ILO Revokes U.S. Official's Top Deputy Role Over Payment Delays

The International Labor Organization (ILO) has revoked the appointment of a senior U.S. official to a top deputy role, citing significant payment delays from the United States. The decision, announced on Monday, underscores the UN agency's fragile financial situation and the ongoing diplomatic tensions over Washington's contributions.

Sheng Li, currently the principal deputy assistant secretary for policy at the U.S. Department of Labor, was slated to become the ILO's Deputy Director-General in July.

However, the UN agency confirmed that Li "will therefore not assume the position of Deputy Director-General in July as previously foreseen," following months of uncertainty and internal discussions. Li had previously worked at the Labor Department during Trump's first term, before moving to the New Civil Liberties Alliance.

The decision comes after the ILO informed Washington that the appointment, initially made in April, would not proceed unless outstanding financial contributions were settled.

The United States, traditionally the largest donor to the ILO, contributing 22% of its budget and typically holding the deputy role, currently owes a substantial $328 million, according to the organization’s website.

These significant arrears have cast a shadow over the ILO's financial stability, threatening 295 job cuts and creating new uncertainty for the agency. While a draft State Department budget for 2026 proposes $50 million for the ILO, this represents only a fraction of the total amount owed.

The ILO stated that its decision "is without prejudice to the possibility of the United States settling its arrears and thereby regaining its position as the largest contributor in assessed contributions," confirming ongoing discussions with the U.S.

The Yale graduate’s initial nomination had already faced a "freeze" due to concerns from staff and member states about Washington potentially exerting excessive influence over the body. The position has been vacant since mid-September and was previously set to be filled by Nels Nordquist, a top economic aide during the Trump administration.

The administration of Donald Trump had previously been openly critical of the ILO, an organization dedicated to promoting international workers' rights and labor standards, and addressing issues like child labor.

In August, the White House, under Trump, stated that the organization "works to unionize foreign workers and punish U.S. corporate interests abroad."

Confidential consultations to resolve the deadlock have been ongoing throughout the year. A diplomatic source noted in November that the appointment was "frozen" while Director General Gilbert Houngbo assessed members' concerns.

Some sources expressed concerns that Houngbo's reform plans, partly shaped by Washington's unpaid fees, would grant greater sway to the U.S. deputy. The Deputy Director-General role is considered "powerful," with the authority to appoint staff, approve or reject missions, and shape the agenda.

An internal ILO proposal indicated that policy decisions, including international labor standards and workers' social protection, would fall under the direct responsibility of the U.S. deputy, causing "a certain amount of anxiety among members," according to one diplomat.

Some stakeholders had argued that the appointment should be contingent on the United States settling its financial shortfall.

An ILO spokesperson confirmed that meetings are underway with workers, employers, and governments ahead of a governing body meeting from November 17-27, where such concerns are typically voiced.

A State Department spokesperson told Reuters that funding for the ILO, alongside other international organizations, is currently under review to ensure it is "not contrary to American interests."

Diplomatic sources suggest some member states are now seeking a European candidate to serve as a counterbalance to the U.S. influence, potentially through an Assistant Director-General role with specific policy responsibilities.