how states staff and report on veteran employment work and creates new standardization pressure.
Mandatory study and report on implementation
Requires a joint DOL–VA study that must produce a detailed report within one year including program improvements, personnel/assets/liabilities analyses, an org-chart placement and duties for the new deputy role, cost estimates, a step-by-step implementation plan (rules/regulatory revisions, MOUs to revise), training needs, employee-transfer options, and IT interoperability planning. The study is both a compliance checkpoint and a practical blueprint; its required depth signals congressional intent that the statutory transfer be operationally mapped before or alongside implementation.
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Explore Veterans in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Veterans seeking employment services — Consolidation promises a single agency responsible for counseling, training, placement, reemployment rights, and homeless reintegration, which could reduce fragmentation and simplify points of contact for veterans, particularly those who receive multiple VA benefits.
- Disabled and homeless veterans — The statutory priority framework and the explicit inclusion of homeless veteran reintegration services in the transfer could lead to more integrated case management if VA successfully coordinates benefits and employment supports.
- Veterans Service Organizations (VSOs) and state veteran offices — A single federal interlocutor (VA) for employment programs may simplify advocacy, contracting, and MOUs, allowing VSOs and states to coordinate service delivery through one federal partner.
- Employers interacting with federal hiring and USERRA issues — Consolidation under VA could create a single federal pathway for federal employment services and USERRA administration, making compliance and communication more centralized.
Who Bears the Cost
- Department of Labor — DOL loses personnel, institutional expertise, and line responsibilities for veterans’ employment programs and must disengage or reassign staff and contracts associated with those functions.
- Department of Veterans Affairs — VA must absorb new programs, staff, liabilities, IT integration, and training obligations and will need to reorganize internally to house the Deputy Under Secretary role and host transferred employees and systems.
- State workforce agencies — States must renegotiate or rework MOUs with VA, align their employment service delivery systems to VA reporting and staffing requirements, and may need to change hiring practices to meet the new veteran employment specialist structure.
- Transferred DOL employees — Individual staff face reassignment, potential relocation, changes in employment terms, and decisions about whether to transfer; the bill requires consideration of options but does not detail personnel protections or bargaining outcomes.
Key Issues
The Core Tension
The central dilemma is accountability versus capacity: centralizing veteran employment services under VA creates a single accountable federal owner—potentially better for integrated veteran services—but risks weakening labor-market expertise, employer relationships, and enforcement capabilities that historically lived at DOL; the bill solves fragmentation but transfers substantial operational risk and funding responsibility to an agency with a different institutional culture and mission.
The bill centralizes authority for veteran employment services in an agency whose core mission is health care and benefits administration rather than labor-market policy. That raises questions about institutional fit: VA will need to develop or acquire DOL’s employer-outreach, labor-market analysis, and USERRA enforcement capabilities.
The statute delegates incidental transfer authority to OMB, which can smooth operational details, but the heavy reliance on OMB determinations and VA–state MOUs creates implementation risk if interagency coordination or funding alignment falters.
Financially, the transfer depends on a budgetary shift — the President must include funding for the transferred functions in VA’s FY2028 budget request — but the bill does not appropriate transition funding or set baseline budget amounts. That creates timing risk: without explicit transition funding or guaranteed carryover amounts, VA may face a gap between taking on responsibilities and receiving steady appropriations.
The mandated joint study and one-year report force both agencies to identify the needed regulatory revisions, training, and IT interoperability, but statutory preservation of existing orders, grants, and proceedings only mitigates short-term legal disruption; service continuity depends on the quality and speed of execution, not on the statutory preservation alone.
Finally, the consolidation of state-facing roles into a single 'veteran employment specialist' standardizes staffing but raises local implementation questions—salary parity, locality pay, and how states meet the veteran-hiring preference targets. The bill requires state reporting and a VA evaluation of pay scheduling, but it leaves many operational choices to VA, states, and OMB.
Those gaps will be the locus of negotiation and may produce uneven service levels across states if funding and workforce arrangements are not harmonized.
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