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Workforce Innovation and Opportunity Act

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AGENCY:

Employment and Training Administration (ETA), Labor.

ACTION:

Final rule.

SUMMARY:

The Department of Labor (DOL or the Department) issues this Final Rule to implement titles I and III of the Workforce Innovation and Opportunity Act (WIOA). Through these regulations, the Department reforms and modernizes our nation's workforce development system. This rule provides the framework for changes for statewide and local workforce development systems to increase the employment, retention, earnings, and occupational skill attainment of U.S. workers, particularly those individuals with barriers to employment, so they can move into good jobs and careers and provide businesses with the skilled workforce needed to make the United States more competitive in the 21st Century global economy.

DATES:

This Final Rule is effective October 18, 2016.

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FOR FURTHER INFORMATION CONTACT:

Adele Gagliardi, Administrator, Office of Policy Development and Research (OPDR), U.S. Department of Labor, Employment and Training Administration, 200 Constitution Avenue NW., Room N-5641, Washington, DC 20210, Telephone: (202) 693-3700 (voice) (this is not a toll-free number). If you use a telecommunications device for the deaf (TDD), call 1-800-326-2577.

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SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary

A. Purpose of the Regulatory Action

B. Summary of Major Provisions

C. Costs and Benefits

II. Acronyms and Abbreviations

III. Rulemaking Authority and Background

A. Workforce Innovation and Opportunity Act Principles

B. Major Changes From the Workforce Investment Act of 1998

C. Workforce Innovation and Opportunity Act Rulemaking Process

D. Legal Basis

IV. Public Comments Received on the Notice of Proposed Rulemaking

V. Section-by-Section Discussion of the Public Comments and Final Regulations

A. Part 603—Federal-State Unemployment Compensation Program

B. Part 675—Introduction to the Regulations for the Workforce Development Systems Under Title I of the Workforce Innovation and Act

C. Part 679—Statewide and Local Governance of the Workforce Development System Under Title I of the Workforce Innovation and Opportunity Act

D. Part 680—Adult and Dislocated Worker Activities Under Title I of the Workforce Innovation and Opportunity Act

E. Part 681—Youth Activities Under Title I of the Workforce Innovation and Opportunity Act

F. Part 682—Statewide Activities Under Title I of the Workforce Innovation and Opportunity Act

G. Part 683—Administrative Provisions Under Title I of the Workforce Innovation and Opportunity Act

H. Part 684—Indian and Native American Programs Under Title I of the Workforce Innovation and Opportunity Act

I. Part 685—National Farmworker Jobs Program Under Title I of the Workforce Innovation and Opportunity Act

J. Part 686—The Job Corps Under Title I of the Workforce Innovation and Opportunity Act

K. Part 687—National Dislocated Worker Grants

L. Part 688—Provisions Governing the YouthBuild Program

M. Part 651—General Provisions Governing the Wagner-Peyser Act Employment Service

N. Part 652—Establishment and Functioning of State Employment Service

O. Part 653—Services of the Wagner-Peyser Act Employment Service

P. Part 654—Special Responsibilities of the Employment Service

Q. Part 658—Administrative Provisions Governing the Wagner-Peyser Act Employment Service

VI. Rulemaking Analyses and Notices

A. Executive Orders 12866 and 13563: Regulatory Planning and Review

B. Regulatory Flexibility Act

C. Small Business Regulatory Enforcement Fairness Act of 1996

D. Paperwork Reduction Act

E. Executive Order 13132 (Federalism)

F. Unfunded Mandates Reform Act of 1995

G. Plain Language

H. Assessment of Federal Regulations and Policies on Families

I. Executive Order 13175 (Indian Tribal Governments)

J. Executive Order 12630 (Government Actions and Interference With Constitutionally Protected Property Rights)

K. Executive Order 12988 (Civil Justice Reform)

L. Executive Order 13211 (Energy Supply)

I. Executive Summary

A. Purpose of the Regulatory Action

On July 22, 2014, President Obama signed the Workforce Innovation and Opportunity Act (WIOA) (Pub. L. 113-128), comprehensive legislation that reforms and modernizes the public workforce system. WIOA reaffirms the role of the public workforce system, and brings together and enhances several key employment, education, and training programs. This new law provides resources, services, and leadership tools for the public workforce system to help individuals find good jobs and stay employed and improves employer prospects for success in the global marketplace. It ensures that the public workforce system operates as a comprehensive, integrated, and streamlined system to provide pathways to prosperity for those it serves and continuously improves the quality and performance of its services.

The Department is publishing this Final Rule to implement those provisions of WIOA that affect the core programs under title I, the Wagner-Peyser Act Employment Service (ES) program, as amended by WIOA title III (ES program), and the Job Corps and national programs authorized under title I which will be administered by the Department. In addition to this DOL WIOA Final Rule, the Departments of Education (ED) and Labor jointly are publishing a Final Rule to implement those provisions of WIOA that affect all of the WIOA core programs (titles I through IV) and which will have to be overseen and administered jointly by both Departments. Readers should note that in this DOL WIOA Final Rule there are a number of cross-references to the Joint WIOA Final Rule published by ED and DOL, including those provisions in the Joint WIOA Final Rule regarding performance reporting. In addition to the Joint WIOA Final Rule, ED and DOL are issuing separate final rules to implement program-specific requirements of WIOA that fall under each Department's purview. DOL is issuing this Final Rule governing program-specific requirements under WIOA title I and for the ES program, as amended by WIOA title III. ED is issuing three final rules: One implementing program-specific requirements of the Adult Education and Family Literacy Act (AEFLA), as reauthorized by title II of WIOA; and two final rules implementing all program-specific requirements for programs authorized under the Rehabilitation Act of 1973, as amended by title IV of WIOA. The Joint WIOA Final Rule and other Department-specific final rules are published Start Printed Page 56073elsewhere in this issue of the Federal Register.

WIOA seeks to deliver a broad array of integrated services to customers of the public workforce system, which include both individuals seeking jobs and skills training and employers seeking skilled workers. The law improves the public workforce system by more closely aligning it with regional economies and strengthening the network of about 2,500 one-stop centers. Customers must have access to a seamless system of high-quality services through coordination of programs, services, and governance structures. The Act builds closer ties among key workforce partners—business leaders, State and Local Workforce Development Boards (WDBs), labor unions, community colleges, non-profit organizations, youth-serving organizations, and State and local officials—in striving for a more job-driven approach to training and skills development.

WIOA will help job seekers and workers access employment, education, training, and support services to succeed in the labor market and match employers with the skilled workers they need to compete in the global economy. The purposes of WIOA described in the statute include:

  • Increasing access to and opportunities for the employment, education, training, and support services that individuals need, particularly those with barriers to employment.
  • Supporting the alignment of workforce investment, education, and economic development systems, in support of a comprehensive, accessible, and high-quality workforce development system.
  • Improving the quality and labor market relevance of workforce investment, education, and economic development efforts.
  • Promoting improvement in the structure and delivery of services.
  • Increasing the prosperity of workers and employers.
  • Providing workforce development activities that increase employment, retention, and earnings of participants and that increase postsecondary credential attainment and as a result, improve the quality of the workforce, reduce welfare dependency, increase economic self-sufficiency, meet skill requirements of employers, and enhance productivity, and the competitiveness of our nation.

WIOA's passage and implementation builds upon the groundwork already laid by an Administration-wide review of employment, education, and training programs to ensure Federal agencies do everything possible to prepare ready-to-work-Americans with ready-to-be-filled jobs. That review identified several priorities for Federally supported training programs, including employer engagement; promoting work-based learning strategies, such as on-the job training and registered apprenticeships, career pathways, and regional collaboration; increasing access to training by breaking down barriers; and data-driven program management and evaluation.

As WIOA implementation progresses, success in accomplishing the purposes of WIOA at the State, local, and regional levels, will be determined by whether:

  • One-stop centers are recognized as a valuable community resource and are known for high quality, comprehensive services for customers.
  • The core programs and one-stop partners provide seamless, integrated customer service.
  • Program performance, labor market, and related data drive policy and strategic decisions and inform customer choice.
  • Youth programs reconnect out-of-school youth (OSY) to education and jobs.
  • Job seekers access quality career services either online or in a one-stop center through a “common front door” that connects them to the right services.
  • One-stop centers facilitate access to high quality, innovative education and training.
  • Services to businesses are robust and effective, meeting businesses' workforce needs across the business lifecycle.

As noted throughout this Final Rule, the Department will be issuing guidance to help our regulated communities understand their rights and responsibilities under WIOA and these regulations. Consistent with the Administrative Procedure Act's exemption from its notice and comment requirement for general statements of policy, interpretations, and procedural instructions, this guidance will provide interpretations of many of the terms and provisions of these regulations and more detailed procedural instructions that would not be appropriate to set out in regulations. The Department also will be issuing guidance to provide information on current priorities and initiatives, suggested best practices, and in response to stakeholder questions.

B. Summary of Major Provisions

To implement WIOA title I, the Department has added several new CFR parts to title 20, chapter V (ETA's regulations). In particular, because the WIA regulations will continue to be referenced in existing and historic documents for some time after the WIOA transition, the Department is creating entirely new programmatic regulations to reflect the requirements of WIOA, rather than amending the WIA title I regulations found at 20 CFR parts 660 through 672. Table 1 below presents a crosswalk for these new CFR parts to illustrate how they relate to the existing WIA regulations.

In addition, the Department is revising in this DOL WIOA Final Rule certain other CFR parts in accordance with WIOA, rather than creating entirely new parts, where it was not necessary to retain the WIA version of the regulation. For example, the Department retains the Wagner-Peyser Act implementing regulations in 20 CFR parts 651 through 658 and is revising in this Final Rule only those parts that are affected by WIOA, i.e., parts 651 through 654 and 658. Further, the Department is amending portions of part 603 (Federal-State Unemployment Compensation (UC) Program; Confidentiality and Disclosure of State UC Information) in accordance with WIOA. These CFR parts that are amended but not new in this DOL WIOA Final Rule are indicated in Table 1 by showing that they do not change location in the CFR from WIA to WIOA. The remainder of this section I.B briefly summarizes each CFR part in this Final Rule and any significant differences between the notice of proposed rulemaking (NPRM) and Final Rule.

Table 1—Crosswalk of WIA and WIOA Regulations

Subject matterWIA CFR partWIOA CFR part
Federal-State UC Program20 CFR part 60320 CFR part 603.
Definitions/Introduction to Regulations20 CFR part 66020 CFR part 675.
State and Local WDBs, Local and Regional Plans, Waivers20 CFR part 66120 CFR part 679.
Adult and Dislocated Workers20 CFR part 66320 CFR part 680.
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Youth Activities20 CFR part 66420 CFR part 681.
Statewide Activities20 CFR part 66520 CFR part 682.
Administrative Provisions20 CFR part 66720 CFR part 683.
Indian and Native American Programs20 CFR part 66820 CFR part 684.
National Farmworker Jobs Program20 CFR part 66920 CFR part 685.
Job Corps20 CFR part 67020 CFR part 686.
National Dislocated Worker Grants20 CFR part 67120 CFR part 687.
YouthBuild20 CFR part 66220 CFR part 688.
Wagner-Peyser Act Employment Service—Definitions20 CFR part 65120 CFR part 651.
Wagner-Peyser Act Employment Service—Establishment and Functioning20 CFR part 65220 CFR part 652.
Wagner-Peyser Act Employment Service—Services20 CFR part 65320 CFR part 653.
Wagner-Peyser Act Employment Service—Special Responsibilities20 CFR part 65420 CFR part 654.
Wagner-Peyser Act Employment Service—Administrative Provisions20 CFR part 65820 CFR part 658.

1. Part 603—Federal-State Unemployment Compensation Program

The Department is amending its regulations at 20 CFR part 603 to help States comply with WIOA. WIOA requires that States use “quarterly wage records” in assessing the performance of certain Federally funded employment and training programs. In particular, this Final Rule amends part 603 to clarify and expand, in a limited fashion, those public officials with whom the State may share certain confidential information to carry out requirements under WIOA, including the use of wage records to meet performance reporting requirements and cooperation with certain DOL and ED evaluations. The Department is amending part 603 as proposed in the NPRM.

2. Part 675—Introduction to the Regulations for the Workforce Development System Under Title I of the Workforce Innovation and Opportunity Act

Part 675 discusses the purpose of title I of the WIOA, explains the format of the regulations governing title I, and provides additional definitions for terms used in the law.

The most notable changes to this part from the regulatory text proposed in the NPRM include the addition of a definition of “family” and strengthening the definition of “consultation.” The DOL WIOA Final Rule defines “family” in the same way as the WIA definition of “family,” except that instead of using the gender-specific “husband” and “wife” terms that were in WIA, it substitutes “a married couple.” This is intended to bring the definition into conformance with the recent Supreme Court decisions about marriage equality.

Regarding the revised definition of “consultation,” in response to public comments expressing concern that the proposed definition was not specific enough, the Final Rule definition better focuses on the public workforce system and is necessary to clarify that consultation constitutes a coming together of stakeholders, robust conversation, and opportunity for all parties to express thoughts and opinions.

The Department also changed the terms “workforce innovation and opportunity system,” and “workforce investment system” to “workforce development system” throughout this rule. This was done to enhance consistency across parts and avoid confusion, and to be emphasize the role of workforce development boards in this system.

3. Part 679—Statewide and Local Governance of the Workforce Development System Under Title I of the Workforce Innovation and Opportunity Act

Part 679 addresses the statewide and local governance provisions of the workforce development system under WIOA title I. This part includes provisions that govern the conditions under which the Governor must establish the State WDB (subpart A); the requirements for designation of regions and local areas under WIOA (subpart B); the role of Local WDBs, Local WDB membership, and the role of chief elected officials (CEOs) (subpart C); the requirements relating to regional and local plans (subpart D); the statutory and regulatory waiver authority provided by WIOA sec. 189(i), including the requirements for submitting a workforce flexibility plan under WIOA sec. 190 (subpart E).

As for notable changes to this part from the NPRM regulatory text, to address concerns about representation of core programs on the State WDB was raised by many commenters, the Department has revised the final regulations to clarify that, for the WIOA title I and ES programs, a single lead State official with primary responsibility for those programs may represent more than one of those programs. However, WIOA title II programs must have a single, unique representative, and the Vocational Rehabilitation (VR) program administered by ED and authorized under title I of the Rehabilitation Act of 1973, as amended by WIOA title IV (VR program), must have a single, unique representative. See § 679.110(b)(3)(iii)(A)(1)(i) through (iii).

Further, the Department clarified the regulatory text by providing details on the duration of initial local area designation and the timing of the first available opportunity for local area subsequent designation to occur. The Department revised the proposed requirement to clarify that initial designation is applicable only to Program Year (PY) 2016 and PY 2017. Noting the commenters' concerns regarding availability of WIOA performance data, which is required for the determination of designation, the Department added § 679.250(c) to clarify that no determination of subsequent designation may be made before the conclusion of PY 2017. The section-by-section discussion of part 679 below details other changes to the part 679 regulatory text, as well as Department responses to all substantive public comments.

4. Part 680—Adult and Dislocated Worker Activities Under Title I of the Workforce Innovation and Opportunity Act

In this part of the Final Rule, the Department describes requirements relating to the services that are available for adults and dislocated workers under WIOA title I. Under WIOA, adults and dislocated workers may access career services and training services. Training is provided through a robust eligible training provider and program list (ETPL), comprised of entities with a demonstrated capability of training Start Printed Page 56075individuals to enter quality employment. WIOA also provides enhanced access and flexibility for work-based training options, such as on-the-job training (OJT), customized training, and incumbent worker training. In this part, the Department also discusses supportive services and needs-related payments that can be provided, based on customer needs, to enable them to participate in WIOA career and training services.

Some of the notable changes to this part from the NPRM regulatory text include that the Final Rule clarifies that the priority of service in the adult program for individuals who are public assistance recipients, other low-income individuals and for individuals who are basic skills deficient exists at all times, not just when funds are limited.

Regarding the role of registered apprenticeship programs, the Final Rule emphasizes the key role WIOA envisions for registered apprenticeship programs by highlighting these programs as a training service for both Individual Training Accounts (ITAs) and as OJT. The Final Rule allows apprenticeship programs that are not registered to go through the eligible training provider (ETP) process if they want to be on the ETP list; the rule does not provide apprenticeship programs that are not registered special access to the ETPL. The Department also clarifies in this Final Rule that registered apprenticeship programs are automatically eligible for the ETPL and the State is required to notify them of their automatic eligibility and allow the registered apprenticeship program an opportunity to consent to be on the State ETPL (see § 680.470). This mechanism must be minimal burden to registered apprenticeship programs and must comply with Federal guidance. The Department further clarifies in this Final Rule that local areas, which have the authority to set more stringent standards than the State for eligibility of training providers, may not do so for registered apprenticeship programs that are on the State ETPL. Finally, the Department clarifies in this Final Rule that registered apprenticeship programs may be removed from the State ETPL for enforcement reasons other than performance, such as a clear violation of WIOA (see § 680.470). Although registered apprenticeship programs are not required to report in the same way as other ETPs, they are required to be a part of the State annual ETP performance report under WIOA sec. 116(d)(2).

5. Part 681—Youth Activities Under Title I of the Workforce Innovation and Opportunity Act

Part 681 describes requirements relating to the services that are available to youth under WIOA title I, subtitle B, as part 664 did for youth activities funded under WIA. The most significant change to the youth formula program under WIOA is the shift to focus resources primarily on OSY. WIOA increases the minimum percentage of program funds required to be spent on OSY from 30 to 75 percent. The Department plans to release subsequent guidance and technical assistance on how States and local areas can incorporate strategies for recruiting and serving more OSY.

In addition, WIOA includes a major focus on providing youth with work experience opportunities with a requirement that local areas must spend a minimum of 20 percent of local area funds on work experience. And although work experience becomes the most important of the program elements, WIOA also introduces 5 new program elements: Financial literacy; entrepreneurial skills training; services that provide labor market and employment information about in-demand industry sectors or occupations available in the local areas; activities that help youth prepare for and transition to postsecondary education and training; and education offered concurrently with and in the same context as workforce preparation activities and training for a specific occupation or occupational cluster.

The most significant change between the NPRM and the Final Rule occurs in § 681.400. This section clarifies that youth activities may be conducted by the local grant recipient and that when the Local WDB chooses to award grants or contracts to youth service providers, such awards must be made using a competitive procurement process in accordance with WIOA sec. 123. The section-by-section discussion of part 681 below details other changes to the part 681 regulatory text, as well as Department responses to all substantive public comments.

6. Part 682—Statewide Activities Under Title I of the Workforce Innovation and Opportunity Act

WIOA provides a reservation of funds for statewide employment and training activities. These activities are undertaken by the States, rather than by Local WDBs; both the required and allowable activities are addressed by part 682. WIOA designates the percentage of funds that may be devoted to these activities from annual allotments to the States—up to 15 percent must be reserved from youth, adult, and dislocated worker funding streams, and up to an additional 25 percent of dislocated worker funds must be reserved for statewide rapid response activities.

Some of the notable changes to this part from the NPRM regulatory text include the specification that layoff aversion is a required rapid response activity, as applicable. Layoff aversion activities may include employer-focused activities such as providing assistance to employers in managing reductions in force, funding feasibility studies to determine if the employer's operation may be sustained through a buy-out, etc. Further, the DOL WIOA Final Rule specifies that a successful rapid response system includes comprehensive business engagement. Finally, the DOL WIOA Final Rule specifies that rapid response funds may be used to pay for incumbent worker training as long as it is part of a broader layoff aversion strategy. Incumbent worker training is also a valuable layoff aversion tool and, under WIA, many States requested a waiver to allow such training with rapid response funds. This Final Rule change recognizes the value of incumbent worker training for this purpose and includes it as allowable under rapid response within the context of layoff aversion activities.

7. Part 683—Administrative Provisions Under Title I of the Workforce Innovation and Opportunity Act

Part 683 establishes the administrative provisions for the programs authorized under title I of WIOA. Some of the provisions are also applicable to grants provided under the Wagner-Peyser Act, as indicated in specific sections of the part. The remaining Wagner-Peyser Act administrative regulations are located in part 658. Additionally, please note that administrative provisions for Job Corps (subtitle C of title I of WIOA) contracts are addressed separately in part 686.

This DOL WIOA Final Rule adds a requirement that the Governor establish criteria or factors for approving Local WDB transfers of funds between the adult and dislocated worker programs and that these criteria must be in a written policy, such as the State Plan or other written policy.

Regarding Pay-for-Performance contract strategies, the final regulations made a change from the NPRM in that the Department has added a new section that maintained the requirement for a feasibility study prior to implementing a Pay-for-Performance contract strategy Start Printed Page 56076but removed it from the 10 percent limitation of funds.

8. Part 684—Indian and Native American Programs Under Title I of the Workforce Innovation and Opportunity Act

Part 684 governs the Indian and Native American (INA) program authorized under WIOA sec. 166. WIOA and part 684 streamline the competitive process for awarding the INA program grants. Section 166 of WIOA requires both that grants be awarded through a competitive process and that grantees submit a 4-year plan (WIOA secs. 166(c) and 166(e)). These WIOA regulations streamline the grant award process to ease the administrative burdens. The Department will no longer designate grantees or require a notice of intent. Moreover, the part 684 WIOA regulations have incorporated the 4-year plan into the competitive grant award process. Because these changes will help streamline the process for awarding grants, these WIOA regulations should result in less of an administrative burden on both applicants and the Department.

Other than a few technical, non-substantive edits, the Department has made no changes to the regulatory text in part 684.

9. Part 685—National Farmworker Jobs Program Under Title I of the Workforce Innovation and Opportunity Act

The purpose of part 685 is to implement WIOA sec. 167, which authorizes migrant and seasonal farmworker (MSFW) programs. In drafting these regulations, the Department consulted with States and MSFW groups during stakeholder consultation sessions conducted in August and September 2014, as required by WIOA sec. 167(f). MSFW programs include career services and training, housing assistance, youth services, and related assistance to eligible MSFWs.

The regulations in part 685 support strategic alignment across workforce development programs by: Aligning the definition of “farmwork” found in this part with that used in the ES program; adjusting the upper and lower age ranges of eligible MSFW youth to conform to those established in WIOA sec. 129 for OSY and ISY; and requiring that grantees coordinate services, particularly outreach to MSFWs, with the State Workforce Agency (SWA) in their service area and the State Monitor Advocate. These changes are intended to support coordination between MSFW programs and other workforce programs such as the ES program, and facilitate MSFW youth co-enrollments with other WIOA title I programs.

Part 685 includes language regarding training services that reinforces that training must be directly linked to an in-demand industry or occupation that leads to economic self-sufficiency and encourages the attainment of recognized postsecondary credentials when appropriate (see § 685.350).

Part 685 also establishes that grantees funded under WIOA sec. 167 can serve eligible MSFW youth participants (see §§ 685.320 and 685.510). These regulations also require that a percentage of the total funds appropriated each year for WIOA sec. 167 activities must be used for housing grants, and described specific housing assistance activities to better articulate the types of services that can be delivered to eligible MSFWs (see § 685.360).

Based on the public comments received in response to the NPRM, the Department made the following significant changes to part 685 as proposed:

  • The Final Rule permits a National Farmworker Jobs Program (NFJP) grantee some flexibility to increase the OJT reimbursement rate up to 75 percent of the wage rate of a participant, provided that such reimbursement rates are consistent with the rates set by the Governor in the State or Local WDB(s) in the local area(s) in which the grantee operates in accordance with WIOA sec. 134(c)(3)(H)(i);
  • The Final Rule revises § 685.360(d) to clarify that NFJP-funded permanent housing development activities that benefit eligible MSFWs do not require individual eligibility determinations;
  • The Final Rule clarifies in § 685.360 that development of on-farm housing located on property owned and operated by an agricultural employer is an allowable activity; and
  • In response to commenters' concerns regarding the negative impact that would result on performance indicator calculations by including individuals who receive only certain minimal “related assistance” services, which do not require a significant investment of staff time and resources, the Department has added language to § 685.400 that puts the NFJP program in alignment with other WIOA authorized programs regarding performance accountability calculations.

10. Part 686—The Job Corps Under Title I of the Workforce Innovation and Opportunity Act

This part establishes regulations for the Job Corps program, authorized in title I, subtitle C of WIOA. The regulations address the scope and purpose of the Job Corps program and provide requirements relating to site selection, protection, and maintenance of Job Corps facilities; funding and selection of center operators and service providers; recruitment, eligibility, screening, selection and assignment, and enrollment of Job Corps students; Job Corps program activities and center operations; student support; career transition services and graduate services; community connections; and administrative and management requirements. The regulations carry out Congressional direction on contracting and competition for centers and incorporate the requirements of title I, subtitle C of WIOA. Specifically, the regulations describe how the Job Corps program is operated in order to deliver relevant academic and career technical training (CTT) that leads to meaningful employment or postsecondary education and explain the requirements necessitated by the unique residential environment of a Job Corps center.

Although the Department received some public comments that opposed the proposed provision stating that the Secretary of Labor, in consultation with the Secretary of Agriculture, may select an entity to operate a Civilian Conservation Center (CCC) or close low performing CCCs if the Secretary of Labor deems appropriate (§ 686.350(e) through (f)), the DOL WIOA Final Rule retains these paragraphs as proposed because the regulatory text mirrors the statutory requirements at WIOA sec. 159(f)(2). In addition, regarding concerns expressed by commenters that the proposed high-performing center criteria were too difficult to achieve, the Department is retaining § 686.320 as proposed because the language in the regulation mirrors that of WIOA and the Department does not have the discretion to loosen the criteria.

11. Part 687—National Dislocated Worker Grants

National Dislocated Worker Grants (DWGs) are discretionary awards that temporarily expand service capacity at the State and local levels through time-limited funding assistance in response to significant dislocation events. These grants are governed by sec. 170 of WIOA. The part 687 regulations set forth the key elements and requirements for DWGs. Additional guidance on DWGs and the application requirements for these grants was published separately by the Department in Training and Employment Guidance Letter (TEGL) No. 01-15, “Operational Guidance for National Dislocated Worker Grants, pursuant to the Start Printed Page 56077Workforce Innovation and Opportunity Act (WIOA or Opportunity Act).”

The part 687 regulations establish a framework that will enable eligible applicants to apply quickly for grants to relieve the impact of layoffs, emergencies, and disasters on employment in the impacted area and to meet the training and reemployment needs of affected workers and to enable them to obtain new jobs as quickly as possible. These regulations call for early assessment of the needs and interests of the affected workers, through either rapid response activities or other means, as well as an indication of the other resources available to meet these needs, to aid in the creation of a customer-centered service proposal. The early collection of information about affected workers will allow applicants to have an understanding of the needs and interests of the impacted workers to enable a prompt application for the appropriate level of DWG funds. Early collection of information also will facilitate the receipt of DWG funds when the Secretary determines that there are insufficient State and local formula funds available. Early intervention to assist workers being dislocated is critical to enable them to access work-based learning opportunities and other types of training that lead to industry-recognized credentials, as appropriate, to help them find new employment in in-demand industries and occupations as soon as possible after their dislocation occurs.

The Department has made several global changes and technical edits to the part 687 regulations proposed in the NPRM for clarity and technical accuracy. For example, “National Dislocated Worker Grants” will be referred to by the acronym “DWGs” in this part for simplicity. In addition, the Department has determined it is necessary to alter the labels of what the NPRM called “Regular” and “Disaster” DWGs to describe more accurately their purpose and intended use. “Regular” DWGs have been renamed “Employment Recovery” DWGs, and “Disaster” DWGs have been renamed “Disaster Recovery” DWGs. Further, the terms “career services” and “employment-related assistance” have been changed to “employment and training assistance” to clarify that the use of DWG funds is not limited to only career services. Training and supportive services also may be provided as appropriate and in accordance with the requirements of part 687. Finally, the term “temporary employment” has been replaced with the term “disaster relief employment” to better align the text of this part 687 with that of WIOA sec. 170. In addition, this DOL WIOA Final Rule clarifies that individuals who relocate to another State, tribal, or outlying area after a disaster may receive services in either the disaster area or the area to which they relocate. However, the Final Rule also includes a provision for the Secretary to allow, in certain circumstances, individuals to receive services in both the disaster and the relocation area. Other non-substantive changes and technical edits are described in detail in the section-by-section discussion of part 687 below.

12. Part 688—Provisions Governing the YouthBuild Program

The YouthBuild program authorizes grants for job training and educational activities for at-risk youth who, as part of their training, help construct or rehabilitate housing for homeless individuals and families and low-income families in their respective communities. Participants receive a combination of classroom training, job skills development, and on-site training in the construction trades. The Department wants to emphasize the connections across all of our youth-serving programs under WIOA, including the WIOA youth formula program and associated boards and youth committees, connections to pre-apprenticeship and registered apprenticeship programs, and Job Corps centers across the country. WIOA is an opportunity to align and coordinate service strategies for these ETA youth training programs, as well as to align with our Federal partners that serve these same customers. WIOA also ensures that these programs are using common performance indicators and standard definitions, which includes aligning the definitions for homeless youth, basic skills deficient, occupational skills training, and supportive services. Additionally, the YouthBuild regulation adopts the six new performance indicators that were codified across WIOA youth-serving programs and aligns YouthBuild with the WIOA youth formula program performance outcomes.

WIOA affirms the Department's commitment to providing high-quality education, training, and employment services for youth and young adults through YouthBuild grants by expanding the occupational skills training offered at local YouthBuild programs. YouthBuild programs can offer occupational skills training in in-demand occupations, such as health care, advanced manufacturing, and IT, as approved by the Secretary and based on the maturity of the program and local labor market information.

Other changes include revisions to the duration of the restrictive covenant clause, clarifying eligibility criteria for participation, and describing qualifying work sites and minimum criteria for successful exit from the YouthBuild program. Beyond these regulations, the Department will continue to develop guidance and technical assistance to help grantees and the workforce development community operate highly effective YouthBuild programs.

13. Part 651—General Provisions Governing the Wagner-Peyser Act Employment Service

The Wagner-Peyser Act of 1933 established the ES program, which is a nationwide system of public employment offices that provide public labor exchange services. The ES program seeks to improve the functioning of the nation's labor markets by bringing together individuals seeking employment with employers seeking workers. In 1998, the ES program was amended to make it part of the one-stop delivery system established under WIA. The ES program has now been amended again under title III of WIOA.

WIOA expands upon the previous workforce reforms in the WIA and, among other provisions, identifies the ES as a core program in the one-stop delivery system, embeds ES State planning requirements into a unified planning approach, and requires the colocation of ES offices into the one-stop centers. The regulations in parts 651, 652, 653, 654, and 658 update the language and content of the regulations to implement amendments made by title III of WIOA to the Wagner-Peyser Act. In some areas, these regulations establish entirely new responsibilities and procedures. In other areas, the regulations clarify and update requirements already established. The regulations make important changes to the following components of the ES program: definitions, data submission, and increased collaboration requirements, among others.

Part 651 sets forth definitions for 20 CFR parts 652, 653, 654, and 658. The Department received several comments regarding these definitions and has eliminated, revised, and added definitions, as needed. Some commenters suggested new terms they would like to see defined in part 651, and other commenters expressed concerns or suggestions relating to specific proposed definitions. Additionally, the Department has made technical and clarifying changes to some of the definitions.Start Printed Page 56078

14. Part 652—Establishment and Functioning of State Employment Service

The regulations at 20 CFR part 652 set forth standards and procedures regarding the establishment and functioning of State ES operations. These regulations align part 652 with the WIOA amendments to the ES program, and with the WIOA reforms to the public workforce system that affect the ES program. The WIOA-amended Wagner-Peyser Act furthers longstanding goals of closer collaboration with other employment and training programs by mandating colocation of ES offices with one-stop centers; aligning service delivery in the one-stop delivery system; and ensuring alignment of State planning and performance indicators in the one-stop delivery system. Other new Wagner-Peyser Act provisions are consistent with long-term Departmental policies, including increased emphasis on reemployment services for UI claimants (sec. 7(a)); promoting robust Workforce Labor Market Information (WLMI); the development of national electronic tools for job seekers and businesses (sec. 3(e)); dissemination of information on best practices (sec. 3(c)(2)); and professional development for ES staff (secs. 3(c)(4) and 7(b)(3)).

Several public comments received in response to the NPRM prompted the Department to make minor changes to parts of the regulations in this section. For example, the Department agreed with comments regarding ensuring comprehensive front-line staff training; and direct language has been added to § 652.204 from sec. 3(c)(4) of the Wagner-Peyser Act (as amended by WIOA sec. 303(b)(4)) to indicate that professional development and career advancement can be supported by the Governor's Reserve. The Department agreed with the commenter-suggested benefits of aligning definitions across the core programs, and as a result, the terms “reportable individual” and “participant” have been revised to align with the performance accountability of the other core programs. The Department also agreed with commenters who suggested that career services under WIOA are not a substitute for Wagner-Peyser Act sec. 7(a) services; § 652.3(f) has been amended to reference sec. 7(a) of the Wagner-Peyser Act. The Department continues to seek alignment of service delivery with WIOA core programs.

The Department received several varying comments regarding colocation. This part clarifies the intent of colocation; how ES-only affiliate sites do not meet the intent of WIOA; the Department's decision to broaden language in 20 CFR 678.315(b) to allow multiple programs to meet the more than 50 percent threshold by combining the time their staff members are physically present (see Joint WIOA Final Rule); and the expectation that colocation should be completed as expeditiously as possible, and that the Department will issue future guidance on this topic. Many commenters also raised questions and provided comments regarding the allowable uses of Wagner-Peyser Act funds. The Department clarified that there are no changes in the activities that may be funded by Wagner-Peyser Act funds. Specifically, training services may not be provided with sec. 7(a) of the Wagner-Peyser Act funding; however, appropriate career services and labor exchange services may be provided to individuals in training and there is no restriction on funding training services with sec. 7(b) funds under the Wagner-Peyser Act.

In regard to WLMI, some of the clarifications identified in this part include: There is a need to provide extensive education and technical assistance with regard to accessing wage record data; the Workforce Information Advisory Council (WIAC) will advise on WLMI and may consider what kind of information is needed for planning, but it will not be involved in developing State Plans; and the Departments of Labor and Education will issue joint guidance with regard to use of wage data for performance in the context of the confidentiality requirements for the use of UI wage record data and education data under the Family Educational Rights and Privacy Act (FERPA). The Department also made other clarifying changes to part 652, as discussed elsewhere in this Final Rule.

15. Part 653—Services of the Wagner-Peyser Act Employment Service

Part 653 sets forth standards and procedures for providing services to MSFWs and provides regulations governing the Agricultural Recruitment System (ARS), a system for interstate and intrastate agricultural job recruitment. In subparts B and F of part 653, the Department is implementing the WIOA title III amendments to the Wagner-Peyser Act, as well as streamlining and updating certain sections to eliminate duplicative and obsolete provisions. Despite these changes, part 653 remains consistent with the “Richey Order.” NAACP v. Brennan, 1974 WL 229, at *7 (D.D.C. Aug. 13, 1974).

Upon the consideration of comments suggesting that the Department require outreach workers to be trained on not only how to identify and refer possible incidents of sexual harassment, but also on similar issues such as sexual coercion, assault, and human trafficking, the Department has added such language to the regulatory text at § 653.107(b)(7). Training outreach workers in this way is key in helping to connect victims with appropriate resources and support networks.

16. Part 654—Special Responsibilities of the Employment Service System

In 1980, the Department published amended regulations at 20 CFR part 654, subpart E, providing agricultural housing standards for MSFWs. In the NPRM, the Department proposed to revise these agricultural housing regulations (hereinafter “ETA standards”) by updating outdated terminology and by establishing an expiration date for the ETA standards. This proposed expiration date was intended to transition housing currently governed by the ETA standards to the Occupational Safety and Health Administration (OSHA) regulations governing temporary labor camps for agricultural workers as set forth at 29 CFR 1910.142. After considering the public comments received on this aspect of the proposal, the Department is rescinding its proposal to establish an expiration date for the ETA standards in order to transition housing currently governed by the ETA standards to the OSHA standards, as explained in further detail in this Final Rule.

17. Part 658—Administrative Provisions Governing the Wagner-Peyser Act Employment Service

Part 658 sets forth systems and procedures for complaints, monitoring for compliance assessment, enforcement, and sanctions for violations of the ES regulations and employment-related laws, including discontinuation of services to employers and decertification of SWAs. The Department's proposed changes to part 658 updated terminology and responsibilities and reorganized various regulations to increase the clarity and efficiency of the provisions involved. Additionally, headings were revised, when necessary, to reflect changes to the regulations, and language was added to permit, where relevant, the use of electronic mail and electronic signatures.

Overall, the Department received several comments seeking clarification on processing complaints and apparent violations, attempting informal Start Printed Page 56079resolution, and the role of MSFW complainant's representatives, among many others. The Department has addressed these requests for clarification in the responses to public comments contained in the part 658 section-by-section discussion below (see section V.Q). Additionally, the Department will issue guidance on the Complaint System, informal resolution, referring complaints and apparent violations, and on part 658, subpart F (Discontinuation of Services to Employers by the Employment Service System).

C. Costs and Benefits

This Final Rule has been designated an “economically significant rule” under sec. 3(f)(4) of Executive Order (E.O.) 12866. Therefore, the Office of Management and Budget (OMB) has reviewed the Final Rule, and the Department has conducted a regulatory impact analysis to estimate the costs, benefits, and transfers associated with the Final Rule, which is detailed in full in section V.A of the Final Rule below. In total, the Department estimates that this Final Rule will have an average annual net benefit of $14,806,210 and a total 10-year net benefit of $95,836,706 (with 7-percent discounting).

The Department estimates that this Final Rule will have an average annual cost of $35,037,540 and a total 10-year cost of $278,750,652 (with 7-percent discounting). The largest contributor to the cost is the requirement related to the development and continuous improvement of the workforce development system, followed by the career pathways development and the colocation of ES services.

The Department quantified the expected incremental benefits associated with this Final Rule relative to the baseline of the current practice under the Workforce Investment Act of 1998 (WIA), where possible. Specifically, the Department quantified the benefits expected to result from required competition for all one-stop operators. Competition for all one-stop operators will result in cost reductions for Local WDBs due to increases in efficiency, which are estimated to amount to approximately $49,843,750 per year and $374,587,357 over the 10-year period (with 7-percent discounting). This quantified benefit resulting from increased competition for all one-stop operators, however, does not account for several other important benefits to society that the Department was unable to quantify due to data limitations or lack of existing data or evaluation findings. Based on a review of empirical studies (primarily studies published in peer-reviewed academic publications and studies sponsored by the Department), however, the Department identified a variety of societal benefits: (1) Training services increase job placement rates; (2) participants in occupational training experience higher reemployment rates; (3) training is associated with higher earnings; and (4) State performance accountability measures, in combination with the board membership provision requiring employer/business representation, can be expected to improve the quality of the training and, ultimately, the number and caliber of job placements. The Department identified several channels through which these benefits might be achieved: (1) Better information about training providers will enable workers to make better informed choices about programs to pursue; (2) sanctions to under-performing States will serve as an incentive for both States and local entities to monitor performance more effectively and to intervene early; and (3) enhanced services for dislocated workers, self-employed individuals, and workers with disabilities will lead to the benefits discussed above.

In addition, the Final Rule will result in transfer payments, i.e., a shift in costs or benefits from one group to another that does not affect total resources available to society. The Department estimates that this Final Rule will result in annual average transfer payments of $12,887,628 and a total 10-year transfer payment of $96,853,514 (with 7-percent discounting). These transfers result from increased funding for targeting OSY.

The Department has determined that the Final Rule will have no cost impact on small entities and will not impose an unfunded mandate on Federal, State, local, or tribal governments as defined by the Unfunded Mandates Reform Act of 1995.

II. Acronyms and Abbreviations

AEFLA Adult Education and Family Literacy Act

ALJ Administrative Law Judge

ACS American Community Survey

ADA Americans with Disabilities Act

ANRC Alaska Native Regional Corporation

ANVSA Alaska Native Village Service Area

AOP Agricultural Outreach Plan

ARC Analyst Resource Center

ARS Agricultural Recruitment System

ATAP Assistive Technology Act Program

AWPA Migrant and Seasonal Agricultural Worker Protection Act

AWOL Absent Without Official Leave

BCL Business and Community Liaison

BLS Bureau of Labor Statistics

CBO Community-based organization

CCC Civilian Conservation Center

CDBG Community Development Block Grant

CEO Chief elected official

CEP Concentrated Employment Program

CFR Code of Federal Regulations

Complaint System Employment Service and Employment-Related Law Complaint System

COO Chief operating officer

COSO Committee of Sponsoring Organizations of the Treadway Commission

CPARS Contract Performance Assessment Reports

CPP Career Preparation Period

CRIS Common Reporting Information System

CTS Career Transition Services

CTT Career Technical Training

DACA Deferred Action for Childhood Arrivals

DINAP Division of Indian and Native American Programs

DOL Department of Labor

DVOP Disabled Veterans Outreach Program

DWG Dislocated Worker Grant

EBSS Enterprise Business Support System

ED Department of Education

EEOC Equal Employment Opportunity Commission

E.O. Executive Order

EO Equal opportunity

ES Employment Service

ESA Employment Standards Administration

ESARS Employment Security Automated Reporting System

ETA Employment and Training Administration

ETP Eligible training provider

ETPL Eligible training provider list

FAR Federal Acquisition Regulations

FECA Federal Employees Compensation Act

FEIN Federal employer identification number

FEMA Federal Emergency Management Agency

FERPA Family Educational Rights and Privacy Act

FLSA Fair Labor Standards Act

FOA Funding Opportunity Announcement

FPO Federal Project Officer

FR Federal Register

FTE Full Time Equivalent

GED General Educational Development

GIS Geographic information system

GPRA Government Performance and Results Act

HEARTH Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009

HHS Department of Health and Human Services

HOME HOME Investment Partnerships

HSD High School Diploma

HSE High School Equivalent

HUD U.S. Department of Housing and Urban Development

IC Information collection

ICR Information Collection Request

IEP Individual Employment Plan

IEVS Income and Eligibility Verification System

INA Indian and Native American

IRFA Initial Regulatory Flexibility Analysis

IRS Internal Revenue Service

ISDEAA Indian Self-Determination and Education Assistance ActStart Printed Page 56080

ISS Individual Service Strategy

ISY In-school youth

IT Information technology

ITA Individual Training Account

JIS Job Information Service

JS Job Service

JTPA Job Training Partnership Act

JVSG Jobs for Veterans State Grants

LEARS Labor Exchange Agricultural Reporting System

LEHD Longitudinal Employer-Household Dynamics

LEP Limited English proficiency

LEWIS Local Employment and Wage Information System

LLC Limited Liability Corporation

LLSIL Lower Living Standard Income Level

LMI Labor Market Information

Local WDB Local Workforce Development Board

MOU Memorandum of Understanding

MPO Management Performance Outcome

MSFW Migrant and Seasonal Farmworker

MSWR Medical Separation with Reinstatement Rights

NAA National Apprenticeship Act

NAACP National Association for the Advancement of Colored People

NAETC Native American Employment and Training Council

NAFTA North American Free Trade Agreement

NAICS North American Industry Classification System

NDWG National Dislocated Worker Grant

NEG National Emergency Grant

NFJP National Farmworker Jobs Program

NICRA Negotiated Indirect Cost Rate Agreement

NIEM National Information Exchange Model

NLX National Labor Exchange

NPRM Notice of Proposed Rulemaking

OA Outreach and Admissions

OALJ Office of Administrative Law Judges

OBS On-board strength

ODEP Office of Disability and Employment Policy

OFLC Office of Foreign Labor Certification

OIG Office of the Inspector General

OJT On-the-job training

OMB Office of Management and Budget

OMS Outcome Measurement System

OPDR Office of Policy Development and Research

OSHA Occupational Safety and Health Administration

OSY Out-of-school youth

OTSA Oklahoma Tribal Service Area

OWI Office of Workforce Investment

PART Program Assessment and Rating Tool

PBP Program Budget Plan

PEDCS Post Enrollment Data Collection System

PIA Privacy Impact Assessment

PII Personally identifiable information

PIP Performance improvement plan

PIRL Participant Individual Record Layout

PMP Projections Managing Partnership

PPACA Patient Protection and Affordable Care Act

PRA Paperwork Reduction Act of 1995

PREP Profiling Reemployment Program

PRH Policy and Requirements Handbook

Pub. L. Public Law

PY Program year

REA Reemployment and Eligibility Assessment

RESEA Reemployment Services and Eligibility

RFA Regulatory Flexibility Act

RFP Requests for proposals

RHY Runaway or Homeless Youth

Richey Order Judge Richey Court Order

RIN Regulatory Information Number

RMA Regional Monitor Advocate

RSA Rehabilitation Services Administration

SBA Small Business Administration

SBREFA Small Business Regulatory Enforcement Fairness Act of 1996

SDA Service delivery area

sec. Section of a Public Law or the United States Code

SESA State Employee Security Act

S-FTP Secure File Transfer Protocol

SMA State Monitor Advocate

SOC Standard Occupational Classification

SNAP Supplemental Nutrition Assistance Program

SSA Social Security Act

SSDI Social Security Disability Insurance

SSN Social Security Number

State WDB State Workforce Development Board

STAWRS Simplified Tax and Wage Reporting System

SWA State Workforce Agency

SWCAP Statewide Cost Allocation Plans

TAA Trade Adjustment Assistance

TANF Temporary Assistance for Needy Families

TAPR Trade Act Participant Report

TAT Technical Assistance and Training

TDD Telephone device for the deaf

TEAP Trainee Employee Assistance Program

TEGL Training and Employment Guidance Letter

TEN Training and Employment Notice

UC Unemployment Compensation

UCX Unemployment Compensation for Ex-service members

UI Unemployment insurance

U.S.C. United States Code

VA Department of Veterans Affairs

VETS Veterans' Employments and Training Service

VR Vocational rehabilitation

Wagner-Peyser Act Wagner-Peyser Act of 1933

WARN Worker Adjustment and Retraining Notification

WDB Workforce Development Board

WHD Wage and Hour Division

WIA Workforce Investment Act of 1998

WIAC Workforce Information Advisory Council

WIASRD Workforce Investment Act Standardized Record Data

WIB Workforce investment boards

WIC Workforce Information Council

WIOA Workforce Innovation and Opportunity Act

WLMI Workforce and Labor Market Information

WLMIS Workforce and Labor Market Information System

WPRS Worker Profiling and Reemployment Services

WRIS Wage Record Interchange System

YB-TAP YouthBuild Trainee Apprenticeship Program

ZT Zero Tolerance

III. Rulemaking Authority and Background

A. Workforce Innovation and Opportunity Act Principles

On July 22, 2014, President Obama signed WIOA, the first legislative reform of the public workforce system in more than 15 years, which passed Congress by a wide bipartisan majority. WIOA supersedes WIA and amends the Adult Education and Family Literacy Act (AEFLA), the Wagner-Peyser Act, and the Rehabilitation Act of 1973. WIOA presents an extraordinary opportunity for the public workforce system to accelerate its transformational efforts and demonstrate its ability to improve job and career options for our citizens through an integrated, job-driven public workforce system that links diverse talent to our nation's businesses. It supports the development of strong, vibrant regional economies where businesses thrive and people want to live and work.

WIOA reaffirms the role of the customer-focused one-stop delivery system, a cornerstone of the public workforce development system, and enhances and increases coordination among several key employment, education, and training programs. Most provisions in WIOA took effect on July 1, 2015, the first full program year after enactment, although the new statutory State Plans and performance accountability system requirements take effect July 1, 2016. Title IV of WIOA, however, took effect upon enactment.

WIOA is designed to help job seekers access employment, education, training, and support services to succeed in the labor market and to match employers with the skilled workers they need to compete in the global economy. WIOA has six main purposes: (1) Increasing access to and opportunities for the employment, education, training, and support services for individuals, particularly those with barriers to employment; (2) supporting the alignment of workforce investment, education, and economic development systems in support of a comprehensive, accessible, and high-quality workforce development system; (3) improving the quality and labor market relevance of workforce investment, education, and economic development efforts; (4) promoting improvement in the structure and delivery of services; (5) increasing the prosperity of workers and employers; and (6) providing workforce development activities that increase employment, retention, and earnings of participants and that increase Start Printed Page 56081postsecondary credential attainment and as a result, improve the quality of the workforce, reduce welfare dependency, increase economic self-sufficiency, meet skill requirements of employers, and enhance productivity and competitiveness of the nation.

Beyond achieving the requirements of the new law, WIOA offers an opportunity to continue to modernize the public workforce system, and achieve key hallmarks of a customer centered public workforce system, where the needs of business and workers drive workforce solutions, where one-stop centers and partners provide excellent customer service to job seekers and businesses, where the public workforce system pursues continuous improvement through evaluation and data-driven policy, and where the public workforce system supports strong regional economies.

Regulations and guidance implementing WIOA titles I and III are issued by DOL, with the exception of the joint regulations issued by DOL and ED on the provisions in title I relating to unified and combined planning, performance, and the one-stop delivery system. Regulations and guidance on implementing titles II and IV of WIOA are issued by ED. The Joint WIOA Final Rule and the ED WIOA Final Rules are published elsewhere in this issue of the Federal Register.

WIOA retains much of the structure of WIA, but with critical changes to advance greater coordination and alignment. Under title I, subtitle A, each State will be required to develop a single, unified strategic plan that is applicable to six core workforce development programs. The core programs consist of the adult, dislocated worker, and youth formula programs administered by the Department under WIOA title I; the Adult Education and Family Literacy program administered by ED under WIOA title II; the ES program administered by the Department and authorized by the Wagner-Peyser Act, as amended by WIOA title III; and the VR program administered by ED and authorized under title I of the Rehabilitation Act of 1973, as amended by WIOA title IV (VR program). In addition to core programs, WIOA provides States the opportunity to include other key one-stop partner programs such as the Supplemental Nutrition Assistance Program (SNAP), Unemployment Insurance (UI), Temporary Assistance for Needy Families (TANF), and Perkins Career Technical Education in a Combined State Plan. The law also includes a common performance accountability system applicable to all of the core programs.

The remainder of WIOA title I authorizes the adult, dislocated worker, and youth formula programs; the State and local WDBs (formerly workforce investment boards or WIBs); the designation of regions and local areas; local plans; the one-stop delivery system; national programs, including Job Corps, YouthBuild, Indian and Native American (INA) programs, and Migrant and Seasonal Farmworker (MSFW) programs; technical assistance and evaluations; and general administrative provisions currently authorized under title I of WIA. Title II retains and amends the Adult Education and Family Literacy Program currently authorized under title II of WIA. Title III contains amendments to the Wagner-Peyser Act relating to the ES and Workforce and Labor Market Information System (WLMIS), and requires the Secretary to establish a WIAC. Title IV contains amendments to the Rehabilitation Act of 1973, which were also included under title IV of WIA; it also requires the Secretary of Labor to establish an Advisory Committee on Increasing Competitive Integrated Employment for Individuals with Disabilities. Finally, title V contains general provisions similar to the provisions applicable under title V of WIA as well as the effective dates and transition provisions.

B. Major Changes From the Workforce Investment Act of 1998

This section contains a summary of the major changes from WIA. As indicated above, WIOA retains much of the structure of WIA. Major changes in WIOA are:

  • Aligns Federal investments to support job seekers and employers. The Act provides for States to prepare a single Unified State Plan that identifies a 4-year strategy for achieving the strategic vision and goals of the State for preparing an educated and skilled workforce and for meeting the skilled workforce needs of employers. States govern the core programs as one system assessing strategic needs and aligning them with service strategies to ensure the public workforce system meets employment and skill needs of all workers and employers.
  • Streamlines the governing bodies that establish State, regional and local workforce investment priorities. WIOA makes State and Local WDBs more agile and well positioned to meet local and regional employers' workforce needs by reducing the size of the WDBs and assigning them additional responsibilities to assist in the achievement of the State and local strategic workforce vision and goals. The State WDBs continue to have a majority of business representation and a business chair and work for all workers and job seekers, including low-skilled adults, youth, and individuals with disabilities, while they foster innovation, and ensure streamlined operations and service delivery excellence.
  • Creates a common performance accountability system and information for job seekers and the public. WIOA ensures that Federal investments in employment, education, and training programs are evidence-based and data-driven, and accountable to participants and the public. It establishes a performance accountability system that applies across the core programs, by generally applying six primary indicators of performance: Entry into unsubsidized employment at two points in time, median earnings, attainment of postsecondary credentials, measurable skill gains, and effectiveness in serving employers.
  • Fosters regional collaboration to meet the needs of regional economies. WIOA promotes alignment of workforce development programs with regional economic development strategies to meet the needs of local and regional employers.
  • Enhances access to high quality services through the network of one-stop delivery system. WIOA helps job seekers and employers acquire the services they need in centers and online, clarifies the roles and responsibilities of the one-stop partner programs, adds the TANF program as a required one-stop partner unless the Governor objects, requires competitive selection of one-stop operators, and requires the use by the one-stop delivery system of a common one-stop delivery identifier or brand developed by the Secretary of Labor (“American Job Center,” see Joint WIOA Final Rule).
  • Improves services to individuals with disabilities. WIOA stresses physical and programmatic accessibility, including the use of accessible technology to increase individuals with disabilities' access to high quality workforce services.
  • Makes key investments for disconnected youth. WIOA emphasizes services to disconnected youth to prepare them for successful employment by requiring that a minimum of 75 percent of youth formula program funds be used to help OSY, in contrast to the 30 percent required under WIA. WIOA increases OSYs' access to WIOA services, including pre-apprenticeship Start Printed Page 56082opportunities that result in registered apprenticeship. It adds a requirement that at least 20 percent of formula funds at the local level be used on work-based training activities such as summer jobs, OJT, and apprenticeship.
  • Helps employers find workers with the necessary skills. WIOA contributes to economic growth and business expansion by ensuring the public workforce system is job-driven—matching employers with skilled individuals. WIOA requires Local WDBs to promote the use of industry and sector partnerships that include key stakeholders in an industry cluster or sector that work with public entities to identify and address the workforce needs of multiple employers.

Additionally, successful implementation of many of the approaches called for within WIOA, such as career pathways and sector strategies, require robust relationships across programs and with businesses, economic development, education and training institutions, including community colleges and career and technical education, local entities, and supportive services agencies.

C. Workforce Innovation and Opportunity Act Rulemaking Process

Since the enactment of WIOA, the Department has used a variety of means to coordinate with other Federal agencies that have roles and responsibilities under the Act. The Department works closely with staff at ED and the Department of Health and Human Services (HHS) on all shared policy and implementation matters. Key areas of collaboration include the Unified State Plan, performance reporting, one-stop service delivery, and services to disconnected youth and to individuals with disabilities. WIOA created an opportunity to enhance coordination and collaboration across other Federal programs through the Combined State Plan and the Department meets with the other Federal agencies regarding those plans.

Before publishing the WIOA NPRM (80 FR 20690, Apr. 16, 2015), the Department solicited broad input through a variety of mechanisms including:

  • Issued Training and Employment Notice (TEN) No. 05-14 to notify the public workforce system that WIOA was enacted, accompanied by a statutory implementation timeline, a fact sheet that identified key reforms to the public workforce system, and a list of frequently asked questions.
  • Issued TEN No. 06-14 to announce a series of webinars to engage WIOA stakeholders in implementation of WIOA.
  • Issued TEN No. 12-14 to provide guidance to States and other recipients of funds under title I of WIA on the use and reporting of PY 2014 funds for planning and implementation activities associated with the transition to WIOA.
  • Established a WIOA Resource Page (www.doleta.gov/​WIOA) to provide updated information related to WIOA implementation to the public workforce system and stakeholders;
  • Established a dedicated email address for the public workforce system and stakeholders to ask questions and offer ideas related to WIOA (DOL.WIOA@dol.gov);
  • Conducted, in conjunction with ED and HHS, outreach calls, webinars, and stakeholder and in-person town halls in each ETA region. The Department and its Federal partners hosted 10 town halls across the country, reaching over 2,000 system leaders and staff representing core programs and one-stop partners, employers, and performance staff. This included a town hall with INA leaders and membership organizations serving Indians and Native Americans, Hawaiians, and Alaskan Natives as well as a formal consultation with members of the Native American Employment and Training Advisory Council to the Secretary of Labor.
  • Conducted readiness assessments to implement WIOA in all States and 70 local workforce areas to inform technical assistance.

Since the DOL WIOA NPRM was published, the Department has issued additional WIOA guidance using various mechanisms including the following:

  • Issued numerous pieces of official guidance to the public workforce system on policies related to WIOA implementation (some jointly with ED), including “Vision for the One-Stop Delivery System under WIOA” (Aug. 13, 2015) and TEGL No. 14-15, “Workforce Innovation and Opportunity Act (WIOA) Requirements for Unified and Combined State Plans.See http://wdr.doleta.gov/​directives/​All_​WIOA_​Related_​Advisories.cfm.
  • Provided on-going technical assistance to the public workforce system in the form of Frequently Asked Questions. See https://www.doleta.gov/​wioa/​FAQs.cfm.
  • Developed a network of peer learners titled the Innovation and Opportunity Network (ION) that is designed to help all levels of workforce development professionals, stakeholders, and partners connect with others throughout the public workforce system who are working to implement WIOA. ION's in-person collaboration is provided through the Department's regional Federal Project Officers, and regional meetings with State and local stakeholders. Regarding online collaboration, the ION Web site provides webinars, quick start action planners, podcasts from voices in the field describing their experiences in implementation, and other online resources.
  • Conducted, in conjunction with ED and HHS, webinars for stakeholders on a variety of topics, including: Credentials that Count for Youth (Apr. 29, 2015); ION (May 13 and June 3, 2015); Firing Up Youth Standing Committees (May 27, 2015); Making the Shift—Successfully Leveraging In-School Youth (ISY) and OSY Resources and Services (June 24, 2015); WIOA Act Now Series: Partnerships in Action (July 1, 2015); Webinar Series Act Now: Governance, Leadership, and Building a Strategic Board (July 15, 2015); Collaborative Partnerships Serving Youth wish Disabilities (July 29, 2015); Customer-Centered Design Implementation WIOA (July 29, 2015); WIOA Eligible Training Provider Provisions: The First Year (Aug. 5, 2015); WIOA Performance Accountability Reporting Requirements—Overview of Layout and Templates (Aug. 12 and 13, 2015); Career Pathways for Youth (Aug. 26, 2015); Proposed Information Collection: Required Elements for Submission of the Unified or Combined State Plan and Plan Modifications Under WIOA (Aug. 27, 2015); Implementing WIOA in Rural Areas (Sept. 30, 2015); DEI Lessons Learned for WIA/WIOA: How Integrated Resource Teams Achieved WIA Outcomes for Populations that Experience Multiple Challenges to Employment and Implications for WIOA (Oct. 22, 2015); ApprenticeshipUSA Online Toolkit: A New Tool to Advance Apprenticeship Under WIOA (Oct. 26, 2015); Partnership Between WIOA and TANF to Serve Youth (Oct. 28, 2015).

Workforce Innovation and Opportunity Act Information Collection Requests

There are two new Information Collection Requests (ICRs) and six existing OMB-approved information collections that are being revised as part of this DOL WIOA Final Rule. Section V.B of the NPRM (Paperwork Reduction Act) included descriptions of the new ICRs and how the proposal would change each of the existing information collections. Section VI.D of this Final Rule (Paperwork Reduction Act) provides summary information about the public comments received on these Start Printed Page 56083ICRs and details the final burden estimates for the revised information collections.

Soon after publication of the DOL WIOA NPRM and the Joint WIOA NPRM, DOL and ED published a notice in the Federal Register announcing the joint ICR for the WIOA Performance Management, Information, and Reporting System (80 FR 43474, July 22, 2015) and requested comments on this ICR during a 60-day public comment period (hereinafter “WIOA Joint Performance ICR”) (see https://www.regulations.gov/​#!docketDetail;​D=​ETA-2015-0007). On September 1, 2015, DOL solicited comments on its own WIOA performance accountability ICR to require the following programs to report on a standardized set of data elements through the WIOA Workforce Performance Accountability, Information, and Reporting System: WIOA adult, dislocated worker, and youth, ES, National Farmworker Jobs, Trade Adjustment Assistance, YouthBuild, INA, and the Jobs for Veterans' State Grants (80 FR 52798) (hereinafter “DOL Performance ICR”) (see https://www.regulations.gov/​#!docketDetail;​D=​ETA-2015-0008). On April 16, 2015, ED solicited comments on its ICR related to the VR program Case Service Report (RSA-911) to require VR agencies to report data required under sec. 101(a)(10) of the Rehabilitation Act of 1973, as amended by WIOA, as well as performance accountability data under title I of WIOA (hereinafter “RSA-911”). DOL and ED received 112 public comment submissions in response to the WIOA Joint Performance ICR, DOL received public comments on the DOL Performance ICR, and ED received public comments on the RSA-911, respectively. The Departments address those comments in the final WIOA Joint Performance and DOL WIOA ICRs.

On August 6, 2015, the U.S. Departments of Labor, Education, Health and Human Services, Agriculture, and Housing and Urban Development proposed a new information collection regarding required elements for submission of the Unified or Combined State Plan and Plan modifications under WIOA (hereinafter “WIOA State Plan ICR”) (80 FR 47003) (see https://www.regulations.gov/​#!docketDetail;​D=​ETA-2015-0006). The WIOA State Plan ICR received a total of 16 public comments. These public comment submissions informed the development of the final WIOA State Plan ICR, which OMB approved on February 19, 2016. See http://www.reginfo.gov/​public/​do/​PRASearch (ICR Reference No. 201601-1205-001).

D. Legal Basis

On July 22, 2014, the President signed WIOA (Pub. L. 113-128) into law. WIOA repeals WIA (29 U.S.C. 2801 et seq.). As a result, the WIA regulations no longer reflect current law. Section 503(f) of WIOA required that the Department issue an NPRM and then a Final Rule that implements the changes WIOA makes to the public workforce system in regulations. Therefore, the Department has developed and issued this Final Rule that implements WIOA. The Department has issued regulations regarding the WIOA sec. 188 nondiscrimination and equal opportunity provisions through separate rulemaking. See 80 FR 43872 (July 23, 2015) (establishing WIOA sec. 188 implementing regulations at 29 CFR part 38); 81 FR 4494 (Jan. 26, 2016) (proposing updates to 29 CFR part 38 consistent with current equal opportunity law).

IV. Public Comments Received on the Notice of Proposed Rulemaking

The Department's NPRM to implement titles I and III of WIOA was published on April 16, 2015 (80 FR 20690). During the 60-day public comment period, the Department received a total of 767 public comments on the WIOA NPRM. In addition to these submissions, the Department also considered portions of 84 public comment submissions from the Joint WIOA NPRM docket that the Department determined related to the DOL WIOA NPRM. The Joint WIOA NPRM, which proposed regulations to implement jointly administered activities authorized under WIOA title I, was also published on April 16, 2015 (80 FR 20574).

General Comments

Comments: Several commenters expressed general support for the proposed regulation, commenting that the regulations would increase employment, make the United States more competitive, lead to higher wages, and produce other benefits. Some of these commenters expressed confidence that that the Department can deliver on this proposal, and that the associated expense is necessary. Several comments made general positive remarks about WIOA, and specifically cited an emphasis on one or more specific aspects of the law, such as adult education, college and career readiness, strengthening connections among programs and recognizing the role of distance learning and technology in reaching broader audiences. The commenters suggested that WIOA provides adequate flexibility to accommodate differences among States (e.g., size, population density and population diversity. Some commenters discussed workforce development-related services currently provided or cited statistics that they asserted illustrate the current or historical use of the public workforce system in terms of services and participant demographics. For example, one organization cited statistics regarding which aspects of titles I and II are being used by LEP individuals.

Department Response: Since these comments require no response, they are not addressed in this DOL WIOA Final Rule. No submissions expressed general opposition to the proposal. Instead, many commenters discussed their disagreement with specific aspects of the proposal. These comments are addressed in the associated and appropriate sections of the section-by-section discussion of the Final Rule (see section V below).

Requests To Extend the Comment Period

Comments: A few commenters requested a 60-day extension of the comment period. The commenters cited the size and complexity of the five proposed NPRMs implementing WIOA.

Department Response: While the Department recognizes that the issues addressed in the DOL WIOA NPRM are complex and important, the Department concluded that the 60-day comment period was sufficient to provide the public a meaningful opportunity to comment, and this conclusion is supported by the hundreds of complex and thoughtful comments received. Additionally, the NPRM was available to the public for a preliminary review on the Federal Register Web site upon submission of the NPRMs to the Federal Register, which was several weeks prior to publication, thereby providing stakeholders additional time prior to the publication date.

Coordination and the WIOA Rulemaking Process

Comments: A commenter urged the Departments of Labor and Education to increase collaboration, including more coordinated implementation guidance, providing incentives for programs within the two Departments to participate in a Combined Plan, and affording flexibility in use of funding streams and on performance accountability. Two commenters said that aspects of the proposed regulations suggest lesser coordination of WIOA Start Printed Page 56084guidance and oversight across Departments than envisioned by WIOA. Further, these commenters expressed concern that the lack of specificity in areas of the proposed regulations could result in the issuance of Federal guidance on levels that should be in regulation to ensure that States and local areas have an opportunity to comment.

Department Response: The Departments of Labor and Education have taken great care to coordinate the issuance of collaborative guidance regarding WIOA implementation, including TEGL No. 14-15, “Workforce Innovation and Opportunity Act (WIOA) Requirements for Unified and Combined State Plans”; TEGL No. 04-15, “Vision for the One-Stop Delivery System under the Workforce Innovation and Opportunity Act (WIOA).” The Departments will continue to issue guidance collaboratively. As appropriate, the Department will reach out and consult other stakeholders as it develops guidance and technical assistance. As the Department implements WIOA, it anticipates lots of stakeholder outreach, building on our long established relationships. The Department will continue this robust outreach throughout implementation.

V. Section-by-Section Discussion of Public Comments and Final Regulations

The analysis in this section provides the Department's response to public comments received on the DOL WIOA NPRM. If a proposed CFR section is not addressed in the discussion below, it is because the public comments submitted in response to the NPRM did not substantively address that specific section and no changes have been made to the regulatory text. Further, the Department received a number of comments on the NPRM that were outside the scope of the proposed regulation and the Department offers no response to such comments. Lastly, the Department has made a number of non-substantive changes to correct grammatical and typographical errors to improve the readability and conform the document stylistically that are not discussed in the analysis below.

A. Part 603—Federal-State Unemployment Compensation Program

Relationship Between 20 CFR part 603 and WIOA

The disclosure of wage record data is governed by 20 CFR part 603, which establishes requirements for maintaining the confidentiality of unemployment compensation (UC) information along with standards for mandatory and permissive disclosure of such information. Part 603 permits State agencies to disclose confidential unemployment compensation information—including “wage information” (referred to in § 603.2(k))—to “public officials” (defined at § 603.2(d)) under limited circumstances (under § 603.5), and authorizes such public officials in turn to use the information to meet certain Federal requirements in the performance of their official duties.

The Department has decided to amend 20 CFR part 603 as proposed in the NPRM. These Final Rules amend current regulations to clarify and expand, in a limited fashion, those public officials with whom the State may share certain confidential information to carry out requirements under WIOA. The regulations enumerate certain additional public officials who may access confidential State wage records for the State's performance reporting. Ensuring such access to these State records will allow State agencies to manage better the information for the purpose of making Federally required reports on certain program outcomes, and to cooperate more effectively and be more informative with respect to Federal program evaluations.

WIOA sec. 116(i)(2) and 20 CFR 677.175(a) (see Joint WIOA Final Rule) require State workforce, training, and education programs to use quarterly wage records to measure the progress of the State on State and local performance accountability measures. The Department interpreted at 20 CFR 677.175(b) the reference to “quarterly wage records” in WIOA sec. 116(i)(2) to require States to use the confidential UC information in the employer-provided wage reports collected under sec. 1137 of the Social Security Act (SSA), 42 U.S.C. 1320b-7. These are the reports that the State UC agency obtains from employers for determining UC tax liability, monetary eligibility, or for cross-matching against State UC agencies' files to determine if improper payments have been made.

The regulation at 20 CFR 677.175(b) (see Joint WIOA Final Rule) defines “quarterly wage record information” to include three data elements or categories of data elements: (1) A program participant's Social Security Number (SSN); (2) information about the wages that program participants earn after exiting from the program; and (3) the name, address, State, and (when known) Federal Employer Identification Number (FEIN) of the employer paying those wages. The “wage information” defined in § 603.2(k)—which the regulations allow State agencies to disclose under limited circumstances—includes the three data categories or elements (wages, SSN(s), employer information) that States must use as their data source for State and local performance reporting under WIOA. These terms are different but refer to the same information: wage records.

As explained in greater detail below, in the NPRM the Department proposed to change and expand § 603.2 (definition of “public official”) and change § 603.5 (governing disclosures to public officials) to help States comply with WIOA's performance requirements, including the performance reports of the States, local areas, and Eligible Training Providers (ETPs). In addition, the Department amended § 603.6 to add a provision requiring disclosure of confidential UC information to a Federal official (or an agent or contractor of a Federal official) requesting such information to meet the new statutory requirement on State cooperation with certain DOL and ED evaluations. These changes facilitate States' obligations to report on performance through the use of quarterly wage records, and to cooperate in DOL and ED evaluations.

The amendments to 20 CFR part 603 only relate to State agency disclosures necessary to comply with certain provisions of WIOA. Much of part 603 was left intact and was not considered for amendment in the NPRM, the purpose of which was to implement WIOA, not to otherwise impact partner programs. The Department invited comments on the proposed amendments to part 603, but did not consider comments on other portions of part 603 or other UC matters that are outside the scope of the proposed rulemaking.

The Department received 22 comments in response to the proposed changes to part 603. While normally the Department does not discuss comments that are outside the scope of the amendment, the Department notes that only the portions of part 603 that are being amended were part of the NPRM and open for comment. The existing data protections required under other portions of part 603 will continue and will be enforced. These required protections, laid out in §§ 603.8, 603.9, 603.10, and 603.12, ensure that confidential UC data are secure. These portions of part 603 were not considered for amendment and so were excluded from the NPRM.

The analysis that follows provides the Department's response to public comments received on the proposed part 603 regulations. If a section is not addressed in the discussion below, it is because the public comments submitted Start Printed Page 56085in response to the NPRM did not substantively address that specific section and no changes have been made to the regulatory text. Further, the Department received a number of comments on this part that were outside the scope of the regulation and the Department offers no response. Lastly, the Department has made a number of non-substantive changes to correct grammatical and typographical errors to improve the readability and conform the document stylistically that are not discussed in the analysis below.

Section 603.2 What definitions apply to this part?

Definition of “public official”: The changes to this section amend the definition of “public official” as used throughout part 603. The changes to § 603.2(d), to facilitate State compliance with WIOA's reporting requirements, clarify and expand the definition of who and what entities are considered “public officials.” The amendments to § 603.2(d) clearly enumerate that “public official” includes officials from public postsecondary educational organizations; State performance accountability and customer information agencies; the chief elected officials of local areas (as that term is used in WIOA sec. 106); and a public State educational authority, agency, or institution. Some of these officials already would meet the definition of “public official” under current § 603.2(d); however, the amendments make this clear.

Comments: The Department received some comments suggesting clarification of the definition and application of the phrase “chief elected official.”

Department Response: No changes were made to the regulatory text in response to these comments. Such clarification is best accomplished through guidance and technical assistance as needed.

Disclosure to public postsecondary institutions: Section 603.2(d)(2) permits disclosure to public postsecondary educational institutions, regardless of how those institutions are structured or organized under State law. Section 603.2(d)(2) clearly delineates the types of postsecondary educational institutions that are allowed access to confidential UC information:

(1) Public postsecondary educational institutions that are part of a State's executive branch, i.e., that derive their authority either directly from the Governor or from an entity (State WDB, commission, etc.) somewhere in that line of authority (see § 603.2.(d)(2)(i));

(2) Public postsecondary educational institutions that are independent of the State's executive branch, which means those institutions whose directors derive their authority either directly from an elected official in the State other than the Governor or from an entity (again, a State WDB, commission, or other entity) in that line of authority. This covers any public postsecondary educational institution established and governed under State law, for example, a State Board of Regents (see § 603.2(d)(2)(ii));

(3) State technical colleges and community colleges, which may also be covered under (1) or (2) (see § 603.2(d)(2)(iii)).

Section 603.2(d)(5) permits disclosure to a public State educational authority, agency, or institution; the Department considers the heads of public institutions deriving their authority from a State educational authority or agency to be “public officials” for purposes of part 603.

These changes are designed to help States comply with WIOA's requirement to use wage records to measure performance (WIOA sec. 116(i)(2)) and to facilitate the performance reporting required for ETPs under secs. 116(d) and 122 of WIOA. As long as the recipients of the data adhere to all of the requirements in 20 CFR part 603, this section permits States to make these disclosures to comply with WIOA requirements for Federal, State, or local government reporting on program outcomes and for other specified purposes.

Comments: The Department received several comments requesting that non-public educational institutions, community-based organizations, and for-profit educational institutions be added to the list of entities included in the term “public official.”

Department Response: As explained in the NPRM, non-public educational institutions, including non-profit or for-profit educational institutions, community-based organizations, and eligible training providers that are not subject to the authority of the executive branch of a State or other elected official, are not permitted to obtain confidential UC information, including wage information, under this authority. In first proposing the “public official” exception to the UC confidentiality requirement in 69 FR 50,022, 50,027 (2004), the Department explained that “there is less risk of unauthorized use or disclosure of UC information if responsibility for safeguarding confidentiality rests within the executive or legislative branches of government.” Any disclosures of confidential UC information to those entities for purposes of complying with WIOA must be authorized under an exception contained in § 603.5 other than § 603.5(e). The Department is issuing guidance to address how non-public entities that need wage record information to complete reports required under WIOA will be able to obtain access to aggregate wage record information for this purpose. No changes were made to the regulatory text in response to these comments.

Section 603.6(b)(8) What disclosures are required by this subpart?

Section 603.6(b)(8) makes the disclosure of confidential UC information mandatory for certain Federal evaluations when the disclosure does not interfere with the efficient administration of State UC law. The addition of § 603.6(b)(8) implements the requirement that States cooperate in conducting evaluations under the authority of either the Secretary of Labor or the Secretary of Education under WIOA sec. 116(e)(4). This cooperation, defined in WIOA, must include “the provision of data (in accordance with appropriate privacy protections established by the Secretary of Labor)”; this includes 20 CFR part 603 and any other privacy protections the Secretary may establish. The final regulation requires disclosure of confidential UC information to Federal officials or their agents or contractors, requesting such information in the course of an evaluation covered by WIOA secs. 116(e)(4) and 116(e)(1) to the extent that such disclosure is “practicable.”

The Department interprets “to the extent practicable” to mean that the disclosure would not interfere with the efficient administration of State UC law. This interpretation is consistent with the application of regulations that apply to disclosures under § 603.5. The introductory language to § 603.5 provides that, in situations where the disclosure of confidential UC information is permitted, the State may make the disclosure only if doing so would not interfere with the efficient administration of State UC law. In effect, § 603.6(b)(8) requires that State UC agencies make disclosures to DOL and ED for the purposes of the Departments' conducting evaluations, when the disclosures do not interfere with the efficient administration of the State UC law. The Department expects this cooperation and related disclosures to include responding to surveys and allowing site visits, as well as disclosing confidential UC information needed for evaluations.

Comments: The Department received two comments that raised concerns that the adoption of § 603.6(b)(8) would Start Printed Page 56086allow the creation of a national UC database and require a State's “entire UI file.”

Department Response: The information required to be disclosed for a given evaluation is considerably less than what may be included in a State's UC file. Additionally, these disclosures are required only for research, evaluation, and investigation purposes found in WIOA, the Rehabilitation Act of 1973, and the Wagner-Peyser Act, as well as evaluations under other laws. The information disclosed may not be used for purposes other than that for which it was obtained. These disclosures are subject to the appropriate privacy and confidentiality protections found throughout 20 CFR part 603. Research projects, evaluations, and investigations have set time frames for which data are being reviewed and are generally limited in scope. In general, the Department would not be in possession of any of the information requested under the disclosure provisions at § 603.6(b)(8). The researcher, evaluator, or investigator would be in possession of the information and use it for their stated purposes under proper authority or would be subject to sanctions for breach of the agreement under which the data were obtained. No changes were made to the regulatory text in response to these comments.

B. Part 675—Introduction to the Regulations for the Workforce Development Systems Under Title I of the Workforce Innovation and Opportunity Act

Part 675 discusses the purpose of title I of the WIOA, explains the format of the regulations governing title I, and provides additional definitions which are not found and defined in WIOA.

Section 675.100 describes the purposes of title I of WIOA.

Section 675.200 outlines the structure of the WIOA regulations.

Section 675.300 provides a list of definitions that are applicable across the WIOA regulations.

Included in this list of definitions, the Department includes the following relevant definitions from the Office of Management and Budget's (OMB) “Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards” found at 2 CFR part 200: Contract, Contractor, Cooperative Agreement, Federal Award, Federal Financial Assistance, Grant Agreement, Non-Federal Entity, Obligations, Pass-Through Entity, Recipient, Subaward, Subrecipient, Unliquidated Obligations, and Unobligated Balance. All other definitions at 2 CFR part 200 apply to these regulations where relevant, but have not been included in this section.

Contract. The definition for “contract” incorporates the definition established by OMB at 2 CFR 200.22. Specifically, the term “contract” refers to the legal document that a non-Federal entity uses to purchase property or services used to carry out its duties under a grant authorized under WIOA. If the Department determines that a particular transaction entered into by the entity is a Federal award or subaward it will not be considered a contract.

Contractor. The definition of “contractor” incorporates the definition contained in OMB's Uniform Guidance at 2 CFR 200.23. The Uniform Guidance has replaced the term “vendor” with the term “contractor.” As used in these regulations, the term “contractor” includes entities that WIOA refers to as “vendors.” Additionally, it is important to note that contractors are not subrecipients. Additional guidance on distinguishing between a contractor and a subrecipient can be found at 2 CFR 200.330.

Cooperative Agreement. The definition of “cooperative agreement” incorporates the definition contained in the Uniform Guidance at 2 CFR 200.24.

Department or DOL. This term refers to the United States Department of Labor, its agencies, and organizational units.

Employment and Training Activity. As used in these regulations, the term “employment and training activity” refers to any workforce investment activities carried out for an adult or dislocated worker under sec. 134 of WIOA and 20 CFR part 678 (see Joint WIOA Final Rule).

Equal Opportunity (EO) Data. This term refers to the data required by the Department's regulations at 29 CFR part 37 implementing sec. 188 of WIOA.

ETA. This term refers to the Employment and Training Administration, which is an agency of DOL, or its successor organization.

Federal Award. This definition incorporates the definition in the Uniform Guidance at 2 CFR 200.38.

Federal Financial Assistance. The definition of “Federal financial assistance” incorporates the definition contained in the Uniform Guidance at 2 CFR 200.40.

Grant or Grant Agreement. The definition of “grant agreement” incorporates the definition contained in the Uniform Guidance at 2 CFR 200.51. Because both WIOA and these regulations use “grant” and “grant agreement” interchangeably, the inclusion of both terms here clarifies that the terms are synonymous.

Grantee. The definition of “grantee” refers to a recipient of funds under a grant or grant agreement. Grantees are also referred to as recipients in these regulations.

Individual with a Disability. This definition uses the definition from sec. 3 of the Americans with Disabilities Act, as amended, and is further defined at 29 CFR 37.4.

Labor Federation. This definition remains unchanged from the definition used in the regulations under WIA at 20 CFR 660.300.

Literacy. The definition for “literacy” as used in these regulations is a measure of an individual's ability to participate and successfully function both in the workplace and in society.

Local WDB. This definition clarifies that the term “Local WDB” as used in these regulations refers to the Local Workforce Development Boards (WDB) established under WIOA sec. 107, to set policy for the local workforce development system.

Non-Federal Entity. The definition of “non-Federal entity” incorporates the definition contained in the Department's Exceptions to the Uniform Guidance at 2 CFR 2900.2.

Obligations. The definition of “obligations” incorporates the definition contained in the Uniform Guidance at 2 CFR 200.71.

Outlying Area. The term “outlying area” refers to those Territories of the United States which are not within the definition of “State,” including the U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and, in certain circumstances, the Republic of Palau.

Pass-through entity. The definition of pass-through entity incorporates the definition in the Uniform Guidance at 2 CFR 200.74.

Recipient. The definition of “recipient,” which is different than the current definition of recipient under WIA at 20 CFR 660.300, incorporates the definition in the Uniform Guidance at 2 CFR 200.86.

Register. The definition of “register” means the point at which an individual seeks more than minimal assistance from staff in taking the next step towards self-sufficient employment. This is also when information that is used in performance information begins to be collected. At a minimum, individuals must provide identifying information to be registered.

Secretary. This term refers to the Secretary of the U.S. DOL, or their officially delegated designees.Start Printed Page 56087

Secretaries. This term refers to the Secretaries of the U.S. DOL and the U.S. ED, or their officially designated designees.

Self-Certification. The term “self-certification” refers to the certification made by an individual that they are eligible to receive services under title I of WIOA.

State. The term “State” refers to each of the several States of the United States, the District of Columbia, and the Commonwealth of Puerto Rico.

State WDB. This definition clarifies that the term “State WDB” as used in these regulations refers to the State Workforce Development Boards (WDB) established under WIOA sec. 101.

Subgrant or Subaward. This term incorporates the definition of “subaward” in the Uniform Guidance at 2 CFR 200.92. This term replaces the term “subgrant” found in WIA at 20 CFR 660.300. Because both WIOA and these regulations use “subgrant” and “subaward” interchangeably, the inclusion of both terms here clarifies that the terms are synonymous.

Subrecipient. The definition of “subrecipient” incorporates the definition in the Uniform Guidance at 2 CFR 200.93. This term is synonymous with the term “subgrantee.”

Unliquidated Obligations. The definition of “unliquidated obligations” incorporates the definition contained in the Uniform Guidance at 2 CFR 200.97.

Unobligated Balance. The definition of “unobligated balance” incorporates the definition in the Uniform Guidance at 2 CFR 200.98.

Wagner-Peyser Act. As used in these regulations, the term “Wagner-Peyser Act” refers to the Wagner-Peyser Act passed on June 6, 1933, and codified at 29 U.S.C. 49 et seq.

WIA Regulations. The term “WIA Regulations” as used in this regulation or subsequently by the Department refers to the regulations 20 CFR parts 660 through 672. This definition is necessary because, as described in the introduction to these regulations, the Department has chosen to retain the WIA regulations at parts 660 through 672 of title 20 of the CFR.

WIOA Regulations. This term, as used in this regulation or generally by the Department means those regulations in 20 CFR parts 675 through 687, the Wagner-Peyser Act regulations in 20 CFR part 652, subpart C, and the regulations implementing WIOA sec. 188 in 29 CFR part 37.

Workforce Investment Activities. The term “workforce investment activities” is a general term that describes the broad array of activities and services provided to eligible adults, dislocated workers, and youth under secs. 129 and 134 of title I of WIOA.

Youth Workforce Investment Activity. The term “youth workforce investment activity” refers to those activities carried out for eligible youth that fall within the broad definition of “workforce investment activity.”

Section 675.100 What are the purposes of title I of the Workforce Innovation and Opportunity Act?

Comments: An advocacy organization urged the Department to include in § 675.100 a reminder to States and employers of their existing obligations under the Americans with Disabilities Act (ADA), notwithstanding anything else reflected in the WIOA regulations.

Department Response: The Department takes nondiscrimination seriously and addresses it in the regulation at 20 CFR part 38. No change to the regulatory text was made in response to this comment.

Section 675.200 What do the regulations for workforce development systems under title I of the Workforce Innovation and Opportunity Act cover?

Comments: Some commenters provided feedback on technical corrections for this section, while others provided comments that addressed specific provisions found elsewhere in this regulation.

Department Response: Technical corrections were made to this section. In addition, several comments that referenced this section were more appropriately addressed in other parts of the regulation, and have been so addressed.

Section 675.300 What definitions apply to these regulations?

Comments: Some commenters suggested that the Department should provide additional detail on what is involved in a requirement to consult. These commenters generally emphasized the importance of meaningful consultation. For example, referring to the proposed definition of consultation, a Local WDB commented that “exchanging viewpoints and ideas” is only helpful when both parties feel equally empowered to influence the outcome of the discussion. Two commenters expressed concern that the requirement to consult could be interpreted to mean just share information or whatever else is in the best interest of the entity required to consult. Another commenter suggested that consultation should be defined as strongly as possible to stress advanced notice, robust conversation, and collaborative efforts with local areas prior to the State's decision-making process. Some commenters made specific suggestions for what the Department should or could include in a definition of consultation, including active engagement, good faith discussion and decision-making agreement and consent from local elected officials, the Local WDB, and the State WDB, provision of written notice of intended changes with a cost-benefit analysis and a specific timeframe for public comment, process to contest decisions through a formal grievance process, requiring consultation with the largest and smallest local areas in the State, and requiring State WDB members to visit and engage local areas.

Department Response: The Department agrees with the need to emphasize meaningful consultation and revised the definition of consultation in this section to emphasize convening, robust conversation, and an opportunity for all stakeholders to share their thoughts and opinions. In addition, some of the specific suggestions not incorporated into this definition are addressed in other parts of this regulation and the Joint WIOA Final Rule. For example, 20 CFR part 676 requires public comment on Unified and Combined State Plans (see Joint WIOA Final Rule), and part 679 of this regulation requires governors to appoint only persons who have been nominated by certain stakeholder organizations to certain positions on the State WDB.

Comments: A commenter recommended clearly defining “career pathways” in this regulation in such a way to ensure flexibility in deviation from a pathway if education and employment requirements are met.

Department Response: WIOA secs. 3(7)(A) through (G) define career pathways as a combination of rigorous high-quality education, training, and other services that meet specified guidelines. The Department agrees that additional guidance would help State and Local WDBs implement career pathways. With the Department of Education, the Department has published a Career Pathways Toolkit, which can be found at www.DOLETA.gov, and continues to provide guidance and technical assistance on the implementation of career pathways under WIOA.

Comments: Asserting that neither WIOA sec. 3 nor the WIOA NPRMs include a definition of “family,” some commenters suggested that the Department provide clarification on this term.

Department Response: The Department agrees that “family” is a term that should be defined in this Start Printed Page 56088regulation and has added a definition of family that is based on the WIA definition and has been updated to reflect the Supreme Court decision in United States v. Windsor, 133 S. Ct. 2675 (2013). While this definition applies to all parts of this regulation, the Department notes that part 681 of this regulation adds a reference to dependents, per specifications of the Internal Revenue Service, when this definition is considered as part of a determination of eligibility to participate in the WIOA youth programs described in that part.

Comments: Several commenters recommended adding to this part definitions of terms not addressed above or in the NPRM. Most of them were related to indicators of performance of WIOA title I programs, which are addressed in 20 CFR part 677 of the Joint WIOA Final Rule. Several other comments focused on defining or revising definitions of terms that are used in regulations applying solely to Department of Education programs. The Department worked with the Department of Education to ensure they were addressed where they most appropriately fit, which was often in the Joint WIOA Final Rule and sometimes in specific parts of this regulation.

Department Response: The Department considered these comments and addressed them in other parts of this regulation, as appropriate, and worked with the Department of Education to address these comments in the most relevant part of the most appropriate regulation. For example, some commenters suggested definitions of terms related to performance under WIOA title I programs are addressed in 20 CFR part 677 (see Joint WIOA Final Rule) and comments related to serving youth under WIOA title I programs are addressed in part 681.

In addition, the Department realized that the NPRM contained minor inconsistencies in how it defined “individual with a disability” across parts. The Department therefore edited such definitions using the statutory definition at WIOA sec. 3(25), which uses the definition from the Americans with Disabilities Act (ADA), to make them consistent with each other. The Department interprets all references to the ADA to include case law and interpretive guidance. The Department also changed the terms “workforce innovation and opportunity system,” and “workforce investment system” to “workforce development system” throughout this rule. This was done to enhance consistency across parts and avoid confusion, and to be emphasize the role of workforce development boards in this system.

C. Part 679—Statewide and Local Governance of the Workforce Development System Under Title I of the Workforce Innovation and Opportunity Act

20 CFR part 679 addresses the Statewide and Local Governance provisions of the Workforce Development System under title I of WIOA. This part includes provisions on the State WDB, the Workforce Innovation and Opportunity Act Local Governance (Workforce Development Areas), Local WDBs, Regional and Local Plans, and Waivers/Workforce Flexibility Plans.

The analyses that follows provides the Department's response to public comments received on the proposed Statewide and Local Governance regulations. If a section is not addressed in the discussion below, it is because the public comments submitted in response to the NPRM did not substantively address that specific section and no changes have been made to the regulatory text. Further, the Department received a number of comments on this part that were outside the scope of the regulation and the Department offers no response. Lastly, the Department has made a number of non-substantive changes to correct grammatical and typographical errors to improve the readability and conform the document stylistically that are not discussed in the analysis below.

1. Subpart A—State Workforce Development Board

Subpart A sets forth the conditions under which the Governor must establish the State WDB. 20 CFR 679.100(a) through (e) explain the purpose of the State WDB. The State WDB represents a wide variety of individuals, businesses, and organizations throughout the State. WIOA is designed to help job seekers and workers access employment, education, training, and support services needed to succeed in the labor market, and match employers with the skilled workers needed to compete in the global economy. The State WDB has the critical role of leading and guiding the State's implementation of WIOA, which requires aligning Federal investments in job training, integrating service delivery across programs, and ensuring that workforce investments are job-driven and match employers with skilled workers. The State WDB serves as a convener of State, regional, and local workforce system partners to enhance the capacity and performance of the workforce development system and align and improve employment, training, and education programs, and through these efforts, promote economic growth. The State WDB's role as a strategic convening place where key stakeholders and partnerships come together can be accomplished only if each State WDB member is an active participant in the business of the board. State WDB members must establish a platform in which all members actively participate and collaborate closely with the required partners of the workforce development system, and other stakeholders, including public and private organizations. This engagement is crucial in the State WDB's role to help integrate and align a more effective job-driven workforce development system that invests in the connection between education and career preparation.

Overarching Comments on State WDBs

Comments: Commenters expressed concern with the WIOA implementation timelines for establishing compliant State WDBs. They said that States should have more flexibility in the time allowable to become compliant with new requirements, including new membership requirements and the new State WDB role, which could require changes by the State legislature.

Department Response: WIOA called for the implementation of most of WIOA, including the State WDB requirements, by July 1, 2015. State WDB requirements are outlined in WIOA sec. 101 and § 679.100. The Department issued operating guidance in TEGL No. 27-14 on April 15, 2015, titled “Workforce Innovation and Opportunity Act Transition Authority for Immediate Implementation of Governance Provisions.” This guidance can be found at http://wdr.doleta.gov/​directives/​All_​WIOA_​Related_​Advisories.cfm.

Comments: One commenter was concerned with potential political influence the Governor holds over State and Local WDBs as well as procurement requirements.

Department Response: WIOA vests certain authority with the Governor, including State WDB appointments, and the Department has no authority to change it.

WIOA sec. 107(e) requires Boards to operate in a transparent manner; §§ 679.140 and 679.390 set forth the parameters for State and Local WDBs to conduct business in an open and transparent manner. Transparency in operations also assures that all parties are held accountable to the public and can mitigate concerns of inappropriate influence. Transparency promotes Start Printed Page 56089accountability and provides valuable information to citizens on the Federal, State, and local government's activities. The State WDB must make available to the public on a regular basis, through electronic means and open meetings, information about State WDB activities such as the State Plan, modifications to the State Plan, board membership, the board's by-laws, and the minutes of meetings. This information must be easily accessed by interested parties. Ensuring that this information is widely available promotes transparency and provides access to the public on how the State WDB works to align, integrate, and continuously improve the workforce development system. No change to the regulatory text was made in response to this comment.

Comments: Another commenter recommended that developing an overarching vision for the workforce development system and monitoring of progress toward that vision should be a function of the State WDB.

Department Response: These actions are a function of the State WDB. 20 CFR 679.100 implements WIOA sec. 101(d) and outlines the vision and purpose of the State WDB. Among other responsibilities, the State WDB is required to assist the Governor in the “development, implementation, and modification of the State Plan” (WIOA sec. 101(d)(1)) and to support the function of the public workforce system enumerated in WIOA sec. 101(d)(2) through (12). The State Plans must detail the State's strategic workforce approach and vision as outlined in 20 CFR 676.100(a) (see Joint WIOA Final Rule) and no change to the regulatory text was made in response to this comment.

Section 679.100 What is the purpose of the State Workforce Development Board?

20 CFR 679.100 implements WIOA sec. 101 and outlines the purpose of the State WDB. A key goal of Federally-funded training programs is to get more U.S. workers jobs and marketable skills and support businesses to find workers with the skills that are needed. The State WDB is responsible for engaging employers, education providers, economic development, and other stakeholders to help the workforce development system achieve the purpose of WIOA and the State's strategic and operational vision and goals outlined in the State Plan.

The Department encourages the State to take a broad and strategic view when considering representatives of the State WDB, and also in establishing processes which it will use to include necessary perspectives in carrying out State WDB functions. For example, alignment of required one-stop partner investments is essential to achieving strategic and programmatic alignment at the State, regional, and local level. Further, States are encouraged to examine factors like the natural bounds of regional economies, commuting patterns, and how economic sectors impact the State, which may benefit from inputs either from formal members of the board, or through other engagement. Broad geographic representation as well as a reflection of diversity of populations within the State is critical.

Comments: A commenter emphasized the need for Boards to remain connected to local and regional programs, and another requested more information on how employer engagement would be measured and how a State WDB would know if their engagement was successful. This commenter suggested surveys of partners (both pre-WIOA and annually) to determine the level of engagement.

Department Response: There is a primary indicator of performance in WIOA sec. 116(b)(2)(i)(vi) to gauge the system's effectiveness in serving business. WIOA does not provide parameters for measuring the Board's effectiveness in engaging employers. However, this engagement is crucial in the State WDB's role to help integrate and align a more effective job-driven workforce development system that invests in the connection between education and career preparation. The Department will continue to provide technical assistance and guidance to Boards to assist their efforts to fulfill this vision. The Department envisions that the State WDB will serve as a convener of State, regional, and local workforce system partners to enhance the capacity and performance of the workforce development system; align and improve employment, training, and education programs, and through these efforts, promote economic growth.

Comments: A commenter suggested that more information regarding the State Plan and how States will satisfy the needs of individuals with disabilities, and the specific performance metrics that will be used for systemic improvement be included in § 679.100.

Department Response: State Plan requirements as a function of the State WDB are addressed in § 679.130. WIOA sec. 102 describes the requirements for the State Plan; State Plan requirements are also addressed in 20 CFR part 676, including requirements to address the needs of the State's workforce and services to individuals with barriers to employment (see Joint WIOA Final Rule). No change to the regulatory text was made in response to this comment.

Section 679.110 What is the State Workforce Development Board?

Local Elected Officials

Comments: Commenters citing the needs of large and diverse States that are concerned with adequate representation of local level interests recommended that Governors include the chief elected official from the smallest and largest workforce areas on the State WDB. Similarly, other commenters recommended that the local elected officials be increased from a minimum of two representatives to a percentage of the Board.

Department Response: Both WIOA and the regulations offer the Governor the flexibility to “include other appropriate representatives and officials designated by the Governor” as detailed in § 679.110(b)(3)(iii)(B). The Governor has the flexibility to appoint more local elected officials to the State WDB as he/she sees fit and a Governor may seek to have such officials represent the range of local government entities. The Department encourages the Governor to use this authority, which may include increasing the representation of CEOs, to ensure accurate representation of the interests of job seekers and businesses in the State. No change to the regulatory text was made in response to these comments.

Representation of Core Programs

Comments: Commenters opposed the Department's interpretation of WIOA allowing for representation of multiple core programs by a single person (as proposed in § 679.110(b)(3)(iii)(A)) and indicated that this situation fails to adequately represent adult education. Some commenters called for specifically mandating the State director of adult education on the State WDB. Others were concerned that the Department's interpretation does not satisfy the requirement to have a representative of the lead State official with primary responsibility for each of the core programs.

Department Response: The Governor is responsible for ensuring adequate representation of the core programs, which the Department interprets to mean that the core program's State WDB representative has not only primary responsibility for the program, but also the expertise to actively and meaningfully contribute to the State WDB's understanding of the program's role in the public workforce system, especially with regard to the strategic Start Printed Page 56090planning for that system, and in the development and implementation of the State Plan. The Department has added § 679.110(b)(3)(iii)(A)(1)(i) through (iii) to clarify that, for title I and Wagner-Peyser Act programs, a single lead State official with primary responsibility for those programs may represent more than one of those programs. However, the WIOA title II and VR programs must have a single, unique representative. When appointing a board member to represent multiple core programs under § 679.110(b)(3)(iii), Governors should take into account the requirement that the representative has the primary responsibility for the core program which includes direct responsibility for, and understanding of, policy issues involving the core program and the public workforce system. The Department encourages Governors to ensure an ongoing role for all core programs to inform the Boards' actions. Meeting these requirements may be achieved in a number of ways, such as directly appointing a State's director for those core programs to the Board, gathering direct input from program administrators via a subcommittee or staffing structure, or frequent efforts to gather input.

These provisions are intended to ensure that all core programs have meaningful input on the State WDB, but neither WIOA nor the regulation requires that the adult education director be appointed to the State WDB. The regulation is not changed to require a specific title be named as representative; however, representatives must meet the requirement of primary responsibility.

The Department will issue guidance to support the implementation and maintenance of compliant State WDBs.

Labor Union, Small Business, and Registered Apprenticeship Representation

Comments: Comments on the membership requirements of representatives of labor organizations and registered apprenticeship included multiple suggestions for regulatory text changes. One commenter suggested changing “exists” in § 679.110(b)(3)(ii)(B) to “operating,” because “exists” could cause confusion. Another commenter suggested that the term “registered” precede apprenticeship, out of concern that the NPRM language would allow low-quality apprenticeship programs that are not registered be considered.

Department Response: The Department disagrees that “exists” will cause confusion in reference to registered apprenticeship programs available in the State. The Department agrees that the reference to apprenticeship should be changed to “registered apprenticeship” because references throughout WIOA are generally references to registered apprenticeship.

No change to the regulatory text was made in response to these comments, with the exception of revising § 679.110(b)(3)(ii)(B) to refer to apprenticeship as “registered apprenticeship.”

Comments: Commenters requested clarification of the total number of labor representatives required on the State WDB, and suggested labor representatives include employee representatives for non-unionized employees.

Department Response: WIOA requires at least two representatives of labor organizations nominated by State labor federations, and a representative of a registered apprenticeship program. Because State WDB members may not serve multiple roles for the categories included in WIOA sec. 101(b)(1)(C)(ii) (as outlined in WIOA sec. 101(b)(3)(B)), the Department's proposed language clarified that, at minimum, two labor representatives and one joint labor-management of a registered apprenticeship program are required. The State WDB must include not less than 20 percent representation of the workforce, including at a minimum these three representatives.

In addition to these representatives, WIOA sec. 101(b)(1)(C)(iii)(II) and § 679.110(b)(3)(iii)(B), give the Governor the flexibility to appoint “other representatives and officials as the Governor may designate.” This would allow the Governor to designate non-union employee organizations as additional members of the State WDB. No change to the regulatory text was made in response to these comments.

Nominations

Comments: Two union commenters urged the Department to clarify that the nominations for representatives of joint labor-management registered apprenticeship programs on State and Local WDBs should be made by State and local building and construction trades councils, except where none exist in the State, in which case the representative(s) should be nominated by the local Building Trades Councils within the State.

Regarding the proposed § 679.110(b)(3)(i)(C) requirement that the Governor must appoint required representatives of businesses or organizations based on nominations from business organizations and trade associations in the State, a commenter asked what would qualify these organizations to submit such nominations and requested that the Department clarify the definition of these organizations.

Department Response: Paragraph (b)(3)(i)(C) of § 679.110 implements WIOA sec. 101(b)(1)(C)(i)(III), which requires State WDB members who represent businesses or organizations representing businesses to be appointed from a list of potential members nominated by State business organizations and business trade associations. WIOA does not further define trade associations; restricting the nominating entity would not comply with WIOA sec. 101(b)(1)(C)(i)(III), but Governors may accept nominations of representatives to the State WDB from Trade Councils. Furthermore, WIOA does not require that the representatives of joint labor-management registered apprenticeship programs (under WIOA sec. 101(b)(1)(C)(ii)(II) be nominated by any organization. The Department declines to add the requirement that trades councils must nominate these members. No change to the regulatory text was made in response to these comments.

Single-Area States

Comments: Relating specifically to concerns for single-area States, one commenter suggested that the core programs can be improved by CEOs on the State WDB and that the Departments of Labor and Education must look critically at any Unified or Combined State Plan that is submitted from a single-area State that does not obviously and fully represent the local viewpoint from a diverse set of stakeholders, as is the intention of this section. Another commenter stated that because local control is primarily with the State WDB in single-area States, the local community advisory groups, who are more familiar with the specific community needs, do not have the influence that they should. Multiple commenters also requested that the Department clarify the meaning of the proposed § 679.110(b)(3)(iii)(A)(2) requirement that the State WDB include two or more CEOs (collectively representing both cities and counties “where appropriate”) and indicate whether this language would exempt single-area States from requiring CEOs to serve on the State WDB.

Department Response: 20 CFR 679.270 implements WIOA sec. 107(c)(4), which describes the requirements of Local WDBs in single-area States. Section 679.270 requires that the State WDB, acting as the Local Start Printed Page 56091WDB, carry out the functions of both Boards except that the State is not required to meet and report on a set of local performance accountability measures. Section 679.110(b) requires CEO representation on the State WDB. There is no exemption for membership categories on the State WDB in single-area States. No change to the regulatory text was made in response to these comments.

Community-Based Organizations

Comments: A few commenters recommended that State WDBs should be required to have at least one representative from community-based organizations (CBOs) with experience and expertise in addressing individuals' training, employment, and educational needs. For example, one commenter suggested adding § 679.110(b)(3)(ii)(E) that states “State Boards are strongly encouraged to include organization representatives in (C) and (D).”

Department Response: Many comments from stakeholders with mandated representation on the Board under WIA requested that they again be mandated Board members or that they be referenced in regulation. WIOA reduced mandated Board membership in an effort to streamline State WDBs and provide Governors the flexibility to establish Boards that best reflect the diversity of the State's job seeker and employer communities. The Department recognizes that many important system partners with experience with specific job seeker populations, such as required one-stop partner programs, tribal organizations, other Department program grantees, and those serving the disadvantaged and disabled populations are no longer required members of the Board. However, § 679.110(b)(3)(ii) permits representatives of community-based organizations that have demonstrated experience and expertise in addressing the employment, training, or education needs of individuals with barriers to employment to contribute to the 20 percent workforce threshold. Paragraph (b)(3)(iii)(B) says the Governor has the flexibility to appoint “other appropriate representatives and officials designated by the Governor” which does not preclude any organization as the Governor deems appropriate for the State. The Department encourages the Governor to ensure that State WDB members represent the diversity of job seekers, and employers across the State, which includes ensuring adequate representation on the State WDB. The Department has made no changes to the regulatory text in response to these comments.

Chairperson Requirements

Paragraph (c) of § 679.110 implements WIOA sec. 101(c) requiring the Governor to select a chairperson of the Board from among the business representatives on the Board who are the owner or chief executive officer for the business or organization, or a person who is an executive with the business or organization with optimum policy-making or hiring authority.

Comments: One commenter requested amending the statutory language to allow outlying areas to appoint a representative from a non-governmental organization, a community-based organization, or a small business rather than a business as chair of the State WDB, expressing concern about finding a chairperson who would be willing to dedicate the time and effort to the Board.

Department Response: A small business owner would meet the qualifications outlined in the statue and would not require a change to the regulations. However, WIOA does not delineate specific Board membership exemptions for outlying areas. No change to the regulatory text was made in response to these comments.

Individuals With Disabilities and Other Barriers to Employment

Comments: Many commenters from stakeholders with mandated representation on the Board under WIA and from other interest groups requested that they again be mandated Board members or that they be referenced in regulation. Various commenters suggested that Governors be required to appoint individuals with disabilities, disability service providers, and direct support professionals, lead State officials from agencies with primary responsibility for providing services to individuals with intellectual, developmental, and other significant disabilities as members of the State WDB. Another commenter recommended that because it is not required, the Department should strongly urge representation of populations with disabilities on State and Local WDBs.

Department Response: WIOA reduced mandated Board membership in an effort to streamline State WDBs and provide Governors the flexibility to establish Boards that best reflect the diversity of the State's job seeker and employer communities. The Department recognizes that many important system partners with experience with specific job seeker populations, such as required one-stop partner programs, tribal organizations, other Department program grantees, and those serving the disadvantaged and individuals with disabilities are no longer mandated members of the Board. However, § 679.110(b)(3)(ii) requires not less than 20 percent of the Board be comprised of workforce representatives which may include one or more individuals who have demonstrated experience and expertise in addressing the employment, training, or education needs of individuals with barriers to employment. Paragraph (b)(3)(iii)(B) says the Governor has the flexibility to appoint “other appropriate representatives and officials designated by the Governor,” which does not preclude representatives of any required partner program, community based organizations or other organizations as the Governor deems appropriate for the State. The Department encourages the Governor to ensure that State WDB members represent the diversity of job seekers, and employers across the State, which includes ensuring adequate representation on the State WDB. The Department has made no changes to the regulatory text in response to these comments.

Work-Relevant Training

Comments: Relating to the WIOA provision that provides that State WDB business representatives may represent businesses that provide “employment opportunities that, at a minimum, include high-quality, work-relevant training and development in in-demand industry sectors,” some commenters asked the Department to clarify the definition of “work-relevant training” in proposed § 679.110(b)(3)(i)(B). In particular, some of these commenters asked whether it pertains to for-profit training providers. Another commenter stated while the definition of “in-demand” is located at WIOA sec. 3(23), there are no definitions for the terms “high-quality” and “work-relevant.” This commenter recommended that the Department allow definition of these terms at the State or local level.

Department Response: Paragraph (b)(3)(i)(B) of § 679.110 implements WIOA sec. 101(b)(1)(C)(i)(II), which provides that State WDB business representatives must represent businesses that provide “employment opportunities that, at a minimum, include high-quality, work-relevant training and development in in-demand industry sectors.” WIOA sec. 3 provides definitions used in the law, however the terms “work-relevant” training and “high quality” are not defined in WIOA. The State WDB, in conjunction with the Governor, is responsible for crafting appropriate parameters to address Start Printed Page 56092circumstances in the State; States are therefore responsible for defining “work-relevant” and “high-quality” in accordance with the particular circumstances faced by that State. The Department has made no changes to the regulatory text in response to these comments.

Comments: Other commenters said that while they agree that customized training, registered apprenticeship, or OJT are all work-relevant, the Department should clarify that these are just a few examples and not a comprehensive list because such limitation could deem ineligible representatives of the business community who may successfully offer alternative types of training such as a non-registered apprenticeship. Similarly, another commenter recommended that § 679.110(b)(3)(i)(B) should clarify that “a representative of a business providing an alternative form of training can serve on the State Board.”

Department Response: The Department acknowledges that the training options mentioned in this section are illustrative, and that other training strategies could reasonably satisfy this requirement. The Department has determined that no further definition is required and has made no changes to the regulatory text in response to these comments.

Voting Rights

Comments: Expressing concern that allowing a Governor to selectively grant voting rights among non-required members could skew a Board or lead to the appearance of discrimination against some of the non-required member interests, a commenter recommended that § 679.110(g) state clearly that the Governor may grant voting privileges to either all or none of the non-required members of the State WDB. Another commenter said that allowing a CEO to give voting rights to non-required members could lead to political tension. Some commenters were concerned that a Governor's authority to convey voting privileges to non-required members, as stated in § 679.110(g), would be used to circumvent the requirement of a business majority on the State WDB, or otherwise impact the functionality of the Board.

Department Response: WIOA sec. 101(b)(1) mandates certain State WDB members in order to ensure a core set of interests are represented. Title 20 CFR 679.110(g) requires all mandated Board members to have voting rights. This section also permits the Governor to grant voting privileges to the non-required members of the board, and the Department encourages the Governor to do so, if doing so would further the mission and goals of the board. Additionally, as described below, the Governor may not award voting rights in such a way that would upset the balance of required membership categories. Under the regulations as proposed, Governors cannot circumvent membership requirements by granting voting rights to non-mandated State WDB members because the membership requirements explained in paragraph (b) will always cause the majority of members on the Board to be mandated members. No change to the regulatory text was made in response to these comments.

Indian and Native American Representation

Comments: Paragraph (b) of § 679.110 implements WIOA sec. 101(b) describing the required State WDB membership. Many comments from stakeholders with mandated representation on the Board under WIA and other interest groups requested that they again be mandated Board members or that they be referenced in regulation. Several commenters suggested that Indian and Native American representatives be required as Board members. As part of a Council resolution submitted as a public comment, the Native American Employment and Training Council (NAETC) proposed that each State WDB should have a representative from a tribe or tribal organization.

Department Response: WIOA reduced mandated Board membership in an effort to streamline the State WDBs and provide Governors the flexibility to establish Boards that best reflect the diversity of the State's job seeker and employer communities. Many important system partners with experience with specific job seeker populations, such as tribal organizations, other Department program grantees, and those serving the disadvantaged and disabled populations are no longer required members of the Board. However, § 679.110(b)(3)(ii) requires not less than 20 percent of the Board be representatives of the workforce, which may include representatives of community-based organizations that have demonstrated experience and expertise in addressing the employment, training, or education needs of individuals with barriers to employment. It also says the Governor has the flexibility to appoint “other appropriate representatives and officials designated by the Governor” (§ 679.110(b)(3)(iii)(B)); the Department encourages the Governor to ensure that State WDB members represent the diversity of job seekers and employers across the State. No change to the regulatory text was made in response to these comments.

Section 679.120 What is meant by the terms “optimum policy-making authority” and “demonstrated experience and expertise”?

Paragraph (a) of § 679.120 defines the term “optimum policy-making authority” as an individual who can reasonably be expected to speak affirmatively on behalf of the entity he or she represents and to commit that entity to a chosen course of action. This section retains the same requirements that were included in the WIA regulations at 20 CFR 661.203(a). Paragraph (b) of § 679.120 defines the term “demonstrated experience and expertise” as an individual who has documented leadership in developing or implementing workforce development, human resources, training and development, or a core program function.”

Comments: The Department sought comment on the definition of optimum policy-making authority, and demonstrated experience and expertise. Commenters recommended adding education and training expertise to § 679.120 by indicating that documented leadership in any of the areas in § 679.110(b)(3)(ii)(C) and (D) also would be considered.

Department Response: The Department agrees with these commenters and changed the regulatory language in § 679.120 to reference § 679.110(b)(3)(ii)(C) and (D).

Comments: Commenters also recommended in-depth criteria including: A successful track record, leveraging of funds, documented service track record, quality partnerships, culturally competent, and a physical location in the area. However, the majority of commenters supported leaving the definition open to State and local discretion. Some commenters expressed concern that the definition proposed in § 679.120 was too specific and may limit the types of representatives on the State WDB to those with experience in human resources.

Department Response: With the clarification that demonstrated experience and expertise may include individuals with experience in education or training of job seekers with barriers to employment as described in § 679.110(b)(3)(ii)(C) and (D), the Department has determined that the definition is sufficiently clear to provide parameters to State WDBs.Start Printed Page 56093

Comments: Another commenter suggested removal of the term “documented,” referencing experience in the areas described in § 679.120, to avoid added administrative burdens of processing documentation.

Department Response: The use of the term “documented” assures that the selected representatives meet the criteria necessary to contribute meaningfully to the Board's actions for job seekers but does not require any specific administrative burden. Processes and procedures related to membership are the responsibility of the elected official. No change to the regulatory text was made in response to these comments.

Section 679.130 What are the functions of the State Workforce Development Board?

20 CFR 679.130 implements sec. 101(d) of WIOA and describes the role and functions of the State WDB. Paragraphs (a), (d) through (e), and (g) through (k) of § 679.130 reiterate the relevant statutory requirements at WIOA secs. 101(d)(1), (4) and (5), and (7) through (11). These functions are the primary functions of the State WDB.

Comments: A few commenters suggested text changes such as requiring State WDBs to partner with public television stations due to those stations' experience creating instructional materials on employability skills for job agencies and one-stop centers, providing professional development tools like workshops, and hosting job fairs.

Department Response: The Department encourages State WDBs to partner with a wide variety of organizations, however it declines to require entities not identified in statute. No change to the regulatory text was made in response to these comments.

Comments: One commenter suggested that § 679.130(a) and (b) should require State WDBs to create and implement an appeal process for all policies, monitoring, and negotiations that take place by the Governor, State WDB, or State pass-through entity and the Local WDBs.

Department Response: Section 679.130 implements WIOA sec. 101(d), which does not include the requirement to establish such an appeals process. No change to the regulatory text was made in response to these comments.

Clarification of Role of the State WDB

Comments: Commenters requested clarification of the roles of the State WDB such as how the State WDB is to assist in reviewing recommendations “on actions that should be taken by the State to align workforce development programs to support a comprehensive and streamlined workforce development system” and whose recommendations the Board is to review.

Department Response: WIOA sec. 101(d) indicates that the role of the State WDB is to assist the Governor in the development, implementation, and modification of the State Plan. To that end the Board is to review policies, programs, and recommendations on actions that should be taken by the State to align workforce development programs in the State. The State WDB is not limited in the types of recommendations that can be reviewed. The Board may consider recommendations from any number of areas, not limited to those resulting from the public comment on the State Plan, from State WDB meetings, or standing committees. In its role in assisting the Governor, the State WDB should review relevant comments regarding State WDB actions, as well as provide its own recommendations of actions to the Governor. No change to the regulatory text was made in response to these comments.

Comments: Commenters requested clarification of the role of the State WDB when other entities perform the same functions such the development and oversight of the State's labor market information (LMI) system, which involves the State WDB and State Unemployment Insurance (UI) Administrator.

Department Response: State WDBs have several roles related to the use of LMI in the State. Paragraph (e)(3) of § 679.130 implements WIOA sec. 101(d)(5)(C) and requires State WDBs to develop effective training programs that respond to real-time data analysis of the labor market. WIOA sec. 101(d)(11) and § 679.130(k) require the development of the statewide workforce and labor market information system described in sec. 15(e) of the Wagner-Peyser Act which refers to the State's responsibilities. The responsibilities are complementary rather than duplicative of the roles of other State agencies in these areas. The State WDB should coordinate with all relevant parties to develop and implement a plan for ensuring activities are cohesively leveraged rather than duplicated. No change to the regulatory text was made in response to these comments.

Comments: Two commenters urged the Department to incorporate into § 679.130 an active review of State policies that encourage innovation or hinder innovative strategies that are developed at the local level and both cautioned against over-regulation by the State.

Department Response: Under § 679.130 State WDBs are already required to review policies, programs, and recommendations on actions that should be taken by the State to align workforce development programs in the State. No change to the regulatory text was made in response to these comments.

Comments: A commenter asked whether, for the purpose of carrying out sec. 101(d), WIOA authorizes the Governor to ignore or otherwise disregard existing State laws with regard to agency rulemaking.

Department Response: WIOA does not provide this authority to the Governor. However, States are required to comply with the Final Rule as a condition of the WIOA grant. The Governor should follow applicable State laws in a manner best designed to comply with these regulations when implementing the functions of the State WDB.

Single-Area States

Comments: Single-area States, which operated as such under WIA, are permitted under WIOA. A commenter urged the Department to mandate use of Local WDBs and/or regional consortia in single-area States.

Department Response: WIOA sec. 107(c)(4) requires that State WDBs operating as the Local WDB carry out the same functions, except as noted, required of the Local WDB as detailed in § 679.270. Therefore, State WDBs in single-area States are already required by statute and regulation to meet all requirements of membership and functions of both State and Local WDBs. No change to the regulatory text was made in response to these comments.

Career Pathways (§ 679.130(c)(2))

WIOA sec. 101(d)(3)(B) outlines “the development of strategies to support the use of career pathways for the purpose of providing individuals, including low-skilled adults, youth, and individuals with barriers to employment (including individuals with disabilities), with workforce investment activities, education” as a function of the State WDB and is described in § 679.130(c)(2). WIOA sec. 107(d) and § 679.300 extends the requirement to Local WDBs. WIOA sec. 3(7)(A) through (G) defines career pathways as a combination of rigorous and high-quality education, training, and other services that meet specified guidelines.

Comments: Commenters requested that the Department provide more comprehensive guidance on the implementation of career pathways. Start Printed Page 56094Several commenters provided recommended changes to the regulatory text that included adding criteria, including a section specific to Local WDB implementation of career pathways, requiring the State and Local WDBs to define the roles and responsibilities of WIOA programs related to career pathways, listing required partners (such as Job Corps, and public television), and developing strategies to include job seekers with specific barriers.

Department Response: The ideas and suggestions provided by the commenters support career pathways as a dynamic topic that involves input of multiple partners and stakeholders throughout the system. The statutory language provides general criteria for both State and Local WDBs to reference in developing career pathway strategies. The Department has concluded that more prescriptive regulatory language may limit State WDBs' innovation in developing career pathways to support individuals to retain and enter employment; however, the Department will issue further guidance and technical assistance to help States. No change to the regulatory text was made in response to these comments.

Industry or Sector Partnerships (§ 679.130(c)(4))

Paragraph (c)(4) of § 679.130 implements WIOA sec. 101(d)(3)(D) states that the roles and functions of the State WDB include the development and expansion of strategies to meet the needs of employers, workers, and job seekers particularly through industry or sector partnerships related to in-demand industry sectors and occupations.

Comments: A commenter suggested that the Department should revise § 679.130(c)(4)'s requirement for State WDBs to assist with strategies related to industry or sector partnerships to include the language “with an emphasis on attainment of recognized post-secondary credentials.”

Department Response: Title 20 CFR 679.130(c)(4) states that State WDBs have responsibility for the development and expansion of strategies to meet the needs of employers, including sector strategies. State WDB functions already include the requirement to develop and update comprehensive State performance and accountability measures to assess core program effectiveness under WIOA sec. 116, which includes a credential attainment measure. Therefore, attainment of credentials, including postsecondary credentials, should already be a State WDB priority, as should sector strategies. No change to the regulatory text was made in response to these comments.

Best Practices (§ 679.130(e))

Paragraph (e) of § 679.130 requires the Board to identify and disseminate best practices in a number of areas (paragraphs (e)(1) through (3)).

Comments: Commenters had concerns about dissemination of best practices surrounding assessments. One commenter urged the Department to explain further how States would use assessments by including how to report this in title-specific data. This commenter expressed concerns that the value of requiring these assessments could be undercut through a perverse incentive for programs to avoid co-enrollment if the assessments' use in an accountability system is not clearly defined and recommended that States ensure that title II providers have processes for sharing assessment data with title I providers and vice versa.

Department Response: The regulation does not require the reporting of the use of assessments in this section. The State WDB's purpose, as outlined in WIOA sec. 101 and § 679.100, is to convene State, regional, and local workforce system, and partners to align and improve the outcomes and effectiveness of Federally-funded and other workforce programs and investments. Therefore, the Board' responsibility already includes aligning the strategies related to best practices in assessments. The State Plan should address the State's strategic and operational vision. No change to the regulatory text was made in response to these comments.

State WDB One-Stop Delivery System Guidance (§ 679.130(f))

Paragraph (f) of § 679.130 requires the State WDB to develop and review statewide policies affecting the coordinated provision of services through the State's one-stop delivery system which is to include developing objective criteria and procedures for the Local WDBs' use in assessing the physical and programmatic accessibility of one-stop centers.

Comments: A commenter suggested that the language in § 679.130(f) should be strengthened to better reflect the importance of including programmatic and physical accessibility in the assessment of one-stop centers. This commenter recommended that accessibility of one-stop centers must include the removal of barriers as defined in the Americans with Disabilities Act (ADA) and 28 CFR 36.304 and should extend to technological accessibility, citing sec. 508 of the Rehabilitation Act of 1973.

Department Response: The Department agrees that accessibility is paramount for all job seekers, and it is the State WDB's function to develop the tools to assist local areas to ensure that one-stop centers are both physically and programmatically accessible to all job seekers. As noted by the commenter, physical accessibility is already required under existing statute and individual State laws as well as the regulation implementing WIOA sec. 188 at 29 CFR part 38. WIOA sec. 102(2)(vii) and the WIOA State Plan ICR require that the State Plan address how the one-stop delivery system will comply with the Americans with Disabilities Act of 1990. No change to the regulatory text was made in response to these comments.

Strategies for Technological Improvements To Improve One-Stop Services (§ 679.130(g)) and Strategies for Aligning Technology and Data Systems Across One-Stop Partner Programs (§ 679.130(h))

Comments: A State agency expressed concern that the requirement that State WDBs develop strategies to ensure technology is accessible to individuals with disabilities and individuals residing in remote areas (§ 679.130(g)(4)) could become costly and asked the Department for information on if each State would create its own plan and for the expectations for the scope of available technology. A commenter expressed concern that the requirement that State WDBs develop strategies to for aligning technology and data systems across one-stop partner programs in § 679.130(h) could become costly, and asked the Department for an explanation of why this responsibility is necessary and what the plan development schedule would look like.

Department Response: Paragraph (g)(4) of § 679.130 and paragraph (h) of § 679.130 address technology improvements, and data system alignment across one-stop partner programs. Neither paragraph (g) nor (h) require the development of a plan, or outline specific technology expectations; rather, the Board is responsible for developing strategies for technological improvements. Although the State WDB may choose to develop a technology plan to achieve those requirements, neither WIOA nor the regulations require the submission of a formal technology plan. No change to the regulatory text was made in response to these comments.Start Printed Page 56095

Development of Statewide Workforce and Labor Market Information System (§ 679.130(k))

Comments: WIOA sec. 101(d)(11) and § 679.130(k) require the development of the statewide workforce and labor market information system described in sec. 15(e) of the Wagner-Peyser Act which refers to the State's responsibilities. A commenter requested clarification of the role of the State WDB in the development and oversight of the State's labor market information (LMI) system. State WDBs have several roles related to the use of LMI in the State.

Department Response: Paragraph (e)(3) of § 679.130 implements WIOA sec. 101(d)(5)(C) and requires State WDBs to develop effective training programs that respond to real-time data analysis of the labor market. WIOA sec. 101(d)(11) and § 679.130(k) require the development of the statewide workforce and labor market information system described in sec. 15(e) of the Wagner-Peyser Act which refers to the State's responsibilities. The responsibilities are complementary rather than duplicative of the roles of other State agencies in these areas. The State WDB should coordinate with all relevant parties to develop and implement a plan for ensuring activities are cohesively leveraged rather than duplicated.

Section 679.140 How does the State Workforce Development Board meet its requirement to conduct business in an open manner under “sunshine provision” of the Workforce Innovation and Opportunity Act?

Title 20 CFR 679.140 implements WIOA sec. 101(g) requiring the State WDB to conduct business in an open manner.

Comments: A commenter recommended the Department revise § 679.140(b)(3) to require State WDBs to make available the minutes of meetings and any public comments, feedback, or requests for service, and to provide a written response to such comments or requests.

Department Response: The Department notes that paragraph (b)(3) already implements the WIOA sec. 101(g) requirement that meeting minutes be available to the public upon request. The Department encourages all State WDBs to operate with transparency; State WDBs are free to make additional information, such as public comments and other information it deems appropriate, available to the public. No change to the regulatory text was made in response to these comments.

Section 679.150 Under what circumstances may the Governor select an alternative entity in place of the State Workforce Development Board?

Title 20 CFR 679.150 implements WIOA sec. 101(e), which authorizes the use of alternative entities to the State WDB under the following conditions: The alternative entity was in existence on the day before the date of enactment of the Workforce Investment Act of 1998; is substantially similar to the WIOA State WDB; and includes representatives of business and labor organizations in the State. As outlined in § 679.150(c), if the alternative entity does not provide representatives for each of the categories required under WIOA sec. 101(b), the State Plan must explain the manner in which the State will ensure an ongoing role for any unrepresented membership group in the workforce development system. The State WDB must maintain an ongoing and meaningful role for an unrepresented membership group, including entities carrying out the core programs.

Comments: Commenters disagreed with the interpretation at § 679.150(d) that required a new State WDB if the membership of the alternative entity had changed significantly after August 7, 1998 and paragraph (e) that defined the criteria for a significant change. Commenters interpreted the alternate entity provisions of WIOA to mean that an alternative entity may add or remove membership categories and maintain alternative entity status unless those changes make the State WDB “substantially dissimilar” to the State WDB. Commenters requested the Governor be given the authority to make a determination regarding the definition of “substantially similar.”

Department Response: The Department agrees and has deleted the proposed text at § 679.150(d) and (e) from the Final Rule. The Department declines to further define “substantially similar” in § 679.150 but considers substantially similar to be aligned with the composition of the WIOA compliant State WDB as outlined in WIOA sec. 101(a) through (c) and § 679.110. The Department considers changes to the alternative entity membership or structure that are contrary to the requirements of WIOA sec. 101(a) through (c) and § 679.110 or those that make the alternative entity less aligned with WIOA State WDB compliance to result in an alternative entity that is not substantially similar to a compliant WIOA State WDB.

Comments: Commenters requested that the Department require a business majority for alternative entities.

Department Response: WIOA sec. 101(e) and § 679.150(b)(3) require alternative entities to have representatives of businesses in the State, however lacks a requirement for a business majority. The Department strongly encourages alternative entities to seek a majority business participation in State WDB activities and decisions. No change to the regulatory text was made in response to these comments.

2. Subpart B—Workforce Innovation and Opportunity Act Local Governance (Workforce Development Areas)

This subpart provides the requirements for identification of regions and designation of local areas under WIOA. WIOA envisions a workforce development system that is customer focused on both the job seeker and business, and is able to anticipate and respond to the needs of regional economies. It requires Workforce Development Boards and CEOs to design and govern the system regionally, aligning workforce policies and services with regional economies and supporting service delivery strategies tailored to these needs. To support this regional approach, this subpart requires States to identify intrastate or interstate regions. When the region contains more than one local area, the local areas are required to plan regionally. WIOA envisions a regional system where public workforce system leaders partner and provide leadership as part of a comprehensive, regional workforce and economic strategy. The majority of comments in this section pertained to the structure of regions, and initial and subsequent designation of workforce development areas.

Section 679.200 What is the purpose of requiring States to identify regions?

Title 20 CFR 679.200 implements requirements found at both WIOA sec. 101(d)(3)(E), and WIOA sec. 106(a), which require the Governor to identify regions with consultation from the CEOs and Local WDBs in the affected region. The development of comprehensive regional partnerships facilitates alignment of workforce development activities with regional economic development activities, and better supports the execution and implementation of sector strategies and career pathways. Regional cooperation may also lower costs and increase the effectiveness of service delivery to businesses that span more than one local area within a region and to job seekers through coordination of shared Start Printed Page 56096services, processes, and operations. The Department encourages States to ensure that local and regional planning areas are aligned to support improved service delivery, improved training and employment outcomes, better meet employer needs, and greater effectiveness and efficiency in achieving these outcomes.

Comments: A commenter expressed concern that defining boundaries of a region at the State level could result in a lack of coordination among locals in different regions. A different commenter suggested that the Department require cooperation between core partners to align existing services into the appropriate regions and “to reject plans where Governors have not effectively assigned local areas to regions.”

Department Response: State WDBs are required to identify regions in consultation with local chief elected officials and Local WDBs. The State WDB is also tasked with ensuring the overall alignment of the public workforce system. The function of identifying regions should not limit coordination among Local WDBs outside of the identified region; in fact, the State WDB function is to ensure that the system becomes more, rather than less, cohesive. No change to the regulatory text was made in response to these comments.

Comments: One commenter said that the market of a local area may lend itself to more than one region and in instances such as this they could exist as a singular local region and partner with the neighboring areas.

Department Response: The Department agrees that the State WDB could reach such a conclusion. No change to the regulatory text was made in response to these comments.

Section 679.210 What are the requirements for identifying a region?

Title 20 CFR 679.210 addresses the requirements for identifying a region and requires a process that includes consultation with Local WDBs and CEOs.

Comments: Commenters suggested additional clarification regarding how consultation will take place including requiring memorandums of agreement, and a detailed policy of the process.

Department Response: The term consultation is used in § 679.210 as a requirement for identifying a region; the Department added a definition of consultation to part 675. This clarifies that consultation constitutes a robust conversation in which all parties are given opportunity to share their thoughts and opinions. The Department declines to add additional requirements.

Comments: The Department requested comment on additional data that may be considered other than that laid out in § 679.210(c)(1) through (8). Commenters provided suggestions for new data points as well as adjustments to those in paragraphs (c)(1) through (8), such as including public transportation when considering commuting patterns, adding the workforce participation rate of people with barriers to employment, especially individuals with disabilities and out of school youth with disabilities, administrative efficiencies, and existing regional capacity and a history of local areas working together.

Department Response: The data points in § 679.210(c)(1) through (8) are for illustrative purposes and should not limit the State's decision-making when identifying regions. The Department will review the suggestions when determining and issuing guidance on any additional factors as outlined in § 679.210(c)(8). No change to the regulatory text was made in response to these comments.

Comments: WIOA sec. 102(b)(2)(D)(i)(II) and § 679.210 require the Governor to develop a policy and processes for identifying regions. Commenters suggested that local areas designated under WIA be able to join one or more region or have the opportunity to remain a single region. Another commenter suggested that any current local areas that incorporate multiple jurisdictions should automatically be considered a region. A commenter requested clarification regarding the difference between the identification of regions and the designation of local areas.

Department Response: Local area designation is addressed in §§ 679.220 and 679.230; the purpose of a local area is to administer workforce development activities. The purpose of a region is addressed in §§ 679.200 and 679.210; the purpose of a regional area is to align workforce development activities and resources with larger regional economic development areas and resources. The regional plan should describe the Governor's processes for ensuring the requirements outlined in WIOA sec. 102 for the identification of regions are met. Local areas designated under WIA are not exempt from the regional identification process. No change to the regulatory text was made in response to these comments.

Comments: Those regions comprised of two or more contiguous local areas are planning regions as described in WIOA sec. 3(48). Commenters have suggested that a single area could participate in multiple planning regions by being a member, or through a memorandum of agreement.

Department Response: In accordance with WIOA sec. 106(a)(2), a single local area may not be split across two planning regions. Local areas must be contiguous in order to be a planning region and effectively align economic and workforce development activities and resources. The Department encourages States confronted with this issue to reevaluate whether the local areas in question are consistent with labor market areas and with regional economic development areas in the State. If these criteria are not met, the State should consider how best to recast local areas for the purposes of subsequent designation and regional integration. Local areas only may be part of one region, however, local areas within planning regions are not prohibited from working or coordinating with other local areas, and regions may coordinate with other planning regions. Coordination may be especially vital across States; the Department anticipates providing additional guidance regarding the creation and management of interstate planning regions. No change to the regulatory text was made in response to these comments.

Comments: A commenter requested that the Governor be provided flexibility to add more criteria to § 679.210(c) for use when identifying a region.

Department Response: The Department has determined that the Governor must use the criteria at § 679.210 in determining a region in order to ensure consistency among States. However, the list of factors in paragraph (c) is illustrative and additional factors may be considered. The Department will review the criteria when determining and issuing guidance on any additional factors as outlined in § 679.210(c)(8), which states that the Secretary of Labor may provide additional considerations for the development of regions according to the policy priorities of the Department. No change has been made to the regulatory text in response to this comment.

Section 679.230 What are the general procedural requirements for designation of local areas?

Title 20 CFR 679.230 describes a general public comment process and the general procedural requirements for designation of local areas, which include consultation with the State WDB, chief elected officials and affected Local WDBs. The Governor has the discretion to establish the process and procedures to solicit comments that it determines appropriate. However, a Start Printed Page 56097wide-reaching, inclusive process allows sufficient time for stakeholders to provide substantive comments that will enable the Governor to receive meaningful feedback from all interested stakeholders, ensuring that the Governor is able to consider all relevant information, data, and opinions before making a decision to designate or redesignate a local area. WIOA sec. 102(b)(2)(D)(i)(II) requires the State Plan to describe the Governor's processes for designating local areas. In addition, the State Plan must detail how the State will ensure the requirements outlined in WIOA sec. 102 regarding public comments and consultation are met.

Comments: Commenters suggested that regulations require additional clarification regarding consultation.

Department Response: The Department agrees with the comment and has added a definition of consultation to the regulatory definitions in part 675 of the Final Rule. The term “consultation” is used throughout WIOA to describe the process by which State and/or local stakeholders convene to discuss changes to the public workforce system. The Department has concluded that this definition is necessary to clarify that consultation constitutes a robust conversation in which all parties are given opportunity to share their thoughts and opinions. Written correspondence or other simple communication methods do not constitute consultation. This definition applies to all provisions that use the term unless otherwise specified. With the addition of the definition in part 675 of the Final Rule, the Department considers the requirements of § 679.230 to be clear. No changes were made to the regulatory text in response to these comments.

Comments: Many commenters expressed their agreement with the general procedural language in this section and commented that pursuant to WIA sec. 189(i)(2), Texas's workforce areas were designated before WIA took effect and therefore, they may continue to be used as local areas. One of the commenters agreed commenter, stating that for these reasons, “Texas should continue to operate pursuant to the waiver authority afforded under WIOA.”

Department Response: Throughout the sections pertaining to Local WDBs several similar comments referenced operations in Texas as approved under WIA. The Department's response to all comments pertaining to Texas's operation under special rule authority in WIA is that WIOA sec. 193 continues the provisions in effect in WIA and the Department will continue to administer them in the same manner under WIOA.

Section 679.240 What are the substantive requirements for designation of local areas that were not designated as local areas under the Workforce Investment Act of 1998?

Title 20 CFR 679.240 implements WIOA sec. 101 and addresses the substantive requirements for designation of local areas that were not designated as local areas under the Workforce Investment Act of 1998 and § 679.250 addresses subsequent eligibility of local areas.

Comments: One commenter supported this section as proposed. A few commenters, including a State WDB, suggested that the Department add language to the regulation that will provide Governors the flexibility to apply the factors outlined in § 679.240(a) following subsequent designation regardless of whether the area was designated previously.

Department Response: WIOA sec. 106(b)(3) outlines the requirements of subsequent eligibility: “After the period for which a local area is initially designated under paragraph (2), the Governor shall approve a request for subsequent designation as a local area from such local area, if such area—(A) performed successfully; (B) sustained fiscal integrity; and (C) in the case of a local area in a planning region, met the requirements described in subsection (c)(1).” WIOA does not require other criteria, and this provision permits existing areas to continue so long as they meet the statutory criteria. No change to the regulatory text was made in response to these comments.

Section 679.250 What are the requirements for initial and subsequent designation of workforce development areas that had been designated as local areas under the Workforce Investment Act of 1998?

Comments: A couple commenters expressed their support for the language in § 679.250(a) through (c). One commenter recommended that in this section and elsewhere in the regulations any language that “prohibits a rural concentrated employment program (CEP) from applying for designation as local workforce area” should be deleted.

Another commenter presented the same suggestion and recommended deleting language from the rule and preamble discussion that exclude rural CEPs from being eligible to apply as local workforce areas. Specifically, the commenter recommended deleting language from the regulatory text of § 679.250(g), and deleting language discussing CEPs in the preamble discussion for § 679.250(g), and the preamble discussion for § 679.290(a), and the commenter provided detailed rationale to support the deletion of all anti-CEP language.

Department Response: WIOA Technical Amendments Act, enacted on May 22, 2015, amended WIOA sec. 106(b) to allow rural concentrated employment programs to apply for initial and subsequent designation as a local workforce area. The regulations have been revised to conform with the statutory direction and paragraph (g) now reads as follows: “The Governor may approve, under paragraph (c) of this section, a request for designation as a local area from areas served by rural concentrated employment programs as described in WIOA sec. 107(c)(1)(C).”

Comments: Many commenters requested clarification regarding the requirements of subsequent designation and the associated timelines in § 679.250.

Department Response: The Department clarified § 679.250 to provide details on the duration of initial designation and the timing of the first available opportunity for local area subsequent designation to occur. The Department revised the proposed requirement to clarify that initial designation is only applicable to PY 2016 and PY 2017. Noting the commenters' concerns regarding availability of WIOA performance data, which is required for the determination of designation, the Department added § 679.250(c) to clarify that no determination of subsequent designation may be made before the conclusion of PY 2017.

Section 679.260 What do the terms “performed successfully” and “sustained fiscal integrity” mean for purposes of designating local areas?

Title 20 CFR 679.260 implements the WIOA sec. 106(e)(1) definition of performed successfully.

Comments: Many commenters asked for guidance in applying the WIOA sec. 106(e)(1) definition.

Department Response: The Department agrees that additional detail is necessary to ensure that initial and subsequent designation requirements are applied consistently. The Department has adjusted the Final Rule at § 679.260 to detail the performance indicators, and corresponding timelines, to be considered for initial and subsequent designation. For clarity and to reduce duplication the Department deleted § 679.260(a)(1) and (2) pertaining to the negotiated levels of performance. The details in paragraphs Start Printed Page 56098(a)(1) and (2) were unnecessarily duplicative to the requirements covered in the introductory text of paragraph (a), which already outline the relevant performance goals. The Department added detailed timeframe information for subsequent designation in § 679.260(b)(1) and (2).

Comments: Some commenters suggested that performance be measured in the aggregate based on the total outcomes for all performance indicators instead of individual performance indicators. Another commenter requested that success be based on achieving 80 percent of the negotiated goal.

Department Response: Based on experiences under WIA, the Department determined that individual indicators of performance provide Governors more detailed information for making designation determinations. Title 20 CFR 679.260 clarifies that local areas must not fail any individual measure for 2 consecutive years. Title 20 CFR 679.260(a) clarifies that the local area must meet or exceed the performance levels the Governor negotiated with Local WDB and CEO.

Comments: A commenter asked for clarification regarding appeal rights if a local area is deemed not to have performed successfully if there was no negotiation between a local area and the State for the previous 1 to 2 years before enactment of WIOA.

Department Response: WIA sec. 136(c) and § 666.310(a) of the regulations implementing WIA required the negotiation of local area performance indicators under WIA. In accordance with WIOA sec. 106(e)(1) and § 679.260(a) and (b), the local performance must be judged in accordance with the definitions of “meets” and “exceeds” in place at the time the performance levels were negotiated. Appeals regarding local area designation must adhere to the requirements in §§ 683.630(a), 683.640, and 679.290.

Comments: Paragraph (c) of § 679.260 implements WIOA sec. 106(e)(2), which defines the term “sustained fiscal integrity.” Commenters requested clarification of fiscal integrity, and one commenter expressed concern that the three criteria used for determining “sustained fiscal integrity” would limit the Governor's ability to designate local areas and suggested that the Department clarify that only the first criterion requires a formal determination by the Secretary of Labor.

Department Response: In WIOA sec. 106(e), “sustained fiscal integrity” means “that the Secretary has not made a formal determination, during either of the last 2 consecutive years preceding the determination regarding such integrity, that either the grant recipient or the administrative entity of the area misexpended funds . . . due to willful disregard of the requirements of the provision involved, gross negligence, or failure to comply with accepted standards of administration.” Section 679.260(c) implements the requirements outlined in WIOA sec. 106(e). No changes were made to the regulatory text in response to these comments. To the extent that additional clarification may be needed, the Department will issue separate guidance.

Section 679.270 What are the special designation provisions for single-area States?

Title 20 CFR 679.270 implements WIOA secs. 106(d) and 107(c)(4)(A), which allow for single-area States so designated under WIA to continue, and requires the State WDB to carry out the functions of the Local WDB in a single-area State.

Comments: Commenters requested additional clarification on the roles of the State WDB in single-area States. Several commenters indicate that single-area States tend to be small or substantially rural areas and fulfilling the mandates of both the State and Local WDBs would be both unduly burdensome for single-area States as well as impractical. Others objected to single-area State WDBs taking on the role of the Local WDB and expressed concern that such situations are non-responsive to local needs and to local stakeholders. Commenters suggested varying solutions which include allowing waivers or exceptions for single-area States of certain Board functions; mandating local representation to a broader extent on the single-area State WDB; creating a specific section regulating exemptions for single-area State WDB functions; and offering non regulatory technical assistance and guidance.

Department Response: WIOA sec. 107(c)(4)(A) requires that single-area States' State WDB carry out the function of the Local WDB with an exemption only for meeting and reporting on local performance indicators, so the requirements of § 679.270(c) cannot be reduced. However, the Department does not intend for single-area States to conduct the required Board functions in such a way as to be inefficient or duplicative. To that end, the Department has amended the regulatory text at § 679.270 by adding paragraph (d), which clarifies that single-area States must conduct the functions of the Local WDB to achieve the incorporation of local interests but may do so in a manner that reduces unnecessary burden and duplication of processes. The Department will issue guidance regarding how single-area States must carry out the duties of State and Local WDBs.

The Department encourages the Governor to ensure that State WDB members represent the diversity of job seekers and employers across the State, which includes ensuring adequate local elected official representation on the State WDB. Single-area States have the additional burden of representing local level interests and stakeholders.

3. Subpart C—Local Workforce Development Boards

Title 20 CFR 679.300 explains the purpose of the Local WDB. The Local WDB represents a wide variety of individuals, businesses, and organizations throughout the local area. The Local WDB serves as a strategic convener to promote and broker effective relationships between the CEOs and economic, education, and workforce partners. The Local WDB must develop a strategy to continuously improve and strengthen the workforce development system through innovation in, and alignment and improvement of, employment, training, and education programs to promote economic growth. Local WDB members must establish a platform in which all members actively participate and collaborate closely with the required and other partners of the workforce development system, including public and private organizations. This is crucial to the Local WDB's role to integrate and align a more effective, job-driven workforce investment system. In this part the Department addresses comments on the roles of the Local WDBs, Local WDB memberships, and the role of local elected officials.

Section 679.300 What is the vision and purpose of the Local Workforce Development Board?

Title 20 CFR 679.300 establishes the vision for and explains the purpose of the Local WDB.

Comments: Commenters suggested the Department clarify that Local WDBs are responsible for organizing the key partners to develop a vision for the system collectively, implementing that system, and monitoring performance.

Department Response: These responsibilities are already laid out in the regulations under § 679.300(b)(1). One of the purposes of the Local WDB is to provide strategic and operational oversight in collaboration with required and other partners to help the workforce Start Printed Page 56099development system achieve the purposes outlined in WIOA sec. 2, and assist in the achievement of the State's strategic and operational vision and goals outlined in the State Plan. Paragraphs (b)(2) and (3) of § 679.300 require the Local WDB to assist in the achievement of the State's strategic and operational vision and goals as outlined in the Unified State Plan or Combined State Plan, and to maximize and continue to improve the quality of services, customer satisfaction, and effectiveness of the services provided. No change to the regulatory text was made in response to these comments.

Section 679.310 What is the Local Workforce Development Board?

Title 20 CFR 679.310 implements WIOA sec. 107 by defining the Local WDB and its functions.

Comments: Commenters suggested changes regarding the function of establishing by-laws covered in § 679.310(g) including suggesting that the criteria that apply to the selection of Local WDB members also should apply to by-laws of the Board, and that Board members should not be required to actively participate in convening system stakeholders.

Department Response: WIOA sec. 107(b)(1) and § 679.320 describe the Local WDB membership requirements as enumerated in WIOA. The WIOA statute does not indicate that by-laws restrict membership. The Department declines to make the suggested regulatory change. No change to the regulatory text was made in response to these comments.

Comments: Some commenters stated that § 679.310(g)(7) should refer to membership on the Local WDB, rather than the State WDB. One commenter suggested that the authority should fall to Local WDBs and not CEOs and recommended that the Department reword § 679.310(g)(7) as follows: “A description of any other conditions governing appointment or membership on the Local Board as deemed appropriate by both the Local Board Chair and the CEO. The rest of these conditions should be under the authority of the [Local Board] and be included as requirements in the [Local Board] developed by-laws.”

Department Response: The Department agrees and will make that technical change to § 679.310(g)(7) to replace State WDB with Local WDB. The regulatory text has been revised with this change to § 679.310(g)(7).

Comments: A commenter requested clarification regarding the financial liability for local areas with multiple chief elected officials.

Department Response: Paragraph (e) of § 679.310 says that if a local area includes more than one unit of general local government the chief elected officials may execute an agreement to describe their responsibilities for carrying out the roles and responsibilities. This agreement may include the assignment of liabilities among the units of local government. The chief elected officials should address financial roles in this agreement. In addition there is authority under WIOA sec. 107(d)(12)(B)(i)(I) that the Governor may agree to take on the liability of the chief elected official.

Comments: A commenter stated that the term “elect” in the nomination process should be changed to “appoint.”

Department Response: The Department agrees and has changed the term “elect” in § 679.310(g)(1) to “select.”

Comments: Regarding the nomination process, a commenter asked the Department to clarify whether the Board chair will be nominated by a vote of the Local WDB members and not by the chief elected official.

Department Response: The Local WDB is required to elect the chairperson as outlined in § 679.330 in accordance with WIOA sec. 170(b)(3).

Comments: The proposed regulations in § 679.310(g) would require the CEO to establish by-laws for Local WDBs. A few commenters suggested that the Department revise the language in proposed paragraph (g) to require that CEOs, “in consultation with the Local Board,” must establish by-laws consistent with State policy for Local WDB membership.

Department Response: Paragraph (g) of § 679.310 requires the local elected official to establish by-laws that include the process to ensure Local WDB members actively participate in convening system stakeholders, brokering relationships with a diverse range of employers, and leveraging support for workforce development activities. The by-laws will outline the process and roles for Local WDB members. An effective Local WDB establishes clear roles, responsibilities, procedures, and expectations through its by-laws, and that these requirements will help Local WDBs to be more agile and proactive in reacting to board turnover, increase board participation when board members are not able to physically attend board meetings, improve board functionality, and help ensure that the public is informed about the operation of the board. No changes to the regulatory text have been made in response to these comments.

Comments: A commenter requested that the Department revise the section so that the Local WDBs must draft by-laws “after consultation with and approval by the chief elected official.”

Department Response: WIOA sec. 107 delegates the establishment of by-laws to the chief elected official. The chief elected official must establish the by-laws in order to constitute a Local WDB. Paragraph (c) of § 679.310 allows the Local WDB and the chief elected official(s) to enter into an agreement that describes the respective roles and responsibilities of the parties which does not prohibit the Local WDB's role in the development of future by-laws. The suggested change is not necessary and no change to the regulatory text was made in response to this comment.

Section 679.320 Who are the required members of the Local Workforce Development Board?

Title 20 CFR 679.320 addresses the required members on the Local WDB in accordance with WIOA sec. 107.

Comments: The Department received comments of support for this section but one commenter suggested that it may cause political tension to allow a Chief Elected Official to appoint Local WDB members.

Department Response: WIOA clearly contemplates that Chief Elected Officials will use the State established criteria to appoint Local WDB membership that meets the requirements in WIOA sec. 107(b)(2). Section 679.320(g) requires the Chief Elected Official establish a formal nomination and appointment process. No change has been made to the regulatory text in response to this comment.

Overarching Comments on the Required Members of Local WDBs

Comments: Commenters requested guidance on documenting the inability to find a certain member type.

Department Response: Local WDBs should follow State guidelines for documenting the lack of member types in the area.

Adult Education Representation

Comments: The Department received several comments suggesting that a specific entity be named to represent adult education programs at the local level.

Department Response: WIOA sec. 107(b)(1) and § 679.320(a) require that the chief elected official use the criteria set by the Governor, in partnership with the State WDB, to appoint members of the Local WDBs. The Department concludes that the Governor, in Start Printed Page 56100partnership with the State WDBs, has authority for creating a policy regarding the criteria for the membership of the Local WDB, which includes criteria for selecting the representative of a title II eligible provider of adult education and literacy activities. No change has been made to the regulatory text in response to this comment.

Comments: Commenters also recommended that a process be implemented for selecting a Local WDB representative in the event there are multiple providers in the area.

Department Response: In accordance with WIOA sec. 107(b)(2)(C)(i), § 679.320(d)(1) requires that the Local WDB include at least one eligible provider administering adult education and literacy activities under title II. Nominations are solicited when multiple entities are in a local area as described in § 679.320(g)(3) and WIOA sec. 107(b)(6). No change to the regulatory text was made in response to these comments.

Comments: One commenter asked for clarification between the terms “education and training activities” and “education and training services,” stating that they seem to mean the same thing in many instances.

Department Response: In order to avoid confusion, the Department eliminated the term “education and training services” from the regulatory text.

Dual Representation

Title 20 CFR 679.320(h) allows an individual to be appointed as a representative on the Local WDB for more than one entity if the individual meets all of the criteria for representation.

Comments: Several commenters expressed concern with this approach because it differs from State WDB requirements; commenters recommended allowing for all core programs to have separate representation on Local WDBs. One commenter supported the flexibility in permitting a Local WDB member to represent multiple entities. Another commenter recommended that the Department should strongly discourage a Local WDB member from representing two interests, reasoning that a Board member serving the interests of two separate functions would not be true to the intent of WIOA. This commenter also expressed concern that it would create a conflict of interest under the Sarbanes-Oxley Act and a Board member's heightened fiduciary responsibilities.

Department Response: The Department recognizes that the structure of core programs may differ across the country and separate representation may not be possible or practical in all local areas. The Department offers Governors and Local Chief Elected Officials the flexibility for an individual to be appointed as a representative on the Local WDB for more than one entity if the individual meets all of the criteria for representation. However, there is no requirement that this be the case. In accordance with WIOA sec. 107(b)(1) and § 679.320(a) the CEO must follow the process established by the Governor, in partnership with the State WDB, for appointing members of the Local WDB. With regard to concerns about conflicts of interest under the Public Company Accounting Reform and Investor Protection Act (Sarbanes-Oxley Act) or other applicable laws, neither WIOA nor these regulations exempt an official serving in a dual representation capacity from any applicable ethical rules. In fact, § 683.200(c)(5) imposes specific conflict of interest requirements on WIOA recipients in addition to those applicable under the uniform administrative requirements. For these reasons, the Department has determined that the flexibility for Local WDB membership is appropriate and no change to the regulatory text was made in response to these comments.

Labor Union, Small Business, and Registered Apprenticeship Representation

Paragraph (c) of § 679.320 requires that at least 20 percent of Local WDB membership must be workforce representatives to include representatives of labor organizations, and a joint labor-management registered apprenticeship program, or (if no such program exists in the area) a representative of a registered apprenticeship program in the area if such program exists.

Comments: Commenters requested clarification of the total number of labor representatives required on the Local WDB, and suggested labor representatives include employee representatives for non-unionized employees.

Department Response: Paragraph (c) of § 679.320 clarified that, at minimum, three labor representatives must be included in the Local WDB: Two or more representatives of labor organizations, where such organizations exist in the local area, and one joint labor-management representative of a registered apprenticeship program where such program exists in the local area. In the event that these organizations are not present in the local area, representatives must be selected from other employee representatives. For local areas with no union-affiliated registered apprenticeship program, a representative of a non-union registered apprenticeship in the area must be appointed if one exists. The Local WDB may include other individuals or representatives as outlined in paragraph (e). The Department has determined that no change is required to the proposed language to allow for additional representation of the labor force as appropriate.

Regarding the number of small business representation, paragraph (b) of § 679.320 implements WIOA sec. 107(b)(2)(A)(ii), which describes Local WDB membership criteria and calls for members that “represent businesses, including small businesses.” The Department interprets WIOA's use of the word “businesses” to indicate that the Local WDB is required to have more than one member representing a small business.

Comments: One commenter requested a definition of the word “business” and asked if it “may include large non-profit organizations.” Another commenter requested a definition of “business organization,” suggesting it “include trade associations and chambers of commerce,” and another commenter also requested clarity that “business organizations can be a local chamber of commerce or a regional entity.” One commenter asked if sector representatives had to come from an established sector or if they also could represent “aspirational industries.”

Department Response: WIOA sec. 3 contains definitions of terms used in the law. This section does not specifically define a business or a business organization. The groups suggested by the commenters may be included as long as they meet the membership criteria outlined in § 679.320. Title 20 CFR 679.320 implements WIOA sec. 107(b)(2) by describing the required members of a Local WDB. Paragraph (b) requires that a majority of the members of the Local WDB be representatives of businesses in the local area and paragraphs (b)(1) and (2) outline the required criteria. The Chief Elected Official (CEO) has the authority in WIOA sec. 107 and § 679.320(e)(4) to appoint other members as he/she deems appropriate. Regarding the comment on “aspirational industries,” many organizations can meet the criteria outlined in § 679.320(b) and the CEO has the authority to appoint additional members that meet the needs of the local area employers and job seekers. The Department concludes that no further definition is required and has Start Printed Page 56101made no changes to the regulatory text in response to this comment.

Comments: Multiple commenters stated that the Department cites WIOA sec. 3(25) regarding business representative requirements in § 679.320(b)(2) and it should reference sec. 3(23) instead. A commenter asked if trained members who have experience with eligible youth, as referenced in proposed § 679.320(c)(4), would include representatives from local government funded programs such as 4-H.

Department Response: The Department agrees that the reference to WIOA sec. 3(25) in § 679.320(b)(2) is incorrect. WIOA sec. 3(23) defines in-demand industry sector or occupation. WIOA sec. 3(25) defines an individual with a disability which is not relevant to § 679.320(b)(2). The Department has made the correction in § 679.320(b)(2).

Regarding the question of whether representatives from 4-H programs would qualify as members having experience with eligible youth, § 679.320 implements WIOA sec. 107(b) which outlines membership criteria for Local WDBs. As outlined in § 679.320(a), for each local area in the State, the members of the Local WDB must be selected by the CEO consistent with the criteria established under statute and criteria established by the Governor, and must meet the requirements of WIOA sec. 107(c)(2). CEOs are required to establish a formal nomination and appointment process (§ 679.320(g)), which should answer specific questions about local area membership requirements. Due to the number of factors involved, the Department is not able to comment on if a specific entity would meet the requirements set forth by the Governor as well as all of the statutory requirements but advises interested parties to review the CEO's process in their area.

Comments: Paragraph (b)(2) of § 679.320 implements WIOA sec. 107(b)(1)(C)(i)(II), which provides that Local WDB business representatives represent businesses that provide “employment opportunities that, at a minimum, include high-quality, work-relevant training and development in in-demand industry sectors.” Some commenters asked the Department to clarify the definition of “work-relevant training” in proposed § 679.110(b)(3)(i)(B). In particular, some of these commenters asked whether it pertains to for-profit training providers. Another commenter stated while the definition of “in-demand” is located at WIOA sec. 3(23), there is no definitions for the terms “high-quality” and “work-relevant.” This commenter recommended that the Department allow these terms to be defined at the State or local level.

Department Response: WIOA sec. 3 provides definitions of terms used in the law. The terms “work-relevant” training and “high-quality” are not defined in WIOA or in the regulations. The Local WDB's functions under WIOA sec. 107(d) and § 679.370 include employer engagement, career pathways development, and identifying and disseminating promising practices. It is incumbent upon the Local WDB to apply the above terms so that it includes the members it determines best support its functions. No change to the regulatory text was made in response to these comments.

Nominations

WIOA sec. 107 and § 679.320 of this part outline the requirements for Local WDB membership.

Comments: Commenters requested that a nomination process not be required in communities where there are multiple adult education providers.

Department Response: WIOA sec. 107(b)(6) requires a nomination process if there are multiple eligible providers of title II adult education and literacy activities serving the local area (a similar process is required for multiple institutions of higher education in a local area). Section 679.320(g)(3) conforms with WIOA sec. 107(b)(6) and the Department made no changes to the regulatory text in response to these comments.

Comments: Another commenter suggested that Local WDB members must be nominated by an appropriate body, and if no such body is clear, then the opportunity to present nominations should be required to be widely publicized.

Department Response: WIOA does not require that the Local WDB nominations be from particular bodies, except that in instances of multiple adult education providers in a local area nominations will be accepted from those institutions in accordance with WIOA sec. 107(b)(6) and § 679.320(g)(3). In accordance with WIOA sec. 107(b)(1) and § 679.320(a) the CEO must follow the process established by the Governor, in partnership with the State WDB, for appointing members of the Local WDB which may include processes for soliciting nominations. No change to the regulatory text was made in response to these comments.

Individuals With Disabilities and Other Barriers to Employment

Section 679.320 implements WIOA sec. 107(b) describing the required Local WDB membership.

Comments: As with the State WDBs, many commenters from stakeholders with mandated representation under WIA, requested that they again be mandated members of the Local WDB, or that they be referenced in regulation.

Department Response: WIOA reduced required Local WDB membership in an effort to streamline the Boards and provide Chief Elected Officials the flexibility to establish Local WDBs that best reflect the diversity of job seeker and employer communities. The Department recognizes that many important system partners with experience with specific job seeker populations, such as required one-stop partner programs, tribal organizations, other Department program grantees, and those serving the disadvantaged and disabled populations are no longer required members of the Board. However, § 679.320(c) and (d) require the Board be comprised of workforce representatives that can include one or more representatives of community-based organizations that have demonstrated experience and expertise in addressing the employment, training, or education needs of individuals with barriers to employment. Paragraph (e)(4) of § 679.320 says the CEO has the flexibility to appoint “other appropriate individuals as determined by the chief elected official” which does not preclude any organization as the CEO deems appropriate. The Department encourages the CEO to ensure that Local WDB members represent the diversity of job seekers and employers in their local areas, which includes ensuring adequate representation on the Local WDB and ensuring appropriate expertise to address needs of individuals with barriers to employment. No change to the regulatory text was made in response to these comments.

Voting Rights

Title 20 CFR 679.320 implements WIOA sec. 107 (b) which outlines Local WDB membership.

Comments: Some commenters recommended that Board members from each core program must be individuals working specifically with core programming and they must get a vote on the Local WDB, including grandfathered Boards.

Department Response: Title 20 CFR 679.320(e)(4) says the CEO has the flexibility to appoint “other appropriate individuals as determined by the chief Start Printed Page 56102elected official” which does not preclude any organization as the CEO deems appropriate. The Department encourages the CEO to ensure that Local WDB members represent the diversity of job seekers, employers, and one-stop partner programs in the local area which includes ensuring adequate representation on the Local WDB. Title 20 CFR 679.320(i), which requires all required Local WDB members to have voting rights, also gives the CEO flexibility to convey voting rights to non-required members. No change to the regulatory text was made in response to this comment.

Comments: One commenter asked how adult education programs that are not funded by the State and do not have voting rights can still contribute.

Department Response: Title 20 CFR 679.360(a) permits the use of standing committees on the Local WDB. Standing committees may be established to provide information and assist the Local WDB in carrying out its responsibilities under WIOA 107. Standing committee members must include individuals who are not members of the Local WDB and who have demonstrated experience and expertise in accordance with § 679.340(b) and as determined by the Local WDB. Stakeholders with expertise may wish to contribute as members of standing committees, if the Local WDB establishes such committees. No change to the regulatory text was made in response to these comments.

Section 679.330 Who must chair a Local Workforce Development Board?

Section 679.340 What is meant by the terms “optimum policy-making authority” and “demonstrated experience and expertise”?

Comments: One commenter strongly supported both proposed definitions. Another commenter expressed concern regarding the language used to define “optimum policy-making authority” because TANF is administered at the State level and local leadership does not have “optimum policy-making authority” for the agency. For this reason, the commenter requested that the Department clarify what “optimum policy-making authority” is at the local level.

One commenter asked the Department if it thinks local administrators of State agencies meet the criteria for optimum policy-making authority or if it expects this regulation will require the nomination and appointment of State capital-based agency executives.

Regarding demonstrated experience and expertise, one commenter recommended that all staff working with job seekers and business customers should receive certification through programs like Certified Workforce Development Professional (CWDP) by the National Association of Workforce Development Professionals (NAWDP) to ensure they are qualified in their role.

Department Response: 20 CFR 679.340 clarifies the term “optimum policy-making authority” as an individual who can reasonably be expected to speak affirmatively on behalf of the entity he or she represents and to commit that entity to a chosen course of action. The section also defines “demonstrated experience and expertise” at the local level, which includes a workplace learning advisor as defined in WIOA sec. 3(70); an individual who contributes to the field of workforce development, human resources, training and development, or a core program function; or someone the Local WDB recognizes for valuable contributions in education or workforce development related fields. The Department concludes that the Local WDB has flexibility to make the determinations of optimum policy-making authority and demonstrated experience and expertise within the outlined criteria. No change to the regulatory text was made in response to these comments.

Section 679.350 What criteria will be used to establish the membership of the Local Workforce Development Board?

Comments: Title 20 CFR 679.350 affirms that the chief elected official appoints the Local WDB in accordance with the criteria in WIOA sec. 107(b) and applicable State criteria. Commenters sought additional detail on which industries can be represented, specifically asking about the healthcare industry and educational institutions. Commenters also requested that 501(c)(3) corporations be defined as businesses.

Department Response: WIOA sec. 3 contains definitions of terms used in the law. This section does not specifically define a business or a business organization. The entities identified by the commenters may be included as long as they meet the membership criteria. No change to the regulatory text was made in response to these comments.

Section 679.360 What is a standing committee, and what is its relationship to the Local Workforce Development Board?

Comments: 20 CFR 679.360 implements WIOA sec. 107(b)(4) and establishes the roles and responsibilities of standing committees within the Local WDB structure. Commenters supported the text, as well as suggested that the Department require or recommend particular groups, such as Job Corps, to be members of standing committees.

Department Response: Standing committees were not legislated under WIA and are optional under WIOA as clarified in § 679.360(b). The Department declines to mandate a specific entity be represented on a standing committee, but nothing would prevent Job Corps representatives from being appointed to standing committees under § 679.360(b).

Standing committees may be used to assist the Local WDB in carrying out its responsibilities as outlined in WIOA sec. 107.

Comments: One commenter suggested changing the word “must” to “may” regarding the requirement in § 679.360(a) to include those appointed by the Local WDB in standing committees but who are not Board members.

Department Response: The Department encourages the use of standing committees to expand opportunities for stakeholders to participate in Local WDB decision-making, particularly for representatives of organizations that may no longer sit on the Local WDB but continue to have a stake in the success of Local WDB decisions. Such committees also expand the capacity of the Local WDB in meeting required functions and expand opportunities for stakeholders to participate in Local WDB decision-making. For this reason, it is important to require the appointment of non-Board members. No change to the regulatory text was made in response to these comments.

Section 679.370 What are the functions of the Local Workforce Development Board?

Role and Function of the Local WDB

Title 20 CFR 679.370 lists the functions of the Local WDBs as enumerated in WIOA sec. 107(d). Under WIOA, the Local WDB, in partnership with the CEO, must perform a variety of functions to support the local workforce system.

Comments: Commenters recommended the addition of a variety of Local WDB functions.

Department Response: In order to preserve Local WDB flexibility, the Department declines to enumerate additional functions. No change to § 679.370 was made in response to these comments.

Comments: Paragraph (b) of § 679.370 discusses a new role for Local WDBs Start Printed Page 56103that are part of a planning region that includes multiple local areas. This provision repeats the WIOA requirement that Local WDBs that are part of a planning region must develop and submit a regional plan in collaboration with the other Local WDBs in the region. Regarding § 679.370(b), a commenter recommended the Department include language allowing any local area that includes multiple jurisdictions and partners to have an automatic designation as a region and to consider that area's local plan to be a regional plan.

Department Response: WIOA sec. 106(a)(2) clearly assigns the State the responsibility of identifying regions after consultation with Local WDBs and chief elected officials. As required in WIOA sec. 106(c)(2), the local plan is incorporated into the regional plan, where required, in accordance with § 679.540. No change to the regulatory text was made in response to this comment.

Career Pathways (§ 679.370(f))

WIOA sec. 3(7)(A) through (G) defines career pathways as a combination of rigorous and high-quality education, training, and other services that meet specified guidelines. WIOA sec. 101(d)(3)(B) enumerates “the development of strategies to support the use of career pathways for the purpose of providing individuals, including low-skilled adults, youth, and individuals with barriers to employment (including individuals with disabilities), with workforce investment activities, education” as a function of the State WDB and is described in § 679.130(c)(2). WIOA sec. 107(d) and § 679.300 extends the requirement to Local WDBs.

Comments: Commenters requested that the Department provide more comprehensive guidance on the implementation of career pathways. Several commenters provided recommended changes to the regulatory text that included adding criteria, including a section specific to Local WDB implementation of career pathways, requiring the State and Local WDBs to define the roles and responsibilities of WIOA programs related to career pathways, listing required partners (such as Job Corps, and public television), and developing strategies to include job seekers with specific barriers to employment.

Department Response: The Department acknowledges the interest in implementing successful career pathway strategies. The ideas and suggestions provided by the commenters support that career pathways is a dynamic topic that involves input of multiple partners and stakeholders across the public workforce system. The Department agrees that further guidance and technical assistance is needed and will be issued. However, the statutory language provides general criteria for both State and Local WDBs to use in developing career pathway strategies meeting their needs. More prescriptive language may limit State and Local WDBs' ability to be proactive and innovative in developing career pathways to support individuals to retain and enter employment. No change to the regulatory text was made in response to these comments.

Strategies for Technological Improvements To Improve One-Stop Services (§ 679.370(h))

Comments: Proposed § 679.370(h)(1) requires that Local WDBs facilitate connections among the intake and case management information systems of the one-stop partner programs; a commenter asserted that connecting intake and case management information systems will raise significant issues in terms of staffing, technology, and confidentiality.

Department Response: Title 20 CFR 679.370(h) does not outline specific technology requirements expectations, but rather the Board is responsible for developing strategies for aligning technology and data systems across one-stop partner programs. The Local WDB may connect intake and case management systems, but neither WIOA nor the regulations require a single case management system among one-stop partners. The regulation provides Local WDBs with flexibility to develop systems that best fit their needs and budgets. No change to the regulatory text was made in response to these comments.

Review of Adult Education Provider Applications (§ 679.370(n))

Paragraph (n) of § 679.370 reflects a number of new functions for the Local WDB related to coordination with adult education and literacy providers in the local area. This provision requires the Local WDB to review applications to provide adult education and literacy activities under title II to determine whether such applications are consistent with the local plan; the eligible agency retains approval authority. It also requires the Local WDB to make recommendations to the eligible agency to promote alignment with the local plan.

Comments: Commenters requested clarification regarding the application review process. Further information regarding Local WDB coordination with adult education and literacy providers is provided at 34 CFR part 463, which requires the eligible agency to establish in its competition a processes by which applicants must submit an application to the Local WDB for review prior to its submission to the eligible agency. This part also includes a role for the Local WDB in replicating and implementing cooperative agreements in accordance with subparagraph (B) of sec. 101(a)(11) of the Rehabilitation Act of 1973 (29 U.S.C. 721(a)(11)), and implementing cooperative agreements in accordance with that section with the local agencies administering plans under title I of that Act (29 U.S.C. 720 et seq.) other than sec. 112 or part C of that title (29 U.S.C. 732, 741) to enhance the provision of services to individuals with disabilities and other individuals.

Commenters expressed concerns that Local WDBs will not have the appropriate amount of time to review all adult education provider applications in a timely manner, particularly in large cities with many programs or for education programs serving jurisdictions with multiple Local WDBs. One commenter also expressed concern about the title II adult education provider application review process because Local WDBs do not understand enough about education programs and recommended that the regulations contain a clear conflict of interest policy as well as a process where the adult education stakeholders have the ability to help shape the local plan. One commenter suggested that the review and approval process outlined in § 679.370(n) for adult education providers should be applied to all core partner plans.

Department Response: The Department of Education provides additional information about the review of local applications for grants or contracts to provide title I adult education and literacy services at 20 CFR 463.20 which reiterates that the purpose of the review is to ensure that the application is consistent with the local plan. The section also advises that the review is taken into consideration when making funding decisions. The Department of Education advises that only appointed local WDB members who do not have a conflict of interest as defined in sec. 107(h) of WIOA are allowed to participate in the review of an eligible training provider application. Boards may arrange to offer training to local WDB members by adult education experts prior to participating in the review process. No change to the regulatory text was made in response to these comments.Start Printed Page 56104

Ensuring Appropriate Use and Management of WIOA Funds

Comments: Under paragraph (h), a commenter asked if the State can limit a Local WDB's authority to increase the on-the-job training reimbursement rate if all factors required in regulation and policy are met.

Department Response: Paragraph (h)(4)(i)(2) of § 679.370 requires Local WDBs, in partnership with the chief elected official for the local area, to ensure the appropriate use and management of funds. Therefore, local areas should establish policies, interpretations, guidelines, and definitions to implement provisions of title I of WIOA to the extent that such policies, interpretations, guidelines, and definitions are not inconsistent with WIOA and the regulations issued under WIOA, Federal statutes and regulations governing one-stop partner programs, and with State policies. States also should establish policies, interpretations, guidelines, and definitions to implement provisions of title I of WIOA to the extent that such policies, interpretations, guidelines, and definitions are not inconsistent with WIOA and the regulations issued under WIOA, as well as Federal statutes and regulations governing one-stop partner programs. Local WDBs, therefore, can set policies but those policies must not conflict with State policy, or WIOA. No change to the regulatory text was made in response to these comments.

Negotiation of Local Performance Indicators (§ 679.370(j))

Comments: Under paragraph (j), a commenter stated that the regulations need to indicate that local areas have the final decision regarding performance negotiations.

Department Response: WIOA sec. 107(d)(9) requires that locals negotiate performance and § 679.510(a)(1)(viii) requires an agreement between Local WDBs and chief elected officials for how a planning region will collectively negotiate and reach agreement with the Governor on local levels of performance. No change to the regulatory text was made in response to these comments.

Negotiating Methods for Funding One-Stop Infrastructure Costs (§ 679.370(k))

Title 20 CFR 679.370(k) requires that the Local WDB negotiate with the CEO and required partners on the methods for funding the infrastructure costs of one-stop centers.

Comments: Comments asked for clarification on the role of CEO.

Department Response: The CEO is not required to provide infrastructure costs, nor is the CEO required to negotiate the infrastructure costs, but rather the Local WDB and the CEO must agree upon the methods that will be applied to determine the infrastructure funding. Section 678.500 (see Joint WIOA Final Rule) describes what must be included in the Memorandum of Understanding executed between the Local WDB, with the agreement of the CEO, and the one-stop partners relating to the operation of the one-stop delivery system in the local area, and provides for additional details regarding infrastructure costs. No change to the regulatory text was made in response to these comments.

Selection of Youth Services, Training, and Career Services Providers (§ 679.370(l))

Comments: Under paragraph (l), a couple of commenters requested clarification that Local WDBs only can determine eligibility of training providers for their local areas and that eligibility is contingent on the providers being approved on the State eligible training provider list (ETPL).

Department Response: WIOA sec. 122 and 20 CFR part 677 of the Joint WIOA Final Rule describe the process for determining the eligibility of training providers. Providers must be approved via the Governor's process, however, Local WDBs may set additional criteria for providers on the local list. No change to the regulatory text was made in response to these comments.

Section 679.400 Who are the staff to the Local Workforce Development Board and what is their role?

Title 20 CFR 679.400 describes the Local WDB's authority to hire staff and the appropriate roles for Board staff as outlined in WIOA sec. 107(f).

Comments: Commenters suggested that any prior agreements between Local WDBs and chief elected officials regarding staffing roles and responsibilities be recognized; that the regulations clarify that the State agency is to take responsibility for hiring; and that the regulations should reiterate that the hiring of a director is optional.

Department Response: WIOA sec. 107(f) describes the authority of the Local WDB to hire a director. There is no mandate that Local WDBs hire staff. The authority to hire staff to support the Local WDB is granted under WIOA sec. 107(f) to the Local WDB, not the State agency.

Prior agreements are not automatically recognized. It is in the best interest of the public workforce system to ensure the director of the Local WDB is competent and experienced with workforce programs and service delivery. Paragraph (b) of § 679.400 requires the Local WDB to apply objective qualifications to the Board director, paragraph (d) limits the Local WDB staff's role to assisting the Board fulfill the functions at WIOA sec. 107(d) unless the entity selected to staff the Board enters into a written agreement with the Board and CEO as noted in § 679.400(e). Title 20 CFR 679.400 aligns with WIOA sec. 107(f) and no change to the regulatory text was made in response to these comments.

Section 679.410 Under what conditions may a Local Workforce Development Board directly be a provider of career services, or training services, or act as a one-stop operator?

Selection as a One-Stop Operator (§ 679.410(a))

Title 20 CFR 679.410 implements WIOA sec. 107(g) and explains the situations in which the Local WDB may directly act as a one-stop operator, a provider of career services, or training services provider.

Comments: The Department received many comments supporting the requirement that one-stop operators be competitively procured. However, other commenters recommended waivers or exceptions to the requirement that one-stop operators be competitively procured. Some commenters recommended waivers for performance, direct designation of the Local WDB as the one-stop operator with the agreement of the CEO and Governor, and allowing Governors to designate the selection of one-stop operators in single-area States. Several commenters disagreed with the Department's interpretation that WIOA sec. 107(g), which allows for the selection of the one-stop operator with the agreement of the CEO and Governor, is an additional requirement under WIOA sec. 121(d)(2)(A) and not a separate path to designation.

Department Response: A more detailed discussion of this issue is contained in 20 CFR part 678 of the Joint WIOA Final Rule. The Department maintains the interpretation, consistent with 20 CFR 678.605 (see Joint WIOA Final Rule) and WIOA sec. 121(d)(2)(A), that the Local WDB must select the one-stop operator through a competitive process. In instances in which a State is conducting the competitive process, the State must follow the same policies and procedures it uses for procurement with non-Federal funds. State, Local, and non-Federal entities should follow the applicable procurement guidelines in the Uniform Guidance at 2 CFR part 200. Neither WIOA nor § 679.410 Start Printed Page 56105prohibit Local WDBs from competing to become a one-stop operator if they could do so in accordance with the Uniform Guidance. The provision requires the competitive procurement of all one-stop operators. No change to the regulatory text was made in response to these comments.

Career Services Provider (§ 679.410(b))

The Department specified in § 679.410(b) that a Local WDB may act as a provider of career services only with the agreement of the CEO in the local area and the Governor.

Comments: Commenters requested clarification regarding the circumstances under which a Local WDB may provide career services.

Department Response: Although WIOA sec. 107(g) requires that one-stop operators be competitively procured, there is no similarly clear statutory requirement for provision of career services and therefore Local WDBs do not have to undertake a competitive process to offer career services.

Comments: Some commenters suggested that Local WDBs only be permitted to offer career services if the CEO and Governor agree that there are insufficient providers of career services in an area. Another commenter responded that many Local WDBs are currently delivering high quality career services and should not be forced to procure them.

Department Response: The Department has interpreted WIOA sec. 107(g)(2), which states that a Local WDB may provide career services described in WIOA sec. 134(c)(2) through a one-stop delivery system or be designated or certified as a one-stop operator only with the agreement of the CEO and the Governor, to mean that the Local WDB's delivery of career services is at the discretion of the CEO and Governor. Section 679.410(b) offers the CEO and Governor flexibility in deciding whether to pursue a competitive award of career services. However, the Department supports competition and maintains the opinion that Local WDBs acting as direct providers of these services is not optimal. No change to the regulatory text was made in response to these comments.

Comments: Commenters also requested clarity regarding the role of Local WDB members in delivering training and career services but offered no suggested language changes.

Department Response: Paragraph (d) of § 679.410 provides language that extends the Local WDB limitations outlined in § 679.410(c) to Local WDB staff. No change to the regulatory text was made in response to these comments.

Training Services Provider (§ 679.410(c))

WIOA sec. 107(g)(B) outlines a waiver process for Local WDBs to offer training services. Local WDBs wanting to offer training services, such as GED, are required to apply to the Governor for a waiver and meet the waiver restrictions outlined in WIOA sec. 107(g)(1) and § 679.410(c).

Comments: Commenters asked for clarification regarding the penalties for violating this provision.

Department Response: WIOA sec. 183 requires the Governor to monitor all locals and lays out the course of action for any deficiencies that are not corrected such as corrective action, sanctions, and reorganizing the Local WDB. Entities that do not comply are subject to appropriate administrative and fiscal actions, which may include revocation of the waiver as described in WIOA sec. 107. No change to the regulatory text was made in response to these comments.

Section 679.420 What are the functions of the local fiscal agent?

Comments: The Department requested comment on § 679.420 which addresses the roles of the local fiscal agent. Many commenters agreed with the regulation as proposed while others provided recommendations for expanding the role and suggested changes to the regulatory text to include requiring the permissible functions in § 679.420(c). Other commenters requested additional guidance on specific concerns such as fees, policy development, clarification on entities that may act as a fiscal agent, and the role of the CEO. Noting that most commenters agreed with the fiscal agent role set forth in the proposed regulatory text, the Department made no changes to the fiscal agent functions under § 679.420.

One commenter said that that the definition of fiscal agent conflicts with § 681.400.

Department Response: The Department disagrees that the two regulatory sections are in conflict. Paragraph (b) of § 679.420 provides a list of the key functions of a fiscal agent. The appropriate role of fiscal agent is limited to accounting and funds management functions rather than policy or service delivery. Section 681.400 provides that the local grant recipient may directly provide youth services. Entities serving multiple roles must adhere to WIOA title I, subtitle E (Administration) and § 679.430 to ensure appropriate firewalls within a single entity performing multiple functions, including when a fiscal agent also functions as a direct provider of services. No change to the regulatory text was made in response to these comments.

Section 679.430 How do entities performing multiple functions in a local area demonstrate internal controls and prevent conflict of interest?

Proposed 20 CFR 679.430 specified that a written agreement with the Local WDB and CEO is required when a single entity operates in more than one of the following roles: Local fiscal agent, Local WDB staff, one-stop operator, or direct provider of career services or training services.

Comments: Several commenters requested clarification regarding how various entities should function in multiple roles.

Department Response: This section requires a written agreement with the Local WDB and chief elected official when a single entity operates in more than one of the specified roles, but does not dictate the specific contents of the agreement, because the regulation cannot account for each individual Local WDB situation. However, the agreement must demonstrate how the organization will carry out its responsibilities while in compliance with WIOA and corresponding regulations, relevant Office of Management and Budget (OMB) circulars, the Uniform Guidance, and the State's conflict of interest policy. While it may be appropriate in some instances for a single organization to fulfill multiple roles, a written agreement between the Local WDB, chief elected official, and the organization fulfilling multiple roles is the best method to limit conflicts of interest or the appearance of conflicts of interest, minimize fiscal risk, and develop appropriate firewalls within a single entity performing multiple functions. Because the regulation must be adaptable to a variety of potential situations, the Department has determined that no regulatory change is appropriate in this section and no change to the regulatory text was made in response to these comments. However, to clarify the multiple roles this section is addressing, the regulatory text was revised to refer to “the direct provider of services” instead of “the direct provider of career and training services” in order to include cases where the entity may be directly providing youth services under WIOA.Start Printed Page 56106

Other Comments on Local Workforce Development Boards

Comments: A commenter expressed its support for all of the proposed part 679, subpart C, regulations. Multiple commenters said that Local WDBs should have more flexibility in the time allowable to become compliant with Federal and State laws during the program year 2015-2016.

Department Response: Regarding timelines, the Department agrees that clarification of the expectation for the process is needed and will add § 679.500(c), which requires the Governor to establish and disseminate a policy for the submission of local and regional plans.

Comments: One commenter asserted that the regulations are missing the vital role of a “system coordinator” that is truly necessary in complex areas like large metropolitan cities. The commenter described three options for designating a “system coordinator” that it asserted would maintain the Local WDB's authority to establish a vision for the local workforce development system, recognize the diversity in models for implementing WIOA, and maintain a competition to ensure the highest quality providers are selected to operate one-stop centers. These options were described as (1) the Local WDB taking on the role of system coordinator (provided it competitively selected one-stop operators per WIOA sec. 121(d)); (2) the Local WDB could, with agreement of the CEO, designate a local public agency or non-profit organization as the system coordinator (provided it competitively selected one-stop operators); or (3) a single one-stop operator could still play this role.

Department Response: WIOA does not define or otherwise reference a role for a system coordinator. WIOA secs. 101 and 107 allow Boards to hire staff for the purposes of assisting in carrying out the Board required functions. The local option to create a role of a system coordinator is already covered in the Boards' authority to hire staff. No change to the regulatory text was made in response to these comments.

4. Subpart D—Regional and Local Plan

Title 20 CFR 679.500 describes the purpose of the regional and local plans; WIOA provides designated regions and local workforce areas the responsibility and opportunity to develop employment and training systems tailored specifically to regional economies. These systems must meet the needs of the full range of learners and workers, including those with barriers to employment. The system must also address the specific needs of regional employers and the skills they require.

WIOA requires the Local WDB, in partnership with the CEO, to submit a local plan to the Governor. If the local area is part of a planning region, the Local WDB will submit its local plan as part of the regional plan and will not submit a separate local plan. The local or regional plan provides the framework for local areas to define how their workforce development systems will achieve the purposes of WIOA. The regional or local plans serve as 4-year action plans to develop, align, and integrate the region and local area's job driven workforce development systems, and provides the platform to achieve the local area's visions and strategic and operational goals. Since the local plan is only as effective as the partnerships that operationalize it, it must represent a collaborative process among local elected officials, boards, and required and other partners (including economic development, education, and private sector partners) to create a shared understanding of the local area's workforce investment needs, a shared vision of how the workforce development system can be designed to meet those needs, and agreement on the key strategies to realize this vision. The Department received comments on the purpose, the content, and the structure of regional and local plans. In this subpart the Department addresses comments regarding how regions can be aligned.

Section 679.500 What is the purpose of the regional and local plan?

WIOA sec. 106(c) addresses regional coordination and regional plans are addressed in WIOA sec. 106(c)(2). In accordance with WIOA sec. 106(c), § 679.500 describes the purpose of the regional and local plans.

Comments: Commenters provided feedback for the content of the regional plan, expressed concern about the challenges of coordination, requested additional guidance on plan development, and asked for clarity regarding plan development and submission.

Department Response: The Department has issued some guidance on planning and anticipates issuing additional guidance on planning to the public workforce system. Regarding timelines, the Department agrees that clarification of the expectation for the process is needed and has added § 679.500(c), which requires the Governor to establish and disseminate a policy for the submission of local and regional plans.

Section 679.510 What are the requirements for regional planning?

Participation in a Regional Planning Process (§ 679.510(a)(1))

WIOA sec. 106(c) governs regional coordination and regional planning requirements, which are clarified in § 679.510.

Comments: A commenter asked which local area within a region would be responsible for the performance negotiation process.

Department Response: The representatives of each local area in the region are collectively responsible for the process. Establishing an agreement among the Local WDBs and local CEOs in the region concerning how the planning region will collectively negotiate and reach agreement with the Governor on local levels of performance for, and report on, the performance accountability measures is required by WIOA sec. 116(c)(1)(H) and § 679.510(a)(1)(viii). No change to the regulatory text was made in response to these comments.

Preparation, Submittal, and Approval of Regional Plans (§ 679.510(a)(2))

Comments: Commenters have suggested that a single local area could elect to participate in multiple planning regions through a memorandum of agreement.

Department Response: In accordance with WIOA sec. 106, a single local area may not be split across two planning regions. Local areas must align with planning regions to align economic and workforce development activities and resources effectively. Local areas may be part of only one region. However, local areas are not prohibited from working or coordinating with other local areas, and regions may coordinate with other planning regions. Similarly, where a single local area is identified as a region, such a local area could reasonably coordinate with other local areas or planning regions. Coordination may be especially vital across States; the Department anticipates providing additional guidance regarding the creation and management of interstate planning regions. As the regulation aligns with WIOA and does not prohibit coordination, no change to the regulatory text was made in response to these comments.

Comments: A commenter asked how the plans are to be submitted.

Department Response: The plans must be submitted to the Governor as outlined in § 679.510(a)(2) and any guidance issued by the Department (§ 679.510(a)(1)(i)).Start Printed Page 56107

Other Requirements for Regional Planning (§ 679.510(b), (c), and (d))

Comments: Commenters suggested specific content for the regional plan including how the region coordinates core program services, economic development strategies, education attainment, credentialing of workforce skills to meet employer skill needs, and data regarding participants with disabilities.

Department Response: WIOA sec. 106(c)(2) and § 679.510 describe the requirements for regional planning, which already address the region's service strategies, regional labor market data, coordination efforts, etc. The Department plans to issue further guidance.

Section 679.520 What are the requirements for approval of a regional plan?

Section 679.520 describes the regional plan approval process.

Comments: The Department received comments regarding the timelines, including suggestions that the timeline for approval in § 679.520 of “90 days after submission” is inconsistent with WIOA sec. 108(e), which says the plan “shall be considered to be approved by the Governor at the end of the 90-day period beginning on the day the Governor receives the plan.”

Department Response: The Department agrees that 90-day period should be revised to track WIOA and has amended both §§ 679.520 and 679.570 to reflect the statutory language of 90 days after receipt of the local plan.

Section 679.530 When must the regional plan be modified?

Title 20 CFR 679.530 describes when a regional plan must be modified and § 679.580 requires the Governor to establish procedures governing local plan review and modification to ensure that the biennial review and modification of local plans is conducted consistently throughout the State. The circumstances identified in § 679.530(b)(1) and (2) identify the significant changes that require modification but the Governor may require other factors. While sec. 106(c) of WIOA clearly describes the required contents of the regional plan, it provides less detail about the approval and modification process, saying only that officials in the planning region must “prepare, submit, and obtain approval” of the plan.

Comments: Commenters requested that the language in this section and of § 679.580 be narrowed to specify that modifications are required only in response to “changes to local economic conditions, and any changes in the financing available” to allow regions more flexibility.

Department Response: Because the local plan is a component of the regional plan, the Department decided to apply the approval and modification requirements to the regional plan, which are reflected in § 679.530(b)(2), and which require modification based on “other factors affecting the implementation of the local plan, including but not limited to changes in the financing available to support WIOA title I and partner-provided WIOA services.” In the Department's view, ensuring that regional and local plans remain up-to-date and relevant, and ensuring consistency between regional and local plan requirements, will improve the effectiveness of the public workforce system. No change to the regulatory text was made in response to these comments.

Section 679.540 How are local planning requirements reflected in a regional plan?

Title 20 CFR 679.540 outlines how local planning requirements are reflected in a regional plan. WIOA is silent on the coordination of the regional and local plan, noting only that the regional plan must “incorporate local plans for each of the local areas in the planning region.” The Department has determined that the most appropriate and least burdensome approach to implementing this provision is to include a copy of each local plan within the regional plan to accompany the plan's discussion of regional strategies. In this arrangement, the regional plan is completed in cooperation with the Local WDBs and CEOs in a planning region, per § 679.510(a). Each individual Local WDB and CEO will respond to the local planning requirements at § 679.560(b) through (e) individually. The Local WDBs and CEOs in a planning region must cooperate to develop a common response to the local planning requirements that discuss regional labor market information, as required by § 679.540(a), and any other appropriate requirements permitted by the Governor per § 679.540(b). When these activities are completed, the planning region submits one regional plan to the Governor that includes the common discussion of regional labor market information and other requirements as required by the Governor, as well as each local plan in a single document.

Comments: A commenter asked the Department to clarify if regions had to submit all of the separate local plans that are encompassed in the regional plan.

Department Response: WIOA sec. 106(c)(2) requires the regional plan to incorporate local plans for each of the local areas in the planning region. As described above, the Department has determined that the most appropriate and least burdensome approach to implementing this provision is to include a copy of each local plan within the regional plan to accompany the plan's discussion of regional strategies. No change to the regulatory text was made in response to these comments.

Section 679.550 What are the requirements for the development of the local plan?

Title 20 CFR 679.550 explains the requirements for the development of the local plan. This section emphasizes the importance of collaboration and transparency in the development and submission of the local plan and subsequent modifications.

Comments: A commenter requested clarification regarding when it was necessary for a local area to submit a local plan.

Department Response: Paragraph (a) of § 679.550 implements sec. 108(a) of WIOA and describes the general requirements for the preparation and content of the local plan. If the local area is part of a planning region, the Local WDB must comply with WIOA sec. 106(c) and §§ 679.510 through 679.540 in the preparation and submission of a regional plan. The local plan is considered submitted when it is incorporated in the regional plan.

Comments: Other commenters asked if the terms plan, the local plan, or the local workforce investment plan are synonymous and recommended consistency be used throughout the regulation.

Department Response: The Department used all terms to refer to the local plan required in WIOA sec. 108 and refers to the local plan in the regulations.

Section 679.560 What are the contents of the local plan?

Contents of a Local Plan

Title 20 CFR 679.560 is consistent with sec. 108(b) of WIOA and outlines the information that must be included in the local plan. These requirements set the foundation for WIOA principles, by fostering strategic alignment, improving service integration, and ensuring that the public workforce system is industry-relevant, responding to the economic needs of the local area and matching employers with skilled workers.Start Printed Page 56108

Comments: The Department received comments supporting the proposed section, and some recommending changes to the content of the local plan, as well as comments requesting additional guidance.

Department Response: The Department has determined it is appropriate for § 679.560 to track closely with WIOA sec. 108(b), which outlines the content requirements of the local plan. No changes were made to the regulatory text in response to these comments. The Department recognizes the need for technical assistance in developing local plans and will issue guidance for State and Local WDBs to assist in developing compliant plans.

Local Levels of Performance

Title 20 CFR 679.560(b)(4) explains that the Local WDB must describe how it will coordinate local workforce investment activities with regional economic development activities that are carried out in the local area and promote entrepreneurial skills training and microenterprise services.

Comments: Commenters requested additional information on performance criteria for the ETPL and “microenterprise development.”

Department Response: Alignment between the public workforce system and local economic development activities is critical in order to identify and fulfill industry talent needs by training customers for emerging and in demand job skills. Furthermore, microenterprise development refers to training for the purposes of self-employment. This training strategy may be appropriate for individuals or participants with multiple barriers to employment, including persons with disabilities.

Title 20 CFR 679.560(b)(5) focuses on the delivery of services through the one-stop delivery system in the local area and requires descriptions regarding how the Local WDB will ensure the continuous improvement of eligible providers of services—see part 680, subpart D, for additional information on the requirements of the eligible training provider list.

Comments: Other commenters suggested that regulations detail the timeline for performance negotiations related to local plan submission.

Department Response: The Department agrees that clarification is needed and has added § 679.500(c), which requires the Governor to establish and disseminate a policy for the submission of local, and regional plans. This policy must account for the requirement that local areas in a region reach agreement on how they will negotiate performance indicators with the Governor, as provided in § 679.510(a)(1)(viii).

Priority of Service (§ 679.560(b)(21))

Comments: Commenters requested additional clarification on the implementation of priority of service, and recommended methods to ensure consistent implementation.

Department Response: Title 20 CFR 679.560(b)(21) requires that the plan include description of the process by which priority of service must be applied by the one-stop operator, but also clarifies that such priority is for adult career and training services and must be given to recipients of public assistance, other low-income individuals, and individuals who are basic skills deficient. Including the priority service policy in the local plan will help ensure a more uniform application of the policy throughout the local area. The Department has issued some guidance on planning and anticipates issuing additional guidance for State and Local WDBs to assist in developing compliant plans; no change to the regulatory text was made in response to these comments.

Comments: A commenter suggested that the WIOA system should provide program participants with access to curriculum-aligned industry-recognized certificates verifying attainment of the critical skills that employers are looking for, so that when opportunities open up, the match between job seeker and employment can be accelerated and career pathways can be illuminated.

Department Response: Title 20 CFR 679.560(b)(2) requires that the Local WDB describe how such alignment will improve access to services and to activities that lead to a recognized postsecondary credential. The Local WDBs have the flexibility to consider many options; the Department declines to require a specific approach. However, the Department recognizes the need for technical assistance in developing local plans and will issue planning guidance for State and Local WDBs to assist in developing compliant plans. No change to the regulatory text was made in response to these comments.

Other Comments on Local Plans

Comments: A commenter suggested deleting § 679.560(b)(17) regarding becoming or remaining a high-performing Board.

Department Response: The Department has determined that the requirement is consistent with WIOA sec. 108(b)(18) and has made no changes to the regulatory text in response to this comment.

Comments: The Department received several comments regarding § 679.560(b)(20) regarding the requirement that a local plan include a description of how one-stop centers are implementing and transitioning to an integrated, technology-enabled intake and case management information system for programs carried out under WIOA and by one-stop operators. Commenters had specific questions regarding how such a system is to be implemented.

Department Response: Paragraph (b)(20) of § 679.560 reflects WIOA sec. 108(b)(21). There is a requirement that the plan detail the actions that will be taken but there is no mandate in this section of a particular approach. No change to the regulatory text was made in response to these comments.

Section 679.570 What are the requirements for approval of a local plan?

Overarching Comments on the Approval of a Local Plan Timeline for Approval and Implementation

The Department recognizes that the development of the local plan is dependent on several other essential State and local WIOA implementation activities and that local areas may not be able to respond fully to each of the required elements of the local plan in the timeframe provided. The Department sought comment on the scope of the challenges local areas may face regarding regional and local planning and potential actions that the Department can take to help local areas address these challenges.

Comments: Several commenters requested that the amount of time be extended for both existing local plans that are already compliant with the initial designation criteria and local plans for new areas or regions. Commenters suggested that local plans be due 6 to 9 months after the State Plans are approved. Many commenters expressed concerns about the timeline in developing and submitting all plans. Several suggested timelines that should be regulated. Other commenters suggested that regulations detail the timeline for performance negotiations related to plan submission.

Department Response: Title 20 CFR 679.570 implements WIOA sec. 108(e). Paragraph (a) of § 679.570 requires that the Governor review completed plans and stipulates that unless the Governor determines that the plan is deficient according to paragraphs (a)(1) through (3), the plan will be considered approved 90 days after the Governor receives the plan. The Department made a clarifying edit to paragraph (a) so that Start Printed Page 56109it is clear the 90-day time period begins when the Governor receives the plan, rather than at submission. The Department also edited paragraph (a)(2) to update the citation to the regulation that implements WIOA sec. 188. Regarding timelines, the Department agrees that clarification of the expectation for the process is needed and, as described above, has added paragraph (c) to § 679.500, which requires the Governor to establish and disseminate a policy for the submission of local and regional plans.

With Training and Employment Guidance Letter No. 14-15, “Workforce Innovation and Opportunity Act (WIOA) Requirements for Unified and Combined State Plans,” dated March 4, 2016, and the WIOA State Plan ICR, published under OMB control number 1205-0522, the Department issued guidance on and requirements for Unified and Combined State Plans. The Department also intends to issue guidance or technical assistance on local and regional planning. Section 679.570 aligns with WIOA sec. 108, and the changes described above address the commenters' concerns. No additional change to the regulatory text was made in response to these comments.

Paragraph (b) of § 679.570 outlines the processes, roles, and responsibilities in the local plan process for situations in which the State is a single local area. Paragraph (b)(1) clarifies the State must incorporate the local plan in the State's Unified or Combined State Plan submitted to the Department. Paragraph (b)(2) states that the Secretary of Labor will perform the roles assigned to the Governor as they relate to local planning activities and § 679.570(b)(3) indicates the Secretary of Labor will issue planning guidance for single-area States.

Comments: Commenters asked why the Secretary of Labor would be performing the Governor's role, what those planning activities are, and if the Secretary of Labor should be limited to approving local plans.

Department Response: Single-area States are required to submit the plan to the Secretary of Labor under WIOA sec. 108. The Secretary will perform the Governor's role in local planning as outlined in WIOA sec. 108(a) and (e) regarding plan submission and approval. Section 679.570 aligns with WIOA sec. 108 and the Final Rule makes no change to § 679.570(b) in response to these comments.

Section 679.580 When must the local plan be modified?

Title 20 CFR 679.580 is consistent with WIOA sec. 108(a), which requires the Governor to establish procedures governing local plan review and modification to ensure that the biennial review and modification of local plans is conducted consistently throughout the State. Paragraph (b) of § 679.580 explains that the Local WDB and appropriate CEOs must review the local plan every 2 years and submit a modification as needed, based on significant changes in labor market and economic conditions and other factors including changes to local economic conditions, changes in the financing available to support WIOA title I and partner-provided WIOA services, changes to the Local WDB structure, or a need to revise strategies to meet performance goals.

Comments: A commenter recommended that modifications be limited to only substantive changes or as required by the State WDB. Other commenters requested guidance that included examples of changes warranting a local plan modification.

Department Response: As outlined in § 679.580, the Governor is required to establish procedures governing local plan review and modification. The Governor has the flexibility to further define the criteria under § 679.580(b) that require a modification to the local plan. The Department does not agree that additional language is needed to require additional modification requirements. Moreover, as described in the discussion of regional plan modification in § 679.530, in the Department's view, ensuring that local and regional plans remain up-to-date and relevant, and ensuring consistency between local and regional plan requirements, will improve the effectiveness of the public workforce system. The Department declines to change the modification requirements and has made no changes to the regulatory text in response to these comments.

5. Subpart E—Waivers/WorkFlex (Workforce Flexibility Plan)

This subpart describes the statutory and regulatory waiver authority provided by WIOA sec. 189(i), and the requirements for submitting a Workforce Flexibility Plan under WIOA sec. 190. The Department addresses comments regarding the purpose of the waiver authority in WIOA, and the circumstances under which a waiver may apply.

WIOA provides States the flexibility to request a waiver of program requirements in order to implement new strategic goals for the improvement of the statewide workforce development system and to provide better customer service in exchange for accountability for expected programmatic outcomes. A Workforce Flexibility plan provides additional flexibility to the State. In general, a State with an approved Workforce Flexibility plan is given the authority to identify local level provisions to waive without further approval from the Secretary of Labor to achieve outcomes specified in the plan. A description of what provisions of WIOA and the Wagner-Peyser Act may and may not be waived is included, along with an explanation of the procedures for requesting a waiver. The subpart also describes what may and may not be waived under a Workforce Flexibility Plan, and the procedures for obtaining approval of a plan. The WIOA requirements for obtaining approval for a waiver or Workforce Flexibility Plan are similar to those in WIA secs. 189(i) and 192, respectively; therefore, many of the proposed regulations are the same as the regulations implementing WIA. No changes have been made to regulatory text in response to these comments.

Section 679.610 What provisions of the Workforce Innovation and Opportunity Act and the Wagner-Peyser Act may be waived, and what provisions may not be waived?

WIOA sec. 189(i)(3)(A)(i) establishes the limitations of the Secretary's general waiver authority for WIOA title I, subtitles A, B, and E. As described in the regulation, the Secretary is statutorily prohibited from waiving any provisions related to the following:

  • Wage and labor standards;
  • Non-displacement protections;
  • Worker rights;
  • Participation and protection of workers and participants;
  • Grievance procedures and judicial review;
  • Nondiscrimination;
  • Allocation of funds to local areas;
  • Eligibility of providers or participants;
  • The establishment and functions of local areas and Local WDBs;
  • Procedures for review and approval of State and local plans;
  • The funding of infrastructure costs for one-stop centers; and
  • Other requirements relating to the basic purposes of title I of WIOA described in § 675.100 of this chapter.

Comments: A commenter suggested that the Department consider waivers of some of these provisions to the extent that they enhance wage and labor standards and non-displacement protections.

Department Response: The Department does not have the authority to approve waivers that are prohibited Start Printed Page 56110by statute and no change to the regulatory text was made in response to this comment.

Section 679.620 Under what conditions may a Governor request, and the Secretary approve, a general waiver of statutory or regulatory requirements under the Workforce Innovation and Opportunity Act?

Title 20 CFR 679.620(a) through (f) implements WIOA sec. 189(i)(3) and describes the conditions under which a Governor may request, and the Secretary may approve a waiver of statutory or regulatory requirements. Title 20 CFR 679.620(a) explains that the Secretary will issue guidelines on waiving WIOA and Wagner-Peyser requirements. States will be required to follow the Secretary's guidelines, which supplement the requirements listed in 20 CFR 679.600 through 679.620.

Comments: A commenter asked for more clarification regarding what the most recent data are that would be required to grant a waiver renewal, as required by proposed § 679.620(d)(7).

Department Response: In general, the Department has not required specific data sources when requesting a waiver under WIA or WIOA. The Governor has the discretion to use the data source or sources that most effectively demonstrates the need and/or benefit of the requested waiver. The Department has made no changes to the regulatory text in response to this comment.

Comments: A commenter asked if existing WIA waivers that are approved to run past 2015 will be applicable under WIOA, and suggested that they remain in effect through the original period for which they were approved. With regard to the WIOA transition period, one commenter supported the current continuation of waivers as granted. Other commenters recommended the continuation of existing waivers until the WIOA State Plan is approved. Regarding States with existing WIA waivers, one commenter recommended that the Department allow such States to keep this flexibility until either the Federal government provides additional time or resources necessary for implementation of WIOA's new requirements, or the States provide evidence that they are prepared to implement the additional requirements.

Department Response: The Department issued TEGL No. 01-15 (“Guidance Regarding the Impact of Workforce Innovation and Opportunity Act Implementation on Waivers Under the Workforce Investment Act”), which addresses the status of waivers during program year 2015 and communicates the Department's position on waivers under WIOA. This guidance includes an attachment that discusses whether each waiver type will be continued into WIOA, as well as those that expired effective July 1, 2015. No change to the regulatory text was made in response to these comments.

Section 679.630 Under what conditions may the Governor submit a Workforce Flexibility Plan?

Comments: One commenter expressed support for the language in this section that prohibits the waiver of certain requirements related to labor standards and worker protections.

Department Response: WIOA sec. 189(i)(3)(A)(i) and (ii) describe the statutory limitations to the Secretary's WIOA title I and Wagner-Peyser waiver authority. These prohibitions include any statutory provisions related to labor standards or worker rights. No change to the regulatory text was made in response to this comment.

Other Comments on Waivers/Work-Flex

Comments: One commenter expressed support for the proposed language in part 679 subpart E regarding waivers and Work-Flex.

To assist employers and job seekers best, one commenter requested that the Department offer waivers whenever possible. A State agency suggested that the Department add waiver provisions to the Final Rule regarding the application for continued eligibility of ETPs and to the internal control policy requirement provided that a written agreement pursuant to proposed § 679.430 is in place.

Department Response: Specific waiver requests must be requested through the waiver process. The Department declines to make changes to identify specific waivers in the regulatory text.

6. Other Comments on Statewide and Local WIOA Governance

Comments: With regard to the alignment of title I and title II services to improve services for immigrant and LEP individuals, multiple commenters recommended that the Department provide additional guidance to States and localities (whether through regulations or policy directive) that allows for differing eligibility criteria across the titles and encourages States and localities to align services without precluding participation by individuals who may be eligible for services under one title but not another. Another commenter stressed the importance of aiding immigrant and refugee communities and asked that the Department include reference to the need for expertise in serving linguistically and culturally diverse populations in its discussion of part 679.

One commenter expressed its concern about the challenge of meeting all WIOA requirements by July 1, 2015, particularly considering the late issuance of the WIOA regulations.

Department Response: While the Department acknowledges the need to be sensitive to the employment and training needs of immigrant and LEP individuals, WIOA sec. 189(i)(3)(A)(i) prohibits the Department from waiving or otherwise altering eligibility criteria. No change to the regulatory text was made in response to these comments.

The Department acknowledges the challenges inherent in implementing WIOA in the absence of a Final Rule. The Department issued Operating Guidance documents to inform the public workforce system how to comply with WIOA statutory requirements. The Operating Guidance provided a framework for program activities while regulations were finalized.

Comments: Explaining that its local areas have utilized funding to serve customers in their jurisdiction only, one commenter asked whether the State can set policy to allow a broader use of funds under WIOA. In addition, this commenter asked whether, if State agencies grant adult education programs to local areas, the infrastructure costs should come from the local vendor or the State.

Department Response: States have authority to set policy that is consistent with WIOA. The Department has determined that the State is in the best position to develop policy regarding allocating scarce Federal funds; the Department has not made changes to the regulatory text in response to this comment. Further, all funds must expended in accordance with the Uniform Guidance regulations and WIOA subtitle E (Administration). TEGL No. 15-14 (“Implementation of the New Uniform Guidance Regulations”) provides additional information on implementing the Uniform Guidance.

Comments: One commenter suggested that Local WDBs should remain responsible for operation of local/regional workforce programs representing business sectors in their communities and that it is a conflict of interest for State governments to receive funding, develop and operate programs, and monitor and evaluate programs. This commenter asserted that State-operated workforce programs are primarily budget-driven, rather than customer-driven, with primarily digital service structures that leave individuals Start Printed Page 56111in rural communities lacking internet, transportation, and skills without access to services.

Department Response: Section 679.100 implements WIOA sec. 101 and outlines the vision and purpose of the State WDB. Section 679.130 implements WIOA sec. 101(d) and describes the roles and functions of the State WDB. The State WDB's purpose, as outlined in WIOA sec. 101 and § 679.100, is to convene State, regional, and local workforce system, and partners to align and improve the outcomes and effectiveness of Federally funded and other workforce programs and investments. Section 679.300 implements WIOA sec. 107 and explains the purpose of the Local WDB. In accordance with the functions of the Local WDB outlined in WIOA sec. 107(d), § 679.300(b)(1) includes the function of providing strategic and operational oversight in collaboration with required and other partners to help the workforce development system achieve the purposes outlined in WIOA sec. 2, and assist in the achievement of the State's strategic and operational vision and goals outlined in the State Plan. Paragraphs (b)(2) and (3) of § 679.300 require the Local WDB to assist in the achievement of the State's strategic and operational vision and goals as outlined in the Unified State Plan or Combined State Plan, and to maximize and continue to improve the quality of services, customer satisfaction, and effectiveness of the services provided.

D. Part 680—Adult and Dislocated Worker Activities Under Title I of the Workforce Innovation and Opportunity Act

1. Introduction

In this part of the Final Rule, the Department describes requirements relating to the services that are available for adults and dislocated workers under WIOA. Adult services are provided to help job seekers who are at least 18 years old succeed in the labor market. WIOA establishes a priority in the adult program for serving low-income individuals, recipients of public assistance, and individuals lacking basic work skills. Dislocated worker services are provided to workers who have lost their job, through no fault of their own. The goal of dislocated workers services is to help these individuals obtain quality employment in in-demand industries.

Under WIOA, adults and dislocated workers may access career services and training services. WIOA provides for a public workforce system that is universally accessible, customer centered, and training that is job-driven. In this part, the Department also discusses supportive services and needs-related payments that can be provided, based on customer needs, to enable them to participate in WIOA career and training services.

The Department generally received comments that were supportive about the delivery of career and training services. It also received comments about the implementation of the statutory priority for the WIOA adult program, and how various populations, including individuals with disabilities, are able to access WIOA title I adult and dislocated worker services, which the Department has sought to clarify. In addition, the Department received comments about some of the new work-based experience and training opportunities under WIOA, including how registered apprenticeship can be utilized by the one-stop delivery system, and clarifications on transitional jobs, on-the-job training, and incumbent worker training. These comments are discussed below, in the sections corresponding to subparts A-D and F-G. The Department also received a number of comments on the Eligible Training Provider (ETP) eligibility requirements, which are discussed below under subpart D. For the comments received that pertain to the WIOA sec. 116(d)(4) ETP annual performance reports, those comments are discussed in the preamble discussion accompanying 20 CFR 677.230 (see Joint WIOA Final Rule published elsewhere in this issue of the Federal Register).

The analyses that follows provides the Department's response to public comments received on the proposed part 680 regulations. If a section is not addressed in the discussion below, it is because the public comments submitted in response to the NPRM did not substantively address that specific section and no changes have been made to the regulatory text. Further, the Department received a number of comments on this part that were outside the scope of the regulation and the Department offers no response. Lastly, the Department has made a number of non-substantive changes to correct grammatical and typographical errors to improve the readability and conform the document stylistically that are not discussed in the analysis below.

2. Subpart A—Delivery of Adult and Dislocated Worker Activities

Introduction

This subpart discusses the role of WIOA adult and dislocated worker services delivered through the one-stop delivery system. The one-stop delivery system provides universal access to career services to meet the diverse needs of adults and dislocated workers. Adult and dislocated worker programs are required partners in the one-stop delivery system and as such, grant recipients are subject to the required partner responsibilities set forth in 20 CFR 678.415 (see Joint WIOA Final Rule).

Career and training services, tailored to the individual needs of job seekers, form the backbone of the one-stop delivery system. While some job seekers may only need self-service or other basic career services like job listings, labor market information, labor exchange services or information about other services, some job seekers will need services that are more comprehensive and tailored to their individual career needs. These services may include comprehensive skills assessments, career planning, and development of an individual employment plan that outlines the needs and goal of successful employment. Under WIA, career services were identified as core and intensive services and participants generally would follow through each level of service to receive training eventually. WIOA provides an individual receiving services in one-stop centers the opportunity to receive the service needed to help him/her meet his/her employment and career goals. WIOA clarifies that an individual does not need to follow a fixed sequence of services that may not be necessary to meet his or her needs.

Under WIOA, the Department classifies career services into two categories: Basic and individualized career services. This grouping is not designed to create barriers to training, but rather identifies the importance that these two types of career services can have in helping individuals obtain employment. Basic career services must be made available to all job seekers and include services such as labor exchange services, labor market information, job listings, and information on partner programs. Individualized career services identified in WIOA and described in these proposed regulations are to be provided by local areas as appropriate to help individuals to obtain or retain employment. Career and training Start Printed Page 56112services are more fully discussed in subparts A and B of this part.

Section 680.100 What is the role of the adult and dislocated worker programs in the one-stop delivery system?

Comments: A commenter expressed support for § 680.100 as proposed. In contrast, another commented that CEOs should not be considered one-stop partners. The commenter stated that CEOs are involved in the governance and oversight of the one-stop delivery system through the Board members that they appoint and so neither CEOs nor Board members should be involved in the operation of a one-stop delivery system.

Department Response: WIOA sec. 107 states that the CEO for the local area is the local grant recipient. WIOA sec. 107(c) provides for how CEOs are to be determined in the event that there are multiple units of local government in a workforce area. As the grant recipient for the adult and dislocated worker programs, the CEO or his/her designee is a required one-stop partner in the governance and delivery of services in the one-stop delivery system consistent with sec. 121(b)(1) of WIOA and 20 CFR part 678 (see Joint WIOA Final Rule). No changes have been made to the regulatory text in response to the comments.

Section 680.110 When must adults and dislocated workers be registered and considered a participant?

Comments: A one-stop center requested clarification on how registration can occur through an electronic submission. Specifically, this commenter asked whether eligibility can be determined based solely on an electronic submission. The commenter also requested clarification of the language in the preamble explaining that “minimal” assistance would trigger the need to register.

Department Response: State and local areas have the discretion to determine appropriate intake methods, which may include electronic and virtual means. Additionally, a service being provided to an individual electronically or virtually can be sufficient for the individual to be considered a “participant,” provided it meets the standards of the definition provided at 20 CFR 677.150(a) (see Joint WIOA Final Rule).

Comments: A few commenters agreed with the way in which the NPRM described participation for adult and dislocated worker involvement with WIOA services. Specifically, several commenter suggested that self-service and information service should be included as participation for the purposes of registering a person to measure performance.

In contrast, several commenters disagreed with the proposed approach to describing participant or participation. A few commenters said that “participant” was described too narrowly, cautioning that the NPRM could lead to denial of services for individuals in need of assistance. Some commenters recommended revisions to § 680.110(a) to describe a “participant” by referencing 20 CFR 677.150 rather than limiting it to those individuals who receive staff-assisted services (see Joint WIOA Final Rule). One commenter expressed support for this revision, explaining that removal of minimally assisted customers from metrics would potentially reduce investments in resource rooms, a self-service facility that provides job seekers internet-based job search opportunities that are required by today's employer.

Additionally, several commenters recommended revisions to § 680.110(b) to allow for the provision of WIOA services to individuals who are not participants. In contrast, one commenter recommended that paragraph (b) more broadly define those individuals who are not required to register and be designated as participants to include individuals receiving referral services.

Another commenter requested clarification on the distinction between a “staff assisted WIOA service” and “self service and informational activities.” This commenter stated that WIA regulations with similar language had caused analogous confusion. A one-stop center asked whether a basic workshop would be considered “informational services” or a career service for purposes of performance accountability. A commenter asked if there was a distinction between basic and individual career services as it relates to participation. Noting that the NPRM explicitly specifies the activities that will not count towards participation but does not specify the activities that will count, a commenter asked whether it is up to the State to determine which career services will place the individual into participation or performance calculations. Expressing confusion over the meaning of participant, a commenter requested a definition of participant, including a clear indication of whether registration or utilization of services was necessary to be considered a participant, and asked the Department to identify the term for clients that are not registered and not participants.

Several commenters stated that clarification is needed on where and when assessments and information collection efforts relevant to identify self-service individuals, reportable individuals, and participants will occur. Some commenters recommended that the Department provide a framework for how the designation of enrollment intertwines with career and training services, allowing maximum flexibility for States to design their approaches for both in-person and online services. In contrast, a commenter encouraged the Department to create a clear system that ensures a consistent approach across the States. Similarly, another commenter encouraged the Department to provide more details on the level/type of information required to be collected by individual and by required program titles to ensure data system integrity for reporting purposes.

A commenter encouraged the Department to require enrollment in WIOA title I programs to occur when an individual employment plan (IEP) is developed. A commenter recommended the point at which funds must be dedicated to the client for their employment or training needs as the appropriate trigger for enrollment.

Department Response: The Department made some non-substantive changes to align the definition of performance with 20 CFR 677.150(a)(3) (see Joint WIOA Final Rule). It also changed the text of § 680.110(a) to clarify when an individual is considered a “participant.” The Department is providing additional clarity in guidance on what services count as self-services or information-only services and activities. Further guidance may be provided to explain which services cause an individual to be considered a “participant.”

The distinction between reportable individual and participant is used for the purposes of reporting on performance, and does not have any impact on eligibility or service provision. Further information on performance is discussed in 20 CFR part 677 (see Joint WIOA Final Rule published in this issue of the Federal Register), and information on the collection and data systems is being provided through the Department's ICRs and guidance.

The Department notes that while an IEP will cause an individual to be considered a participant, there are other ways to qualify for participation because there is no sequence of services requirement in WIOA. An IEP is an individualized career service and can be provided under either title I of WIOA or under the Wagner-Peyser Act Employment Service (ES) (as amended by title III of WIOA). Individualized Start Printed Page 56113career services (of which an IEP is one) may be provided with Wagner-Peyser Act funds.

Comments: A few commenters recommended that § 680.110(c) be revised to require the collection of data from only those individuals actually receiving aid, benefits, services, or training.

Department Response: The Department made a technical correction at § 680.110(c), changing “Employment Opportunity” data to “EO” data because that is the data referred to in this section as defined in 20 CFR 675.300. The collection of Equal Opportunity (EO) data on every individual who is interested in being considered for WIOA title I financially assisted aid, benefits, services, or training is necessary to ensure compliance with WIOA sec. 188. The regulations governing WIOA sec. 188 can be found at 29 CFR part 38.

The point at which an individual has indicated “interest” in WIOA title I services is within the grant recipient's discretion; however, the recipient's request for and receipt of information triggers the accompanying responsibility to collect EO data at the same time. The EO data must be maintained in a manner that allows the individuals from whom the data was collected to be identified, and that ensures confidentiality. This responsibility is separate from, and might not arise at the same point in the process as, the registration responsibility.

Section 680.120 What are the eligibility criteria for career services for adults in the adult and dislocated worker programs?

Comments: A commenter stated that there is a discrepancy between the preamble and the proposed regulation creating confusion whether individuals who are basic skills deficient also have to be low-income. Similarly, a few commenters stated that priority should be given to low-income adults and public assistance recipients and individuals who are basic skills deficient, in accordance with WIOA sec. 134(c)(3)(E). One commenter recommended that priority should also be given to adults who lack a regionally accredited secondary education diploma or high school equivalent (HSE).

A commenter stated that the change from core and intensive services to career services as in proposed § 680.120 would place a burden on States and local areas to revise policy and procedures. This commenter also requested that the Department define “basic career services” and “individualized career services” and describe when participants get placed into training.

Department Response: WIOA sec. 134(c)(3)(E) provides a statutory priority for public assistance recipients, other low-income individuals, and individuals who are basic skills deficient. The priority for these populations is not a criterion for eligibility for services under this program; rather, it is a statutory emphasis on providing individualized career services and training services to these populations under this program. The Department refers readers to § 680.600, which governs the priority provisions of the adult program. No changes have been made to the regulatory text in response to the comments.

Individuals who are basic skills deficient are to be provided priority with funds for these adult services. Basic skills deficient is defined in WIOA sec. 3(5), and an individual who lacks a secondary education diploma or HSE may qualify based on this standard. Additionally, § 680.600 provides Governors and Local WDBs with the authority to designate other priority populations. Individuals who lack a secondary education diploma or HSE could be designated by a Governor or Local WDB under that authority.

Under WIA, priority with adult funds was to be provided in the event that funding was limited; that provision was removed from WIOA. Thus, priority and the policies and procedures for determining priority are statutory requirements for the WIOA title I adult program. The Department refers a commenter to 20 CFR 678.430 for definitions of “basic career services” and “individualized career services” (see Joint WIOA Final Rule).

In addition, when participants are to be placed into training is a decision that must be made consistent with WIOA sec. 134(c)(3) and § 680.210.

Section 680.130 What are the eligibility criteria for career services for dislocated workers in the adult and dislocated worker programs?

Comments: Commenters requested clarification on the meaning of “unlikely to return to a previous industry or occupation,” and what is meant by “unemployed as a result of general economic conditions in the community in which the individual resides or because of natural disasters.”

One commenter encouraged the removal of the “unlikely to return” to their previous industry/occupation criteria from the definition of dislocated worker, because it hinders the ability to serve individuals that have been laid off or terminated.

Further, a commenter stated that the process for determining eligibility as a dislocated worker through receipt of unemployment insurance or exhaustion of unemployment insurance currently is a cumbersome process. This commenter recommended that one-stop or the ES staff have real time access to the unemployment insurance database for verification of eligibility of dislocated workers.

Department Response: WIOA defines “dislocated worker” under WIOA sec. 3(15), and requires the individual be “unlikely to return to a previous industry or occupation” under WIOA 3(15)(A)(iii). The regulation maintains this statutory definition. The Department has added regulatory text at § 680.130(b)(3) allowing for Governors and Local WDBs to establish policies and procedures for one-stop centers to use in determining when an individual is unlikely to return to his or her previous industry or occupation. Any policy or procedure must be consistent with § 680.660, which provides that separating service members meet this criterion.

The Department may utilize guidance and technical assistance to assist States and local areas in determining when an individual is “unlikely to return to a previous industry or occupation” or when an individual is “unemployed as a result of general economic conditions in the community in which the individual resides or because of natural disasters.” No other changes have been made to the regulatory text in response to the comments.

Section 680.140 What Workforce Innovation and Opportunity Act title I adult and dislocated worker services are Local Workforce Development Boards required and permitted to provide?

Comments: A commenter requested a definition of how Local WDBs are allowed flexibility when providing services with adult and dislocated worker funds. This commenter also stated that there would be a burden on States to track local flexibility of funds. Another commenter asked whether subgrantees would need to report expenditures for job seeker services, employer services, or coordination activities, as listed in proposed § 680.140(b)(1) through (3).

Department Response: Section 680.140 describes the required and permissible employment and training activities with WIOA title I adult and dislocated worker funds. Paragraph (a) of § 680.140 describes the required activities a Local WDB must provide, Start Printed Page 56114which includes career and training services. These services are required under WIOA sec. 134(c)(2) and (3). Paragraph (b) lists the permissible activities a Local WDB may provide. Local WDBs have discretion in what permissible activities and services they provide. All expenditures must be tracked and documented by the State and Local WDB to ensure the proper administration of these funds. No changes have been made to the regulatory text in response to the comments. Section 680.140(b) is further discussed below.

Comments: A few commenters expressed support for the various provisions within proposed § 680.140 covering services for individuals with disabilities and recommended additional language be added to the regulation to urge Local WDBs to focus their optional services on this population because these services are permissive and not mandatory. Two commenters also encouraged the Department to reference veterans' priority of service in § 680.140(a).

A couple of commenters encouraged the Department to mention bridge programs explicitly, which are programs that prepare individuals with limited academic or English skills to succeed in postsecondary education and training programs, as an acceptable activity under WIOA, and to encourage their use in the Final Rule. Another commenter recommended that referrals by one-stop centers to regionally accredited secondary-level educational programs providing entry-level workforce preparation and/or postsecondary education and training activities be included as a basic service and counseling service.

Department Response: The commenters above refer to the permissible local employment and training activities under WIOA sec. 134(d) and § 680.140(b). Paragraph (b)(1) of § 680.140 describes the permissible “job seeker services” that may be provided. The one-stop delivery system plays a vital role in providing career and training services to individuals with disabilities, as well as the customer supports that may be provided to help individuals with disabilities to navigate multiple services. The Department understands the commenters' desire to make these services to individuals with disabilities mandatory; however, WIOA states that these are permissible activities under WIOA sec. 134(d). The Department does encourage Local WDBs to provide these services for individuals with disabilities, veterans, and other individuals with barriers to employment. No changes have been made to the regulatory text in response to the comments for § 680.140(b)(1)(i) through (iv). The citation to transitional jobs at § 680.190 has been moved from § 680.830 to reflect the Department's position that transitional jobs are a type of work experience, and thus a career service.

Regarding the reference to veterans' priority of service, the regulation at § 680.650 ensures priority of service for veterans in all Department-funded employment and training programs.

The Department notes bridge programs may be an appropriate activity for individuals to obtain meaningful employment; however, bridge programs are not discussed in WIOA and are not included in the regulatory text.

Comments: A commenter recommended that career services for self-employed adults and dislocated workers be defined to include industry sector and/or entrepreneurship training for individuals who wish to remain self-employed.

Department Response: The Department does not propose to mandate any particular career services for self-employed adults and dislocated workers; these decisions are best made locally based on individual need. Decision-making about career and other services and training should be informed by information about in-demand industry sectors and occupations. The Department notes that entrepreneurship training is allowed for adults and dislocated workers under WIOA sec. 134(c)(3)(D).

Comments: A commenter requested clarification regarding employer services and the relationship to career services provided to job seekers versus employer services provided to businesses. This commenter explained that services provided to employers do not appear to be considered a career service because there would be no specific job seeker to register. Furthermore, the commenter stated that delivery of employer services does not need to be procured for a one-stop center, but can be designated by the local elected officials.

Several commenters recommended that to serve both job seekers and employers effectively, the role of business services outreach staff should, in addition to supporting the priorities of the Local WDB, be focused on the goals of the individual WIOA titles. One commenter sought clarification on whether custom training, on-the-job training (OJT), and incumbent worker training were acceptable services to be offered under the business services function. This commenter also urged the Department to clarify the regulations to make clear that the operation of business services by the Local WDB itself and its staff are acceptable.

A commenter encouraged the Department to define “employment generating activities,” which are prohibited by the proposed regulation.

Department Response: Business and employer services are a permissible local activity under § 680.140(b)(2); services to employers are not considered a career service that is a required activity under § 680.140(a). No changes have been made to the regulatory text in response to the comments at § 680.140(b)(2).

The Department acknowledges the comments about defining “employment generating activities,” and has addressed them in § 683.245 of the preamble and regulations. The Department notes that employer services described in § 680.140(b)(2) must not be used to encourage business relocation to the local area from another State or local area.

Comments: One commenter stated that it would be very difficult, if not impossible, to determine accurately when implementing a pay-for-performance training contract the amount of administrative funds that were spent on this specific activity because administrative funds may be pooled and that pooling includes the youth program. This commenter asserted a similar concern for percentage limitations associated with incumbent worker training (§ 680.800), transitional jobs (§ 680.820 in the NPRM; § 680.195 in this Final Rule), and work experience activities in the youth program (§ 681.590).

Department Response: WIOA allows Local WDBs to set aside and use up to 10 percent of their adult and dislocated worker funds on WIOA Pay-for-Performance contract strategies (see WIOA sec. 134(d)(1)(A)(iii) and § 683.500), up to 20 percent on incumbent worker training (see WIOA sec. 134(d)(4)), and up to 10 percent on transitional jobs (see WIOA sec. 134(d)(5)). See also § 680.140(b)(1)(v), (b)(4), and (b)(8). Administrative activities necessary to initiate or procure Pay-for-Performance contract strategies, incumbent worker training, and transitional jobs must be consistent with § 683.215, which discusses how to determine whether an activity is administrative or programmatic for purposes of WIOA. If the activity would be considered programmatic under § 683.215, then the cost would be subject to the caps discussed above. If the activity would be considered administrative under § 683.215, it may be paid for out of the Boards' usual Start Printed Page 56115administrative funds, and it is not subject to the caps. Therefore, the Board would not need to specifically account how much of the administrative funds are spent on these particular programs.

Section 680.150 What career services must be provided to adults and dislocated workers?

Comments: A commenter stated that the definition of career services should be clarified to include pre-screening, application assistance, and colocation of application assistance services for the programs for which career services one-stop centers must provide information and referrals.

Another commenter recommended that referrals to regionally accredited secondary-level educational programs providing entry-level workforce preparation and/or postsecondary education and training activities be included as part of basic services and counseling services. A commenter requested clarification regarding whether alternative secondary school (formerly General Education Diploma [GED]) preparation is considered a career service or a training service.

One commenter recommended that § 680.150(c) be revised to refer to activities provided for a “participant” and not a “registered participant” to avoid confusion resulting from “registrants” and “participants” being two separately defined terms. Another suggested that the Department revise the regulations to allow participants to opt out of follow-up services, as was allowed under the WIA regulations. A few commenters requested clarification on the meaning of “follow up services as appropriate.”

A commenter recommended that supportive services such as tools, uniforms, bus passes, or childcare, be allowed for up to 1 year after the exit date of adults or dislocated workers, saying some individuals may need a little additional help to keep a job that may not have been known when the individual initially took the job.

A commenter association recommended the addition of new paragraphs within § 680.150 to (1) specify that career services can be provided by any of the one-stop partners, as opposed to having to be provided by a WIOA title I partner; and (2) create a framework by which prior interviews, evaluations, and assessments of participants can be used for purposes of evaluating eligibility for career services.

Department Response: The Department has added “basic” before “career services” to ensure consistency with 20 CFR 678.430(a) in how these services are described (see Joint WIOA Final Rule). No changes have been made to the regulatory text in response to the comments at § 680.150(b).

Career services are defined in 20 CFR 678.430 (see Joint WIOA Final Rule) and WIOA sec. 134(c)(2). Pre-screening, application assistance, referrals, and other information all would qualify as basic career services under 20 CFR 678.430(a). Basic career services under § 680.150(a) must be made available and are key to ensuring high quality services throughout the one-stop delivery system.

The Department considers adult education and literacy activities (see WIOA sec. 3(3)) that lead to a secondary school diploma to be a training service. An entity that offers a program that leads to a secondary school diploma or its equivalent can be eligible as a State eligible training provider (ETP), see § 680.420. The Department notes, however, that if title I adult and dislocated worker funds are used for these activities, they must be done concurrently or in coordination with any training activities in WIOA sec. 134(c)(3)(D)(i)-(vii). The Department has added regulatory text to clarify this point at § 680.350.

The Department agrees with the suggestion that “registered participant” be changed to “participant” and has made this change in the regulatory text. The Department has added “as determined appropriate by the Local WDB” to proposed § 680.150(c) to clarify how the determination is made to provide follow-up services. This addition is consistent with the statutory text at section 134(c)(2)(xiii), which states that follow-up services are provided “as appropriate.”

The Department declines to make any change in regulatory text to allow the provision of supportive services for adult and dislocated workers for up to a year after exit; section 134(d)(2)(A) of WIOA requires that adults and dislocated workers must be participants to receive supportive services. The Department also declines to modify the regulatory text about the provision of career services. Career services are defined in 20 CFR 678.430, which is the one-stop section of the joint regulation, and they may be provided by any partner program. The Department has decided that the use of prior interviews, evaluations, and assessments of participants for the purpose of eligibility is to be determined by State and local policies.

Section 680.160 How are career services delivered?

Comments: A few commenters expressed opposition to a requirement that Local WDBs obtain a waiver before providing career services. One of these commenters stated that the NPRM requirement that Local WDBs receive a waiver before being allowed to deliver career services would be a major change and a significant burden because getting a waiver is not an easy process. This commenter recommended that the Department provide States with an easier, quicker process for requesting waivers.

A commenter recommended that, at a minimum, a waiver request should address: (1) Why the waiver is necessary, (2) how granting the waiver would provide service to the affected area superior to that which would have been provided as the result of a competitive process; (3) why the prospective designee is the best choice as the local one-stop operator or provider of career services; and (4) what process was used in making the determination (including the specific data that supports it).

Department Response: For a Local WDB to provide career services, it must meet the requirements in WIOA sec. 107(g)(2), which allows for Local WDBs to be providers of career services of title I career services for adult and dislocated workers with the agreement of the CEO in the local area and the Governor. Although there is a waiver requirement for Local WDBs to provide training services under WIOA sec. 107(g)(1)(B) and § 679.410(c), which documents how Local WDBs may apply for a waiver with the State, there are no waiver requirements for Local WDBs to provide career services. No change is made in the regulatory text in response to these comments.

Section 680.170 What is the individual employment plan?

The Department has moved the proposed § 680.180 to § 680.170, so that the work experience regulation that was proposed as § 680.170 can be renumbered as § 680.180, closer to the transitional jobs provision at § 680.190. In § 680.170, the regulation also replaces the words “case manager” with “career planner” to be more consistent with the nomenclature used in WIOA.

Comments: A few commenters requested clarification on the role of IEPs for all services categories of individuals and programs and urged the Department to ensure consistency at the program enrollment level, including when an IEP is required to be started/Start Printed Page 56116completed and some flexibility in serving the general public job seeker. Another commenter asked whether: (1) The development of an IEP requires participation under WIOA title I, (2) this service can be delivered by ES staff, or (3) this determination can be made at the local level.

Department Response: The Department strongly encourages the use of IEPs as a tool in the career planning process. However, there is no sequence of service requirement in WIOA and determining when an IEP is appropriate for individuals is a local decision. The Department encourages Local WDBs to develop policies and procedures for the appropriate use of IEPs.

An IEP is an individualized career service and can be provided under either WIOA title I or the ES (as amended by WIOA title III and as described in § 652.206), which is decided locally and is a part of the Memorandum of Understanding (MOU) governing the role of the ES in the one-stop delivery system.

Section 680.180 What is an internship or work experience for adults and dislocated workers?

The Department has moved this proposed § 680.170 to § 680.180, so that this work experience regulation is renumbered to be closer to the transitional jobs provision at § 680.190.

Comments: A commenter stated that it is important that WIOA participants who are placed in work experience or internships are fully protected by the nation's wage and hour laws and regulations. This commenter recommended that the Department revise proposed § 680.170 by deleting the language allowing for paid and unpaid work experiences and adding a cross reference to the U.S. Department of Labor Wage and Hour Division (WHD) regulations and guidance concerning unpaid internships. Similarly, a commenter requested clarification on when work experience can be unpaid, including assessment of the implications of unpaid work as a potential violation of the Fair Labor Standards Act.

Department Response: The Department notes the comments and has added language to the regulatory text stating that internships and work experiences under WIOA may be paid or unpaid, as consistent with other laws, including the Fair Labor Standards Act. The Department will continue to use guidance and technical assistance to assist grantees in determining how WIOA intersects with other laws.

Comments: A commenter encouraged the Department to maintain a broad definition of work experience that is applicable to all core programs, reasoning that work experience is an invaluable tool to engage businesses and to support job seekers in overcoming barriers by gaining experience that leads to unsubsidized employment.

Department Response: The Department agrees with the commenter's suggestion and makes no change in the regulatory text.

Comments: A commenter asked whether there were limitations on the percentage of funds to be utilized for paid work experience.

Department Response: Work experiences may be paid or unpaid, consistent with the Fair Labor Standards Act and other applicable laws. Transitional jobs is a type of paid work experience described in §§ 680.190 and 680.195. A Local WDB may use up to 10 percent of funds allocated to the local area under section 133(b) of WIOA to provide transitional jobs. (Sec. 134(d)(5) of WIOA.) Transitional jobs also are subject to certain eligibility criteria along with comprehensive career and supportive services requirements. In addition to transitional jobs, other work experiences may be paid; to be eligible for these work experiences an individual must meet adult and dislocated worker program eligibility and there is no requirement for comprehensive career and supportive services. These other types of paid work experiences are not subject to a statutory funding cap.

Comments: Another commenter encouraged the Department to allow Local WDBs to determine the appropriate timeframe for internships and/or work experience based upon multiple factors, including industry standard and/or practice and the sector-based accepted length of time needed to acquire one or more relevant skills and/or industry-recognized credentials.

Department Response: The Department has set no minimum or maximum duration requirements for work experiences. These factors may be used by Governors and Local WDBs in making such determinations.

Section 680.190 What is a transitional job?

Comments: Many commenters asked for clarification of “transitional jobs” versus “work experience;” including exceptions to the 10 percent cap on transitional jobs, the similarities between transitional jobs and work experiences, and distinctions from OJT.

Another commenter expressed concern that the distinctions between transitional jobs and OJT contracts in the NPRM are not clear enough and recommended that the Department expand on the differences in the Final Rule several ways: (1) Unlike OJT, the program provider should act as employer of record and assume all responsibilities of the employer-employee relationship; (2) transitional jobs require a 100 percent wage subsidy, while OJT subsidize up to 75 percent of wages; (3) funds for transitional jobs support all components of the service strategy; (4) transitional jobs should be targeted at those job seekers most in need of intervention; and (5) transitional jobs may be structured as offsite placements with private-sector, public-sector, or nonprofit employers or as in-house social enterprise or work crew placements.

Department Response: The Department agrees with the recommendation of some commenters and has added language to § 680.180, which defines what an internship or work experience is for adults and dislocated workers and clarifies that transitional jobs are considered to be a type of work experience. The Department also has moved proposed §§ 680.830 and 680.840 to §§ 680.190 and 680.195 respectively.

The Department agrees with the comments made about the OJT contracts, i.e., that in transitional jobs programs the program provider may act as the employer of record; however, there may be a joint employment relationship between the worker, the firm in which the worker is placed, and the program provider. The Department has added regulatory text defining transitional jobs as providing an individual with work experience that takes place within the context of an employee-employer relationship, in which the program provider may act as the employer, and with an opportunity to develop important workplace skills. The Department will provide further guidance and technical assistance on transitional jobs programs, including best practices.

Comments: Some commenters asked the Department to define “inconsistent work history.” One of these commenters also requested a substantive quantifiable definition of the term “chronic unemployment.” One commenter requested that the Department define “transitional jobs” and asked for clarification of the required funds for career services and supportive services that must be provided with transitional jobs. A couple of commenters recommended that the Department strengthen the definition of “transitional jobs” with further guidance and technical support to States and localities. These commenters also Start Printed Page 56117recommended that the Final Rule reiterate that the term means “wage-paid” subsidized employment consistent with other definitions in Federal law and agency guidance. Similarly, another commenter recommended that the Department define “transitional jobs” as “time-limited wage-paid experiences that are subsidized for individuals with barriers to employment who are chronically unemployed or have an inconsistent work history.”

Department Response: The Department has decided that the definitions of “inconsistent work history” and “chronic unemployment” should be left to the Local WDBs and has added language to the regulatory text in § 680.190 to reflect this. The Department encourages Local WDBs to utilize information such as an individual's labor market history, unemployment status, durations of unemployment, long-term unemployment, and other factors that the Local WDB may determine appropriate for defining these terms. The Department has added language to better define transitional jobs, including adding the terms “time-limited” and “wage-paid” in § 680.190. WIOA requires transitional jobs to include both comprehensive and supportive services. Local WDBs determine which comprehensive and supportive services are appropriate for each individual.

Comments: One commenter recommended that the Department and the Internal Revenue Service (IRS) identify an acceptable means of paying a training stipend that does not trigger the Patient Protection and Affordable Care Act (PPACA) regulations. Another commenter recommended specific language to amend proposed § 680.830 (as explained above, renumbered in the Final Rule to § 680.190) to articulate that people who participate in transitional jobs are not counted toward labor participation rates, that is, not counted as “employed persons” by the BLS.

Further, this commenter and others asserted that workers in transitional jobs should be classified as employees rather than contractors or trainees and should be subject to protections such as wage and hour laws, minimum wage laws, unemployment insurance, and workers compensation.

Department Response: The ACA employer responsibility provisions are governed by the IRS and any training and employment agreements the grantees make may be subject to those provisions. The Department encourages grantees to utilize IRS resources and guidance when determining those responsibilities. The Department will issue subsequent guidance and technical assistance to help identify appropriate IRS resources and guidance. Transitional jobs and other work-based training often establish an employer-employee relationship that must follow applicable laws and regulations that govern such relationships, including: Wage and hour laws, minimum wage laws, unemployment insurance, and workers' compensation.

The suggestion that transitional jobs not count in the labor force participation rate that is captured by the Current Population Survey that the BLS administers is not germane to WIOA or these regulations.

Comments: A couple of commenters recommended that transitional jobs programs be targeted at populations with multiple employment barriers and people with sporadic, problematic and inconsistent work histories within the 2 years prior to engaging in the program. These commenters recommended targeting people experiencing homelessness; opportunity youth; people reentering communities from prison and those with criminal records; long-term recipients of TANF, SNAP and other public benefits; low-income noncustodial parents; and other chronically unemployed people.

Some commenters recommended that allowable use of funds should include: Wages paid to transitional jobs program participants during their subsidized job placement; funding for employment-related case management and support such as transportation vouchers and clothing allowances; funding for job retention services for no fewer than 6 months after placement in a subsidized job; supporting integration of literacy, adult basic education, training, and career advancement resources; and supporting program capacity-building needs, such as adding additional staff and/or infrastructure improvements as appropriate.

Department Response: The Department considers these recommended criteria to be appropriate factors that a Local WDB may use when determining who is eligible for a transitional job and which groups to target. Thus, no change is made in the regulatory text. The Department will provide further guidance and technical assistance as appropriate.

Allowable uses of transitional jobs funds include wages to the participant and supportive services such as transportation vouchers. The Department encourages local staff to align services and provide the appropriate mix of services to meet individuals' needs. Staff and infrastructure improvements are not allowable uses of transitional jobs funds.

Comments: Commenters asserted that transitional jobs are typically 3 to 9 months and seldom longer than 1 year. They recommended that transitional job arrangements include the following in order to avoid displacement of incumbent workers: Strong prohibitions against substitution and displacement; protections for recently laid-off employees, workers on leave, and striking workers; and preservation of recall rights under collective bargaining agreements for union employees of transitional job employer partners.

Department Response: The regulations at § 683.270 contain safeguards against displacement of employees that are applicable to WIOA title I employment and training activities, including transitional jobs. The Department also added § 680.840, which clarifies that funds for work-based training and work experiences may not be used to fill openings that resulted from a labor dispute.

Comments: Commenters recommended several ways to maximize the likelihood that workers are retained in unsubsidized employment after a transitional job program: (1) Monitoring participants and providing retention services for at least 6 months following unsubsidized job placement; (2) regular, frequent follow-up contacts by retention specialists; (3) ongoing retention-focused activities such as workshops, peer learning groups and support groups; (4) retention incentives in the form of monetary bonuses or nonmonetary incentives such as child care services; and (5) reemployment services for workers who are terminated from unsubsidized employment. The commenters also recommended several specific structure elements and polices that they asserted are essential: (1) A flexible length of time in subsidized employment based on the skill development needs of the individual; (2) subsidized employment offered should be no fewer than 20 hours per week and workers should be allowed to remain in the subsidized employment until unsubsidized employment slots are available for transition; (3) employers should support participant development and skill building; and (4) personal contact and consistent follow-up should be provided among program staff, participants, and employment supervisors, as well as opportunities to work with a case manager for the participant to address serious issues if they arise.

Department Response: The Department declines to propose a Start Printed Page 56118minimum or maximum duration for transitional jobs that could create unnecessary restrictions that may prevent an individual from obtaining unsubsidized employment. The Department also declines to create a one-size-fits-all approach to transitional jobs, and considers these decisions are best made by the Local WDB and the individual's career planner. No changes have been made to the regulatory text in response to these comments. The Department will address these issues further through guidance and technical assistance.

Comments: A commenter recommended that proposed § 680.830 (as explained above, renumbered in the Final Rule to § 680.190) be amended to refer to “time-limited work experience” to be consistent with the language and intent of WIOA sec. 134(d)(5).

Department Response: The Department agrees with this comment and has amended the language in § 680.190 to include the phrase “time-limited work experience.”

Comments: Another commenter asked what is the employer reimbursement rate and contract length?

Department Response: The employer reimbursement rate is to be determined by the Local WDB and can be up to 100 percent. The Department encourages Local WDBs to work with employers that are willing to provide a certain percentage of the cost of the transitional job.

Section 680.195 What funds may be used for transitional jobs?

Comments: Some commenters requested clarification on the 10 percent limit on use of funds. In particular, some commenters asked if the 10 percent limit would apply to work experience as an activity. A State WDB asked whether all adult and dislocated workers transitional job work experience is subject to the 10 percent cap.

Department Response: The Department considers transitional jobs to be a targeted service that includes comprehensive career and supportive services. Non-transitional job work experiences have no requirement that they must be paid or unpaid, and they do not have the same requirements for comprehensive career and supportive services. They also are not subject to the 10 percent funding cap that transitional jobs are. The Department has added text to the regulatory text to further clarify the 10 percent cap and that transitional jobs, defining them as a certain type of work experience which is targeted to a specific population that is: “chronically unemployed” or has an “inconsistent work history.”

Comments: A commenter asked for clarification on what “comprehensive career services” means when required to be part of transitional jobs, and asked if it includes basic career services, individualized career services, or both, and if there is a sequence of services before service can be provided.

Department Response: Comprehensive career services may include both basic and individualized career services and are based on the needs of the participant. Comprehensive career services and supportive services, which are required to be provided as part of any transitional jobs strategy, are not subject to the 10 percent cap described at § 680.195. However, the Department is providing flexibility to allow for these services to be provided with the funds set-aside for transitional jobs. Local areas determine which comprehensive and supportive services are appropriate for each individual. There is no sequence of service required.

3. Subpart B—Training Services

Training services are discussed at §§ 680.200 through 680.230. WIOA is designed to increase participant access to training services. Training services are provided to equip individuals to enter the workforce and retain employment. Training services may include, for example, occupational skills training, OJT, registered apprenticeship (which incorporates both OJT and classroom training), incumbent worker training, pre-apprenticeship training, workplace training with related instruction, training programs operated by the private sector, skill upgrading and retraining, entrepreneurial training, and transitional jobs. Training services are available for individuals who, after interview, evaluation or assessment, and case management are determined to be unlikely or unable to obtain or retain employment that leads to self-sufficiency or higher wages than previous employment through career services alone. The participant must be determined to be in need of training services and possess the skills and qualifications to participate successfully in the selected program. It also must be determined that they are unlikely or unable to retain employment that leads to self-sufficiency or higher wages. Some participants may need additional services to assist their vocational training, such as job readiness training, literacy activities including English language training, and customized training.

Comments: Comments generally were supportive of the Department's flexible approach to the delivery of training services for the WIOA title I adult and dislocated worker programs.

Department Response: The Department has updated and clarified language regarding how registered apprenticeship and other apprenticeships may be utilized as a training solution for adult and dislocated worker customers.

Section 680.200 What are training services for adults and dislocated workers?

Comments: Two commenters strongly recommended that local flexibility be preserved as it relates to determining the appropriate availability, structure, and mix of training services that are offered locally to individuals and employers. Another commenter encouraged the Department to avoid restrictive standards and allow customization of varying training practices because there is slower adoption among small businesses of newer best practices. This commenter stated that this flexibility is particularly important when considering the effectiveness of competency-based training versus number of hours trained.

Department Response: The Department agrees that it is important to maintain local flexibility to make decisions about the appropriate mix of career and training services and has provided local flexibility in making those determinations.

Comments: A few commenters provided input on pre-apprenticeships and non-registered apprenticeships. One commenter encouraged the Department to add more flexibility into the regulations as they relate to pre-apprenticeships and non-registered apprenticeships so that manufacturers can develop and use programs that best meet their unique needs. Another commenter cautioned the Department not to discriminate against non-registered apprenticeships because many smaller employers rely on these types of programs. One commenter recommended that employer-sponsored craft training programs that are not registered, but that lead to an industry-recognized credential, should have an automatic initial ETP determination and then, be required to satisfy continued eligibility requirements after 1 year.

Department Response: WIOA sec. 122(a)(2)(B) provides automatic qualification for registered apprenticeship programs on eligible training provider lists (ETPLs) and WIOA in general provides an overall emphasis on registered apprenticeship Start Printed Page 56119programs throughout the one-stop delivery system. The Department has used this emphasis to highlight the unique flexibilities the one-stop delivery system has in making use of registered apprenticeship programs to provide training services, including Individual Training Accounts (ITAs) and OJT. This in no way restricts pre-apprenticeship programs and non-registered apprenticeship programs from being an ETP according to the criteria in WIOA sec. 122(a). These training providers, in order to receive ITA payments, must go through the same eligibility criteria as other training providers on the ETPL. The Department considers programs that lead to an industry-recognized credential as valuable providers of training, and these programs are welcome to apply to become ETPs. The Department declines to make changes to the regulatory text in response to these comments.

Comments: One commenter encouraged the Department to allow adult education providers to provide workforce preparation rather than training in sector work. The commenter stated that if community-based adult education providers were required to offer sector training, most of these providers would have to be completely transformed, would require significant capacity boosts, would be less likely to reach the hard-to-serve, and would have drastically reduced enrollment.

One commenter requested clarification on the role of adult basic education.

Department Response: Under WIOA sec 134(c)(3)(D)(x), title I adult and dislocated worker funds may be used to support adult education and literacy activities, provided concurrently or in combination with other training services. The Department has added regulatory text clarifying this use of WIOA title I adult and dislocated worker funds in § 680.350. This regulation involving appropriate uses of adult education and literacy activities only applies to WIOA title I adult and dislocated worker funds.

Comments: A commenter expressed support for having both OJT and classroom training available to adult and dislocated workers. Two commenters supported the inclusion of integrated English literacy/civics education programs in WIOA. These commenters recommended that the Departments of Labor and Education provide diverse examples of how such programs may be designed, including ways in which they may represent components of sector partnerships and/or career pathways initiatives, and how they may facilitate the economic, linguistic, and civic integration of participants.

Department Response: The Department of Labor will work with the Department of Education to provide additional guidance and technical assistance on sector partnership and career pathways initiatives under WIOA, including how to integrate programs such as those the commenters highlighted.

Comments: One commenter described the benefits of entrepreneurship training and encouraged the Department to revise performance indicators that would create a barrier to the inclusion of entrepreneurship training in the WIOA public workforce system.

A few commenters requested clarification on what constitutes entrepreneurial training as cited at sec. 134(c)(3)(D)(vii) of WIOA.

Department Response: Entrepreneurial training is an allowable training activity, and the Department will issue guidance and technical assistance to support its use and to address performance accountability. Additionally, the Department has addressed instances where quarterly wage records are not traditionally available for performance accountability purposes, as may be the case where participants have received entrepreneurial training, in 20 CFR 677.175 (see Joint WIOA Final Rule).

Comments: Two commenters recommended that the regulations explicitly recognize the need for direct support professionals to address the growing “direct support worker crisis”.

Department Response: WIOA sec. 108(b), which lists the required contents of local plans, states that the plans must include an analysis of existing and emerging in-demand industry sectors and occupations including the employment needs of employers in those sectors and occupations. Training programs for WIOA title I adult and dislocated worker programs are to be linked to in-demand industries and occupations in the local plan. The Final Rule does not explicitly recognize any specific industry or occupation needed to meet current workforce needs because these needs may change and often are based on State and local labor markets.

Comments: One commenter suggested that the regulations should better articulate the important role for digital literacy instructions, reasoning that these skills are critical to job advancement as well as educational credentials, including high school equivalency diplomas. Additionally, this commenter urged the Department to adopt a flexible framework as it relates to the integration of occupational skills training, which the commenter stated should include a student-centered approach in which co-enrollment in workforce education programs be optional rather than required.

Department Response: The Department considers digital literacy to be a pre-vocational service or a workforce preparation activity, both of which are considered to be individualized career services and not training services. The Department agrees that digital literacy is an important skill to succeed in the 21st century workforce, but considers it to be a service that may be made available based on individual need as determined by the local area. While WIOA encourages program alignment, and co-enrollment is one way to align service delivery, the Department does not require co-enrollment across programs.

Comments: A commenter suggested that the Department provide the list of training services found in WIOA in the regulations rather than simply referencing the statutory citation.

Department Response: The Department agrees with the recommendation and has adjusted the regulatory text of § 680.200 to include the list of training services provided in WIOA sec.134(c)(3)(D).

Comments: Commenters requested clarification on whether alternative secondary school (formerly GED) preparation is considered a career service or a training service.

Department Response: The Department considers a program that leads to a secondary school diploma to be a training service. A program that leads to a secondary school diploma or its equivalent can be eligible as a State ETP, see § 680.420.

Section 680.210 Who may receive training services?

Comments: A commenter asked who would be responsible for determining what constitutes self-sufficiency when determining who may receive training services under proposed § 680.210(a)(1).

Department Response: Under WIOA sec. 134(a)(3)(A)(xii), States may use statewide funds reserved by the Governor for adopting, calculating, or commissioning for approval an economic self-sufficiency standard for the State that specifies the income needs of families, by family size, the number and ages of children in the family, and sub-State geographical considerations. Under WIOA sec. 134(d)(1)(A)(x), local areas may use employment and training funds to adjust the State standard for local considerations, or can adopt, calculate, or commission for approval a Start Printed Page 56120self-sufficiency standard for the local area that specifies the same factors required of the State standard. Under WIOA sec. 134(c)(3)(A)(i) individuals who receive training must be unlikely or unable to obtain or retain employment that leads to economic self-sufficiency or wages comparable to or higher than wages from previous employment through career services. Additionally, they must be in need of training services to obtain or retain employment that leads to economic self-sufficiency or wages comparable to or higher than wages from previous employment. The one-stop center is responsible for determining if an individual meets the self-sufficiency standard set by this process.

Comments: A commenter requested clarification about the division of responsibilities between one-stop centers and local service providers, including clarification on who is responsible for determining who can receive training services.

Department Response: The Department considers the ultimate responsibility for determining who can receive training services to rest with the Local WDB. However, through the service procurement process and other arrangements established through the local MOU, the board may delegate those responsibilities to the one-stop center or local service providers.

Comments: A commenter disagreed with the language in proposed § 680.210(a) that indicates that a determination needs to be made that the training will result in receipt of wages higher than wages from previous employment, reasoning that economic conditions can make this difficult.

Department Response: The Department notes that § 680.210(a) mirrors the requirements for title I adult and dislocated worker services found in WIOA sec. 134(c)(3)(A), and that training that leads to a “comparable wage” also is allowed for individuals to receive training services. No changes have been made to the regulatory text in response to the comments.

Comments: A commenter recommended that the Department make efforts to inform employers of the availability of training services to assist workers on short-term or long-term disability programs.

Department Response: The Department considers this to be an example of an appropriate business or employer service that may be provided through the one-stop delivery system. While the Department will not add language to the regulatory text mandating specific employer services, the Department does recognize the importance of ensuring quality services for individuals with disabilities and will utilize guidance and technical assistance to ensure best practices in serving businesses and individuals with disabilities.

Comments: A commenter suggested that the regulations should direct one-stop centers to take into account older workers' different training needs and lesser access to financial aid, and make sure that older workers are not discriminated against in access to WIOA-funded ITAs.

Department Response: Older workers are identified as a target population for WIOA services, based on their inclusion in the definition of individuals with a barrier to employment in WIOA sec. 3(24). The Department will issue guidance and technical assistance on best practices in providing career and training services to older workers.

Section 680.220 Are there particular career services an individual must receive before receiving training services under the Workforce Innovation and Opportunity Act?

Comments: One commenter stated that there should be no required sequence of services prior to providing training services to allow more flexibility in meeting the needs of customers. Another commenter asked whether there is a frequency rate permitted to bypass career services and whether bypassing career services before training was considered to be an exception.

One commenter requested further guidance and direction on how Local WDBs should document the circumstances that justify determinations that training services should be provided.

Department Response: There is no sequence of service requirement and therefore, no requirement that career services must be provided before training services. Section 680.220(b) states, if training services are provided without career services, the Local WDB must document the circumstances that justified its determination to provide training without career services. Eligibility for training must be determined by an interview, evaluation, or assessment, and career planning or any other method through which the one-stop partner or partners can obtain enough information to make an eligibility determination for training services. Paragraph (b) of § 680.220 requires a case file that includes a determination of need for training services, based on the criteria discussed in § 680.220(a). There is no frequency requirement; the need for training services should be determined prior to their provision. There have been no changes to the regulatory text in response to these comments.

Comments: Several commenters requested clarification as to how far back an assessment could have been conducted to satisfy the prerequisite for training services.

Department Response: The Department does not mandate a certain length of time that previous assessments may go back; however, the Department expects that the previous assessments must be recent. The Department recommends that Governors and Local WDBs develop policies for the use of recent assessments that are appropriate for the individual and the one-stop center. The recent assessment must have sufficient information to make an eligibility determination for training services.

Comments: A commenter recommended replacing the references to “eligibility” and “eligible” in proposed § 680.220(a) with “determined appropriate,” “suitable,” or “ability to benefit” to make it clear that this is not an additional eligibility determination beyond the eligibility determination conducted in § 680.110.

Department Response: WIOA sec. 134(c)(3)(A) refers to “eligibility” for training services and this language is incorporated in the regulatory text. The Department recognizes that there are two types of eligibility—eligibility for program services and eligibility for training services. An individual must meet program service eligibility to be considered for training service eligibility.

Comments: A commenter stated that the proposed steps required before a participant can receive training are appropriate for a customer who is in career transition, but questioned the appropriateness of the path where an employed worker is in need of skills upgrade to achieve economic self-sufficiency.

Another commenter encouraged the addition of a provision that training for jobs that fall below economic self-sufficiency standards also must include ongoing training post-hire for career ladders within the industry and take into consideration other factors including benefits, retirement, vacation, and education that can mitigate and improve lower wage jobs.

Department Response: The steps before a participant can be determined eligible for training services in the regulatory text are the minimum required by WIOA sec 134(c)(3)(A). The Department allows flexibility for local areas to develop methods to provide Start Printed Page 56121services for individuals in need of a skills upgrade to achieve economic self-sufficiency. As part of the training eligibility, training services provided must be determined to lead to economic self-sufficiency or wages comparable to or higher than previous employment.

Section 680.230 What are the requirements for coordination of Workforce Innovation and Opportunity Act training funds and other grant assistance?

Comments: A commenter suggested that the Department revise the regulations to require, rather than recommend, that one-stop centers and partners take into account the full cost of training, including the cost of supportive services, when coordinating grant assistance.

Department Response: The Department considers the full cost of training services to be an important factor when coordinating assistance from other grants or resources. The Department strongly encourages this coordination and consideration be taken into account. WIOA allows for one-stop centers or partners to make this a consideration and does not require it. Therefore, the Department has changed “should” to “may” in § 680.230(a).

Comments: Some commenters recommended revisions to the proposed regulations as they relate to reimbursement of WIOA funds for participants who eventually receive Pell Grants. Specifically, because of the difficulties associated with implementing the proposed framework, these commenters recommended that WIOA funds not be reimbursed in situations where a Pell Grant is subsequently awarded after a one-stop center has paid for training. A commenter asked whether required educational fees are considered part of the training expenses or education-related expenses. This commenter sought clarification on this issue, but recommended that they be considered training expenses and not education-related expenses.

Department Response: The Department maintained the requirements of Pell Grant reimbursement, as described in § 680.230(c). WIOA sec 134(c)(3)(B)(ii) requires reimbursements to local areas from Federal Pell Grants to an individual who received WIOA title I training services while his or her Pell Grant was pending. The Department agrees with the commenters' suggestion that educational fees be considered part of the training expenses that should be reimbursed to the local area and has added language in § 680.230(c) to require this reimbursement.

Comments: A commenter stated that WIOA funds should be directed toward Temporary Assistance for Needy Families (TANF) recipients to enhance the work and training needs of the public assistance population without a requirement that TANF funds first be considered. Furthermore, the commenter stated that when resources in a local area are limited, local areas are best suited to determine which funds are dedicated to provide training and WIOA should be a primary funding source.

Department Response: The Department declines to make a change in the regulatory text at § 680.230(b). WIOA funds supplement other sources of training grants and do not supplant them.

Comments: To ensure consistency with previous Federal guidance, a commenter suggested that the Department add language to § 680.230 to clarify that education and training benefits earned by veterans are not required to be coordinated with training funds available under WIOA title I.

Department Response: While the Department declines to make a change in the regulatory text, it notes that the Department of Veterans Affairs benefits for education and training services are not included in the category of “other sources of training grants” listed in § 680.230(b). Therefore, veterans and spouses are not required to first use any available benefit entitlements associated with their military service before being considered eligible for WIOA funded training, and one-stop centers are not required to consider the availability of those funds.

Comments: Some commenters recommended that the Department clarify that WIOA title I funds can support title II adult education programs, as the WIOA sec. 134(c)(3) definition of training includes “adult education and literacy activities, including activities of English language acquisition and integrated education and training programs” at sec. 134(c)(3)(x). Commenters asserted that this clarification was needed as expeditiously as possible so that the planning processes in the States can proceed efficiently.

Department Response: Under WIOA sec. 134(c)(3)(D)(x), title I adult and dislocated worker funds may be used to support adult education and literacy activities, provided concurrently or in combination with other training services. The Department has added regulatory text clarifying this use of WIOA title I adult and dislocated worker funds in § 680.350. This regulation involving appropriate uses of adult education and literacy activities only applies to WIOA title I adult and dislocated worker funds.

Comments: Because availability of training assistance depends on whether participants have access to other sources to pay for training, a commenter strongly encouraged the Department to stress to Local WDBs the importance of the optional services outlined in § 680.140 for individuals with disabilities.

Department Response: The Department identifies in § 680.140 all of the required and permissible WIOA title I adult and dislocated worker services that Local WDBs may provide. The Department considers the permissible activities described in § 680.140(b) that may help individuals with disabilities to navigate among multiple services and activities to be important. The Department also has listed “reasonable accommodations for individuals with disabilities” to be an allowable supportive service in § 680.900.

4. Subpart C—Individual Training Accounts

Individual Training Accounts (ITAs) are key tools used in the delivery of many training services. The Department seeks to provide maximum flexibility to State and local programs in managing ITAs. These regulations do not establish the procedures for making payments, restrictions on the duration or amounts of the ITA, or policies regarding exceptions to the limits. The authority to make those decisions resides with the State or Local WDBs. The authority that States or Local WDBs may use to restrict the duration of ITAs or restrict funding amounts must not be used to establish limits that arbitrarily exclude eligible training providers.

Through the one-stop center, individuals will be provided with quality and performance information on providers of training and, with effective career services, case management, and career planning with the ITA as the payment mechanism. ITAs allow participants the opportunity to choose the training provider that best meets their needs. Under WIOA, ITAs can more easily support placing participants into registered apprenticeship programs.

Section 680.300 How are training services provided?

Comments: A commenter expressed support for the ability to pay an ITA at the beginning of the training program rather than on an incremental basis, because it would allow Local WDBs to budget and manage their ITAs much Start Printed Page 56122more easily, eliminates the concern about putting customers into training that straddles 2 program years, and simplifies the determination of how much carry over funding to include in the next program year's budget.

Department Response: The Department considers it important to maintain flexibility in how ITA payments are made to support Local WDBs to use the most effective payment mechanisms. There have been no changes to the regulatory text in response to these comments.

Section 680.320 Under what circumstances may mechanisms other than Individual Training Accounts be used to provide training services?

Comments: A few commenters expressed support for the approach proposed in § 680.320. One commenter expressed support for the opportunity to contract for services rather than rely solely on ITAs, potentially support streamlining and more effective administration and planning for training providers. Another commenter expressed support for the training of cohorts, allowing States and local areas to contract with providers to assist groups of participants through one contract for services with defined goals and outcomes, rather than the administratively burdensome process of having each individual participant request services from providers through an ITA. Another commenter supported the Department's detailed list of circumstances under which a mechanism other than an ITA may be used to provide training services.

Several commenters provided input on funding mechanisms for training for individuals with barriers to employment. One commenter expressed support for allowing local areas to contract directly with training providers to supply training that will effectively service individuals with barriers to employment, expanding innovative and effective models for helping participants obtain industry-recognized credentials. Another commenter recommended that the Department recognize the need for coordination with vocational rehabilitation programs when addressing services for individuals with disabilities to avoid duplication of effort.

Department Response: The Department generally received supportive comments about the use of alternative methods to ITAs. The Department encourages coordination with Vocational Rehabilitation programs when serving individuals with disabilities to ensure effective service delivery. No changes have been made to the regulatory text in response to the comments, but the Department is adding, “and the local area has fulfilled the consumer choice requirements of § 680.340” to § 680.320(a), to ensure that the statutory requirement at WIOA sec. 134(c)(3)(G)(ii)(I) is included. This provision requires that a local area have a full ITA system in place even if it decides to provide training through contracts because one or more of the situations in § 680.320(a)(1) through (5) applies. Section 680.320(c) provides that the local plan describe the process to be used in all cases to select training under a contract to be consistent with WIOA sec. 108(b)(16).

Comments: A few commenters recommended that the Department clarify which individuals are considered to have a barrier to employment as a result of being an English language learner. Specifically, these commenters asserted that the preamble and the regulatory text differ in that one requires that three elements be met ((1) English language learners, (2) individuals who have low levels of literacy, (3) individuals facing substantial cultural barriers) while the other allows any one element as triggering categorization of having a barrier to employment. One commenter asked that the Department add a definition of “ex-offender” and encouraged the Department to include individuals with deferred sentences to be included within the definition because these individuals encounter similar barriers to employment as those individuals who actually spend time incarcerated. Another commenter asserted that the regulation should include employer incentives to encourage the hiring of ex-offenders.

Department Response: WIOA sec. 3(24) defines “individuals with barriers to employment,” and WIOA sec. 3(24)(I) includes the following groups that qualify for this definition: “Individuals who are English language learners, individuals who have low levels of literacy, and individuals facing substantial cultural barriers.” The Department clarifies that if an individual meets any one of the three criteria in WIOA sec. 3(24)(I), that individual may be considered to have a barrier to employment. WIOA defines “English language learner” in WIOA sec. 203(7) and is one of the criteria that may be met to be considered an individual with a barrier to employment. The Department also considers the definition of “literacy” provided in WIOA sec. 203(13) as the standard to be used for determining if an individual is considered to have low literacy, and therefore a barrier to employment. The Department will use guidance and technical assistance to States and Local WDBs to aid in determining when these elements are met. The term “offender” is defined in WIOA sec. 3(38) and the Department considers this to be the basis by which an individual is determined to be an “ex-offender.” The Department declines to alter the regulatory text to include employer incentives for hiring of specific groups.

Comments: One commenter expressed support for the inclusion of “older individuals” in the list of barriers to employment, reasoning that the aging community has more challenges than younger workers in regaining employment once it has been lost and are more likely to be among the long term unemployed. Two commenters requested that the Department define the duration of unemployment that must be reached for an individual to be considered a long term unemployed individual.

Department Response: The Department generally defers to the Bureau of Labor Statistics (BLS) definition and will provide additional guidance to States and local areas on long-term unemployed.

Comments: Another commenter urged the Department to provide flexibility and guidance to use ITA funds concurrently or successively with paid work experience or OJT, reasoning that this combined use of ITA/OJT or ITA/paid work experience would provide additional benefits to the participants.

Department Response: The Department notes that there is no prohibition on the combined use of ITAs and OJT as well as any other contracted training services under WIOA sec. 134(c)(3)(G)(iv). These decisions must be based on individual need and they must be paying for separate program elements. There also is no prohibition on using career services, such as work experience, in combination with ITAs.

Comments: A commenter asked how the Department defines “institution of higher education” as the term relates to funding mechanisms for training services in proposed § 680.320.

Department Response: The term “institution of higher education” is defined in WIOA sec. 3(28); the Department has added this citation into the regulatory text in § 680.320(a)(4).

Comments: One commenter recommended a minor technical correction to proposed § 680.320(a)(4) to replace the phrase “will facilitate” with “in order to facilitate.”

Department Response: The Department agrees with the commenter's suggestion and has made Start Printed Page 56123this nonsubstantive correction in the regulatory text in § 680.320(a)(4).

Section 680.330 How can Individual Training Accounts, supportive services, and needs-related payment be used to support placing participating adults and dislocated workers into a registered apprenticeship program and support participants once they are in a registered apprenticeship program?

In this section, a new paragraph (a) was created, and proposed paragraph (a) is now (a)(1). Similarly, proposed paragraph (b) is now (a)(2). Proposed paragraph (c) has been renumbered to (b), and the following proposed paragraphs (d) and (e) are now (c) and (d).

Comments: A few commenters expressed support for allowing ITA funding to be used to pay for supportive services and needs-related payments to support the placement of a participant into a registered apprenticeship program. A commenter asked whether supportive services would be provided throughout a multi-year apprenticeship and whether supportive services would be provided to an employed individual participating in an apprenticeship. Additionally, the commenter asked how WIOA would assist an already employed worker who moves up the career ladder and is put into an apprenticeship either through OJT, ITA, or support services. Another commenter stated that one-stop centers should provide career services and supportive services during the final year of an apprenticeship because this is a crucial time that can directly lead to employment.

Some commenters stated that there should be no limitations placed on program service funding, including incumbent worker funding, which these commenters described as possibly the most appropriate funding to serve apprentices. In regard to incumbent worker funding, these commenters said that some companies may select current employees to upskill in a registered apprenticeship program given the length of the investment and the increased likelihood of the individual remaining engaged.

Department Response: The Department refers to the regulatory text in §§ 680.900 through 680.920, the general requirements for supportive services. Supportive services may be used for both employed and unemployed individuals to support their participation in career and/or training services. Decisions about the provision of supportive services, including the duration, timing, and type, are to be made by the Local WDB.

The Department refers to the regulatory text in §§ 680.700 through 680.750 and in particular § 680.710, which discusses the requirements for OJT contracts for employed workers. Incumbent worker training may be an appropriate service that would help an individual move up a career ladder within an apprenticeship program.

Comments: A commenter recommended that the Department revise proposed § 680.330(b) (renumbered in regulatory text as § 680.320(a)(2)) to allow for payments from ITAs to non-profit, joint labor-management training to defray the cost of providing apprenticeship or pre-apprenticeship training for programs that do not charge “tuition.” This commenter suggested that these payments should include not only the pro-rata cost of delivering direct training to enrollees, but also should cover costs incurred to retain third-party providers. Two commenters stated that ITAs could be used to pay for pre-requisites for apprenticeship such as math courses, required education courses, and/or certifications as part of the work-based experience. Another commenter encouraged the Department to support the use of ITAs for competency-based apprenticeship models.

Department Response: The Department agrees with the comment that the term “tuition” does not reflect the funding arrangements of registered apprenticeship programs and has changed the text in § 680.330(a)(2) to change it to “Training services provided under a registered apprenticeship program” to address this and be consistent with the way the Department refers to other types of training. The other suggestions from commenters about allowable uses for ITA funds are acceptable as long as the providers of those services are on the ETPL. No other changes have been made to the regulatory text in response to the comments.

Comments: A commenter recommended that the regulations should allow for contracted apprenticeship programs as well as the placement of trainees into these programs solely through the ITA system, which the commenter described as not allowing for the easy organization of cohort-based programs. This commenter asserted that cohort-based apprenticeships and pre-apprenticeships can work with students recruited through the one-stop delivery system as well as those recruited from outside the system but would require a threshold number of trainees to be cost effective. The commenter concluded that the availability of trainee cohort classes in apprenticeship and pre-apprenticeship programs is a cost-effective approach to training.

Department Response: The Department considers that these types of training cohorts are allowable provided that the individuals meet the training eligibility requirements and the training providers are on the ETPL.

Comments: A commenter expressed the desire to be able to use ITAs to pay for apprenticeship programs that are not on the ETPL and that can last for many years to ensure that participants receive the training needed and that the local area is able to capture all applicable credentials received for performance purposes. Similarly, a commenter asked how long WIOA enrollment lasts past the 6 months of OJT if an apprenticeship lasts multiple years. This commenter also asked how a credential is documented if a WIOA participant exits the system prior to completion of the apprenticeship.

Department Response: To receive funds from an ITA, the training provider must be on the ETPL. The Department encourages interested providers to apply to be ETPs. The Department is issuing guidance about the credential measures in performance. WIOA enrollment is governed by the definitions of “participant” and “exit” in 20 CFR 677.150 (see Joint WIOA Final Rule). Local areas can develop ITA contracts within the framework of these definitions and the requirements for ITAs. Training services should be provided based on the needs of the individual and ITAs should be structured to address those needs.

Comments: To expand pre-apprenticeships and apprenticeships, some commenters recommended that the one-stop centers be given authority to initiate the application for registered apprenticeships. A commenter recommended that one-stop centers build and maintain relationships with apprenticeship programs that operate within their region to provide a point of contact for individuals that would like to enroll. To serve individuals enrolled in pre-apprenticeship or registered apprenticeship programs best, a commenter suggested including a regulatory requirement that the one-stop delivery system receive technical assistance to help expand one-stop center capacity to serve women entering these training programs.

Department Response: There is no prohibition in WIOA on one-stop centers initiating applications for registered apprenticeships. The Department encourages Local WDBs to partner with registered apprenticeships, work to align service delivery, and make Start Printed Page 56124appropriate arrangements to build on these partnerships. The Department encourages the one-stop delivery system to help populations access training in nontraditional employment and will provide technical assistance to share best practices on this subject.

Comments: Two commenters listed the following ways in which a one-stop delivery system could serve the pre-apprenticeship programs, including, marketing, referrals, training costs, direct placements in registered apprenticeships, and use of OJT funds.

Department Response: The Department considers these recommendations to be examples of best practices to be shared through guidance and technical assistance.

Comments: A commenter requested clarification on several issues related to pre-apprenticeships: (1) With pre-apprenticeship programs moving to ITAs and therefore onto the ETPL, is the expectation that all other intensive service providers also will be included in the ITAs and ETPL; (2) the treatment of pre-apprenticeship programs that are not linked to a registered apprenticeship under WIOA; and (3) whether an out-of-school youth under 18 or an in-school youth be approved for an ITA for a pre-apprenticeship program?

Department Response: Pre-apprenticeship programs may be eligible for an ITA if they are on the ETPL. The Department encourages pre-apprenticeship programs that provide training services under an ITA to apply to be an ETP. The Department considers pre-apprenticeship programs to be directly partnered with at least one registered apprenticeship program; programs that do not meet this criterion are not considered a pre-apprenticeship program for the purposes of WIOA. In order to receive an ITA under WIOA title I adult and dislocated worker programs, an individual must meet program eligibility criteria as well as the training eligibility criteria.

Section 680.340 What are the requirements for consumer choice?

Comments: A commenter indicated that proposed § 680.340 does not speak effectively to the concept of “consumer choice.” This commenter stated that it would take serious efforts by the Department to develop more extensive information regarding the learning providers to inform individuals seeking training opportunities properly. Furthermore, the commenter asserted that posting information about eligible trainers has not proven to assist the learner.

Department Response: The regulations on consumer choice are consistent with the language in WIOA sec 134(c)(3)(F). The Department emphasizes the importance of performance information on training providers to ensure consumers may make an informed assessment of their training options. The Department considers the role of the career planner as critical to support individuals to make well-informed training decisions. Career planners are responsible for making training eligibility determinations, and these determinations require that States and local make available high quality performance information to participants to make informed training choices.

Comments: One commenter suggested that the Department rewrite proposed § 680.340(b) so that it is clear that there is no requirement for the employer to report outcomes when using OJT and customized training other than in those circumstances required by the Local WDB.

Department Response: The Department agrees with the commenter and has changed the regulatory text in § 680.340(b) to emphasize that the ETPL is a separate list from the list that the Governor may require for work-based training providers.

Comments: A commenter recommended that proposed § 680.340 be revised to make it clear that training funds are not an entitlement and that criteria in addition to eligibility are assessed prior to referral to a provider and program. Two other commenters requested clarification as to the reasons that training could be refused.

Department Response: WIOA is not an entitlement program. Determinations for training are made consistent with the law, including WIOA sec. 134(c)(3)(A), State and local policies, funding availability, and other appropriate considerations. There have been no changes to the regulatory text in response to these comments.

One commenter requested that the Department provide a definition for the term “cost of referral” as used in proposed § 680.340(d).

Department Response: The Department declines to define the term “cost of referral” in the regulatory text.

Comments: A commenter expressed support for the prioritization of funding for training programs that result in a recognized postsecondary credential.

Department Response: The Department acknowledges the comment and has added language to the regulatory text in § 680.340(f) referencing the citation for WIOA sec. 3(52), which defines a recognized postsecondary credential.

Comments: A commenter recommended a technical correction to proposed § 680.340(b) to reference paragraph (d) in WIOA sec. 122 rather than paragraph (e).

Department Response: The Department agrees and has made this nonsubstantive correction in the regulatory text in § 680.340(b).

Section 680.350 May title I adult and dislocated worker funds be used to directly support adult education and literacy activities?

Comments: Some commenters recommended that the Department clarify that WIOA title I funds can support title II adult education programs, as the WIOA sec. 134(c)(3) definition of training includes “adult education and literacy activities, including activities of English language acquisition and integrated education and training programs” at sec. 134(c)(3)(D)(x). A commenter recommended that referrals to regionally accredited secondary-level educational programs providing entry-level workforce preparation and/or postsecondary education and training activities be included as part of basic services and counseling services. A commenter requested clarification regarding whether alternative secondary school (formerly General Education Diploma [GED]) preparation is considered a career service or a training service.

Department Response: Under WIOA sec. 134(c)(3)(D)(x), title I adult and dislocated worker funds may be used to support adult education and literacy activities, provided concurrently or in combination with other training services. The Department has added regulatory text clarifying this use of WIOA title I adult and dislocated worker funds in § 680.350. The Department notes that these activities for title I adult and dislocated worker funds must be done in coordination with other training activities in WIOA sec. 134(c)(3)(D)(x).

5. Subpart D—Eligible Training Providers

This subpart describes the process by which organizations qualify as eligible training providers of training services under WIOA. It also describes the roles and responsibilities of the State and Local WDBs in managing this process and disseminating the State Eligible Training Providers and Programs List (ETPL). Throughout the preamble, the Department refers to the State Eligible Training Providers and Programs List as the “State List,” the List, and the ETPL. The State ETPL and the related Start Printed Page 56125eligibility procedures ensure the accountability, quality, and labor market relevance of programs of training services that receive funds through WIOA title I, subtitle B. The regulations emphasize that the List and accompanying information must be easily understood and disseminated widely in order to maximize informed consumer choice and serve members of the public.

The State plays a leadership role in ensuring the success of the eligible training provider system in partnership with Local WDBs, the one-stop delivery system, and the one-stop's partners. The Governor, in consultation with the State WDB, must establish eligibility criteria and procedures for initial and continued eligibility for training providers and programs to receive funds under WIOA title I, subtitle B. In doing so, the Governor may establish minimum performance levels for initial and continued eligibility and the Department encourages Governors to do so. In establishing minimum performance levels for eligibility, the Governor should take into consideration the need to serve targeted populations. Except for with respect to registered apprenticeship programs, the Local WDB may establish higher performance levels or require additional information from State eligible training providers to receive funds through the local area Individual Training Accounts (ITAs).

The regulations in this subpart implement WIOA sec. 122 and refer to WIOA secs. 107, 116, and 134 where those sections affect program and provider eligibility, the ETPL, the use of ITAs, and the inclusion of registered apprenticeship programs on the ETPL. In § 680.410, the regulations clarify what entities can be eligible training providers. Section 680.470 provides that registered apprenticeship programs, which WIOA treats differently than other eligible training providers in some respects, are automatically eligible to be included on the ETPL. Finally, § 680.500 requires the Governor or State Workforce Agency (SWA) to disseminate the State ETPL with accompanying performance and cost information to Local WDBs in the State and to members of the public through specified means. The performance information must be presented in a way that is easily understood, in order to maximize informed consumer choice and serve all individuals seeking information on training outcomes, including WIOA participants and individuals with disabilities. Separately, 20 CFR 677.230 (see Joint WIOA Final Rule) addresses the ETP annual performance reports mandated at WIOA sec. 116(d)(4), which require providers to report on, among other things, the levels of performance for the WIOA primary indicators of performance for all individuals enrolled in the program of study.

In response to concerns expressed by stakeholders that some providers of training would face difficulties in participating in this WIOA-revised system, the Department has clarified the interrelated eligibility requirements and explained that while WIOA places an emphasis on quality training as measured by performance criteria, State and Local WDBs and training providers must work together in achieving this goal. The regulations emphasize the Governor's role in offering financial or technical assistance to training providers where the information requirements of this section result in undue cost or burden. Making a wide variety of high-quality programs of training available to participants will increase customer choice and training providers may find performance information useful to improve their programs of study, which in turn will provide a direct benefit to participants. The Department also encourages the Governor to work with eligible training providers to return aggregate performance information to the providers in ways that will help the providers improve their program performance. The State and Local WDBs must work together to ensure sufficient numbers and types of training providers and programs to maximize customer choice while maintaining the quality and integrity of training services. In addition, the regulations explain that community-based organizations (CBOs) can be eligible training providers, provided they meet the requirements to become eligible training providers in WIOA sec. 122 and this subpart. Because of WIOA's emphasis on ensuring the provision of quality training, and the importance of using performance criteria to obtain such quality, the Department does not intend to waive the requirement to submit performance information at this time.

Throughout this subpart, the Department has changed references from the Eligible Training Provider List to the list of eligible training providers and programs to convey that the list is a compilation of the programs of training services for which ITAs can be used. The Department has also made revisions throughout this subpart for consistency in the use of the term “program of training services” and to incorporate the use of youth funds for ITAs for out-of-school youth (OSY) aged 16-24.

The Department received a number of comments that pertain to the WIOA sec. 116(d)(4) ETP annual performance reports. The Department notes that submission of the ETP annual performance reports is required by WIOA sec. 116(d)(4) and comments and responses relating to this report are addressed in the Joint WIOA Final Rule preamble section for 20 CFR 677.230. This subpart D of part 680 addresses the ETP eligibility requirements.

Section 680.400 What is the purpose of this subpart?

Proposed § 680.400 explained the purpose of this subpart. It stated that the list must be accompanied by relevant performance and cost information and made publicly available online through Web sites and searchable databases as well as any other means the States use to disseminate information to consumers. The Department has made non-substantive corrections for consistency in how the Department uses terms throughout this section. Additionally, the Department has made substantive changes to paragraphs (a) and (b) of this section which are described in detail below.

Comments: A commenter requested that Local WDBs ensure the availability of training providers that understand the unique needs of individuals with disabilities. Another commenter cited the challenges faced by older workers and recommended that the regulations direct one-stop centers to take into account older workers' different training needs and lesser access to financial aid, and make sure that older workers are not discriminated against in access to WIOA-funded ITAs.

Department Response: The unique needs of individuals with disabilities require a minor revision to § 680.400 to emphasize the importance of disseminating the State ETPL to individuals with disabilities. One of WIOA's stated purposes is to increase access to employment and training for individuals with barriers to employment, which is defined in WIOA to include individuals with disabilities as well as older individuals. Individuals with disabilities (e.g., those who are blind or hearing-impaired) may have unique needs that prohibit access to information through the Internet or other common databases. To fulfill the statutory purpose of WIOA, the Department has added language to § 680.400(b) that requires States to disseminate information to consumers in formats accessible to individuals with disabilities. In response to the comment that the regulations direct one-stop centers to take into account older Start Printed Page 56126workers' different training needs, the Department notes that the ability to provide services to individuals with barriers to employment is a factor that must be taken into account in the Governor's eligibility procedures under § 680.460(f)(9) and that WIOA sec. 3(24)(D) and (E) define “individual with a barrier to employment” to include individuals with disabilities and older individuals. Because this is a required factor in the eligibility procedures, the Department has decided not to address this in the purpose section of the regulation. No changes were made to the regulatory text in response to these comments.

Comments: Another commenter requested that the Department explain whether programs other than those authorized by WIOA title I must use the eligible training provider list. A few commenters recommended that § 680.410 specify that the requirements apply to entities providing training to participants paid for with WIOA title I adult or dislocated worker funding only and are not more generally applicable to all entities providing training to adult and dislocated workers.

Department Response: WIOA's requirements regarding the State list of eligible training providers pertains to WIOA title I, subtitle B funds only. Core programs and partners other than the title I programs are not required to use the list of eligible training providers and programs, although States may choose to employ their ETP list for other activities. No changes were made to the regulatory text in response to this comment.

Comments: The Department received a number of comments regarding whether youth may use ITAs in response to proposed § 681.550 (Are Individual Training Accounts permitted for youth participants?).

Department Response: In § 680.400, the Department has added that this subpart describes the process for determining eligible training providers and programs for the adult, dislocated worker, and youth programs. More information about this is provided in the preamble corresponding to § 681.550. The Department has updated §§ 680.400(a), 680.430, and 680.490 to clarify which requirements of this subpart apply to the eligible training providers and programs that serve OSY aged 16 through 24 with ITAs.

Section 680.410 What is an eligible training provider?

The Department made non-substantive edits for consistency in how the Department uses terms throughout this section. Additionally, the Department has made significant substantive revisions to this section that are explained below.

The Department significantly revised this section to more clearly define the term “eligible training provider” (ETP) and changed the section's title to reflect this change. The Department made these changes to clarify which entities are considered ETPs, as many of the requirements of WIOA sec. 122 apply only to those entities that are considered ETPs under WIOA. This clarification responds to commenters' requests for clarification on which requirements of WIOA sec. 122 apply to which entities.

Section 680.410(a) through (c) lays out the defining characteristics of ETPs. Specifically, revised § 680.410(a) provides that ETPs are the only types of entities that can receive funding for training services through an ITA. This means that if an entity is not on the State ETPL, the entity may not receive ITA funds to pay for training services. Section 680.410(b) was revised to make clear that ETPs must be included on the State ETPL. The Department added new § 680.410(c) to provide that ETPs must provide a program of training services as that term is defined at § 680.420.

The Department also added new § 680.410(d) to describe the kinds of entities that can be ETPs. Eligible training providers can be institutions of higher education that provide a program which leads to a recognized postsecondary credential, entities that carry out programs registered under the National Apprenticeship Act (29 U.S.C. 50 et seq.), and other public or private providers of training services, which may include community-based organizations (§ 680.410(d)(3)(i)), joint labor-management organizations (§ 680.410(d)(3)(ii)), and eligible training providers of adult education and literacy activities under WIOA title II if such activities are provided in combination with the training services described at § 680.350 (§ 680.410(d)(3)(iii)).

The Department deleted proposed paragraph (b) of § 680.410 to clarify that this subpart is focused on ETPs and the State list of ETPs. The requirements for individuals receiving training from entities other than ETPs are addressed in §§ 680.320 and 680.530. Further description of the training that can be provided to individuals through entities other than ETPs can be found in § 680.530.

Part of the reason for this revision to this section is to make it clear that only entities that have gone through the Governor's ETP eligibility procedures and registered apprenticeship programs are considered ETPs, are able to be on the State ETPL, and can receive funding through ITAs. Additionally, because only these entities are on the State ETPL, only these entities, except for registered apprenticeship programs, are required to provide information for the ETP annual eligible training provider performance report required by WIOA sec. 116(d)(4).

Comments: Many commenters provided input on specific categories of training providers. A few commenters supported allowing Local WDBs to provide training services as long as the Local WDB is licensed, registered, or otherwise exempt by the State office of education. Some commenters requested guidance on approval of distance learning providers requesting to be put on the ETPL. One commenter requested that the Department define and add a distance learning category as a potential ETP.

Another commenter encouraged the Department to expand the definition of eligibility for training providers to include platforms that work with accredited institutions of higher education to provide Massive Open Online Courses (MOOCs). Several commenters encouraged the Department to revise § 680.410(a) to identify public television stations explicitly as an ETP with demonstrated expertise in developing and implementing evidence-based training services. Another commenter recommended that § 680.410 explicitly identify public libraries as potential providers, and particularly for enhanced digital literacy training and services. One commenter recommended that industry-based multi-employer training programs with a minimum of 50 percent employer representatives be eligible for inclusion on the ETPL to allow for training funds to be included as providers who would then be eligible for WIOA support. Another commenter urged the Department to consider integrating microenterprise development organizations, entities that help people in the very earliest stages of creating their own businesses, into the WIOA system. In addition, one commenter suggested a revision to paragraphs (a)(1) through (3) of § 680.410 to include, as examples of eligible training providers of training services with WIOA adult funds under title I, public or private organizations that have demonstrated effectiveness in providing regionally accredited secondary-level educational programs that include entry-level workforce preparation and/or postsecondary education and training activities.

Department Response: The Department has determined it is not appropriate in the regulation to specify Start Printed Page 56127types of public and private entities that are appropriate to be ETPs, as many of these entities could be ETPs if they meet the requirements for initial and continued eligibility under § 680.410(d)(3). Instead, the Department has defined broadly the kinds of entities which are eligible to be ETPs based on WIOA sec. 122(a)(2). The public and private entities commenters encouraged for inclusion on the ETPL are within the parameters of entities under § 680.410(d) that can be ETPs, provided they meet all other applicable requirements, such as the Governor's eligibility requirements. In addition, the Department has not regulated to require training to be delivered in a specific format; programs may be delivered in-person, online, or in a blended approach. Nothing in the regulation precludes any of these approaches to training; therefore, it is unnecessary to regulate specifically that these are permissible types of training. In addition, the Department is clarifying that Local WDBs may provide training services, if they meet the conditions of WIOA sec. 107(g)(1), which includes the information required in a written waiver request to the Governor. This provision is addressed in § 679.410. In response to the commenter that suggested Local WDBs can provide training as long as the Local WDB is licensed, registered, or otherwise exempt by the State office of education, the Department notes that WIOA sec. 107(g)(1) establishes the requirements that must be met if a Local WDB wishes to provide training. Therefore, the Department has not included this in this section.

Section 680.420 What is a “program of training services”?

This section defines the term “program of training services” that is used throughout the regulations. The Department proposed to define the term as one or more courses or classes, or a structured regimen that leads to specified outcomes, including recognized postsecondary credentials, secondary school diplomas or their equivalent, employment, or measurable skill gains toward such credentials or employment. The Department made non-substantive edits for consistency in how the Department uses terms throughout this section. The Department also made substantive revisions to paragraphs (a) and (b) which are described in detail below.

In the NPRM preamble, the Department explained that the definition of a WIOA “program of training services” includes a structured regimen that leads to an industry-recognized credential. The NPRM preamble indicated that the outcomes in the definition of program of training services aligned with performance requirements in WIOA sec. 116(b)(2)(A).

Comments: Many commenters requested that the definition of “program of training services” be clarified with options to recognize “non-credentialed training, such as incumbent worker training, work-based learning opportunities, or single courses that fall within a career pathway for employment.” These commenters also requested clarification of “industry-recognized credentials” to avoid confusion over which programs should qualify as eligible for WIOA funding. Several commenters requested clarification regarding how or when a program of training services leads to “a recognized postsecondary credential, secondary school diploma or its equivalent.” A few commenters recommended that § 680.420 include training programs that lead to a “recognized postsecondary degree or industry recognized credential” to avoid a potential debate over what constitutes a “postsecondary credential.” Other commenters suggested that a definition of “recognized industry credential” include a degree, diploma, or certification provided by an educational institution, third-party industry association, or industry accreditation body if it is not widely recognized by multiple employers in a region or industry. One commenter recommended that the term “industry-recognized credentials” as used in the preamble to the NPRM be added to the regulatory text. Another commenter asked whether having a group of five employers state the certificate of completion from a training provider is “industry recognized” would meet the definition of industry-recognized credential. One commenter recommended a change to § 680.420(a) through (c), to include, as outcomes of programs of training services, regionally accredited secondary education diplomas and career certification for entry-level work force preparation earned as a part of a secondary education program.

Department Response: The Department has revised the regulatory text of § 680.420 to further clarify which programs qualify as WIOA “programs of training services.” The introductory text of § 680.420 was modified to clarify that a “program of training services” is one that provides the services in § 680.200 and leads to any of the outcomes listed in paragraphs (a) through (d) of this section, making clear the relationship between the definition of “program of training services” in this section and the definition of “training services” in § 680.200.

Section 3(52) of WIOA defines the term “recognized postsecondary credential,” which was used in the Department's proposed definition of a “program of training services.” The Department has revised § 680.420(a) to include all of the credentials, certificates, licenses, and degrees included in the WIOA definition of “recognized postsecondary credential.” However, the Department removed the term “recognized postsecondary credential” from the definition of “program of training services” in response to comments that this may be read as too limiting if it is interpreted to mean that these credentials can only be obtained by individuals who have a secondary degree, or a high school diploma or its recognized equivalent. The new definition of “program of training services” remains consistent with the program outcomes described in WIOA sec. 116(b)(2)(A) and 20 CFR part 677 (see Joint WIOA Final Rule).

The Department chose not to define the term “industry-recognized credential” in the subpart and used the term “industry-recognized certificate or certification” in the definition of “program of training services” in order to mirror the definition of “recognized postsecondary credential” under WIOA. The term “industry-recognized credential” is an evolving term and the Department determined that defining it in the regulation may limit future innovation around industry-relevant training.

The Department agrees that programs of training services should be inclusive of non-credentialed training, such as incumbent worker training, work-based learning opportunities, or single courses that fall within a career pathway. The introduction to § 680.420 emphasizes that training services that “lead to” any of the outcomes listed at § 680.420, which includes employment, is a program of training services. Therefore, programs that are components of such a regimen may be eligible programs.

In addition, as explained in §§ 680.410 and 680.350 and associated sections of the preamble, WIOA title I adult and dislocated worker funds may be used for programs of training services that provide adult education and literacy activities if they are provided concurrently or in combination with occupational skills training and training services specified in § 680.350. For example, English as a second language may be part of a program of training services that leads to measurable skill gains toward postsecondary credentials, industry-recognized credentials, or Start Printed Page 56128employment. The Department has added a cross reference to § 680.350 in § 680.420(b) to clarify that a participant may utilize a program offering a secondary school diploma or its equivalent only when that program is offered in conjunction with occupational skills training and other training options listed at § 680.350. The revised definition of program of training services and the acceptable outcomes to which a structured regimen may lead align with the definitions within WIOA sec. 116(b)(2)(A) and in 20 CFR part 677 (see Joint WIOA Final Rule). Section 680.420(d) provides that a program of training services is one that leads to measurable skill gains towards a credential described in paragraph (a) or (b) of this section. In this context, the term “measurable skill gains” is used similarly to its use in 20 CFR part 677 and the accompanying ICR. For clarification, the Department notes that the ETP annual performance report layout required under WIOA sec. 116(d)(4) uses the term “training program,” which is synonymous with “program of training services.”

Section 680.430 Who is responsible for managing the training provider eligibility process?

Section 680.430 outlines the roles and responsibilities of the Governor, the State WDB, any designated State agencies, and Local WDBs in establishing and implementing criteria and procedures for determining the eligibility of training providers. The Department received several comments addressing § 680.430. The Department made non-substantive edits for consistency in how the Department uses terms throughout this section and to this section's title. The Department also made substantive changes to paragraphs (a), (c)(3), and (d), and these changes are described in detail below.

The title to this section of the NPRM was “Who is responsible for managing the eligible provider process.” The Department is making a non-substantive edit and inserting the word “training” between “eligible” and “provider” for consistency.

The Department modified § 680.430(a) to clarify that the Governor, in consultation with the State WDB, establishes the criteria, information requirements, and procedures, including procedures identifying the roles of the State and local areas, governing eligibility of providers and programs of training services to receive funds for out-of-school youth as described in § 681.550.

The Department renumbered and re-arranged paragraph (d) and added paragraph (e) for consistency with other portions of this subpart, including §§ 680.450, 680.460, and 680.470, in regard to what is required for registered apprenticeship programs to be an eligible training provider. These provisions of the subpart make it clear that registered apprenticeship programs are not required to follow the Governor's eligibility procedures (initial or continued) in order to be eligible training providers. This is consistent with WIOA sec. 122(a)(3), which provides that registered apprenticeship programs are maintained on the State List for so long as the program is registered under the National Apprenticeship Act. Therefore, the Department modified this section to ensure that the registered apprenticeship programs are not subject to the additional standards that may be established by a local area.

Because registered apprenticeship programs are not subject to the Governor's criteria and information requirements or required to report on their levels of performance for eligibility, Local WDBs cannot establish additional criteria and information requirements or establish higher levels of performance for these entities to receive training services in the local area. Moreover, permitting the Local WDBs to establish additional criteria and performance standards for registered apprenticeship programs would be in tension with what the Department has determined is a key purpose of sec. 122(a)(3): Encouraging the integration of the registered apprenticeship program into the WIOA system. Section 680.430(d) provides that the Local WDB can make recommendations to the Governor on the procedure used in determining the eligibility of providers and programs. This is not a change from the NPRM.

The Department has added new § 680.430(e), which contains the provisions from proposed § 680.430(d)(2) and (3), but clarifies that the provisions do not apply with respect to registered apprenticeship programs. Except for registered apprenticeship programs, the Local WDB may establish higher performance levels or require additional information from State eligible training providers to receive funds through local area ITAs. Paragraph (e)(1) provides that the Local WDB can, except with respect to registered apprenticeship programs, require additional criteria and information from local programs to become or remain eligible, and paragraph (e)(2) states that the Local WDB can set higher levels of performance, except with respect to registered apprenticeship programs, than those required by the State for local programs to become or remain eligible. In paragraph (e)(2), the Department made a non-substantive edit changing the phrase “local providers” to “local programs” to clarify that eligibility is determined on a program-by-program basis and removed the word “particular” from this paragraph as unnecessary.

Comments: One commenter commended the Department for outlining the responsibilities of State and Local WDBs to ensure adequate availability of training services for individuals with disabilities and recommended that § 680.430(c)(3) similarly remind Local WDBs to disseminate and maintain lists of providers in formats accessible to individuals with disabilities.

Department Response: As noted above under § 680.400, the State List must be made publicly available in a format this is accessible to individuals with disabilities. One of WIOA's stated purposes is to increase access to employment and training for individuals with barriers to employment, which WIOA defines as including individuals with disabilities as well as older individuals. Individuals with disabilities (e.g., those who are blind or hearing-impaired) may have unique needs that prohibit them from accessing information through the Internet or other common databases. To fulfill one of the statutory purposes of WIOA articulated in WIOA sec. 2(1), the Department has added language to § 680.430(c)(3) requiring that Local WDBs ensure that the State list of eligible training providers and programs is disseminated through the one-stop delivery system in formats accessible to individuals with disabilities.

Comments: A commenter asked the Department to revise § 680.430(d)(1) to require the Governor to engage with the Local WDB and to require an equal exchange of information that allows for mutual consent in the management of the ETP process.

Department Response: The Department considered this comment; however, WIOA sec. 122 explicitly states that the Governor, in consultation with the State WDB, is to establish the criteria, information requirements, and procedures governing the eligibility of providers and programs and the Department will not create an additional requirement that the Governor obtain mutual consent of the Local WDBs. Moreover, § 680.430(d) already provides a role for the Local WDB in this process: It allows Local WDBs to make recommendations to the Governor on Start Printed Page 56129the procedures used to determine eligibility of providers and programs. The Department encourages Local WDBs to make such suggestions and strongly encourages the Governor to carefully consider and incorporate the Local WDBs' suggestions, as they are most familiar with the training needs of their specific area. No changes were made to the regulatory text in response to this comment.

Comments: One commenter recommended that the regulation explicitly require a Governor to make the process for becoming an ETP transparent and ensure adequate access for CBOs to become ETPs. The commenter stated that a transparent and accessible process is necessary in order to expand access to a variety of high-quality providers and programs for individuals seeking employment and a way out of poverty.

Department Response: The Department notes that § 680.410 was modified to include paragraph (d)(3)(i), which explicitly acknowledges that CBOs may be eligible training providers. Moreover, CBOs can provide training through training contracts with the Local WDB under § 680.320. The Department agrees that a transparent process is important. Section 680.450(c) requires the Governor to solicit and take into consideration recommendations from Local WDBs and providers, provide an opportunity for interested members of the public to comment, and designate a specific time for doing these things. Additionally, § 680.460(e) requires that the Governor's procedures be described in the State Plan, which is subject to the public comment requirements for State Plans. Because the Department concludes the process will already be transparent as public comment is required in the development of the procedures and in the development of the State Plan, no changes were made to the regulatory text in response to this comment.

Comments: Another commenter recommended that “may” be changed to “must” in § 680.430(c)(2), to ensure that States with large Indian, Alaska Native and Native Hawaiian populations focus attention on the special circumstances of these populations.

Department Response: The Department notes that § 680.430(c) requires the Local WDB to carry out the activities in § 680.430(c)(2) and already uses the term “must.” This section of the regulation implements WIOA sec. 107(d)(10)(E), which requires the Local WDB to work with the State to “ensure there are sufficient numbers and types of providers of career services and training services (including eligible training providers with expertise in assisting individuals with disabilities and eligible training providers with expertise in assisting adults in need of adult education and literacy activities) serving the local area and providing the services involved in a manner that maximizes consumer choice, as well as providing opportunities that lead to competitive integrated employment for individuals with disabilities.” This section is focused on ensuring consumer choice for individuals with disabilities and adults in need of adult education and literacy activities. However, the Department interprets § 680.430(c)(2) to ensure that there are sufficient numbers and types of providers of career services and training services, to include ensuring that such services are available to assist specific populations such as the Indian, Alaska Native, and Native Hawaiian populations. No changes to the regulatory text were made in response to these comments.

Section 680.440 [Reserved]

The NPRM included a proposed § 680.440 implementing WIOA sec. 122(c), which allowed the Governor to establish a transition procedure for training providers eligible under WIA to maintain their eligibility and the eligibility of their programs under WIOA until December 31, 2015. In this Final Rule, the Department has removed § 680.440 in its entirety because the time during which providers could retain their eligibility under WIA into WIOA has elapsed. Therefore, this provision is no longer necessary. Although this provision is not in the Final Rule, the Department received several comments on the proposed rule and is addressing them below.

Comments: Commenters addressed the Department's proposed timeline and transition procedures for implementation of the continued eligibility provisions for ETPs eligible under WIA. A handful of commenters expressed support for exempting ETPs eligible under WIA from initial eligibility procedures and for providing these ETPs a transition period before requiring compliance with the application procedures to establish continued eligibility.

A number of commenters requested that the Department allow States more time to implement the continued eligibility procedures. One commenter recommended that the Department extend the time allowed for transition of ETPs to meet the new requirements under WIOA until June 30, 2016. Another commenter recommended that the Department allow all ETPs to receive initial and/or subsequent eligibility under WIA regulations until the State publishes and implements its new eligibility procedures, no later than June 30, 2016, reasoning that this approach would be consistent with the Department's transition authority in sec. 503 of WIOA. One commenter cautioned that the procedures for initial and continued eligibility are lengthy and that there would not be enough time for implementation, then urged the Department to adopt more flexible procedures for easier implementation.

A few commenters recommended that a waiver provision be added in the WIOA Final Rule relating to the application for continued eligibility of ETPs. Another commenter recommended a longer period of transition (i.e., more than 12 months) because of the additional information required from applicants to become an ETP under WIOA as well as the additional programming needed to electronically capture this information.

One commenter recommended that States be allowed to use existing procedures for new providers and develop and implement new procedures by July 1, 2016, consistent with the start date of Unified State Plans. The commenter reasoned that this timeframe would allow States to identify best procedures and update software programming and user training and communicate these to potential providers. Other commenters recommended that the timeframe relevant in § 680.440 be determined by each individual State policy as determined by the Governor, without providing additional detail about the specific activities of concern. One commenter requested that continued eligibility be implemented as a phased transition.

Department Response: In order to facilitate the transition from WIA to WIOA and give the states sufficient time to create robust eligibility policies and procedures for ETPs, the Department exercised its transition authority and issued guidance (Training and Employment Guidance Letter (TEGL) 41-14, Change 1) that extended the timeline for implementation of continued eligibility requirements for training providers eligible under WIA by 6 months through June 30, 2016, unless the Governor determined that an earlier date was possible. While this is not the 12-month extension requested by a commenter, the Department concluded this was sufficient time for States to implement the continued eligibility procedures. The Department has chosen not to regulate waiver policy in the Final Rule.Start Printed Page 56130

WIOA sec. 122(b)(4)(B) requires providers not previously approved under WIA to complete the initial eligibility procedure. WIOA sec. 122(i) requires that the Governor and Local WDBs implement these requirements no later than 12 months after the date of enactment. Although States are required to implement new procedures for initial eligibility and continued eligibility, rather than using existing procedures, the regulation at § 680.460(f)(1)(v) allows the Governor to use alternate factors for performance until performance information is available to establish continued eligibility. The Department notes that the Governor has discretion to determine what the alternate factors for performance are; thus the Governor's procedure may take into account existing performance information. Moreover, the regulation at § 680.450(e)(2) requires the initial eligibility procedures to take into account “a factor related to” the indicators of performance which may take into account existing performance information.

It is unclear what the commenter is suggesting by a “phased transition.” The Department notes that the Governor's transition procedures could have been implemented in phases if the Governor chose to conduct the transition this way, as long as the continued eligibility procedures were implemented in a timely way to ensure that continued eligibility was established prior to the end of the transition period in that State, which, consistent with ETA guidance, could have extended no later than June 30, 2016.

The Department notes that it also received comments on this section related to the eligible training provider annual performance report required under WIOA sec. 116(d)(4). The Department addresses these comments and provides responses in the preamble to 20 CFR 677.230 (see Joint WIOA Final Rule).

Comments: Several commenters expressed confusion about how providers designated under WIA between WIOA's enactment on July 22, 2014, and implementation of WIOA's ETP provisions on July 22, 2015, were to be treated. One commenter requested that the Department clarify the date at which States are no longer allowed to use their old eligibility-determination process. Another commenter recommended either grandfathering or offering States the discretion to allow training providers that become eligible under WIA between July 22, 2014, and June 30, 2015, to remain eligible training providers until December 31, 2015, or to an earlier date according to the Governor's transition procedures.

Department Response: The Department is clarifying that WIOA sec. 122(i) covers all providers and programs that were previously eligible under WIA. Thus, any provider that was previously eligible under WIA procedures, regardless of whether this was before or after the date of WIOA's enactment on July 22, 2014, is subject to the continued eligibility procedures under WIOA. This reading is consistent with WIOA and with the Department's intention stated in the NPRM to grandfather all WIA providers through the duration of the Governor's transition period. The Department modified § 680.460(a)(1) to make the treatment of providers and programs eligible under WIA consistent, regardless of whether they became eligible before, on, or after July 21, 2014. This interpretation is in accord with WIOA secs. 122(b)(4)(B) and 122(i) because all WIA providers determined eligible through June 30, 2015, were deemed eligible under the version of WIA sec. 122 requirements in effect on July 21, 2014 (the day before enactment of WIOA).

Section 680.450 What is the initial eligibility process for new providers and programs?

Section 680.450 establishes the requirements for the initial eligibility procedures for new providers and programs. The Department made non-substantive edits for consistency in how the Department uses terms throughout this section. The Department also made substantive edits to paragraph (b), which are discussed in detail below.

Comments: The Department received comments addressing various issues relating to § 680.450. Several commenters expressed support for the proposed initial eligibility process. Other commenters suggested that provisions for waivers be included in §§ 680.450 (initial eligibility) and 680.460 (continued eligibility) of the Final Rule, and that WDBs be given authority to waive eligibility requirements on a case-by-case basis where it is in the best interest of those receiving training services. Some commenters recommended that Governors be given authority to approve public higher education schools automatically, similar to the proposed approach for registered apprenticeship programs, including eliminating the need for these institutions to be subject to initial or continued eligibility. These commenters stated that this was a duplicative burden on these institutions that are already required to report on programs to their primary funding sources. Several commenters recommended that National Farmworker Jobs Program (NFJP) grantees be presumed to be ETPs and be included on their States' ETPLs automatically to encourage and streamline the ability of WIOA adult and dislocated worker programs to co-enroll participants who also qualify for NFJP. In addition, one commenter expressed concern that its State would be unable to implement a new process that includes creating a technical system to track provider performance and other new WIOA requirements, as well as have public comment and implement by July 22, 2015, the date by which initial eligibility procedures are required to be implemented. Another commenter stated that even though local areas may set more stringent standards for performance for eligible training providers, because providers can apply to any Local WDB for approval to the statewide list, these more stringent standards are ineffective in ensuring provider quality. This commenter suggested that local areas should have full control over their Eligible Training Provider List, provided minimum standards are met.

Department Response: The Department is clarifying in this preamble that States and local areas are the only entities authorized to determine new provider or program eligibility under WIOA. WIOA sec. 122(a) requires the Governor to determine eligibility procedures. State and Local WDBs do not have authority under WIOA to waive initial or continued eligibility requirements. The Department is therefore not including such waiver authority in this subpart. However, the eligibility requirements in the regulations are quite flexible because although they require the Governor to take certain factors into account, they do not proscribe what weight is given to any one factor. Additionally, Local WDBs may use contractual arrangements under §§ 680.320 and 680.530 to ensure that training is available. Automatic approval of higher education institutions or NFJP grantees as eligible training providers is not permitted under WIOA; these institutions and grantees will need to apply for initial eligibility in the same manner as all other training providers. In response to comments about duplicative burden, the Department acknowledges that there may be some duplication of requirements. However, the Department encourages these institutions to examine where there is overlap in the reporting requirements to minimize duplicative Start Printed Page 56131work in complying with all of the institution's reporting requirements. Therefore, no change was made in response to this comment.

The Department has made no change to the timeline for implementing initial eligibility procedures in order for new training providers and programs to be included on the State Eligible Training Provider and Programs List. The States must implement initial eligibility procedures within 1 year of WIOA's enactment as is required under WIOA sec. 122(c).

The Department corrected the reference to paragraph (d) in § 680.450(c) to paragraph (e).

Comments: Several commenters provided input on the specific performance information that the Governor of each State is required to request from potential training providers under § 680.450(e).

Department Response: The Department considered commenters' suggestions on what kinds of information could be considered a “factor related to the indicators of performance” to meet § 680.450(e)'s requirement. However, with regard to the comments on the performance information requirements in § 680.450(e), no substantive changes were made to the regulatory text in response to these comments. In part, because the factors related to performance that a Governor must take into account to establish initial eligibility are set forth in WIOA sec. 122, the regulations are consistent with the statutory requirements. Moreover, WIOA sec. 122 gives the Governor the discretion to determine the procedures for initial eligibility and establish minimum performance standards and the Department wants to allow the Governor the flexibility to establish procedures that are most relevant and applicable to the Governor's State.

Section 680.450(e)(2) requires the initial eligibility procedures to take into account “a factor related to the indicators of performance . . . .” This does not mandate a specific factor and it is at the Governor's discretion to determine what information to require for the applicant to meet this requirement. The Department has listed below the comments and responses received on the requirement at § 680.450(e)(2).

Finally, the Department notes that it revised § 680.450(e)(4) to clarify its implementation of WIOA sec. 122(b)(4)(E)(iii). This provision of WIOA permits the Governor to require other factors that indicate high-quality training services, including the factor described at WIOA sec. 122(b)(1)(H). WIOA sec. 122(b)(1)(H) requires an analysis of the quality of a program of training services, including programs of training services that lead to recognized postsecondary credentials. Therefore, the Department has made a minor revision to § 680.450(e)(4) to reflect that the Governor's criteria may require applicants to provide information demonstrating the program is a high quality program, which can include information related to training services that lead to recognized postsecondary credentials.

Comments: A few commenters described the burden associated with the proposed performance information requirements and cautioned that they may limit the options available to training customers. Similarly, one commenter stated that the performance information requirements under both §§ 680.450 and 680.460 were too burdensome for small training providers, who are generally not equipped for tracking employment outcomes.

Department Response: The Department considered commenters' concerns about the burden of providing performance information under §§ 680.450 and 680.460. However, the information required for submission is set out in WIOA sec. 122 and the sections implement WIOA's requirements for initial and continued ETP eligibility. The Department encourages States and providers to consider the benefit to the programs of training of having robust performance outcome data that can be used to evaluate and advertise the effectiveness of their programs of training. No changes were made to the regulatory text in response to these comments.

Comments: A commenter cautioned against requiring past performance information for new training providers that do not have past performance information to evaluate. Another commenter recommended requiring applicant training providers to present average earning rates after exit rather than median earnings.

Department Response: The Department considered the commenter's recommendation, but determined that the Governor's flexibility to determine what factors related to the performance indicators will be selected as part of the initial eligibility criteria is sufficient. This includes determining what factor related to performance may be used for new training providers. The Department notes that while the Governor has discretion to determine the factor related to performance that may be used for initial eligibility, once eligibility is established, WIOA sec. 116(b)(2)(A)(i)(III) requires approved ETP programs to report on median earnings. However, this does not prohibit the Governor from also requiring ETP programs to report on average earnings. No changes were made to the regulatory text in response to these comments.

Comments: One commenter requested changes in training provider eligibility criteria for providers that are different from WIA occupational skill providers (e.g., pre-apprenticeships, entrepreneurial training, customized and incumbent worker training, and youth services).

Department Response: As explained above, the provider eligibility criteria are left to the Governor's discretion. No changes have been made to the regulatory text in response to this comment. However, the Department notes that it is within the Governor's discretion to have specific eligibility criteria for providers that provide training that is distinct from traditional WIA-occupational skill providers, as long as the criteria also comply with §§ 680.450 and 680.460 and are included in the State's policies. Section 680.530 and its preamble provide additional information on how States may provide customized and incumbent worker training.

Comments: One commenter asked whether each State is required to specify which elements from § 680.450(e)(2) training providers need to provide information on or whether the training provider can submit information on any of the factors listed.

Department Response: The State procedure must specify which elements from § 680.450(e)(2) training providers need to provide information on and what verifiable information will satisfy this requirement.

Comments: Another commenter sought clarification of the definition of “partnership with a business” as used in NPRM § 680.450(e)(3), and asked how this would impact the eligibility of a training provider.

Department Response: The Department is clarifying that information about whether a provider is “in a partnership with a business” under § 680.450(e)(3) could include information about the quality and quantity of employer partnerships. However, the Department did not include this example, or others in the regulation text, as States may have other methods for determining whether the provider is in a partnership with a business and including one example may be seen as limiting State options. The impact of this factor on the eligibility of the training provider is Start Printed Page 56132determined by the Governor's initial eligibility procedure.

Comments: One commenter requested flexibility in initial eligibility requirements for training providers in rural areas and those serving the hardest to serve populations.

Department Response: The Governor may require additional information in order to ensure that the needs of the State are being met, including in rural areas and in serving hard-to-serve populations. The Governor's procedure determines how these additional factors may impact initial eligibility. In addition, the Local WDB must work with the State to ensure there are sufficient numbers and types of providers of training services, including eligible training providers with expertise in assisting individuals with disabilities and eligible training providers with expertise in assisting adults in need of adult education and literacy activities described under WIOA sec. 107(d)(10)(E), serving the local area. No changes were made to the regulatory text in response to this comment.

Comments: Another commenter urged the Department to require new applicants to be subject to the same anti-discrimination provisions as registered apprenticeship programs under 29 CFR part 30. This commenter suggested that new applicants provide the following: A plan for recruitment to ensure underrepresented populations have access to nontraditional opportunities; capacity to deliver equitable training practices and classroom and OJT training environments that support underrepresented populations' success and retention in the training program; and support services, case management, mentorship, and other strategies necessary for underrepresented populations' success in training and employment.

Department Response: Title 29 CFR part 30 governs the policies and procedures to promote equality of opportunity in apprenticeship programs registered with the U.S. Department of Labor and State apprenticeship programs registered with recognized State apprenticeship agencies. Therefore, the Department will not apply 29 CFR part 30 to all eligible training providers. However, for all other programs, the Department notes that the Governor has discretion to consider a wide range of factors when determining initial and continuing eligibility under §§ 680.450 and 680.460. Therefore, if the Governor wishes to consider factors such as an eligible training provider's treatment of underrepresented populations, this is within the Governor's discretion. The Department has determined that applying criteria developed for one type of program of training to all types of training programs may unnecessarily limit the types of programs of training available to participants in WIOA programs. No changes were made to the regulatory text in response to this comment.

Comments: The Department also received responses to the specific solicitation in the NPRM requesting comments about the types of verifiable program-specific information the Governor must require from providers seeking initial eligibility as ETPs under § 680.450(e).

Department Response: The Department has carefully analyzed the comments regarding verifiable program specific performance information, including the suggestions of specific factors and methods of providing verifiable information in the least costly manner. The Department has determined that no substantive changes to regulatory text are necessary in response to these comments. Instead, the Department is clarifying that the Governor and the States have discretion when developing their initial eligibility criteria and requirements to decide what constitutes verifiable program specific performance information and the factors related to indicators of performance. This flexibility will enable States to meet the individual needs of each State and allow each State to establish requirements that the ETPs and the State are able to manage given their current levels of technology. Examples of potential criteria include average earnings rates, average cost of training, and criteria based on information available in UI wage records. However, these examples are not intended to be an exhaustive list and States are not limited to the Department's suggestions.

In meeting the requirement that the factor be “related” to the WIOA sec. 116 reporting requirements in § 680.450(e)(2), this factor need not be limited to WIOA participants, even though under sec. 116 the primary indicators of performance require reporting on WIOA participants. This is because programs of training applying for initial eligibility will be applying to serve WIOA participants for the first time and will not have results available for WIOA participants.

Comments: One commenter stated that the easiest-to-verify information that providers could furnish would be customer-level data that States can match to unemployment insurance (UI) wage records to determine employment outcomes. The commenter stated that providers would be expected to submit that information if they are placed on the ETPL because this information would be required for the ETP annual performance report. The commenter asserted that requiring information for an eligibility determination that matches information required for the ETP annual performance report would reduce costs for both providers and States and increase data integrity. A few commenters stated that the most valid, reliable, and efficient way to measure training providers' performance is for the State to first collect a small set of seed records from each provider for each student (e.g., social security number, program of study, start date, end date, credential, and demographic characteristics) and then link the records with UI wage records and other administrative records used to determine outcomes.

Department Response: The Department notes that these are potential options for States and the Governor may choose to utilize these approaches. However, the Department has chosen not to require States to implement these approaches for initial eligibility to give States the flexibility to determine the most effective method for obtaining verifiable program specific performance information for determining initial eligibility. As explained earlier, the Department recognizes that there is overlap between what is required for eligibility and the WIOA sec. 116(d)(4) ETP annual performance report. The Department strongly encourages States and ETPs to work together to find efficiencies in how information can be reported in the performance report and for eligibility purposes. No changes were made to the regulatory text in response to these comments.

Comments: Another commenter stated that the regulations should encourage ETPs to focus their follow-up efforts on participants who do not appear in the UI wage records, relieving data collection burdens on the individual participants and the non-public training providers.

Department Response: The Department recognizes that social security numbers will not be available for each participant and has determined that supplemental follow-up methods will be allowable. The use of supplemental information in performance reporting is further discussed in 20 CFR part 677 (see Joint WIOA Final Rule) and the associated ICR.

Comments: Another commenter requested that the system used to gather ETP data should be accurate by nature Start Printed Page 56133so that Local WDBs are not required to monitor or ensure accuracy of information.

Department Response: The Governor or the Governor's designated SWA (or appropriate State entity) is responsible for ensuring that programs meet eligibility criteria and performance levels established by the State, including verifying the accuracy of the information. The Local WDB must carry out the procedures assigned to the Local WDB by the State, including monitoring and ensuring accuracy of the information. No changes were made to the regulatory text in response to this comment.

Comments: One commenter recommended specific performance information to be collected, including average cost of training to include tuition, supplies, and supportive service needs; loan default rates; employer partners; and the completion rates of all students rather than the exit rates.

Department Response: The Departments have included in the subpart only the performance information required by WIOA secs. 122 and 116. However, as described in § 680.490(c), the Department notes that the Governor may require additional specific performance information that the Governor determines to be appropriate to determine or maintain eligibility. No changes were made to the regulatory text in response to this comment.

Comments: One commenter stated that wages and retention should be verified using the employment base wage.

Department Response: The Department is unclear what the commenter intends by “employment base wage.” However, the Department has chosen not to require States to implement these approaches for initial eligibility. States have the flexibility to determine the most efficient method for obtaining and verifying program specific performance information for determining initial eligibility.

Comments: A few commenters suggested that States should be allowed to use supplemental/existing data because most schools are already required to report on programs to their primary funding sources, making the ETP reporting requirement a duplicative effort. These commenters asserted that the local area should determine if a training provider's performance is acceptable and whether the training provider should continue to be listed on the ETPL.

Department Response: The Department recognizes that some of the information ETPs are currently reporting might overlap with the information required for reporting for initial eligibility. The Department encourages States to examine closely WIOA reporting requirements and the other requirements ETPs are subject to, to find overlap and reporting efficiencies. Regarding the commenter's suggestion that the local area determine if a training provider's performance is acceptable, the Department notes that WIOA sec. 122(b)(3) and § 680.430(e) provide that Local WDBs can establish criteria and information requirements, in addition to the Governor's, and require higher levels of performance than the Governor for purposes of determining the continuing eligibility of providers to receive funds to provide training services in the Local WDB's area. No changes to the regulatory text have been made in response to this comment.

Comments: Some commenters recommended that the Department allow States to determine the definition of verifiable information. Another commenter requested clarification regarding the “program specific” indicators required by the Department and recommended that States be allowed the flexibility to define what those mandated indicators will be through their ETP State policy.

Department Response: As explained above, this subpart leaves the Governor the flexibility to determine what constitutes “verifiable program-specific information.” No changes were made to the regulatory text in response to this comment.

Comments: One commenter suggested that providers report data on (and States determine eligibility for) all similar degree programs as one. For example, all bachelor's degree programs at that provider are reporting as one bachelor's degree program, rather than breaking them out into bachelor's in education, bachelor's in biology, bachelor's in math, etc. This commenter also suggested that providers report data on (and States determine eligibility for) the main program of study, rather than all of the individual courses that make up the program. Further, this commenter recommended that providers do not need to report on (and States determine eligibility for) courses that are pre-vocational intensive service or skills upgrade courses, or courses that cross industry sectors and occupations or which are less than 3 days in duration.

Department Response: In response to the recommendation that eligibility be determined generally at the degree level, the Department is clarifying that eligibility is determined at the level of “program of training” as described in § 680.420, rather than at the class, course or general degree level. A program of training may involve one course or a course of fewer than 3 days in duration, if the course leads to one of the outcomes as described in the definition of a program of training services at § 680.420. In order for such a program of training to receive WIOA title I adult, dislocated worker, or youth training funds through an ITA, the program must be determined eligible and is therefore subject to reporting requirements. Registered apprenticeship programs are an exception to the eligibility requirements. Work-based training options do not receive training funds through an ITA, and are described at § 680.530. No changes were made to the regulatory text in response to this comment.

Comments: One commenter recommended that States be given an additional 2 years to implement the performance information requirements in §§ 680.450(e) and 680.460(f). After stating that the Department does not anticipate complete performance data derived from wages until PY 2018, a few commenters suggested allowing eligibility to be based on completion rates and credentials until complete employment and wage performance data can be collected.

Department Response: The Department has determined that a regulation change is not necessary given the flexibility in the regulation at §§ 680.460(f)(1) and 680.450(e)(2). Under § 680.460(f)(1), the State may use alternate factors for performance until data from the conclusion of each performance indicator's first data cycle is available. Under § 680.450(e)(2), the Governor's procedure must require applicant providers to provide information addressing a factor related to performance indicators, meaning that the Governor's initial eligibility procedure may not require the provision of the results for each of the indicators of performance. The required factors for initial and continued eligibility allow the Governor's procedure to determine whether to set minimum performance standards and how much emphasis to put on any one factor that is taken into account.

Although the Department determined no change to the regulation was necessary in response to those comments, the Department has made a revision to § 680.450(f) by inserting the word “performance” between “minimum standards” to clarify that the minimum standards a Governor may set refer to minimum performance standards. Additionally, in response to commenters who requested that initial Start Printed Page 56134eligibility last for longer than a year because more time is needed to generate enough exiters to provide a meaningful outcome measurement given the data lag for performance indicators, the Department is clarifying that § 680.460(f)(1)(v) allows the Governor to take into account alternate factors related to the performance indicators described in § 680.460(f)(1) until performance information is available. Similarly, for initial eligibility, the Governor may use a factor related to performance in determining eligibility. Thus, the Governor's ability to establish continued eligibility procedures and to take other factors into account enable the State to build in consideration of the limits of initially eligible training providers to supply performance information after only 1 year. The Department notes that it also plans to launch an intensive technical assistance effort.

Comments: A commenter requested that initial eligibility under § 680.450(g) last longer than 1 year because more time is needed to generate enough exiters to provide a meaningful outcome measurement given the data lag for performance indicators, such as earnings in the fourth quarter after program exit.

Department Response: The Department has determined that initial eligibility will be maintained at 1 year. WIOA sec. 122(b)(4)(B) provides that initial eligibility is “for only 1 fiscal year.” However, because program eligibility is not aligned with a fiscal year, the Department has removed the word “fiscal” from paragraph (g) in this section. Since initial eligibility may be determined at any time during a calendar year or program year, requiring initial eligibility to be for 1 year, rather than 1 fiscal year enables the State to establish a 12-month initial eligibility period for each program.

Comments: One commenter recommended that the Department launch an intensive technical assistance effort for States to develop the IT infrastructure needed to meet these requirements. Another commenter requested that the regulation allow States and localities to waive the reporting requirements for libraries when developing lists of ETPs in the first year, on the grounds that libraries would be prevented from providing training with WIOA funding without such a waiver. A few commenters stated that reductions in overall funding and limited funding for the Governor's set-aside will make performance reporting requirements, including the need to modify data reporting systems, difficult. As a solution to this concern, commenters recommended that the full Governor's set-aside be reinstated. One commenter encouraged the Department to pay particular attention to the impact that the requirements would have upon students that have expressed a desire to reengage back into the educational system and obtain their accredited high school diploma. The commenter made several specific recommendations about programs that would be helpful for this particular population, including making State WIOA program eligibility to be dictated by regional accreditation.

Department Response: The Department has already deployed technical assistance for ETP requirements, including webinars and a Quick Start Action Planner and plans to engage in a technical assistance effort to assist with ensuring adequate information technology infrastructure to implement the new WIOA requirements.

The Department has chosen not to regulate waiver policy in the Final Rule. The Department does not have authority under WIOA to provide States and local areas the ability to grant waivers. Therefore, the Department has not included such waiver provisions in the Final Rule for libraries. However, the Department notes that small CBOs, such as libraries, can provide programs of training services under contracts with local areas as described at §§ 680.530 and 680.320. Programs of training services provided under such contracts are not eligible training providers and are not included on the State ETPL. Thus, they are not required to comply with the requirements to be on and stay on the list. The Department additionally notes that because CBOs providing training services through a contract are not on the State ETPL, they are also not required to submit the WIOA sec. 116(d)(4) ETP annual performance report.

The set-aside amount is determined by Congress as part of the annual appropriations process and is therefore outside the scope of this regulation.

The Governor's procedure for initial eligibility may require other information in order to demonstrate high quality training services and such information may include regional accreditation and the ability to serve students who wish to reengage the educational system. As described under § 680.420, a program of training services may lead to a secondary diploma or its equivalent, as long as this is consistent with § 680.350. No changes to the regulatory text were made in response to this comment.

However, the Department has made a change to the regulatory text at § 680.450(b) to align with changes made to § 680.470, providing that apprenticeship programs registered under the National Apprenticeship Act are exempt from initial eligibility procedures and must be included and maintained on the State ETPL unless the program is removed from the list for the reasons in § 680.470. This change was made to conform with changes made to § 680.470, which are discussed in the preamble corresponding to that section. Although this is discussed more fully in the preamble to 20 CFR 677.230 (see Joint WIOA Final Rule), the Department notes that registered apprenticeship programs are not required to submit the WIOA sec. 116(d)(4) ETP annual performance report. Outcomes for WIOA participants in WIOA-funded registered apprenticeship programs must still be included in the State's annual performance report under WIOA sec. 116(d)(2). The Department also made a non-substantive change to this provision by removing the word “corresponding” from the phrase “corresponding program” as the word “corresponding” did not provide needed clarification and therefore was unnecessary.

Section 680.460 What is the application procedure for continued eligibility?

Section 680.460 sets out the requirements for the application procedure for continued eligibility. The Department has made non-substantive edits to this section for consistency with how the Department uses terms throughout the regulation. The Department has also made substantive revisions to paragraphs (c), (f)(1) and (10), and (j). The Department made edits to (i) to clarify the requirements for biennial review of eligibility information. These changes are discussed in further detail below.

Comments: Several commenters supported requiring public comment during the development of continued ETP eligibility procedures as well as allowing the Governor discretion to set the timetable for consultation and public comment. One commenter recommended that the regulations be revised to provide assurance that the biennial review is transparent and that it allows for adequate input from employers, as well as to provide guidance on specific ways in which Governors may hold providers accountable for meeting the needs of local employers. Another commenter suggested that the Department provide more structure for the process of including education programs on the ETPL and include specific examples for Start Printed Page 56135gauging program quality by demanding standards of effective practice.

Department Response: The Department has determined that no changes to the regulatory text are necessary to address the concerns raised by commenters as the section already achieves the commenters' suggestions. The Governor's procedure for biennial review may take into consideration factors to ensure that the State will meet the needs of local employers. The Governor establishes the procedure after taking into consideration recommendations from Local WDBs and training providers and providing an opportunity for comment from interested members of the public, including representatives of business and labor organizations as required by § 680.460(b)(1) through (3). In addition, States must describe the eligibility procedures in their State Plans, which are subject to public comment requirements that include allowing for input from key stakeholders such as employers. This is further discussed in 20 CFR part 676 (see Joint WIOA Final Rule) and the WIOA State Plan ICR. Therefore, commenters' concerns about public comment during the development of the policies are already addressed.

In response to commenters' concerns about the Governor setting up a timetable for consultation with the public, the Department notes that § 680.460(b)(3) requires the Governor to set up a time period for soliciting and considering recommendations from Local WDBs and providers and giving the public an opportunity for comment. However, this section of the regulation does not prescribe a specific time period. Therefore, the Governor has discretion to set up a timetable for considering recommendations and public comment. Per § 680.460(f)(4), the Governor must take into account the degree to which programs of training relate to in-demand industry sectors and occupations in the State. Further, as described in § 680.460(f)(11), the Governor may take into account other factors such as ensuring that one-stop centers are meeting the needs of local employers and participants. It is unclear what additional structure the commenter is recommending in order to gauge program quality by demanding standards of effective practice. WIOA performance accountability requirements, as addressed in the ETP performance reports in 20 CFR 677.230 (see Joint WIOA Final Rule), are highly structured. Through technical assistance, States will have opportunities to share effective practices to gauge program quality.

The Department modified proposed § 680.460(c). In the NPRM, this paragraph required programs registered under the National Apprenticeship Act (NAA) to be included and maintained on the list for as long as the program was registered and required the Governor's eligibility procedures to include a mechanism for registered apprenticeship programs to indicate interest in being on the list as described in § 680.470. The Department reorganized this paragraph for clarity, moving the sentence that procedures for including registered apprenticeship programs on the list are found in § 680.470 to the beginning of the paragraph, instead of the end of the paragraph, and made a substantive revision for consistency with § 680.470. This section now provides that programs registered under the NAA are automatically eligible to be on the State's list and must remain on the State's list unless they are removed from the list for the reasons set forth in § 680.470. This is a conforming edit to changes made in § 680.470 and more can be read about that change below. The Department also made a non-substantive edit to this section removing the word “corresponding” as it was unnecessary.

Comments: Many commenters responded to our request for comment under proposed § 680.460(f)(1) on the alternate factors that may be used until performance data are available. The Department revised § 680.460(f), breaking the requirements into separate subsections for clarity and consistency with WIOA sec. 122(b)(1)(A)(i) and (ii). The flexibility for the Governor to use alternate factors until performance data are available is now located at § 680.460(f)(1)(v). The regulation at § 680.460(f)(1)(v) allows the Governor to use alternate factors for performance until performance information is available to establish continued eligibility. Several commenters suggested that alternate factors for performance be left to the Governor and Local WDBs to decide, while others offered a variety of specific alternate factors that the Governor could take into account. These suggestions included: WIA criteria; use of other information already supplied for State and Federal accountability measures, such as Carl D. Perkins Act performance indicators; three letters from local employers; completion rates; credentials; gainful employment measure; and graduation rates.

Department Response: The Department acknowledges that the suggestions provided by commenters offer appropriate options for the Governor's procedure, but has chosen not to include these in the regulation text to give Governors flexibility in choosing what performance information to use. In this way, the Governor's procedure can be tailored to the best performance data available among applicant training providers in that State.

Comments: A few commenters recommended a separate, lower set of performance standards for training providers who serve hard to serve participants, such as tribal colleges and programs specifically designed to provide combined workplace language and workplace skills to new Americans needing English literacy instructions. A few commenters recommended allowing States and local areas to grant waivers to CBOs for the reporting of data to ensure that these entities have the capacity to qualify as ETPs. However, a few other commenters stated that CBOs, including those serving hard to serve participants, must be held to the same standards as any other provider on the list.

Department Response: The regulatory language authorizes the Governor to take into account such factors as meeting the needs of hard-to-serve participants and programs specifically designed to provide combined workplace language and workplace skills to new Americans needing English literacy instruction when developing the State's continued eligibility procedures. Section 680.460(f)(9) specifically requires the Governor to take into account the ability of providers to provide training services to individuals who are employed and individuals with barriers to employment. In addition, local areas may enter into contracts to provide training services under specific circumstances, including with CBOs. Because CBOs which are providing programs of training through contracts are not considered ETPs, they do not need to meet the initial and continuing eligibility requirements of this subpart. However, CBOs that are included in the State List of Eligible Training Providers and receive payment for the training services through ITAs, rather than contracts, are subject to the eligibility and reporting requirements of the State list. No changes to the regulatory text were made in response to these comments.

Comments: Commenters addressed the performance information under § 680.460(g) that the Governor must require for continued eligibility for the State list of ETPs. One commenter questioned whether 20 CFR 677.230, which requires reporting performance Start Printed Page 56136information on all participants, is in conflict with § 680.460(g) which requires reporting on WIOA-participants only.

Department Response: The Department does not consider these provisions as being in conflict as they are derived from different statutory provisions and serve different purposes under WIOA. The ETP annual performance report is required by WIOA sec. 116(d)(4) and explicitly requires information on the levels of performance for all individuals in a program of study. As explained above, more information about this requirement can be found in 20 CFR 677.230 and its corresponding preamble (see Joint WIOA Final Rule). Separately, the requirements for a training provider to continue to be on the State List of Eligible Training Providers and programs are found in WIOA sec. 122, and sec. 122(b)(2)(A) explicitly identifies the performance information the ETP must provide for this purpose. Thus, the WIOA sec. 116(d)(4) annual report is for reporting on performance, while the requirements in § 680.460 are for staying on the State List of Eligible Providers and Programs. In order to continue to be eligible, the ETP must provide information on the performance accountability measures in sec. 116 of WIOA for “participants” whose training is funded under title I, subtitle B. However, the Department notes that both the Governor, under WIOA sec. 122(b)(1)(J), and the Local WDB, under WIOA sec. 122(b)(3), have authority to require additional data from ETPs, which might include data on all students. In addition, WIOA sec. 122(b)(1)(A)(ii) explicitly permits the Governor to require reporting on all individuals enrolled in the programs in which WIOA-funded participants studied.

Comments: Several commenters cited the potential problem of a small number of participants (“small in size”) when providing WIOA-participant-only data. These commenters stated that the resulting data would be too small to yield useful outcome information and would risk revealing personally identifiable information (PII). Other commenters suggested that § 680.460(g) specifically include instructions similar to those found in WIOA sec. 116(d)(6)(C), which states that the disaggregation of data for the State performance reports is not required when the number of participants is too small to yield statistically reliable information or when results would reveal PII about an individual participant. One commenter said that an alternative approach is needed for using performance results for management, provider selection, and public/consumer information, but did not specify what the alternative approach would be. Some commenters suggested that the State List require reporting on all students in order to yield a larger data set. One commenter urged the Department to require biannual reporting of all completers and placement numbers for the previous year utilizing a standardized template to collect data to ensure an educated training program selection process. Several commenters recommended that the materials to be considered when determining ETP continued eligibility include information reported to State agencies on Federal and State training programs other than WIOA title I, subtitle B, and asked for submission of performance results for all students and not just those who received training subsidized by WIOA title I adult or dislocated worker funds.

However, several commenters supported a requirement that performance reports include only WIOA-funded students. One commenter cautioned that the cost for reporting all students and not just WIOA-funded students by program could result in training providers not accepting WIOA-funded students to avoid the reporting burden. One commenter stated that in order to avoid revealing data on any individual, it would normally not be required to disclose performance information on any program with a small number of participants and that performance data would be relatively meaningless if too few individuals are in the performance cohort. This commenter recommended that the regulations specifically recognize that this information shouldn't be revealed for those programs with low participant numbers.

Department Response: With respect to the privacy concerns that arise from the small numbers in participant data, the Department notes that the regulation already addresses this issue. Paragraph (e) of § 680.500 addresses privacy concerns for the dissemination of the ETPL by requiring that the State List and accompanying information be made available in a manner that does not reveal personally identifiable information about an individual participant and that, in developing the information to accompany the State List of Eligible Training Providers and Programs, disclosure of personally identifiable information from an education record must be carried out in accordance with the Family Educational Rights and Privacy Act, including the circumstances relating to prior written consent. Accordingly, additional regulatory text for § 680.460 is not needed. While the Governor must take into account all of the information listed in WIOA sec. 122(b)(1) in setting the criteria for eligibility on the State ETPL, the Department interprets WIOA sec. 122(b)(1)(A)(ii) to provide discretion to the Governor to determine whether reporting on all students is an “appropriate” measure of performance outcomes under that paragraph. The Department is not regulating State eligibility procedures to require reporting on all students in order to yield a larger data set; however, the Governor may choose to do so as part of the State's eligibility procedures.

With respect to the minimum size of a data set that would ensure participant confidentiality and the reliability of outcomes data, the Department has determined that States will maintain confidentiality and reliability of data by complying with relevant State law and with WIOA itself. WIOA sec. 122(d)(3) states that the State List and accompanying information must be made available to such participants and to members of the public through the one-stop delivery system in the State in a manner that does not reveal PII about an individual participant. WIOA sec. 122 does not require that the performance information that accompanies the State List be statistically reliable in the same way that WIOA sec. 116(d)(6)(C) does for the annual performance reports. Therefore, the Department has not regulated this as a requirement.

In response to commenters suggesting that the Department require biannual reporting of all completers and placement numbers for the previous year utilizing a standardized template, the Department has chosen not to require a template for the State List of Eligible Training Providers. While a standardized template is required for the reporting of information in the ETP Performance Reports, as described in 20 CFR 677.230 (see Joint WIOA Final Rule), the Department has concluded that WIOA intends the development of the State List to be at the State's discretion in order to meet the needs of individuals seeking training in that State. In addition, the flexibility to determine the format and presentation of the State List enables the State to accommodate additional information that the Governor may choose to require as part of the State's eligibility procedures.

In response to commenters that suggested that eligibility information include materials submitted to State agencies on Federal and State training Start Printed Page 56137programs other than programs within WIOA title I, subtitle B, this is already reflected in the factors that the Governor's continued eligibility must take into account under § 680.460(f)(3).

The Department again wishes to clarify that reporting on all participants is a requirement of the ETP performance reports described in 20 CFR 677.230. Suggestions that the ETP performance reports include WIOA-funded students only, and related comments citing potential concerns by training providers, are addressed in that section.

Comments: Several commenters requested that the Department add waiver provisions to ease the transition to WIOA or to adjust reporting requirements for providers applying for continued eligibility for the ETPL. Other commenters disagreed with the proposed continued eligibility procedures for ETPs eligible under WIA and described them as a time-consuming burden for State and Local WDBs.

Department Response: Because of WIOA's emphasis on ensuring the provision of quality training, and the importance of using performance criteria to obtain such quality, the Department is not including waivers in the regulation. In transitioning to collection of WIOA data, § 680.460(f)(1) already provides sufficient flexibility by allowing the Governor to use alternate factors for performance until WIOA performance information is available for an ETP. No changes were made to the regulatory text in response to these comments.

Comments: The Department received comments in response to the request for ideas on how to reduce the burden and avoid duplication of effort to meet reporting requirements under WIOA secs. 122 (provider eligibility) and 116 (performance accountability).

A few commenters responded to the requirement that the State criteria for continued eligibility take into account the timely and accurate submission of ETP performance reports. Several commenters commented on the ETP annual performance report requirements under WIOA sec. 116(d)(4). Comments related to this report are more fully addressed in the preamble to 20 CFR 677.230 (see Joint WIOA Final Rule). A commenter cautioned that requiring training providers to submit appropriate, accurate, and timely information to the States to create the ETPL under § 680.460(f)(10) is an unnecessary burden because most case management systems already capture and validate this information as part of case management, and that collecting this information from training providers would compromise the accuracy, validity, and consistency of the information. This commenter recommended that States be granted flexibility to capture this information in the manner that best balances the validity of data and efficiency of progress, rather than strictly from training providers. Another commenter stated that the Governor and local WDBs should have the discretion to utilize alternative data sources in the interim to determine ETPs' performance outcomes and that these data outcomes should not be prescribed by the Department because local case managers have real-time participant outcomes not subject to the lag time associated with DOL performance indicators. One commenter disagreed with the proposed WIOA continued eligibility requirements and recommended that the Department continue to use the WIA requirements.

One commenter, referring to § 680.460(l), questioned what qualifies as an “undue cost or burden” to remove a training provider from the performance requirement.

Department Response: The information required under § 680.460 to maintain continued eligibility is separate from the ETP annual performance reports required under 20 CFR 677.230 (see Joint WIOA Final Rule). Paragraph (e)(3) of 20 CFR 677.230 addresses coordination and dissemination of the ETP performance reports and the State list of eligible training providers as described at § 680.500. With respect to the commenter's recommendation that the requirement to consider whether a provider timely and accurately submits information for the WIOA sec. 116(d)(4) ETP annual report to the State, the Department acknowledges that there will be some overlap in what is required for inclusion in the WIOA sec. 116(d)(4) report and the information the State already has in its case management files. The Department recommends that States work with training providers to minimize the reporting burden and utilize integrated systems as much as possible. No change in the regulation text was made in response to this comment.

Additionally, the Department notes that the provision at § 680.460(l) does not allow a State to remove a training provider from this performance requirement based on undue cost or burden. Rather, this provision allows the Governor to establish procedures and timeframes for providing technical assistance to training providers that are failing to meet the criteria and information requirements due to undue cost or burden. The Governor's procedures determine what constitutes undue cost or burden. The Department has chosen not to regulate what constitutes “undue cost or burden” in order to provide Governors the flexibility needed to best address the particular needs of the ETPs in each State.

WIOA, not WIA, dictates the continued eligibility requirements and the Department declines to substitute WIA requirements for WIOA requirements. WIOA sets forth factors and the Governor's continued eligibility procedures determine how these WIOA-required factors are taken into account. WIOA and the regulations further provide that the Governor's criteria for eligibility and information requirements may include any appropriate additional information that the Governor may require. In addition, WIOA allows for WIA-eligible providers to remain eligible through December 31, 2015.

Comments: One commenter requested clarification on the timeline for initial eligibility compared to the beginning of the biennial review and renewal period.

Department Response: States have discretion in how they implement eligibility procedures and timelines for biennial review. Some States may find it efficient to review the entire State list every 2 years, while others may have a system for reviewing each provider on the second anniversary of when that provider established continued eligibility under WIOA. The timeline for how initially eligible training providers are deemed continued eligible training providers and thereby incorporated into the review system will vary from State to State. The Department made minor edits to § 680.460(i) for clarity regarding the requirement for biennial review of eligibility information by inserting the word biennial before the word “review.”

The Department modified § 680.460(j) on the biennial review to provide that, in addition to the verification of the registration status of registered apprenticeship programs, the biennial review also must include removal of any registered apprenticeship programs that are removed from the list under § 680.470. This change was made to conform with changes to § 680.470. More can be read about the Department's changes to proposed § 680.470 below.

Paragraph (f)(10) of § 680.460 proposed to require the Governor, in establishing the eligibility criteria for continued eligibility, to take into account whether providers timely and accurately submitted the information needed for the WIOA sec. 116(d)(4) ETP report. The Department also revised this Start Printed Page 56138provision to require the Governor to take into account whether the provider timely and accurately submitted the information required for initial and continued eligibility. Additionally, the Department revised this provision to require that the Governor consider whether the provider submitted “all of the” information for the report and eligibility procedures, which means the Governor must take into account whether the information the provider submitted is complete.

In response to comments and to ensure that providers comply with the requirement to timely and accurately submit all of this information, the Department added § 680.460(l) to require that the Governor's procedure include what the Governor considers to be a substantial violation of § 680.460(f)(10). And § 680.460(l)(2) requires those providers that substantially violate this requirement be removed from the State list of eligible training providers and programs consistent with § 680.480(b).

These modifications were made for consistency with WIOA sec. 122(f)(1)(B), which requires programs be removed from the State list of eligible programs and providers when a provider substantially violates any of the requirements of title I of WIOA. Given WIOA's focus on performance accountability in WIOA sec. 116 and informed consumer choice in WIOA sec. 122, the Department has concluded that failure to timely and accurately submit the information required for the WIOA sec. 116(d)(4) ETP report and the initial and continued eligibility constitutes a substantial violation of WIOA title I requirements.

Because WIOA sec. 122(f)(1)(B) requires the determination of a substantial violation to be made by an individual or entity specified in the Governor's procedures, § 680.460(l) gives the Governor the discretion to determine what constitutes a substantial violation of the requirement to timely and accurately submit all of the required information. Therefore, the Governor has the flexibility to take into account the specific circumstances in the State that affect a provider's ability to submit the required information. Moreover, the Department notes that paragraph (l)(1) requires the Governor's determination of what constitutes a substantial violation of the requirement to timely and accurately submit all of this information to take into account exceptional circumstances beyond the provider's control, such as natural disasters, unexpected personnel transitions, and unexpected technology-related issues. The Department included this provision specifically to address instances in which, through no fault of its own, a provider may not be able to timely or accurately submit all of the information required. In those instances, the Governor may not determine that a substantial violation has occurred. Additionally, the Department notes that the list of the exceptional circumstances in this regulatory provision is not exhaustive and the Department encourages Governors to consider the particular needs of providers in the State in creating the policy and determining what constitutes exceptional circumstances beyond the provider's control.

The Department also has made a clarifying change to § 680.460(f)(10) adding the words “information required for completion of” between “submitted” and “eligible” to clarify that while the ETPs are required to provide accurate and timely information for purposes of completion of the ETP performance report required by WIOA sec. 116, an ETP will not have all of the information to complete that report.

Finally, the Department removed paragraph (k) because the authority for the Local WDBs to require higher levels of performance for local programs is already referenced in § 680.430(e). Therefore, this provision was unnecessary. The Department renumbered what was previously proposed paragraph (l) to paragraph (k) to conform to this change.

Section 680.470 What are the procedures for including and removing registered apprenticeship programs on a State list of eligible training providers and programs?

Section 680.470 described the process for including and maintaining registered apprenticeship programs on the ETPL. The Department made non-substantive edits for consistency in how the Department uses terms throughout this section. The Department also made substantive changes to § 680.470(a) and (b), and added new paragraphs (c) and (f). The Department received comments regarding § 680.470(d), which is now renumbered as (e).

Proposed § 680.470(a) provided that all registered apprenticeship programs would be automatically eligible to be included on a State Eligible Training Providers and Programs List and required the Governor to establish a mechanism by which registered apprenticeship programs may indicate whether they wish to be included on the State Eligible Training Providers and Programs List. The NPRM required registered apprenticeship programs to indicate interest to be included in the State Eligible Training Providers and Programs List. Due to concern that some registered apprenticeship programs may not wish to be on the State ETPL, proposed § 680.470(b) provided that registered apprenticeship programs will remain on the List until they are deregistered or have notified the State that they no longer wish to be included on the List. The proposed section was silent on whether a registered apprenticeship program could be subject to the provisions for removal from the ETPL under § 680.480, and § 680.480 did not provide an express exclusion from those procedures for registered apprenticeship programs. Proposed § 680.470(d) encouraged Governors to consult with State and Local WDBs and other entities to establish voluntary reporting of performance information for registered apprenticeship programs, because WIOA sec. 122(a)(3) specifically exempts registered apprenticeship programs from the criteria and information requirements and Governor-established procedures required for inclusion on the State ETPL, and therefore the NPRM did not require registered apprenticeship programs to provide performance information in order to be included on the ETPL. In addition, 20 CFR 677.230(b) of the Joint WIOA NPRM (regarding information required for the ETP performance report) exempted registered apprenticeship programs from reporting information for purposes of the ETP performance report required by WIOA sec. 116(d)(4) but specified that any such information submitted voluntarily to a State must be included by the State in the ETP annual performance report required by 20 CFR 677.230. A number of changes were made to this § 680.470 in response to comments received and for purposes of clarity.

Comments: Several commenters expressed support for automatic qualification of registered apprenticeship programs for the State ETPL. In addition, several commenters offered suggestions on how registered apprenticeship programs are added to and removed from a State List of Eligible Training Providers and Programs. One commenter urged the Department to create a uniform standard for all Governors to follow when developing a mechanism by which registered apprenticeship programs request inclusion on the List. The commenter warned that nationally registered apprenticeship programs that offer training in various States would need to assess each State's process, which could prove overly burdensome Start Printed Page 56139if States have different mechanisms. Another commenter objected to placing the burden on registered apprenticeship training programs to ensure inclusion on the ETPL, in part because of the statutory mandate that registered apprenticeship programs be eligible to be included on the List. The commenter expressed concern that the added requirement to indicate interest would create confusion and cause delay in getting registered apprenticeship programs on the State List. A few commenters were concerned that States with a history of being unfriendly or hostile to unions or of having significant bureaucratic inertia may use the requirement as an excuse to disfavor registered apprenticeship programs. Another commenter recommended revising the regulations to create an opt-out framework rather than an opt-in framework, such that registered apprenticeship programs would be included on the ETPL unless the program took steps to be excluded. This commenter stated that an opt-out system would allow program sponsors that may not wish to be on the State List to remove themselves while avoiding ill-designed opt-in procedures that could preclude or delay, intentionally or accidentally, the sponsors of registered joint labor-management apprenticeship programs from appearing on the State ETPL. Other commenters supported the proposal to require registered apprenticeship programs to opt in. Some commenters suggested revising the regulation to clarify when registered apprenticeship programs may be removed from the State List of Eligible Training Providers and Programs and whether registered apprenticeship programs are exempt from the enforcement provisions of WIOA sec. 122(f) that were set forth in proposed § 680.480. One commenter asked how States should monitor registered apprenticeship programs for compliance and what the criteria are to qualify as a registered apprenticeship program.

One commenter stated that proposed § 680.480 was inconsistent with WIOA to the extent that it allows registered apprenticeship programs to be removed from the List for any reason other than deregistration because, in this commenter's view, the requirement in WIOA sec. 122(a)(3) that registered apprenticeship programs shall be included and maintained on the State ETPL for so long as the program is registered precludes removal for any reason other than deregistration. According to the commenter, the standards for deregistration under the National Apprenticeship Act are sufficient to trigger removal from the ETPL where appropriate, and application of the enforcement provisions in WIOA sec. 122(f) is inappropriate and unnecessary. The commenter states that regulations implementing the National Apprenticeship Act already include clearly-defined, qualitative standards governing when such a program can be deregistered. The commenter suggested a change to the enforcement section of the ETP requirements at proposed § 680.480 to affirm that registered apprenticeship programs are not subject to these enforcement provisions. The commenter suggested adding language to § 680.480(a) that states: “Except for a provider described in section 122(a)(3) of WIOA, a training provider may lose its eligibility pursuant to this section.”

Department Response: The Department has made revisions to § 680.470(a) to clarify the process for including registered apprenticeship programs on the State List of Eligible Training Providers and Programs. Through a mechanism established by the Governor, registered apprenticeship programs must be informed of their automatic eligibility and must be provided an opportunity to consent to their inclusion before being placed on the State Eligible Training Providers and Programs List. The Department chose this approach in order to ensure that the States include registered apprenticeship programs that are interested in accepting WIOA participants while at the same time ensuring that all registered apprenticeship programs are readily included with minimal burden. The Department chose to allow Governors to develop such a process, rather than create a uniform standard for all States, in keeping with the Governor's discretion to implement procedures regarding the State List of Eligible Training Providers. This approach will also allow each Governor to establish a procedure that works best for the registered apprenticeship programs in that specific State.

While the NPRM provided that the Governor's mechanism “should” be developed based on guidance from the U.S. Department of Labor Office of Apprenticeship representative in the State or the assistance of the recognized State apprenticeship agency, § 680.470(a) now requires the procedures to be developed based on such guidance. This guidance includes how to ensure that national registered apprenticeship programs are included as eligible training providers. Finally, this paragraph has been amended to add a requirement that the Governor develop a process to impose only minimum burden on registered apprenticeship programs. In response to commenters' concerns that States with a history of being unfriendly or hostile to unions or of having significant bureaucratic inertia may use the requirement as an excuse to disfavor registered apprenticeship programs, these changes together with Departmental technical assistance and guidance ensures that States are inclusive of registered apprenticeship programs.

These revisions will provide registered apprenticeship programs the opportunity to consent to being included on the State List of Eligible Training Providers and Programs while minimizing the affirmative burden placed on them to do so. The Department has concluded that this type of process will increase the participation rate of registered apprenticeship programs on the ETPL and further the aims of the registered apprenticeship program by having such programs included on the State List as soon and as easily as possible. The Department chose not to revise the regulation to require registered apprenticeship programs be included on this List unless they choose to opt out, in order to reduce the potential confusion for participants utilizing the List. Allowing for registered apprenticeship programs to consent allows States to ensure that only providers that are willing to accept WIOA participants are included on the State List of ETPs.

The Department has also revised the regulation at § 680.470(b) and added a new § 680.470(c) to clarify that registered apprenticeship programs may be removed from the State List of Eligible Training Providers and Programs for violations of WIOA and that enforcement provisions may apply in such cases. The regulation now includes § 680.470(b)(3), which provides that a registered apprenticeship program may be removed from the State List of Eligible Training Providers and Programs for having intentionally supplied inaccurate information or substantially violated any provision of WIOA title I (e.g., civil rights or discrimination violations) or WIOA regulations.

Section 680.470(c) provides that removal from the List for reasons under § 680.470(b)(3) will result in a termination of eligibility for the ETPL for not less than 2 years and liability to repay all training funds received during the period of noncompliance, consistent with the requirements under § 680.480 for all other ETPs. Section § 680.470(c) further provides that the Governor must specify in enforcement procedures Start Printed Page 56140established under § 680.480 the process for and the entity making the determination of ineligibility, and must provide an opportunity for hearing. The Department has concluded that the process used for all non-compliant eligible training providers must be applied to noncompliant registered apprenticeship programs, including removal from the State ETPL. This is needed to maintain the integrity and quality of the State ETPL. Application of the WIOA enforcement provisions to registered apprenticeship programs enables the State to take action to remove a registered apprenticeship program from the State List, if that program is in significant violation of WIOA. The Department wishes to avoid a scenario where a registered apprenticeship program that is in significant violation of WIOA could remain on the State List of ETPs until that program's registered status is reviewed under the National Apprenticeship Act.

In addition, the Department disagrees that WIOA requires the Department to exclude registered apprenticeship programs from the enforcement provisions of WIOA sec. 122(f). WIOA sec. 122 contains express statutory exceptions for registered apprenticeship programs from providing performance information as a requirement for inclusion and maintenance on the State ETPL but WIOA sec. 122 contains no similar exception for registered apprenticeship programs from the enforcement provisions. In fact, WIOA sec. 122(h) contains express exemptions from the enforcement provisions for several types of providers, but does not include registered apprenticeship programs on that list of exempted entities. The Department interprets this silence to mean that the regular WIOA enforcement provisions apply to registered apprenticeship programs. Accordingly, the Final Rule now allows the State to take action as appropriate, in addition to the enforcement and deregistration process under the National Apprenticeship Act.

The Department has also revised the wording in the title of § 680.470 to reflect that this section addresses both inclusion and removal of registered apprenticeship programs from the State List of Eligible Training Providers and Programs.

Comments: A few commenters encouraged mandatory reporting of performance information for all training programs, including registered apprenticeship programs, that seek to be included on a State's List of Eligible Training Providers and Programs. Several commenters stated that registered apprenticeship programs should not be exempt from reporting ETP performance data, reasoning that this information is valuable in determining the effectiveness of registered apprenticeship programs in leading individuals to unsubsidized employment. One commenter supported exempting registered apprenticeship programs from the application procedures, information requirements, and performance reporting requirements of other training providers in light of the rigorous process for registering apprenticeship programs with the Department. Several commenters opposed any additional reporting for registered apprenticeship programs and requested that the regulation clearly describe applicable reporting requirements for registered apprenticeship programs. One commenter pointed out that States and local areas will have to determine and establish data collection for tracking for performance and asked whether the Department will define the measures for registered apprenticeship program performance.

Department Response: The Department has decided to maintain the wording of proposed § 680.470(d) in the Final Rule, renumbered to § 680.470(e), because of the addition of new § 680.470(c). The exception for registered apprenticeship programs from providing performance information to be included or maintained on the State ETPL is required by WIOA sec. 122(a)(3). However, the Department is clarifying that voluntary reporting of performance information by registered apprenticeship programs is encouraged under the regulation. More information can be read on this in the preamble to 20 CFR 677.230 (see Joint WIOA Final Rule). In addition, the Department is maintaining the exception for registered apprenticeship programs from providing performance information for the ETP performance report required under 20 CFR 677.230 for the reasons discussed in the preamble to that section, but notes that outcomes for WIOA participants in WIOA-funded registered apprenticeship programs must still be included in the State's annual performance report under WIOA sec. 116(d)(2).

Comments: A few commenters recommended that apprenticeship programs be required to demonstrate recruitment of underrepresented populations. One commenter suggested that a key qualification for apprenticeship programs' integration into the use of ITAs be adherence to existing requirements under 29 CFR part 30, which prohibits discrimination based on race, color, religion, national origin, or sex in apprenticeship programs. Another commenter suggested that the WIOA regulations should ensure that older workers are not discriminated against in apprenticeship programs.

Department Response: The Department has concluded that putting additional requirements on registered apprenticeship programs in order to participate in the State List of ETPs or to use ITAs is outside the scope of this regulation because WIOA designates registered apprenticeship programs as eligible to serve as ETPs. In addition, registered apprenticeship programs are already required to comply with 20 CFR part 30 anti-discrimination provisions.

Comments: Other commenters recommended that pre-apprenticeship programs be included on the State ETPL but with a performance measurement model that is more appropriate for the activity, for example, enrollment in an apprenticeship program or a community college program would both be positive outcomes.

Department Response: The commenter did not specify whether it meant that pre-apprenticeship programs should be included under the exception for registered apprenticeship programs or included through the Governor's eligibility procedures for eligible training providers. However, the Department acknowledges the need to clarify how pre-apprenticeship programs are treated for inclusion on the State ETPL. The Department has added a § 680.470(f) to clarify that because pre-apprenticeship programs are not registered under the National Apprenticeship Act and are not included in the exceptions for registered apprenticeship programs under WIOA sec. 122(a)(3), they must follow the Governor's procedure for eligibility in this subpart. Pre-apprenticeship providers that wish to use WIOA funds to provide training services may go through the normal training provider program application procedure to be included on the State List of Eligible Training Providers and Programs. Therefore, such pre-apprenticeship programs would be subject to the eligibility and information reporting requirements of the State ETPs.

Comments: One commenter expressed concern throughout the regulation that in defining how individual training accounts may be used, and defining the use of on-the-job training funds, preference is given to registered apprenticeship programs. The commenter urged the Department to revise the regulation to reflect the Start Printed Page 56141importance of other OJT programs. The commenter emphasized the robust and valuable non-registered apprenticeship programs embraced by many manufacturers, and that training for in-demand skills is available in multiple venues and that these programs should be considered based on the value of their training, rather than their registration status with a government entity. However, the commenter did not provide suggestions on how the Department could address the commenter's concerns.

Department Response: The Department has determined that no changes to the regulatory text are needed in response to this comment. Both the requirement that registered apprenticeship programs shall be included on the State ETPL and the exemption for registered apprenticeship programs from the requirement to submit performance information for inclusion on the State List are specifically limited to registered apprenticeship programs by WIOA sec. 122(a)(3). Regarding the commenter suggesting a revision to the regulatory text to emphasize OJT, it is unclear what revisions to the regulation the commenter is suggesting. The Department has made revisions to § 680.530 to clarify how exceptions to the eligible training provider List, which may provide training through contracts with the Local WDB, including OJT, are to be treated; more about this change can be read in the preamble to § 680.530. The Department agrees with the commenter that non-registered apprenticeship programs and work-based training are important training options.

Section 680.480 May an eligible training provider lose its eligibility?

Section 680.480 describes the enforcement provisions available to apply to training providers who are not in compliance with WIOA and WIOA regulations. The Department made non-substantive edits for consistency in how the Department uses terms throughout this section. The Department also made substantive changes to paragraphs (b) and (c) which are further described below.

The Department made a clarifying edit to § 680.480(a). The Department is deleting the phrase “deliver results” and replacing it with language to clarify that this provision requires that training programs meet the Governor's eligibility requirements and that training providers provide accurate information.

The Department also made a clarifying edit to § 680.480(e) to clarify that if a training program is removed from the eligible training providers in a local area because the training program failed to meet the local area's higher performance standards, the training provider may appeal this eligibility denial under § 683.630(b). This provision no longer requires Local WDBs to create an appeals procedure for these purposes.

Proposed § 680.480(b) provided that providers whose eligibility is terminated under this section are liable to repay all adult and dislocated worker funds received during the period of non-compliance. The Department revised this paragraph for consistency with § 681.550 that permits youth funds to pay for training for out-of-school youth aged 16-24 and such funds are also subject to the requirement to repay funds received during non-compliance.

Comments: The Department received only a handful of comments addressing proposed § 680.480. As discussed above, one commenter stated that proposed § 680.480 was inconsistent with WIOA to the extent that it allows registered apprenticeship programs to be removed from the List for any reason other than deregistration.

Department Response: The Department revised § 680.480(c) by adding language stating that registered apprenticeship programs may only be removed from the List for reasons set forth in § 680.470. The regulation includes registered apprenticeship programs within the enforcement provisions in WIOA sec. 122(f) for the reasons set forth in the preamble to § 680.470. WIOA sec. 122 does not require registered apprenticeship programs to supply performance information in order to be determined eligible training providers, in light of the extensive vetting process that registered apprenticeship programs undergo in order to become registered. Therefore, the Department is not regulating that registered apprenticeship programs be removed from the State List of Eligible Training Providers for reasons related to performance.

Comments: Another commenter stated that training providers should be considered to be noncompliant when less than 50 percent of those enrolled complete the program in the allotted training period or when less than 50 percent of completers fail to find employment within 180 days of completion. The commenter stated that these statistics should be based on all enrolled students, not just WIOA-funded individuals. In addition, a commenter suggested that ETPs that do not provide performance information as required under WIOA should be removed from the State ETPL, as those that are non-compliant or intentionally provide inaccurate information. The commenter said that such providers should also be liable for repayment of adult and dislocated worker funds. Another commenter asked how monitoring of training providers will be conducted and who has ultimate responsibility for this task.

Department Response: The Governor's procedures for establishing eligibility may establish minimum performance standards for all providers other than registered apprenticeship programs. Under § 680.480(c), the Governor may remove provider programs from the State List during its biennial renewal procedure for failure to meet State eligibility criteria, including any minimum performance levels established. The Department has not regulated specific threshold amounts for compliance because it is within the Governor's authority under WIOA to establish appropriate minimum standards through its procedure. Under § 680.430(e), the Local WDB may establish higher levels of performance than those required by the Governor for a provider to be eligible to receive training funds from that local area. The Department made a minor revision to § 680.480(e) for consistency with § 680.430(e) to clarify that if the Local WDB has established higher performance standards pursuant to § 680.430(e), the Local WDB can remove a program of training services from the eligible programs in that local area for failure to meet those higher performance standards. In response to the comment suggesting that ETPs who do not provide performance information should be removed from the State ETPL, the Department refers readers to § 680.460 and its accompanying preamble.

Regarding comments on which entity is responsible for monitoring ETPs, the Department notes that under WIOA sec. 122, States and local areas are responsible for monitoring eligible training providers and for determining how such monitoring is conducted. Per § 680.430(b)(2) and (c), the Governor or the Governor's designated SWA (or appropriate State entity) is responsible for ensuring that programs meet eligibility criteria and performance levels established by the State, including verifying the accuracy of the information, and the Local WDB must carry out procedures assigned to the Local WDB by the State.Start Printed Page 56142

Section 680.490 What kind of performance and cost information must eligible training providers other than registered apprenticeship programs provide for each program of training services?

Section 680.490 describes the information that training providers must submit to the State to meet initial and continued eligibility criteria for inclusion on the State List of Eligible Training Providers and Programs under § 680.460(h). Proposed § 680.490(d) required the Governor to establish a procedure and methods to assist training providers who demonstrate that providing the required information is unduly burdensome or costly. This section has been adopted as proposed, with revisions for clarity and consistency of terms and one substantive change at paragraph (c).

The Department revised proposed § 680.490(a) for clarity. Proposed § 680.490(a) provided that, in accordance with § 680.460(h), every 2 years training providers are required to submit appropriate, timely, and accurate performance and cost information. However, the Department changed the reference to § 680.460(h) in this paragraph to § 680.460(i) to clarify that eligible training providers, except registered apprenticeship programs, must submit this information at least every 2 years in accordance with the State's continued eligibility policy.

The Department also modified § 680.490(c) by adding that the Governor may require additional performance information if the Governor determines it is appropriate to better inform consumers. This paragraph originally provided that the Governor could add this information if the Governor determined it was appropriate for determining or maintaining eligibility. However, WIOA sec. 122(b)(1)(J)(iii) provides that the Governor's criteria and information requirements can include other factors the Governor determines are appropriate to ensure informed choice of participants among training service providers, and the modification to this section reflects this authority.

Comments: Several commenters agreed with the Department's message that the Governor must assist providers in supplying the information required of them under WIOA and the NPRM. These commenters urged that the State ETPL coordinators at the State level be required to maintain a list of available technical assistance for training providers and that a probationary period be included for all those who may miss eligibility. One commenter encouraged the Department to ensure that the regulations provide maximum flexibility for the State to work with training providers to report on the primary indicators of performance.

Department Response: The Department cannot require States to provide a probationary period or maintain technical assistance lists. However, the Governor has significant flexibility under § 680.490(d). For example, if a provider demonstrates that providing additional information required under this section would be unduly burdensome or costly, the Governor may provide additional resources from funds for State workforce investment activities reserved under WIOA secs. 128(a) and 133(a)(1) as provided in § 680.490(d)(2) to assist providers in the information collection. Further, in addition to the required factors, the regulations allow the Governor to take any appropriate additional factors into account when developing procedures for providers to be included and maintained on the State List of Eligible Training Providers and Programs. No changes to regulatory text were made as a result of these comments.

Comments: Several commenters supported the § 680.490(d) requirement that Governors have a procedure in place to address the costs and burden of any increased reporting requirements. One commenter expressed appreciation for the Department's recognition of the potential cost and burden of WIOA's requirements for ETPs in meeting their performance reports and urged the Department to issue guidance to the States on how to streamline performance reporting for training providers and minimize the burden associated with reporting on multiple programs through the ETP performance reports required by WIOA sec. 116 and the performance information required by WIOA sec. 122 for inclusion and maintenance on the State ETPL. A number of comments appear to reflect confusion between these two types of performance information.

A few commenters stated that many of the requested reporting elements are not valuable to the consumer and asserted that local areas should determine if a provider should continue to be listed on the ETPL because local areas' performance is directly related to the quality of the training programs. One commenter suggested that for each program of study, the following information be collected: Number enrolled, number completed, number of completers employed at 90 and 180 days after exit, and wage at placement of those employed.

Department Response: WIOA sec. 122 requires specific information that must accompany the State List of Eligible Training Providers and Programs. The Departments of Education and Labor are issuing joint guidance on data sharing. Submission of ETP performance reports is required by WIOA sec. 116(d)(4) and addressed in 20 CFR 677.230 of the regulations (see Joint WIOA Final Rule). This section of the preamble addresses § 680.460 and is focused on the requirements for ETP eligibility and maintenance of the State ETPL. Comments related to the ETP annual performance reports required under WIOA sec. 116(d)(4) and other issues related to specific performance indicators are addressed in the Joint WIOA Final Rule preamble section relating to 20 CFR part 677. In addition, the Governor's procedure for continued eligibility and for publishing the State List may include the specific information suggested by the commenter. No changes were made to the regulatory text in response to these comments.

Comments: Several commenters stated that flexibility is needed in the performance reporting requirements for inclusion on the State ETPL to allow Local WDBs to assess providers at the course, program, or institutional level because the proposed ETP performance reporting requirements could raise data privacy concerns where PII is provided. One commenter suggested that performance information be maintained at the participant level and not across programs.

Department Response: The Department has determined that reporting requirements for inclusion and maintenance of the State ETPL must be established at the program level only. WIOA clearly establishes initial and continued eligibility requirements for provider programs. Eligibility and performance reporting is thus determined on a program-by-program basis for each provider under the regulations. Therefore, reporting is done through the program of study, rather than the individual courses that make up the program. All performance reporting requirements must be carried out consistent with all applicable Federal and State privacy laws and the Department is issuing guidance to assist States in complying with these laws.

In addition, the Department made a revision to the title of § 680.490 to clarify that registered apprenticeship programs are not subject to these performance reporting requirements. As the Department explained in the preamble addressing § 680.470, WIOA exempts registered apprenticeship Start Printed Page 56143programs from ETP performance reporting requirements for inclusion on the ETP list. However, voluntary reporting of performance information by registered apprenticeship programs is encouraged under the regulation. The Department also modified § 680.490(a) to clarify, consistent with the decision that registered apprenticeship programs are exempt from the performance reporting requirements, that registered apprenticeship programs are not required to submit the performance and cost information required by this section.

Finally, as noted in the preamble to § 680.400, § 680.490(b) has been revised to require performance reporting on all WIOA participants enrolled in a program of training services and receiving funding through an ITA for the performance information on WIOA participants required by § 680.490(b). This includes OSY aged 16-24. As the Department is permitting youth program funds for OSY aged 16-24 to use ITAs, it is important that the performance information required encompass these WIOA participants. However, the ETPs will report based on the adult primary indicators of performance for these youth to provide comparability and to eliminate the burden that would be imposed if ETPs were required to report on separate performance indicators for adults and dislocated workers and for the subset of youth who may receive training through ITAs.

Section 680.500 How is the State list of eligible training providers and programs disseminated?

Section 680.500 describes the requirements for distributing the State List of Eligible Training Providers and Programs and accompanying cost and performance information to Local WDBs and to the general public. Other than non-substantive changes for consistency of terms, the Department has adopted this section as proposed.

Comments: One commenter supported making the ETPL publicly accessible in a consumer friendly format. Another commenter stated that only one List per State should be permitted to be published because multiple publications within a State would be confusing for participants and ETPs. One commenter recommended that States be required to identify and list credentialing organizations and helpful information about key or high growth sectors on the homepages of the State Lists of Eligible Training Providers and Programs, including providing a list of high growth industries. This commenter stated that when a nationally-recognized, industry-driven credential has been discovered by a State or local entity, or the Federal government, this information should be shared publicly to raise the bar on training programs and help ensure that tasks are performed to the highest standards available, while maintaining and improving American competitiveness.

Department Response: WIOA requires the State to generate and disseminate its List of ETPs that contains, at a minimum, the information required by WIOA sec. 122(d) and § 680.500. However, as provided at § 680.430(e), Local WDBs may establish higher performance standards or additional information and criteria, except with respect to registered apprenticeship programs. In addition, the Department notes that States have the discretion to identify credentialing organizations or to restrict the types of providers included on the State List. It is up to the State to determine what providers meet its initial and continued eligibility criteria in order to be included on the State List. Some of this information, including whether a provider organization provides an industry-recognized credential may be noted on the State List. No changes were made to the regulatory text in response to these comments.

Comments: Several commenters responded to the Department's request for comments on the value of a summary sheet to accompany the ETPL. A few commenters stated that a summary sheet was not necessary because applicants only need the following key data to make an informed choice: Completion rate, placement rate, credential, and wages. In contrast, another commenter encouraged the use of a uniform summary sheet to help prospective students compare information across all participating programs. This commenter recommended that the summary sheet include detailed information about the programs, including many data points that are part of the ETP performance reports, such as comparative information about costs, program completion, and job placement rates, average starting salaries, and debt upon completion. Other commenters recommended that each State be allowed to design its own accompanying information. One commenter suggested that the information required for the ETP be detailed in a simple chart format with cohort information for completion and placement information, and that the public site should include information that is pertinent to the customer. One commenter urged the Department to consider the work of Local WDBs that already have scorecards. Another commenter encouraged developing “ease of use reports” that meet the needs of training seekers while minimizing the reporting burden on providers and States. Another commenter recommended allowing States to design their own display.

Department Response: The Department has determined that no revisions to the regulatory text are needed in response to these comments. The list of ETPs and accompanying cost and performance information must be disseminated in coordination with the ETP annual performance reports in accordance with 20 CFR 677.230(e)(3) (see Joint WIOA Final Rule). The ETP annual performance report must include the information required under WIOA sec. 116(d)(4) and must be provided using a template created by the Department. In contrast, WIOA sec. 122(d) does not require that the State List of Eligible Training Providers and Programs and accompanying information comport with a Federal template or format. The Department, therefore, has decided that the statutory mandate is best met by leaving it to the States' discretion to determine: (1) What information should accompany the State ETPL provided that the accompanying information meets statutory requirements (including the requirement in WIOA sec. 122(d)(1) that the accompanying information identify the recognized postsecondary credential); (2) the best format to provide that information to users; and (3) how to coordinate its distribution with the ETP performance reports. The Department plans to issue further guidance to States regarding the relationship between ETP performance reports and the State List of Eligible Training Providers and Programs.

Comments: One commenter stated that some State laws include additional restrictions on data sharing beyond the Federal law requirements and encouraged the Department to consider how regulations and guidance can help States interpret or revise their own laws to allow greater access to data for strategic planning and evaluation purposes. One commenter urged the Department to issue guidance and technical assistance on how data shared for WIOA performance reporting may be incorporated into Statewide Longitudinal Data Systems (SLDS) in compliance with both UI confidentiality provisions and the Family Educational Rights and Privacy Act (FERPA). The commenter stated that the data collected would be useful for a variety of stakeholders, including for longitudinal Start Printed Page 56144research and evaluation to improve the mix and targeting of program services.

Department Response: Privacy concerns in regard to how the State List and accompanying information are made available are addressed under the regulations in § 680.500(e). In developing the information to accompany the State List described in § 680.490(b), disclosure of personally identifiable information from an education record must be carried out in accordance with the Family Educational Rights and Privacy Act, including the circumstances relating to prior written consent. No changes were made to the regulatory text in response to these comments. Instead, the Department intends to provide additional guidance on this issue and will also provide technical assistance to States who face legal barriers in complying with performance reporting requirements.

Section 680.510 In what ways can a Local Workforce Development Board supplement the information available from the State list of eligible training providers and programs?

The Department did not receive any comments addressing § 680.510 other than a general statement of support for the provision as drafted. The Department made non-substantive edits to the title of this section for uniformity in use of the term “State list.” The Department also modified § 680.510 to clarify that, as explained above, the Local WDB cannot supplement the criteria and information requirements established by the Governor for registered apprenticeship programs.

Section 680.520 May individuals choose training providers and programs located outside of the local area or outside of the State?

Section 680.520 governs when an individual can choose to attend a training program located outside of the local area or State. The Department has made non-substantive revisions to this section for consistency in the use of terms, and made revisions for clarity to this section.

Section 680.520(a) provides that individuals may choose training providers and programs outside of the local area provided that the training program is on the State List and it is consistent with local policies and procedures. For State ETPs that are outside of the local area or that do not meet the local area's criteria for eligibility, local policies and procedures determine whether participants in the local area may utilize ITAs for training. However, the local area may choose to make exceptions to its local eligibility criteria. The local policies and procedures must be consistent with State policies and procedures in order for the program to receive funds through an ITA.

Section 680.520(b) provides that individuals may choose eligible training providers and programs outside of the State consistent with State and local policies and procedures and that State policies and procedures may provide for reciprocal or other agreements established with another State to permit eligible training providers in a State to accept ITAs provided by the other State. The State policies and procedures may allow training providers or programs located outside of that State to receive funds through a participant's ITA within specific circumstances, or a State may enter into a broader agreement with another State to establish that ETPs in the other State are eligible in the “home” State. State policies may determine whether the training providers and programs in another State must meet any or all of the “home” State's eligibility criteria order to receive the ITA funds provided by the State. In either case, the local policies and procedures can have more stringent standards than the State policy, and therefore any use of ITAs for training providers and programs outside of the State must be consistent with both State and local policies and procedures.

Comments: The Department received a handful of comments addressing proposed § 680.520. One commenter supported allowing participants to choose training located outside the local area or in other States. Another commenter agreed with allowing individuals to choose training providers located outside of the local area as long as the training providers meet the performance criteria set by the Local WDB in the local area where the person resides.

One commenter urged the Department to work with inter-governmental organizations to develop guidance for the active inclusion of out-of-area and eLearning options into the training approaches of Local WDBs. This commenter stated that guidance would be preferable to reciprocity agreements to reduce the time required to understand and implement the specifics of interstate agreements.

Department Response: The Department has concluded that reciprocity agreements will be maintained in § 680.520 because they are specifically authorized under WIOA sec. 122(g) and they further the goals of WIOA. Reciprocity agreements reduce the burden on States and providers by eliminating duplicative procedures. They also expand the array of training options available to individuals seeking training. The Department recommends that States consider how best to establish and implement reciprocity agreements, and how these agreements may be used to expand distance and online training options. The Department notes that its revisions to this section, in § 680.520(b), permit the States to develop other agreements that permit ETPs in a State to accept ITAs provided by another State. This provides additional flexibility to the States as the agreement does not have to be reciprocal. The Department will consider whether there is a need for additional guidance on this issue in the future.

Section 680.530 What eligibility requirements apply to providers of on-the-job training, customized training, incumbent worker training, and other training exceptions?

Section 680.530 explains that providers of OJT, customized training, incumbent worker training, internships, paid or unpaid work experience, or transitional jobs are not subject to the same WIOA eligibility requirements of sec. 122(a) through (f) that are established for providers listed on the State List of Eligible Training Providers and Programs. Section 680.530 requires local one-stop operators to collect any separate performance information required by the Governor and determine whether these providers meet the Governor's performance criteria. The Department made non-substantive edits for consistency in how the Department uses terms throughout this section and made substantive edits to the provision which are further explained below.

The Department reorganized this section for clarity by breaking what was one paragraph into several paragraphs. Paragraph (a) now provides that providers of OJT, customized training, incumbent worker training, internships, paid or unpaid work experience, or transitional jobs are not subject to the requirements applicable to providers and programs which are included on the State ETPL. Paragraph (b) now provides that the Governor may establish performance criteria those providers must meet to receive funds through the adult or dislocated worker programs pursuant to a contract consistent with § 680.320. Thus, while these kinds of programs cannot be paid for with ITAs, Local WDBs may enter into a contract with these entities to provide these training services. More information can be read about this in § 680.320 and its accompanying preamble. Paragraph (c) provides that one-stop operators must Start Printed Page 56145collect any performance information required by the Governor and determine if the provider meets these performance standards. For those that meet the Governor's standards, paragraph (d) requires the one-stop operator to distribute information about those programs, with the relevant performance information, throughout the system.

Comments: Several comments requested clarification of whether these other training providers are exempted from the State eligibility process required by WIOA sec. 122 and/or from the ETP performance reporting process required by WIOA sec. 116, if they are not included on the State List of Eligible Training Providers and Programs. Other commenters supported allowing local areas to contract with providers not on the State List of Eligible Training Providers for customized training, incumbent worker training, internships, paid or unpaid work experience, and transitional employment. One commenter expressed support for exempting OJT, customized, and incumbent worker training from the ETP process but recommended that these training programs be subject to performance reporting. Another commenter recommended revising § 680.530 to provide that OJT, customized training, incumbent working training, and other training exceptions are not exempt from rigorous performance standards even though they are exempt from the general performance metrics in WIOA sec. 122 and must be subjected to rigorous performance standards suited to the type of program. This commenter recommended that § 680.530 be revised to emphasize that local one-stop operators must collect the performance information that the Governor shall require and to emphasize that local one-stop operators must disseminate this list of training exceptions. This commenter recommends requiring inclusion of the Governor's performance criteria for OJT, customized training, and incumbent worker training in the State Plan and annual reports and that the monitoring of these programs be referenced in § 680.530. Further, this commenter recommended that performance of these programs be detailed by industry, company, and occupation at the quarterly meetings of Local and State WDBs Another commenter suggested the Local WDB must concur with the Governor that such information is worth collecting and that the Local WDB should determine how best to collect the information. This commenter felt that requiring the operator to collect such information is likely to be less efficient that obtaining the information directly from the service provider or UI wage records, and that local areas should decide if it is worth collecting data on every work-based, customized, incumbent worker training, internship, or work experience arrangement.

One commenter recommended that work experience programs be excluded from reporting. Another commenter suggested that the Department require the Governor's performance standards for these exceptions to be described in the State Plan. Some commenters recommended that these exceptions be subject to the same accountability, transparency, and monitoring standards that apply to all programs regulated by WIOA. One commenter recommended that where a Local WDB is using short-term and/or eLearning assisted “training,” these training services should be regarded as being provided by the Local WDB, and these approaches should be exempted from the ETP process. This commenter stated that these training programs should be subject to performance reporting. One commenter stated that OJT and customized training providers should not be included on the State ETPL because these should be matters of negotiation between Local WDBs and affected business entities. Finally, one commenter said that customized training, registered apprenticeship, or OJT are all work-relevant, but the section-by-section discussion in the regulation should clarify that these are examples and not an exhaustive list of the types of training that would have to be provided by a business. Such limitation could deem ineligible representatives of the business community who may successfully offer alternative types of training such as a non-registered apprenticeship.

Department Response: The Department has made changes to the regulatory text of § 680.530 to clarify that the training providers listed in this section are not included on the State ETPL. The Department is including among these exceptions the types of work-based training included at WIOA section 122(h), which does not specifically identify non-registered apprenticeship programs but does include on-the-job training, customized training, incumbent worker training, internships, paid or unpaid work experience, and transitional jobs. There is no Federal restriction on States and Local WDBs including non-registered apprenticeship programs on the ETPL; however, these programs must apply through the Governor's eligibility procedure to become an eligible training provider, just as any other potential eligible training provider would. Additionally, there is no restriction on non-registered apprenticeship programs participating in on-the-job training or customized training through contracts as described in § 680.530, if it is determined appropriate by the State and Local WDB. This decision is based on the exception in WIOA sec. 122(h) exempting these providers from the requirements for inclusion on the List, maintenance on the List, and removal from the List. Notwithstanding this exclusion, that exemption in WIOA sec. 122(h) further authorizes the Governor to require the local area to collect performance information on these providers. That information can be the same as that required for ETPs or may be different information.

Local WDBs may provide training services, including short-term and/or eLearning assisted training, if the Local WDB meets the conditions of WIOA sec. 107(g)(1), which includes the information required in a written waiver request to the Governor.

The revised regulatory text at § 680.530(d) clarifies that one-stop operators must disseminate information identifying providers and programs that have met the Governor's performance criteria and the relevant performance information as required by the Governor throughout the one-stop delivery system. Local WDBs are not required to concur with the Governor regarding the value of the performance information that the Governor chooses to require.

While States are not required in their State Plans to describe the State's performance standards for on-the-job training, incumbent worker training, transitional jobs, and customized training, the State is required to describe the State's strategies for how these exceptions ensure high quality training for both the participant and the employer. State Plan requirements are fully described in the WIOA State Plan ICR and 20 CFR part 676 (see Joint WIOA Final Rule).

The Department does not have the authority to require State or Local WDBs to review performance information by industry at quarterly meetings.

Further, the regulatory text has been modified to clarify that these other training providers are eligible to receive WIOA funding through a contract for services rather than through ITAs. The regulatory text was also edited to remove the statement that approved providers under this section are considered eligible training providers services, which could inappropriately suggest that these entities may serve as Start Printed Page 56146ETPs and receive funding through ITAs without going through the Governor's eligibility procedures. As explained, this is not the case. The regulation text was also revised to clarify that these providers are not subject to the other requirements that training providers and programs which are on the State ETPL must fulfill. However, these providers are still subject to other requirements of WIOA outside of this subpart.

The Department has also made a change to the terminology used in reference to transitional employment. For consistency with other areas of the WIOA Final Rule, the Department is using the term transitional jobs.

Comments: One commenter recommended that § 680.530 be revised to ensure that non-credit training and education be included on the ETP, and that performance-related elements are consistent across all ETPs, including community colleges, to ensure better program outcomes and a level playing field for all ETPs. Two commenters suggested that work experience should be excluded from any reporting required of these training exceptions.

Department Response: Section 680.530 describes programs that are not included on the State ETPL. The programs listed in this section may or may not offer credit, and the eligible training providers included in the State List of Eligible Training Providers and Programs may or may not offer credit. For performance reporting, the performance-related elements required by WIOA are consistent across all eligible training providers, except for registered apprenticeship programs. For eligibility procedures, the performance-related elements in the Governor's procedure should be consistent across all programs in the State. However, the Governor's performance criteria for the work-based training exceptions described at § 680.530 may be quite different and these programs are not a part of the State List of Eligible Training Providers. No changes were made to the regulatory text in response to these comments.

Comments: Several commenters requested clarification of how the Governor may treat providers who fall within the exceptions to ITAs described at §§ 680.320 and 680.530 as to whether these excepted providers may use ITAs or only contracts, and what is required if they are to be on the State ETPL.

Department Response: As described above, local areas may contract for these work-based training exceptions and these programs of training services do not need to be on the State List nor are they subject to the ETP eligibility procedures. However, these providers also could have programs of training that are not excepted under § 680.530 and that the provider wishes to be eligible to use ITAs. As explained above, only ETPs on the State List are able to use ITAs. Therefore, when a provider that provides a program of training services through contract to a local area wishes to be eligible to receive students using ITA funding, the training provider would need to complete the ETP eligibility process described in this subpart. These programs would be subject to the Governor's eligibility procedure. An example of such a case would be a company that provides OJT through a contract with a local area and also offers classroom training or credentialing; the classroom training could be a regular ETP while the company could have a contract for the OJT. More information about the ETP exceptions can be found in § 680.320. No changes were made to the regulatory text in response to these comments.

6. Subpart E—Priority and Special Populations

Introduction

The services provided with adult funds can be a pathway to the middle class for low-income adults, public assistance recipients, and individuals who are basic skills deficient. The regulations implement the statutorily-required priority for the use of adult funds, and ensure any other priorities or designations are consistent with the statutory priority. This subpart contains regulations about how participants from certain populations are able to access adult and dislocated worker services, and regulations establishing priority access to these services. WIOA sec. 134(c)(3)(E) provides that priority for adult training services and certain career services must be given to recipients of public assistance, other low-income individuals, and individuals who are basic skills deficient. Under WIOA, priority access to services by members of this group is always in effect regardless of funding levels. Nonetheless, WIOA allows one-stop centers to provide individualized career services to individuals who are not members of these groups, if determined appropriate by the one-stop center.

The Department encourages close cooperation between WIOA-funded programs and other Federal and State sources of assistance for job seekers. Coordination between WIOA-funded programs and the TANF program is a crucial element in serving individuals who are on public assistance. TANF is a required partner in the one-stop delivery system. Through close cooperation, each program's participants will have access to a much broader range of services to promote employment retention and self-sufficiency than if they relied only on the services available under a single program.

In this subpart, the Department explains how displaced homemakers may be served with both adult and dislocated worker funds. Under WIOA, a displaced homemaker qualifies as an “individual with a barrier to employment” (see WIOA sec. 3(24)(A) and § 680.320(b)). Additionally, displaced homemakers meet the definition of a “dislocated worker,” as defined in WIOA sec. 3(15)(D). Displaced homemakers, whose work, albeit without a formal connection to the workforce, is recognized for its value, may need WIOA services to develop further work skills. WIOA also expands the definition of displaced homemakers to include dependent spouses of the Armed Forces on active duty to ensure they have access to WIOA title I services.

This subpart ensures that veterans and certain service members have access to adult and dislocated worker programs. Under WIOA, as was the case under WIA, veterans receive priority of service in all Department-funded employment and training programs. The regulations in this subpart describe what is meant by “priority of service.” The regulation is consistent with guidance it issued in TEGL No. 22-04 (“Serving Military Service Members and Military Spouses under the Workforce Investment Act Dislocated Worker Formula Grant”), dated March 22, 2005 (http://wdr.doleta.gov/​directives/​attach/​TEGL22-04.pdf) and expanded in TEGL No. 3-15 (“Guidance on Services Provided through the Adult and Dislocated Worker Program under the Workforce Innovation and Opportunity Act (WIOA or Opportunity Act) and Wagner Peyser, as Amended by WIOA, and Guidance for the Transition to WIOA Services”), dated July 1, 2015 (http://wdr.doleta.gov/​directives/​attach/​TEGL/​TEGL_​03-15.pdf) that separating service members meet the eligibility requirements for dislocated worker activities. This regulation will ensure that service members will have access to the full array of services available through the one-stop delivery system.Start Printed Page 56147

Section 680.600 What priority must be given to low-income adults and public assistance recipients and individuals who are basic skills deficient served with adult funds under title I?

Comments: Several commenters expressed general support for giving priority for service to recipients of public assistance, other low-income individuals, and individuals who are basic skills deficient. In contrast, a few commenters expressed disagreement with the priority of service provisions, reasoning that the regulations fail to address employer needs and focus instead solely on the needs of the employee. Two commenter recognized the need to be responsive to both the employers and the employees.

Department Response: The Department notes that WIOA sec. 134(c)(3)(E) requires priority be given to individuals who are public assistance recipients, low income, or basic skills deficient, with regard to the provision of individualized career services and training services. This priority applies to funds allocated to a local area for the WIOA title I adult program, It is not an eligibility criterion for the program, but it is the means to ensure an emphasis on providing services to these populations. This priority is not required for the WIOA title I dislocated worker program. The Department recognizes the need to serve not only low-skilled individuals but also those with more advanced skills and training who also need assistance. The Department also recognizes the importance of the one-stop delivery system's employer customer, assisting them to find, hire, train, or upskill their workforces. The one-stop delivery system connects the provision of career services and training to help individuals get good jobs and build careers and the development of the skilled workers employers need and their match to employers. Work-based training focuses on employer workforce needs, particularly incumbent worker training, where the employer is the primary customer.

Comments: A few commenters supported the removal of the WIA “limited funding” exception. Two commenters strongly urged the Department to clarify in the Final Rule that the priority is in effect regardless of funding. Two commenters stated that it was preferential to apply the proposed priority of service provisions when funds are limited. One commenter questioned whether the regulations pre-suppose that limited funding exists and expressed support for the development of criteria that would give local areas the authority to set priority of service thresholds that would take effect only during times of limited funding.

Department Response: The application of priority under the title I adult program applies at all times as required in WIOA sec. 134(c)(3)(E).

Comments: A commenter recommended that the regulation allow for local definition of low income rather than the Federally defined Lower Living Standard Income Level (LLSIL), reasoning that an individual might not be below the low-income level as defined by the LLSIL, but still be far below the level of self-sufficiency in the local area. Another commenter asked what the definition of “family” would be when determining whether someone is considered low income in regard to priority of service. One commenter recommended incorporating the definition of family from WIA sec. 101(15) into the regulations to clarify the meaning of low income. One commenter questioned how the priority groups included in the regulation relate to Equal Employment Opportunity (EEO) considerations and requested clarification within the regulation that EEO applies within the priority groups rather than before prioritization is considered.

A few commenters asserted that insufficient detail was provided in the regulations (e.g., family income calculations) and expressed concern with an approach that provided these details through guidance, reasoning that guidance allows for requirements to change over time.

Department Response: The term “low-income individual” is statutorily defined in WIOA sec. 3(36); it includes language that the LLSIL is determined by the Secretary. The Department agrees with the commenters requesting a definition of “family” and has added language to the definitions in part 675 of this Rule. Discussion of the added definition is provided in the preamble accompanying part 675.

The non-discrimination provisions of WIOA sec. 188 do not provide for preference for services. They protect against discrimination in the provision of services and prevent individuals from being otherwise adversely affected because of their membership in a protected class. Therefore, the Department has declined to make changes in the regulatory text in response to this comment.

Comments: Several commenters recommended a revision to proposed § 680.600(c) to clarify that any designation of priority for other eligible individuals must be subject to both the veterans priority of service requirements at § 680.650 and the WIOA statutory priority of service requirements in sec. 134(c)(3)(E). A commenter suggested that any guidance in this area, including guidance on expectations for State and local implementation, should support flexibility to allow States and localities to serve their unique and diverse populations best. One commenter questioned the relative priority that should be applied to other groups of individuals designated by the Local WDB or Governor as receiving priority of service compared to those explicitly listed in WIOA.

Department Response: The Department agrees with the commenters' suggestion that any additional priority populations identified by the Governor must be consistent with the statutory priority as well as the veteran's priority of service. The Department has made changes to the regulatory text at § 680.600(c) to reflect this suggestion. The Department will issue guidance and technical assistance about the implementation of these priority requirements.

Comments: Several commenters stated that the Department must revise proposed § 680.600(a) to align with WIOA and allow for priority to be given to “recipients of public assistance, other low-income individuals, and individuals who are basic skills deficient,” not “recipients of public assistance, other low-income individuals, who are basic skills deficient,” as was proposed. A commenter requested clarification as to whether being basic skills deficient alone would quality an individual for priority of service.

Department Response: The Department agrees with the commenters and has modified the regulatory text in § 680.600(a) to make clear that individuals who are basic skills deficient is its own category to be eligible for priority of service in the WIOA title I adult program.

Basic Skills Deficient

Comments: A commenter provided several recommendations about priority of service for individuals who are basic skills deficient: (1) Basic skills deficient should include computer literacy skills as a skill necessary to function on the job; (2) the process for identifying basic skills deficient should allow self-attestation and observation by one-stop staff; (3) a standard tool for measuring basic skills deficient should be developed and should include consideration of career-oriented employability skills; and (4) any individual who meets the definition of basic skills deficient should be eligible for services.Start Printed Page 56148

A few commenters cautioned against using a definition of basic skills deficient that considered how the individual's skill set would allow them to “function on the job.” These commenters reasoned that such a definition could create a loophole that might diminish the priority of service requirement by permitting services to otherwise non-low- income individuals who simply lack some skill needed to do a specific job. A few commenters recommended that the methodology for determining basic skills deficiency should be identified in State or local policy, rather than in regulation or Department policy.

Department Response: The term “basic skills deficient” is defined in WIOA sec 3(5). States and Local WDBs have flexibility in determining when an individual meets this definition.

Comments: A commenter stated that proposed paragraphs (a) and (c) of § 680.600 included inconsistent language when describing individuals who are basic skills deficient, one paragraph using the term “basic skills deficient” and the other using the term “individuals without basic work skills.” The commenter asserted that consistent terminology is important.

Department Response: The Department agrees with these comments and has modified the regulatory text to incorporate this suggestion.

Implementation of Priority of Service Requirements

Comments: Several commenters requested guidance on the implementation of the priority of service requirements. A few commenters stated that guidance should include an explanation of how States and localities will be monitored to ensure that an appropriate process or protocol is established and details on what the protocols should include. Because the priority groups could be seen as a threat to successful performance tracking, one commenter stated that reporting and incentives should be put into place to ensure these participants are actually served and supported.

Several commenters provided additional input on how to implement the priority of service requirements, including the following recommendations, building on the Department's use of veterans' priority of service, utilizing technical assistance and best practices, developing performance metrics and benchmarks, and coordination with immigration and refugee organizations and State Refugee Coordinators.

A few commenters described how U.S. Census data could be used to implement or verify the priority of service requirements. To verify that the priority of service has been properly implemented, two commenters recommended that the Department require that State and local planning efforts utilize the most current Census and administrative data available to develop estimates of each priority service population in their planning efforts and update these data year to year. Additionally, these commenters recommended that this data be used in Federal reviews of State Plans to ensure that system designs and projected investments are equitably targeted to service priority populations. The commenters also stated that this data should be used to benchmark system performance in actual implementation of the priority of service from year to year.

Department Response: The Department will provide further guidance to clarify how priority of service should be implemented and monitored.

Section 680.610 Does the statutory priority for use of adult funds also apply to dislocated worker funds?

Comments: A commenter sought clarification as to whether the same priority given to adult funds applied to dislocated worker funds that were transferred to the adult program.

Department Response: The Department considers funds transferred from the dislocated worker program to the adult program to be adult program funds and fall under the priority requirements of the adult program. Likewise, any transfer of funds from the adult program to the dislocated worker program will fall under the requirements of the dislocated worker program.

Comments: Commenting that older workers are more likely to show up in the dislocated worker program than in the adult program, one commenter recommended that priorities and protections should be established within the dislocated workers program.

Department Response: There is no priority in the dislocated worker program, other than veteran's priority of service. Participants must meet the dislocated worker eligibility criteria in order to participate in this program. No changes have been made to the regulatory text in response to the comments.

Section 680.620 How does the Temporary Assistance for Needy Families program relate to the one-stop delivery system?

Comments: A commenter suggested that the statement in the NPRM introduction to subpart E that the “Department strongly encourages close cooperation” between WIOA-funded programs and other Federal and State sources of assistance for job seekers does not convey the strength needed to have full coordination between WIOA-funded programs and the TANF program. This commenter recommended changing the wording to “mandates close coordination with funding tied to coordinated partnerships.”

One commenter recommended that the Department seek out opportunities for increased alignment between WIOA common performance indicators and TANF. This commenter stated that one challenge is that TANF programs are not measured by the same accountability measures as the other core WIOA programs.

Department Response: WIOA delegated the authority to Governors and Local WDBs, to decide how closely to align and coordinate their plans with WIOA programs and other sources of public assistance like TANF. The Department encourages strong partnership and close alignment with TANF at the State and local level.

Comments: A commenter requested clarification on whether TANF funding had to be used, rather than WIOA funds, if available, and how TANF organizations should document that TANF funds are not available.

Department Response: Under § 680.230(b) and WIOA sec. 134(c)(3)(B), one-stop centers are required to consider the availability of other sources of grants to pay for training costs, which includes TANF funds. The Department will provide additional guidance and technical assistance to one-stop centers to answer questions about how to document whether funds from other sources such as TANF are available.

Comments: Several commenters recommended that the Department ensure that Local WDBs or their standing youth committees identify how connections will be made with TANF partners at one-stop centers to ensure policy and programmatic alignment for the young adult population under 25, who may receive a different set of services if they are not served though WIOA title I youth programs. These commenters asserted that WIOA and TANF differ greatly from each other, requiring specific policy and Start Printed Page 56149programmatic alignment by the State and Local WDBs to service TANF recipients in a WIOA program.

Department Response: Coordination between TANF and WIOA services must take place at the State and local level and therefore, States and local areas are responsible for establishing policies and MOUs, and aligning plans wherever they deem to be appropriate to serve participants best. The Department recognizes that there are challenges associated with such planning and coordination and will continue to provide guidance and technical assistance to assist with these processes. No change is made in the regulatory text.

Section 680.630 How does a displaced homemaker qualify for services under title I?

Comments: A commenter expressed support for the inclusion of spouses of members of the Armed Forces on active duty as a displaced homemaker. Two commenters encouraged the Department to urge States to highlight the displaced military spouse homemakers in dissemination of information about services to this population.

Department Response: The Department agrees with the commenters' suggestion and encourages States and Local WDBs to highlight the eligibility for displaced military spouse homemakers in the information they disseminate about this program. No changes have been made to the regulatory text in response to the comments.

Section 680.640 May an individual with a disability whose family does not meet income eligibility criteria under the Workforce Innovation and Opportunity Act be eligible for priority as a low-income adult?

Comments: A few commenters expressed support for the provisions in § 680.640 as proposed. One comment also expressed support for the provisions in proposed § 680.640 to keep a family's income separate from the adult with a disability's income to that services are provided to all individuals who need it and that another eligibility barrier is not created to ensuring access to these services.

One commenter requested clarification on whether the provisions specifying the circumstances under which an individual with a disability may still qualify as a priority low-income adult, even when family income does not meet the low-income eligibility criteria, also apply to persons receiving Social Security Disability Insurance.

Another commenter recommended the Department clearly identify receipt of Social Security disability benefits as a barrier to employment.

Department Response: The circumstances that allow these individuals to qualify still as a low-income adult, regardless of family income, do not apply to persons receiving Social Security Disability Insurance (SSDI). The Department considers WIOA to be very specific about what does count and what does not with regard to income-based eligibility in its definition of “low-income individual” in WIOA sec. 3(36). This definition allows individuals on Supplemental Security Income (SSI) to be considered low-income, but does not consider individuals on SSDI to be considered low-income of the basis of that status alone. Also, SSDI payment cannot be excluded when making income-based eligibility determinations. However, individuals receiving SSDI meets the definition of an individual with a disability, which means the individual meets the criteria of an individual with a barrier to employment under WIOA sec. 3(24) and § 680.320(b). The Department encourages individuals receiving SSDI who are seeking to return to employment to access services through the one-stop delivery system. WIOA is subject to 38 U.S.C. 4213, and therefore military benefits are excluded from income-based eligibility determinations under WIOA.

7. Subpart F—Work-Based Training

Sections 680.700 through 680.850 are regulations for work-based training under WIOA. The regulations apply to (OJT) training, customized training, incumbent worker training, and transitional jobs. The regulations include specific information about general, contract, and employer payment requirements. Work-based training is employer-driven with the goal of unsubsidized employment after participation. Generally, work-based training involves a commitment by an employer or employers to employ successful participants fully after they have completed the program. Registered apprenticeship training is a type of work-based training that can be funded in the adult and dislocated worker programs; additionally pre-apprenticeships may be used to provide work experiences that can help participants obtain the skills needed to be placed into a registered apprenticeship.

Work-based training can be an effective training strategy that can provide additional opportunities for participants and employers in both finding high quality work and in developing a highly skilled workforce. Each of these work-based models can be effectively used to meet a variety of job seeker and employer needs. OJT is primarily designed to first hire the participant and provide them with the knowledge and skills necessary for the full performance of the job. Incumbent worker training is designed to ensure that employees of a company are able to acquire the skills necessary to retain employment and advance within the company or to provide the skills necessary to avert a layoff. Customized training is designed to provide local areas with flexibility to ensure that training meets the unique needs of the job seekers and employers or groups of employers.

Both training providers and employers providing OJT opportunities must be providing the highest quality training to participants. OJT contracts must be continually monitored so that WIOA funds provided through OJT contracts are providing participants the training to retain employment successfully. It is important that OJTs provide participants with relevant skills and opportunities for career advancement and provides employers with a skilled workforce.

Under WIOA, the statute enables a Governor or Local WDB to increase the reimbursement rate for OJT from 50 to 75 percent. This is designed to give States and Local WDBs additional flexibility in developing OJT opportunities that work best with the participating employers and in the local economy.

WIOA also explicitly allows for incumbent worker training at the local level. WIOA introduces incumbent worker training as an allowable type of training for a local area to provide. Incumbent worker training is designed to either assist workers in obtaining the skills necessary to retain employment or to avert layoffs and must increase both a participant's and a company's competitiveness. Local areas may use up to 20 percent of their local adult and dislocated worker funds for incumbent worker training. The Department seeks to ensure that incumbent worker training is targeted to improving the skills and competitiveness of the participant and increasing the competitiveness of the employer. The training should, wherever possible, allow the participant to gain industry-recognized training experience and ultimately should lead to an increase in wages. To receive incumbent worker funding under WIOA, an incumbent worker must have an employer-employee relationship, and an Start Printed Page 56150established employment history, with the employer. Incumbent workers are employed at the time of their participation, and the contract funds are paid to the employer for training provided to the incumbent worker either to avert a lay-off or otherwise retain employment. A “model” incumbent worker training would be one where a participant acquires new skills allowing him or her to move into a higher skilled and higher paid job within the company, thus permitting the company to hire a job seeker to backfill the incumbent worker's pre-training position.

Comments: A commenter recommended that the regulations clarify that OJT, customized, and incumbent worker training are exempt from the ETP process.

Department Response: Work-based training and work experiences are subject to the dissemination requirements of WIOA sec. 134 (a)(2)(B)(v) and the requirements of WIOA sec. 122(h) as the Governor may require. These requirements are separate from the ETP section of WIOA sec. 122(a) through (f). The Department has modified the language of the regulatory text in § 680.340(b), which requires Local WDBs to disseminate the list of ETPs, to make clear that the work-based training provider information requirements are separate from the requirements governing the ETPL. These provisions of WIOA sec. 122(h) apply to providers of work-based training.

On-the-Job Training

Comments: A commenter expressed support for the proposed requirements regarding OJT. Another asked the Department to earmark funding either on the national or State level for employer education as to the benefits of hiring after training is received.

Department Response: The Department considers employer engagement to be critical to the success of these programs. It plans to provide additional guidance and technical assistance for this purpose.

Comments: A commenter expressed concern that the different “employer match” requirements for OJT, customized training, and incumbent worker training would present a challenge to explain to employers, and recommended that the Department simplify the match requirements and lower them for small businesses to encourage their participation in the programs. Specifically, this commenter recommended that the match requirement be the same across all three types of training and be differentiated based on business size.

Department Response: The matching requirements training for these three types of training are specified in WIOA, and are provided, consistent with WIOA, at: § 680.700 for OJT, § 680.760 for customized training, and § 680.820 for incumbent worker training. Each type of training emphasizes a different need of employers and individuals, and the employment match is designed to reflect the differences in those training types. No change is made in the regulatory text.

Section 680.700 What are the requirements for on-the-job training?

Comments: Two commenters asked if it would be permissible to enter into an OJT contract with a public non-profit agency such as a local fire department or board of education.

Department Response: Yes, as long as the requirements of §§ 680.700 through 680.730 are met, this type of OJT contract would be allowable.

Comments: Regarding the circumstances under which adult and dislocated worker funding may not be used to enter into an OJT contract, two commenters recommended adding to § 680.700(b) that OJT training contracts may not be entered into with employers that have unpaid unemployment insurance and workers compensation taxes.

Department Response: The Department considers this to be at the discretion of State and Local WDBs and declines to modify the regulatory text to include this requirement.

Comments: Two commenters recommended adding language to § 680.700 requiring OJT contracts that cover “apprenticeable occupations” and pre-apprenticeship programs to be attached to registered apprenticeship programs. These commenters also recommended adding an additional condition to the list of factors that the Governor or Local WDB must take into account when exercising discretion to increase the reimbursement rate for OJT contracts in § 680.730(a). Specifically, these commenters recommended that the Department add a new subparagraph that would prohibit reimbursements for OJT programs for apprenticeable occupations unless they are part of a registered apprenticeship program.

This commenter also suggested that this new regulatory provision require the Governor to consider whether the OJT contracts are harmonized with registered apprenticeship programs such that no OJT contract operates to train in an apprenticeable occupation unless it is part of a registered apprenticeship program (or comparable program determined by the Secretary not to undermine registered apprenticeship programs) and that any contract for pre-apprenticeship is articulated with at least one registered apprenticeship programs.

Department Response: Section 680.740 specifies how registered apprenticeship program sponsors or participating employers in registered apprenticeship programs may be contracted to provide OJT. The Department declines to add language that restricts the OJT portion of non-registered apprenticeships from receiving OJT funds providing that they meet the requirements of §§ 680.700 through 680.730 and any criteria established by the Local WDB.

Comments: One commenter requested that the Department amend § 680.700 to include work-based learning activities that are identified and linked to training provided by ETPs.

Department Response: There are no prohibitions to ETPs providing work-based learning activities, provided that those activities meet the conditions of §§ 680.700 through 680.730.

Comments: To prevent hiring workers for the duration of the OJT with no job continuity afterwards, a commenter recommended there be a minimum standard to address performance relating to both employment and career pathways to which all Governors would be required to adhere.

Department Response: OJT participants are part of the performance accountability system under WIOA which includes employment related outcomes, and performance information will be collected on all participants in OJT. This approach will help to ensure that States and local areas are utilizing high quality training providers for both ITAs and work-based training. In addition to the required performance information, Governors may set additional performance criteria for work-based training under WIOA sec. 122(h). The Department will continue to support collaboration across all WIOA title I programs.

Comments: Regarding the duration of an OJT contract, a commenter recommended that OJT be used for 6 to 12 months with discretion resting with the Local WDB.

Department Response: The Department is not requiring specific OJT duration limitations. The Department agrees with the comment that the discretion should be left to the Local WDBs and declines to make changes to the regulatory text at § 680.700(c). Comment: Two commenters requested that § 680.700 include a reference to agreements with registered apprenticeship programs under Start Printed Page 56151§ 680.740(a), to make clear OJT can be provided by registered apprenticeship programs.

Department Response: The Department has added language to § 680.700 to be clear that OJT contracts may be written with registered apprenticeship program sponsors.

Section 680.710 What are the requirements for on-the-job training contracts for employed workers?

Comments: A commenter stated that the determination of a “self-sufficient wage” should be left to the State and local areas and driven by local circumstances.

Department Response: The Department maintains the self-sufficiency standard. States may develop a State self sufficiency standard, and local areas may adjust the standard, within the set parameters of WIOA sec. 134(c)(3) and (d)(1)(a).

Comments: A commenter recommended insertion of a reference to “workers with barriers to employment, including people with disabilities” in § 680.710(a) and broadening OJT contracts to include introduction of accessible technology and other workplace accommodations for workers with emerging disabilities in need to training to stay on the job.

Department Response: Title I adult and dislocated worker funds are to be used to target services to individuals with barriers to employment as defined in WIOA sec. 3(24). Individuals with disabilities are a part of this definition. The Department has added “reasonable accommodations for individuals with disabilities” as an allowable supportive service in § 680.900, which can be used to help enable an individual to participate in OJT training.

Section 680.720 What conditions govern on-the-job training payments to employers?

Comments: Several commenters concurred with the Department's decision not to define “extraordinary costs” through the regulation, allowing for flexibility. One commenter would leave the definition up to the States, while another recommended that it be left to local discretion to ensure their OJT arrangements are applicable to local market conditions.

One commenter recommended that “extraordinary costs” be defined according to the Association for Talent Development Guidelines, which divide expenses according to whether they are direct or indirect. The commenter suggested that at a minimum that the regulations provide explicit coverage of unrecoverable material expenses (i.e., materials and articles nonproductively expended in training that do not create a usable product) and of participant trainees and trainers lost from productive work.

Two commenters recommended deleting proposed § 680.720(c), which specified that employers are not required to document the extraordinary costs associated with training OJT participants and replace it with a requirement that the Governor collect performance data regarding OJT to ensure that OJT contracts are fulfilling the purposes of WIOA.

Department Response: The Department declines to require additional cost or other documentation from employers to avoid creating an unnecessary burden. States and local areas may further define what constitutes an “extraordinary cost” at their discretion.

Section 680.730 Under what conditions may a Governor or Local Workforce Development Board raise the on-the-job training reimbursement rate up to 75 percent of the wage rate?

Comments: A commenter requested clarification about when a Local WDB may increase the rate for OJT contracts up to 75 percent, and specifically asked if a Governor may limit the Local WDB's authority to increase the reimbursement rate if all factors required in the regulation and under local policy are met.

Department Response: The Governor may not limit the Local WDB's authority to increase the reimbursement rate for OJT contracts provided with funds allocated to the local area. The difference between the Governor and the Local WDB with respect to OJT reimbursement rates is what funding source each is allowed to raise the reimbursement rate for. The Governor may increase the reimbursement rate for OJT contracts provided with Governor's Reserve funds or NDWG funds. Local WDBs may increase the reimbursement rate for OJT contracts provided with funds allocated to the local area.

Comments: A commenter suggested that employers paying above the median wage for the occupation should be eligible for increased reimbursement as follows: “Entry Level” at 50 percent, “Median” at 60 percent, and “Experienced” at 75 percent.

Another commenter described its current waiver that allows for a graduated rate of OJT reimbursements based on the size of the company, which it asserted has helped small businesses gain funding and skilled employees.

Department Response: The Department declines to add these factors into the regulatory text. They may be determined appropriate by the Governors or Local WDBs under § 680.730(a)(4).

Comments: One commenter asked if a State needs to seek a waiver to reimburse employers more than 75 percent of the OJT wage, and if the waiver could be obtained before July 1, 2015. This commenter described its current waiver to provide up to a 90 percent employer reimbursement rate.

Department Response: The Department is not considering waiver requests as part of this rule making. All WIOA title I adult and dislocated worker OJT projects going forward are expected to adhere to the reimbursement rates set forth in WIOA.

Comments: A commenter urged the Department to provide guidance to State and Local WDBs on coordinating the increased reimbursement criteria with high-road economic development strategies that improve wages, benefits, and other job quality factors for front-line employment in a State and region.

Department Response: The Department will issue guidance and technical assistance on work-based learning, including OJT, sector strategies, and industry partnerships.

Comments: A commenter recommended that the Department include a reference to individuals with disabilities in § 680.730(a)(1) to provide an incentive to State and Local WDBs to focus on this population.

Department Response: Paragraph (a)(1) of § 680.730 states that Governors may take the characteristics of the participants into consideration when raising the reimbursement rate, emphasizing “individuals with barriers to employment” as defined in WIOA sec. 3(24). Individuals with disabilities are included in this definition. No change is made to the regulatory text.

Comments: Some commenters stated that the factors to be considered regarding the relation of training to the competitiveness of the participant should be the size of the employer or the characteristics of the participant as determined by the Governor or Local WDB. A commenter agreed that employer size should be a factor related to increasing an OJT reimbursements rate, stating that smaller employers often need additional support.

Two commenters requested that the Department numerically clarify or define “small businesses” as it applies to the employer size factor under § 680.730(a)(2). Similarly, two commenters recommended that the Department clarify the meaning of “with an emphasis on small businesses” in § 680.730(a)(2). One commenter Start Printed Page 56152recommended that the Department rely upon the Small Business Administration's (SBA's) definition of “small business.” Another commenter requested that “size of the employer, with an emphasis on small businesses” be removed from § 680.730(a)(2), or at least clarified to ensure that it does not negatively impact medium and large employers seeking a higher OJT reimbursement rate.

Department Response: The Department included “the size of the employer” as a factor that Governors and Local WDBs may take into account when deciding to raise the reimbursement rate for a particular OJT project. The Department recognizes that providing these services to small businesses, which may need additional support in providing OJT, is an important factor in determining the reimbursement rate for OJT. However, there is not requirement that only small businesses may receive a higher reimbursement rate. The Department recommends that Governors and Local WDBs refer to SBA's definition of “small business” as a guide which varies by industry; it can be found at https://www.sba.gov/​content/​summary-size-standards-industry-sector.

Comments: A commenter stated that before entering training, all individuals should be thoroughly assessed to determine appropriateness of training—including demand of an occupation, post-training wages, and other individualized customer-level criteria—to be as efficient as possible with limited training resources. Several commenters specifically addressed the “competitiveness of the participant” factor (proposed § 680.730(a)(4)); including, its use in the provision of incumbent worker training, a measure used in determining wages for eligibility purposes, job retention, and credential attainment.

Department Response: In order for an individual to receive training, he or she must meet the criteria in WIOA sec 134(c)(3)(A). The Department notes that there is no sequence of service requirement; however, the eligibility for training must be established by the Local WDB. An assessment is one appropriate ways of determining training eligibility. The Department considers the “competitiveness of a participant” to be an appropriate factor that Governors or Local WDBs may use when determining the OJT reimbursement rate, under § 680.730(a)(4). The Department agrees with the commenters' recommendation and declines to define “competitiveness of a participant” through regulation. Governors and Local WDBs may develop a policy or criteria to be used in determining “competitiveness of a participant.”

Section 680.740 How can on-the-job training funds be used to support placing participants into a registered apprenticeship program?

Comments: Many commenters addressed the issue of maximum amount of time for OJT funds to be used to support registered apprenticeships; including, what entity decides the duration, flexibilities in determining duration, and tailoring to the needs of the participant.

Department Response: The Department has considered these comments and declines to make changes to the regulatory text that would limit the flexibility of States and local areas to determine the appropriate duration for OJT funds used to support placing apprentices into a registered apprenticeship program. These decisions to be best made on a case-by-case basis at the State and local level based on individual need.

Comments: One commenter stated that WIOA funding for apprenticeship is useful only if it: (1) Could support a pre-apprenticeship class of 15 to 20 students for a 90-day training class; and (2) provide additional funding for State-approved apprenticeship training, and if funding could go directly to the program and not an intermediary like the State WDB. The commenter warned that most registered apprenticeship programs are multi-employer, which makes it difficult to offer OJT contracts to employers as a hiring incentive; instead, the commenter suggested that it would be more productive to use OJT contracts as an incentive to enroll OJT contract-eligible individuals in their apprenticeship programs.

Two commenters requested clarification regarding management of reimbursement to employers by the registered apprenticeship training program when relationships with multiple employers exist; for example, when registered apprenticeship participants work for multiple employers during an OJT to maintain full-time employment.

A commenter urged the Department to revise § 680.740 to provide that OJT contracts may be written with a registered apprenticeship program, an employer participating in a registered apprenticeship program, or both. This commenter stated that having registered apprenticeship programs as signatories to OJT contracts guards against OJT becoming an employer subsidy without advancing the worker's progress. Further, the commenter recommended that OJT funds initially be received by the apprenticeship program, then reimbursed to the participating employer for the “extraordinary costs.”

Several commenters said that States would benefit from guidance and technical assistance on facilitation and implementation of apprenticeships.

Department Response: The Department recognizes the value of pre-apprenticeships and encourages pre-apprenticeship programs to become ETPs through WIOA sec. 122(d). Pre-apprenticeship programs do not automatically qualify to be on the ETPL like RA programs do; however, if they meet the requirements under the provisions of sec. 122(a-f) to become ETPs, they can be funded using ITAs. To provide information and new technical assistance resources for starting and enhancing registered apprenticeship programs, the Department issued Training and Employment Notice No. 20-15, dated January 11, 2016 (http://wdr.doleta.gov/​directives/​attach/​TEN/​TEN_​20-15.pdf). The Department plans on issuing additional guidance and technical assistance clarifying pre-apprenticeship and registered apprenticeship use in the one-stop delivery system. The Department has changed the regulatory text in § 680.740(a) to make it clear that OJT contracts may be entered into with registered apprenticeship program sponsors or participating employers in a registered apprenticeship program for the OJT portion of the registered apprenticeship program.

Comments: Commenters urged the Department to revise the regulation to allow OJT funding to be used for non-registered apprenticeship programs. Similarly, two different commenters stated that § 680.740 should not limit OJT funds to registered apprenticeship programs.

Department Response: WIOA sec. 122(a)(2)(B) provides automatic qualification for registered apprenticeship programs on ETPLs and provides an overall emphasis on registered apprenticeship programs throughout the one-stop delivery system. The Department has used this emphasis to highlight the unique flexibilities the one-stop delivery system has in making use of registered apprenticeship programs to provide training services, including ITAs and OJT. The regulatory text in § 680.740 is designed to highlight those flexibilities for OJT. This in no way restricts other appropriate uses of OJT, including for use with non-registered apprenticeships. The Department declines to make a regulatory text change include all allowable training Start Printed Page 56153types; however, because of WIOA's emphasis on registered apprenticeship, the Department has determined it appropriate to highlight.

Comments: A commenter expressed support for combining funds to support registered apprenticeship training under §§ 680.740 and 680.750.

Department Response: This allows for the combined use of OJT and ITAs to support placing participants in a registered apprenticeship program. The Department notes that there is no prohibition on the combined use of ITAs and OJT as well as any other contracted training services under WIOA sec. 134(c)(3)(G)(iv). However these decisions must be based on individual need, and they must be paying for separate program elements. No changes have been made to the regulatory text in response to the comment.

Section 680.760 What is customized training?

Comments: A commenter requested clarification of the “commitment” by the employer to employ all individuals upon successful completion of customized training; specifically, whether it must be by written letter or verbal, and whether an employer may use a temporary agency for the first 90 days of employment. Similarly, another commenter urged that the regulations address an employer's expectation to commit to hire.

Department Response: The “commitment” is a statutory requirement in WIOA sec. 3(14) and 134(c)(3)(g)(1) requires a contract between the employer and the Local WDB for customized training. Local WDBs have flexibility in determining what constitutes an appropriate commitment to hire the individuals on behalf of the employer.

Comments: One commenter requested that the Department include language in § 680.760 that would exempt the requirement that “the employer pays a significant cost of the training” when the Local WDB determines that the workers are “at-risk” for layoff. This commenter reasoned that customized training seems the most appropriate support to provide when workers are determined to be vulnerable to layoff or closure and have basic skills but may lack a preferred credential and/or industry-recognized certification.

Department Response: WIOA sec. 3(14) states that for customized training, employers must pay for a significant cost of the training, which is to be determined by the Local WDB. Customized training is generally for hiring new or recent employees and not for retraining existing employees. Incumbent worker training may be used to provide training for current employees as a layoff aversion strategy. No changes have been made to the regulatory text in response to the comments.

Comments: Two commenters asked if the § 680.760(c) requirement that an employer pay a “significant cost of the training” means the employer must pay for more than 50 percent of the cost of training. One commenter recommended that “significant cost of the training” should be eliminated as a criterion for customized training under § 680.760 because it is vague and arbitrary.

Department Response: WIOA sec. 3(14)(C) requires that employers pay a “significant cost of the training” of WIOA. Local WDBs have the discretion to define the term “significant cost of the training” as is appropriate for their local areas. No change is made in the regulatory text.

Comments: A commenter proposed adding a paragraph (d) to the definition of customized training in § 680.760 stating, “For which the training results in a degree, certificate, or industry-recognized credential.”

Department Response: The requirements for customized training are defined in WIOA sec. 3(14). No change is made to the regulatory text. The Department encourages the use of customized training that leads to credentials, but this is not a requirement of customized training.

Section 680.770 What are the requirements for customized training for employed workers?

Comments: Two commenters recommended that the Department remove the requirement for employed workers to be under the self-sufficient wage to participate in customized training because it is a deterrent for many companies and does not provide an optimal situation for new hires. Other commenters asserted that the provision would prevent dislocated workers reemployed at a lower wage but still above the self-sufficiency wage from participating in customized training that could help them reach their prior wage levels. One commenter recommended that the Department eliminate “self-sufficient wage” as a criterion or standard for use by Local WDBs in determining work-based training arrangements under § 680.770 because it is arbitrary and holds different meanings in different communities. This commenter asserted that wage gain is a more objective measure.

One commenter expressed concern that the self-sufficient wage requirement and the requirement for training to incorporate new technologies, processes, or procedures are too restrictive.

Department Response: The Department is maintaining the self-sufficiency standard for employed workers to be eligible for customized training, consistent with eligibility for training services under WIOA sec. 134(c)(3)(A). The Department considers wage gain an important measure that a Local WDB may consider when determining if customized training would be appropriate.

Comments: A commenter recommended adding a criterion to the regulation that would allow customized training for individuals making more than self-sufficient wage if it would prevent them from being unemployed as a result of a layoff.

Department Response: The Department considers incumbent worker training to be the most appropriate type of training for layoff aversion. Customized training is generally for hiring new or recent employees and not for retaining existing employees, although there may be instances where customized training is appropriate in that circumstance. In those instances customized training may be used for individuals making more than self-sufficient wages if all appropriate criteria are met. Lastly, customized employment can be used for individuals making more than self-sufficient wages as long as it leads to comparable to or higher than previous employment.

Comments: A commenter cautioned that if customized training and incumbent worker training are differentiated for low-skilled workers below the self-sufficiency wage, the regulations should add language that requires local areas to fund and promote both options to employers.

Department Response: Under WIOA, both incumbent worker training and customized training are permissible activities, each with specific eligibility, funding, and allowable criteria. Local WDBs have the flexibility to provide the appropriate types of training and services needed by their local area.

Comments: One commenter recommended that small businesses and Local WDBs be given maximum flexibility to develop customized training programs tailored for their individual needs. This commenter stated that customized training should definitely include OJT. Expressing concern that proposed § 680.770 is overly burdensome and would erect a Start Printed Page 56154significant barrier for access to training funds, another commenter stated that, by definition, if a manufacturer is providing the training then it is in-demand and valuable in the workplace.

Department Response: Customized training and OJT are two distinct types of allowable training. OJT participants learn on the job, while customized training is generally designed so that participants are trained by a third party for the employer. The regulatory text at § 680.770 is consistent with WIOA sec. 134(c)(3)(A) about how individuals may qualify to receive training services. Local WDBs determine training service investments based upon an analysis of the employment needs of the employers in current and emerging in-demand industry sectors and occupations and the needs of the area's labor force.

Comments: A commenter stated that for customized training involving multiple employers, opportunities must be offered to contract directly with a training provider without triggering procurement requirements.

Department Response: Grant recipients and subrecipients must adhere to the procurement standards set forth by the Uniform Guidance at 2 CFR 200.317 through 200.326. When procuring property and services under a Federal award, States must follow the same policies and procedures used for procurements from its non-Federal funds [2 CFR 200.317]. All entities that are not States must ensure that procurements are conducted in a manner that is consistent with 2 CFR 200.318 through 200.326.

Comments: Several commenters addressed the distinction between OJT and customized training; including, customization, use of classroom training, and needs of the participant and employer.

Department Response: WIOA defines both customized training and OJT at WIOA sec. 3(14) for customized training and sec. 3(44) for OJT and provides the differentiation, which is primarily OJT is focused on learning on the job, while customized training is generally classroom based and is often provided by a third party for the employer. There have been no changes to the regulatory text in response to this comment.

Section 680.780 Who is an “incumbent worker” for purposes of statewide and local employment and training activities?

Comments: One commenter expressed concern that the definition of “incumbent worker” was unclear and stated that if the definition of incumbent worker is to be refined by Governors, factors such as hours worked and skill level should be considered. Another commenter stated that there was confusion under WIA about the distinctions between “employed” and “incumbent” workers.

Department Response: While the Department agrees that hours worked and skill level are appropriate considerations that may be used by Governors and the Local WDBs when deciding when an employer is eligible to receive incumbent worker training under § 680.810. Any further definition may occur outside of the regulation, including by Governors and Local WDBs.

Incumbent worker training is designed to meet the workforce needs of an employer or group of employers. The employer must meet the eligibility criteria established in § 680.810. The incumbent worker must meet the requirements established in § 680.780 and the incumbent worker training requirements described in § 680.790, which discuss the requirements for incumbent worker training for individuals receiving training and the standard by which incumbent worker training should be provided. An incumbent worker does not have to meet the eligibility criteria for WIOA title I adult and dislocated worker programs. An employed worker must meet title I eligibility criteria for adult and dislocated worker programs in order to receive career services, and/or must meet the wage requirements of WIOA sec. 134(c)(3)(A)(i) and § 680.210(a)(1) and (2) to receive training services while also being employed at the beginning of participation in career and training services. No changes have been made to the regulatory text in response to these comments.

Comments: Many commenters addressed the issue of the appropriate amount of time an employee must have worked for an employer before being eligible for incumbent worker training. There was a range of timeframes recommended, ranging from 3 months to 1 year, and some commenters recommending no minimum timeframe. Some commenters stated that it should be when an employee is off of probationary status or once the employer-employee relationship is established. One commenter discussed that new employees are often the most in need of training. One commenter wanted Local WDBs to develop policies on employee tenure with a company. A commenter recommended that the Department utilize a standard that is based on the company's tenure in a community as the standard not to incentivize business relocation. Lastly, a commenter wanted the Department to ensure there was no maximum duration of time an employee could work for a company and not be eligible for incumbent worker training.

Department Response: Incumbent worker training is intended for workers with an established work history with the current employer, and who have the knowledge, skills, and abilities needed by their current employer but because of changes in the necessary skills to remain in their position, to advance in the company, or to avoid a layoff, the employees now need additional training. Thus, the Department has decided to retain the 6-month requirement for incumbent workers.

The Department does not consider incumbent worker training to be part of the occupational training for the position in which the new employee was hired. This type of training is most appropriate for an OJT or customized training. However, given that some incumbent worker training may be provided for a cohort of employees, the Department recognizes the concern about excluding certain members of a cohort based on this criterion and has added language into the regulatory text in § 680.780 to create an exception for cohort training, stating that a majority of the cohort must meet the 6-month requirement.

Comments: Many commenters recommended adding specific language to § 680.780 recognizing the need for incumbent training services to assist long-term workers who were hired when skill level requirements were much lower.

Department Response: While the Department has established a 6-month rule for the minimum duration of employment for incumbent worker training eligibility, it has not set a maximum duration of employment. Long-term workers who are looking to gain new skills may benefit from incumbent worker training.

Comments: The Department received a number of comments on the requirement incumbent worker training “must satisfy the requirements in WIOA sec. 134(d)(4) and § 680.790 and increase the competitiveness of the employee or employer.” Because this sentence is more properly included in § 680.790, which discusses what incumbent worker training is, the Department removed the text from § 680.780 and instead included it in § 680.790. The comments received about this text are discussed below, in the discussion of § 680.790.

The Department made one final clarifying change at the end of § 680.780. The NPRM stated that an Start Printed Page 56155incumbent worker does not necessarily have to meet the eligibility requirements for career and training services for adults and dislocated workers under WIOA. The Department has added language to make clear that if the worker is receiving other services in addition to incumbent worker training, the individual must meet the eligibility requirements like all other adult or dislocated worker participants.

Section 680.790 What is incumbent worker training?

Comments: Two commenters urged the Department to define how incumbent worker training should “increase the competitiveness of the employee or employer” and recommended that such training be designed to retain a skilled workforce or avert the need to lay off employees. Another commenter urged the Department to define “improving the skills and competitiveness of the participant” and “increasing the competiveness of the employer” and to stipulate how competitiveness will be initially assessed and continuously measured. One commenter recommended that “increasing the competitiveness of the employee or employer” be defined in State policy to allow for flexibility or, alternatively, be defined as training that retains and advances a skilled workforce.

Department Response: The Department agrees that the phrase “increase the competitiveness of the employee or employer” may be defined under State and Local WDB policy, as consistent with the discussion below, and with any future guidance provided by the Department. No change is made to the regulatory text.

Comments: A commenter stated that incumbent worker training should be “employer driven” and “competitiveness of the participant” should be a factor only for determining if incumbent worker training is appropriate.

Another commenter recommended that States be allowed to develop incumbent worker training policies while the Department provides technical assistance and guidance. This commenter urged against relying on layoff aversion and recommended using available labor market data and sector strategies to target occupations for training.

Some commenters urged the Department to omit layoff aversion as a criterion for incumbent worker training, asserting that it would have a chilling effect and would not be offered during healthy economic times. One commenter asserted that proposed § 680.790 is too restrictive in focusing only on averting layoffs or retaining employment. This commenter recommended that the Department add specific language allowing incumbent training “to promote the competitiveness of both the participant and the employer” and “to ensure an employee's skill set is advanced.”

One commenter stated that incumbent worker training should be used for individuals who are at a self-sufficient wage and require training that helps the employer stay competitive and retain a skilled workforce or avert a layoff.

Department Response: WIOA sec. 134(d)(4)(B) states that incumbent worker training is to assist workers in obtaining the skills necessary to retain employment or avert layoffs. The Department considers these to be two distinct, although not mutually exclusive, types of requirements for the training, and the regulatory text retains the requirements at § 680.790. Further definition of these terms may be articulated in State and local policies. There have been no changes to the regulatory text in response to this comment.

Comments: Some commenters recommended using earnings growth in the 6 months following incumbent worker training to measure increased competitiveness of the employee. One commenter recommended measuring increased competitiveness by higher wages 1 year after training, portability, layoff aversion, and progress toward self-sufficiency.

Another commenter recommended measuring “competiveness of the employee” by documented wage increases; access to other documented benefits, bonuses, or commissions; obtaining industry-recognized certificates or credentials; or ascension of the worker into an advanced job classification or pay grade. This commenter stated that identifying opportunities for increased competitiveness of employers might require access to confidential business information.

One commenter recommended that the Department require the following to “increase the competitiveness of the employee and employer”: (1) Training takes place on company time and trainees are compensated at no less than their normal rate of pay while attending training; (2) training is short-term and ideally 6 months or less; (3) training focuses on occupational skills; and (4) businesses must demonstrate that the costs of training are reasonable.

Department Response: Section 680.810 outlines the factors that a Local WDB must consider when determining eligibility for an employer to receive incumbent worker funds and provides flexibility to the Local WDB to establish other factors in making such a determination. The Department notes that some ideas commenters provided about how to provide incumbent worker training have merit, and the Department will include them in guidance and technical assistance. No changes have been made to the regulatory text in response to these comments.

Comments: One commenter recommended the following metrics for evaluating the effectiveness of incumbent worker training: Revenue increase, contracts awarded, sales data, geographic expansion, wage increase, increased education attainment, and increased credential attainment. Another commenter stated that incumbent worker training arrangement should be flexible, with success measured by metrics such as earnings gains, new skills and competencies gained, new certifications received and/or number of employees migrating into new employment, especially in the case of layoff aversion. One commenter recommended that an employer should demonstrate where incumbent worker training would increase revenue and lead to an increase in wage level within 90 days of training completion.

Department Response: With respect to eligibility for incumbent worker training, many of these metrics are what the Department considers to be possible factors for a State or local area in determining incumbent worker training eligibility for training providers, employers, and employees, as included under §§ 680.780 and 680.810. The Department may issue further guidance on this subject.

The Department clarifies that, because of the unique nature of the Incumbent Worker Training Program, where the Local WDB only evaluates the employers for eligibility consistent with § 680.810, individuals receiving Incumbent Worker Training are not subject to the eligibility criteria that apply to participants in the adult or dislocated worker programs, unless they are also receiving other services under those programs. Therefore, individuals who only receive incumbent worker training and no other WIOA title I service do not fall within the definition of “participant” in 20 CFR 677.150(a) (see Joint WIOA Final Rule). As such, they are not included in calculations for the State Primary Indicators of Performance. The Department is making a change to be consistent with this in § 680.810(a) and (b) by removing the word “participant” and inserting “individual” to reflect that incumbent Start Printed Page 56156worker training eligibility is decided at the employer level.

States and Local WDBs are, however, required to report on individuals who receive incumbent worker training, including employment status after training, wages after training, and credential attainment, the details of which are provided through the Department's ICR process and subsequent guidance. As part of future collections and guidance, the Department may seek to collect additional employer data, such as employer size, industry, and other information that may be used to evaluate the effectiveness of Incumbent Worker Training programs for both the employer and employee.

Regarding the development and provision of Incumbent Worker Training by States and local areas, the Department encourages States and local areas to cultivate opportunities and develop policies that can appropriately support employers in their efforts to develop a more competitive workforce or avert potential layoffs and that provide incumbent workers with opportunities for advancement and wage gains within their company. Incumbent Worker Training policies must be aligned with State and Local Plans, as well as with sector strategy approaches for in-demand occupations.

In addition to the required performance indicators, WIOA sec. 122(h)(2) says that the Governor may require and use performance information relating to incumbent worker training and other work-based training to determine whether providers meet such performance criteria as required by the Governor. More detailed information on performance definitions and metrics are in 20 CFR part 677 (see Joint WIOA Final Rule).

Comments: Several commenters said that it is unrealistic to expect incumbent worker training to result in the employee being promoted; instead, local areas need flexibility on timing of training and hiring new workers that coincides with the needs of business. In response to the NPRM preamble statement that ideal incumbent worker training would result in promotion and hiring to backfill the incumbent worker's position, two commenters asked if it is realistic to expect a company, through a round of training to retain workers, to also be able to add new employees. One of these commenters stated that this is an ideal structure that would be better served under customized training for employed workers. However, one commenter agreed with the Department's goal of using incumbent worker training to “advance-and-backfill” to benefit two employees.

Department Response: The Department clarifies that the ideal incumbent worker training strategy of upskilling and backfilling employee positi