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Workforce Innovation and Opportunity Act; Joint Rule for Unified and Combined State Plans, Performance Accountability, and the One-Stop System Joint Provisions; Final Rule

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Start Preamble Start Printed Page 55792

AGENCY:

Office of Career, Technical, and Adult Education (OCTAE), Rehabilitation Services Administration (RSA), Education; Employment and Training Administration (ETA), Labor.

ACTION:

Final rule.

SUMMARY:

The Departments of Education (ED) and Labor (DOL) (or, collectively, Departments) issue this Joint Final Rule to implement jointly administered activities authorized by title I of the Workforce Innovation and Opportunity Act (WIOA) signed into law on July 22, 2014 (hereafter “Joint WIOA Final Rule”). Through these regulations, the Departments implement workforce education and employment system reforms and strengthen the nation's public workforce development system to provide increased economic opportunity and make the United States more competitive in the 21st century evolving labor market. This Joint WIOA Final Rule provides guidance for State and local workforce development systems that increase the skill and credential attainment, employment, retention, and earnings of participants, especially those with significant barriers to employment, thereby improving the quality of the workforce, reducing dependency on public benefits, increasing economic opportunity, and enhancing the productivity and competitiveness of the nation.

DATES:

This final rule is effective October 18, 2016.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

DOL: Adele Gagliardi, Administrator, Office of Policy Development and Research, 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) or 1-800-326-2577 (TDD—Telecommunications device for the deaf).

ED: Lekesha Campbell, U.S. Department of Education, OCTAE, 400 Maryland Avenue SW., Room 11-145, PCP, Washington, DC 20202-7240, Telephone: (202) 245-7808; Edward Anthony, U.S. Department of Education, RSA, 400 Maryland Avenue SW., Room 5085 PCP, Washington, DC 20202-2800, Telephone: (202) 245-7256.

If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

This Joint WIOA Final Rule reflects changes made as a result of public comments received to the joint Notice of Proposed Rulemaking that was published on April 16, 2015, at 80 FR 20574.

WIOA strengthens the alignment of the public workforce development system's six core programs by compelling unified strategic planning requirements, common performance accountability measures, and requirements governing the one-stop delivery system. In so doing, WIOA placed heightened emphasis on coordination and collaboration at the Federal, State, local, and tribal levels to ensure a streamlined and coordinated service delivery system for job seekers, including those with disabilities, and employers. These regulations lay the foundation, through coordination and collaboration at the Federal level, for implementing the Departments' vision and goals of WIOA.

In addition to this Joint WIOA Final Rule, the Departments are issuing separate final rules to implement program-specific requirements of WIOA that fall under each Department's purview. The DOL is issuing a Final Rule governing program-specific requirements under titles I and III of WIOA (hereinafter “DOL WIOA Final Rule”). The 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 Department-specific final rules are published elsewhere in this issue of the Federal Register. Developing and issuing all five WIOA final rules collaboratively reinforces WIOA's heightened emphasis on coordination and collaboration to ensure an integrated and seamless service delivery system for job seekers and employers.

Preamble Table of Contents

I. Executive Summary

II. Acronyms and Abbreviations

III. Public Comments Received on the Notice of Proposed Rulemaking

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

A. Unified and Combined State Plans Under Title I of the Workforce Innovation and Opportunity Act (20 CFR Part 676; 34 CFR Part 361, Subpart D; 34 CFR Part 463, Subpart H)

B. Performance Accountability Under Title I of the Workforce Innovation and Opportunity Act (20 CFR Part 677; 34 CFR Part 361, Subpart E; 34 CFR Part 463, Subpart I)

C. Description of the One-Stop System Under Title I of the Workforce Innovation and Opportunity Act (20 CFR Part 678; 34 CFR Part 361, Subpart F; 34 CFR Part 463, Subpart J)

V. 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

Purpose of This Regulatory Action: President Barack Obama signed WIOA into law on July 22, 2014. WIOA is the first legislative reform of the public workforce system in more than 15 years, which passed Congress by a wide bipartisan majority. WIOA supersedes the Workforce Investment Act of 1998 (WIA) and amends the Wagner-Peyser Act and the Rehabilitation Act of 1973. WIOA strengthens and improves our nation's public workforce system and increases economic opportunities for individuals in the United States, especially youth and individuals with significant barriers to employment, to secure and advance in employment. 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.Start Printed Page 55793

WIOA supports innovative strategies to improve coordination among the six core programs and other Federal programs that support employment services, workforce development, adult education and literacy, and vocational rehabilitation (VR) activities.

In WIOA, Congress directed the Departments to issue regulations implementing statutory requirements to ensure that the public workforce system operates as a comprehensive, integrated, and streamlined system to provide pathways to prosperity and continuously improve the quality and performance of its services to job seekers and to employers. Therefore, the Departments are issuing this Joint WIOA Final Rule to implement jointly administered activities authorized under WIOA, specifically those related to the Unified and Combined State Plans, performance accountability, and the one-stop delivery system. In an effort to promote collaboration and coordination at the State and local levels among the core programs and other Federal partner programs, the Departments have collaborated extensively with the Department of Health and Human Services (HHS) and other Federal agencies in developing this Final Rule.

The Departments are publishing this Joint WIOA Final Rule to implement those provisions of WIOA that affect all of the six core programs, specifically the: Adult, dislocated worker, and youth programs authorized under title I and administered by DOL; AEFLA program authorized under title II and administered by ED; Employment Service program authorized under the Wagner-Peyser Act, as amended by title III, and administered by DOL (Wagner-Peyser Act Employment Service program); and VR program, authorized under title I of the Rehabilitation Act of 1973, as amended by title IV, and administered by ED. The requirements in these joint final regulations will be jointly administered by both Departments. The regulations contained in this Final Rule also impact other Federal programs that participate in the one-stop system and/or are identified as partner programs in a State's Combined State Plan if a State elects to submit such Plan rather than a Unified State Plan.

A critical part of the implementation of WIOA is the collection and reporting of accurate, timely information about individuals who receive services through the programs authorized under the law. Such information is critical to inform public policy and support analysis of effective strategies. In keeping with the Paperwork Reduction Act (PRA), the methods for collecting such information are provided to the public for comment through information collection requests (ICRs). The Joint WIOA Final Rule had two accompanying requests to support the performance and planning aspects of these rules. Soon after publication of the Notice of Proposed Rulemaking (NPRM) (80 FR 20574, April 16, 2015), the Departments 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, Wagner-Peyser Act Employment Service, National Farmworker Jobs Programs (NFJP), Trade Adjustment Assistance, YouthBuild, Indian and Native American (INA) grantees, 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”). The Departments 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).

On August 6, 2015, the Departments, together with the Departments of Health and Human Services, Agriculture, and Housing and Urban Development (HUD), proposed a new information collection regarding required elements for submission of the Unified or Combined State Plan and Plan modifications under WIOA (hereinafter “State Plan ICR”) (80 FR 47003) (see https://www.regulations.gov/​#!docketDetail;​D=​ETA-2015-0006). The State Plan ICR received a total of 16 public comments. These public comment submissions informed the development of the final State Plan ICR, which the Office of Management and Budget (OMB) approved on February 19, 2016. Most provisions in titles I through III of WIOA took effect on July 1, 2015, the first full program year after enactment; however, the new State Plans and performance accountability system requirements in the statute will take effect on July 1, 2016. Title IV took effect upon enactment unless otherwise indicated.

Section V. Rulemaking Analysis and Notices, D. Paperwork Reduction Act provides summary information about the public comments on the Joint Performance ICR and the State Plan ICR.

In addition to this Joint WIOA Final Rule, the Departments are publishing, in separate regulatory actions published in the Federal Register, four agency-specific final rules that implement the provisions of WIOA that are administered separately by the Departments—one published by DOL implementing the agency-specific provisions of title I, and three published by ED implementing the agency-specific provisions of titles II and IV. Readers should note that there are a number of cross-references in this Joint WIOA Final Rule to the agency-specific final rules. Finally, the Departments structured this Joint WIOA Final Rule so that the Code of Federal Regulations (CFR) parts will align with the CFR parts in the agency-specific final rules.

To implement those provisions of WIOA that affect the WIOA programs and which will be jointly administered by both Departments, these regulations implement a number of improvements that WIOA makes to the public workforce system. These include improvements to:

  • Ensure that workforce education and employment services are coordinated and complementary by requiring a single, 4-year strategic State Plan for achieving the workforce goals of the State. Additionally, States may conduct, along with the core programs, collaborative planning with other Federal education and training programs specified in WIOA;
  • Ensure that Federal investments in education, employment, and training are evidence-based, data-driven, and accountable to participants and taxpayers by establishing a common performance accountability system for the core programs, requiring other authorized programs to report on the common performance indicators, and providing easy-to-understand information to consumers and the public about training providers and Start Printed Page 55794program performance to help inform their decision-making; and
  • Enhance services provided to all job seekers and employers through the one-stop delivery system, also known as the American Job Center system, by: Requiring the colocation of the Wagner-Peyser Act Employment Service program; adding the Temporary Assistance for Needy Families (TANF) program as a required partner; providing for State-established certification to ensure high-quality American Job Centers; requiring partners to dedicate funding for allowable infrastructure and other shared costs that are commensurate to the partner's proportionate use and relative benefit received by the program; and promoting the development of integrated intake, case management, and reporting systems.

Changes From the Notice of Proposed Rulemaking

The Departments published a Joint WIOA NPRM on April 16, 2015 at 80 FR 20574. The Final Rule supports the tenets expressed in the NPRM. In response to comments received and to strengthen the intent of the law, the Departments have made numerous revisions, including but not limited to changes to the following areas:

  • State Plans: The Joint WIOA Final Rule text, among other things: (1) Clarifies the expected involvement of stakeholders, core programs, and the State Workforce Development Boards (WDBs) in the State Plan development; (2) ensures consistency by requiring a description of joint planning and coordination across core programs, required one-stop partners, and other programs and activities included in the Unified and Combined State Plans; (3) requires States to provide an opportunity for public comment on and input into the development of Unified and Combined State Plans prior to their submission, and (4) clarifies requirements for Unified and Combined State Plan modifications. The preamble responds to suggestions regarding certain Unified and Combined State Plan requirements, as well as provides further guidance and clarifications with regard to certain regulatory requirements governing the Unified and Combined State Plans.
  • Performance Accountability: The Joint WIOA Final Rule clarifies certain definitions, primary indicators of performance, and sanctions. Changes in the Final Rule text include, among others: (1) Revising the definitions of “participant,” “exit,” and “State;” (2) clarifying the credential attainment rate indicator; (3) adding the types of gain that are included in the measurable skill gains indicator; (4) clarifying the difference between the “adjusted level of performance” that is agreed upon at the time the Unified or Combined State Plan is approved and the “adjusted level of performance” that is determined at the end of the program year; and (5) adding a phased-in approach for sanctions due to failure to achieve adjusted levels of performance and a transition period for complete WIOA data to be available. The preamble explains intent to phase in implementation of the “effectiveness in serving employers” indicator and to implement a uniform, national customer satisfaction survey that is not tied to accountability provisions or the determination of sanctions. The preamble also provides further guidance and clarification regarding changes made to the Final Rule text, including the inclusion of outlying areas (American Samoa, Guam, Commonwealth of the Northern Mariana Islands, the U.S. Virgin Islands, and, as applicable, the Republic of Palau) for purposes of the performance accountability system.
  • One-Stop Governance and Operations: The Joint WIOA Final Rule includes changes to the operational aspects of one-stop operations including, among others: (1) Revising coverage of multiple program services and staff coverage in one-stop affiliate sites; (2) revising infrastructure funding regulations, and emphasizing partners' responsibilities towards infrastructure costs; (3) providing detailed information about career services; (4) clarifying the involvement of the TANF programs as one-stop partners; (5) simplifying provisions governing Memoranda of Understanding (MOU) negotiations; (6) emphasizing the need to conduct an open competition for one-stop operator selection; (7); changing the requirements related to hours of operation outside normal business hours; (8) emphasizing both physical and programmatic accessibility; (9) clarifying when the State funding mechanism is triggered for the funding of the one-stop system, including the funding limits applicable to the State funding mechanism; and (10) establishing a deadline to conform to the new common one-stop identifier.

As noted throughout this Final Rule, the Departments 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 Departments will also be issuing guidance to provide information on current priorities and initiatives, suggested best practices, and in response to stakeholder questions.

The Departments also 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.

II. Acronyms and Abbreviations

AEFLA Adult Education and Family Literacy Act

ABAWD Able-Bodied Adults Without Dependents

ABS Adult Basic Skills

APA Administrative Procedure Act

BFET Basic Food Employment and Training

BLS Bureau of Labor Statistics

CBO Community-based organization

CEO Chief elected official

CFR Code of Federal Regulations

CHIP Children's Health Insurance Program

CMS Case Management System

CRIS Common Reporting Information System

CRO Community Rehabilitation Organization

CSBG Community Services Block Grant

CTE Career and Technical Education

DOL U.S. Department of Labor

DSA Designated State Agency

DSU Designated State Unit

ED U.S. Department of Education

EEOC Equal Employment Opportunity Commission

EFL Educational Functioning Level

E.O. Executive Order

ESEA Elementary and Secondary Education Act of 1965

ESL English-as-a-second-language

ETA Employment and Training Administration

ETP Eligible training provider

FEDES Federal Employment Data Exchange System

FEIN Federal employer identification number

FERPA Family Educational Rights and Privacy Act

FY Fiscal Year

GED General Education Diploma

GPA Grade Point Average

GS General Schedule

HHS Department of Health and Human Services

HSE High School Equivalency

HUD Department of Housing and Urban Development

ICR Information Collection Request

INA Indian and Native American

INAP Indian and Native American Programs

IPE Individualized Plan for Employment

IT Information technology

ITA Individual Training Account

JVSG Jobs for Veterans State GrantsStart Printed Page 55795

LMI Labor market information

LSAL The Longitudinal Study of Adult Learning

MOU Memorandum of Understanding

NAICS North American Industry Classification System

NASWA National Association of State Workforce Agencies

NFJP National Farmworker Jobs Program

NIST National Institute of Standards and Technology

NPRM Notice of Proposed Rulemaking

MIS Management Information System

OCTAE Office of Career, Technical, and Adult Education

OJT On-the-job training

OMB Office of Management and Budget

ORR Office of Refugee Resettlement

PII Personally identifiable information

PIRL Participant Individual Record Layout

POP Period of Participation

PRA Paperwork Reduction Act of 1995

PY Program Year

RFA Regulatory Flexibility Act

RFP Request for Proposals

RHY Runaway and Homeless Youth

RIA Regulatory Impact Analysis

RSA Rehabilitation Services Administration

SBA Small Business Administration

SBREFA Small Business Regulatory Enforcement Fairness Act of 1996

SCSEP Senior Community Service Employment Program

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

SLDS Statewide Longitudinal Data System

SNAP Supplemental Nutrition Assistance Program

SRC State Rehabilitation Council

SSA Social Security Administration

SSN Social Security Number

SWA State Workforce Agencies

TAA Trade Adjustment Assistance

TAG Technical Assistance Guide

TANF Temporary Assistance for Needy Families

TDD Telecommunications Device for the Deaf

TEGL Training and Employment Guidance Letter

UI Unemployment insurance

U.S.C. United States Code

VETS Veterans' Employment and Training Service

VEVRAA Vietnam Era Veterans' Readjustment Assistance Act

VR Vocational rehabilitation

WDB Workforce Development Board

WIA Workforce Investment Act of 1998

WIOA Workforce Innovation and Opportunity Act

WISPR Workforce Investment Streamlined Performance Reporting

WRIS Wage Record Interchange System

III. Public Comments Received on the Notice of Proposed Rulemaking

The Departments published five NPRMs related to WIOA on April 16, 2015. The first NPRM is the Joint Rule for Unified and Combined State Plans, Performance Accountability, and the One-Stop System Joint Provisions (80 FR 20574) (hereinafter “the Joint WIOA NPRM”); the second NPRM is the Workforce Innovation and Opportunity Act (80 FR 20690); the third NPRM is the Programs and Activities Authorized by the Adult Education and Family Literacy Act (Title II of the Workforce Innovation and Opportunity Act) (80 FR 20668); the fourth is the State Vocational Rehabilitation Services program; State Supported Employment Services program; Limitations on Use of Subminimum Wage (80 FR 21059); and the fifth is the Workforce Innovation and Opportunity Act, Miscellaneous Program Changes (80 FR 20688).

During the 60-day public comment period, the Departments received a total of 546 public comments on the Joint WIOA NPRM. In addition to these comments, the Departments also considered relevant public comments on the DOL and ED program-specific NPRMs.

General Comments

Comments: The Departments received many comments supporting these regulations. For example, the Departments received comments supporting cross-program data and performance measurement, the increased focus on adult education and services to immigrants, improved alignment between Federal initiatives and State and local needs, increased matching of apprenticeships with employers, as well as support for other provisions discussed in the section-by-section analysis below. Additionally, the Departments received comments commending the collaboration on joint regulations and encouraging additional coordinated guidance. Also, several commenters expressed support for the enactment of WIOA, noting the law will decrease unemployment, make the United States more competitive, lead to higher wages, and facilitate entry into the middle class.

A few commenters generally opposed the rulemaking, in part because they disagreed with the role WIOA assigns to the Federal government concerning covered programs. Others suggested that the NPRM itself was excessive, overly cumbersome, and not understandable to the layperson, needed clarification, and was inconsistent with the plain and simple language of WIOA.

Departments' Response: The Departments acknowledge these comments, but do not address them further in the Final Rule since they do not request specific changes to the regulatory text. However, the Departments note that the section-by-section analysis is drafted to provide additional clarity on complicated provisions, such as those related to the definitions used in the performance accountability regulations, requirements for the State funding mechanism for the one-stop system, and requirements for Unified and Combined State Plan modifications. Furthermore, revisions were made to various sections in the regulatory text to improve readability. Additionally, the Departments will continue to provide guidance and technical assistance, as needed, to assist States in implementing WIOA.

Accessibility of the Public Workforce System to Individuals With Disabilities

Comments: The Departments received many comments related to increased access to workforce services for individuals with disabilities, both in support of legislative changes and expressing concern that the regulations need to hold the public workforce system fully accountable to implement such changes. Several commenters noted that, under WIOA, individuals with disabilities will have greater access to workforce training programs and be able to take advantage of the benefits resulting from their training. However, one commenter asserted that the rule must do more to consider the unique needs of individuals with disabilities, who may take longer than others to achieve employment. Another commenter expressed concern that her organization would not have enough resources to provide pre-employment transition services to potentially eligible students with disabilities. A commenter encouraged efforts to improve the ability of the one-stop system to serve customers with disabilities through existing services and programs, and another urged the Departments to include specific requirements for training and access to text-to-speech and speech-to-text technologies for people with dyslexia and print disabilities.

Departments' Response: WIOA includes numerous provisions intended to increase employment opportunities for individuals with disabilities, and these regulations reinforce those statutory provisions. There are numerous discussions throughout part 678 reiterating the Departments' intent to ensure access to needed employment and training services to all individuals.

The Department has published a Final Rule to implement sec. 188 of WIOA, which prohibits discrimination against WIOA participants, by making technical changes only to its existing regulation implementing WIA (i.e., (1) replicating at part 38 the rule from part 37, and (2) replacing references to the “Workforce Investment Act of 1998” or “WIA” with “Workforce Innovation and Opportunity Act” or “WIOA” to reflect the proper Start Printed Page 55796statutory authority). See 80 FR 43,871 (July 23, 2015).

In addition, on January 26, 2016, DOL proposed updating these regulations to better align with the Americans with Disabilities Act Amendments Act of 2008, Public Law 110-325, sec. 2(b)(1), 122 Stat. 3553 (2008) and the relevant implementing regulations and guidance issued by the Department of Justice (28 CFR parts 35 and 36), as well as the final regulations and guidance issued by the Equal Employment Opportunity Commission (29 CFR part 1630, 76 FR 16978 (Mar. 25, 2011) (Equal Employment Opportunity Commission regulations implementing Americans with Disabilities Act title I)). See 81 FR 4493 (January 26, 2016). The proposed WIOA sec. 188 rule would ensure that the definition of “disability” is consistent with the Americans with Disabilities Act Amendments Act and current case law, which will enable more individuals with disabilities to be effectively served within the public workforce system. That NPRM also addresses accessibility requirements (such as those for information and electronic technologies) and service animals. The Departments encourage commenters to review carefully the provisions of part 678 in this Joint WIOA Final Rule, as well as the proposed WIOA sec. 188 rule.

With respect to the commenter's concerns about pre-employment transition services, the Departments acknowledge that the provision of these services is a new requirement imposed on the VR program under sec. 113 of the Rehabilitation Act of 1973, as amended by title IV of WIOA. States must reserve at least 15 percent of their VR allotment to provide these services to students with disabilities. The ED provides detailed discussions regarding this requirement in the VR program-specific final regulations published elsewhere in this issue of the Federal Register.

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.

Departments' Response: While the Departments recognize that the issues addressed in the NPRM are complex and important, the Departments 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.

Conclusion

These final regulations provide the critical framework for the implementation of WIOA. However, achieving the goals of WIOA will take visionary leadership and coordination at the State, regional, and local levels, and partnerships across many programs. It will require investment and innovation to develop new information technology that supports this important work, and make the most of this investment of public funds. The Departments will support these activities through program funding, on-going technical assistance and the provision of guidance to all levels of the American Job Center system.

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

A. Unified and Combined State Plans Under Title I of the Workforce Innovation and Opportunity Act (20 CFR Part 676; 34 CFR Part 361, Subpart D; 34 CFR Part 463, Subpart H)

WIOA requires the Governor of each State to submit a Unified or Combined State Plan to the Secretary of Labor that outlines a 4-year strategy for the State's workforce development system. States must have approved State Plans in place to receive funding for the six core programs under WIOA—the adult, dislocated worker, and youth programs (WIOA title I); the AEFLA program (WIOA title II); the Employment Service program authorized under the Wagner-Peyser Act, as amended by WIOA title III (Wagner-Peyser Act Employment Service); and the VR program authorized under title I of the Rehabilitation Act of 1973, as amended by WIOA title IV (VR program). States must submit, at a minimum, a Unified State Plan, which encompasses the six core programs under WIOA. However, States are encouraged to submit a Combined State Plan, which must include the six core programs of the Unified State Plan, plus one or more Combined State Plan partner programs, as described at § 676.140(d): (1) Career and Technical Education (CTE) programs authorized under the Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. 2301 et seq.); (2) TANF, authorized under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.); (3) Employment and training programs authorized under sec. 6(d)(4) of the Food and Nutrition Act of 2008 (7 U.S.C. 2015(d)(4)); (4) Work programs authorized under sec. 6(o) of the Food and Nutrition Act of 2008 (7 U.S.C. 2015(o)); (5) Trade adjustment assistance activities under chapter 2 of title II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.); (6) Services for veterans authorized under chapter 41 of title 38 United States Code; (7) Programs authorized under State unemployment compensation laws (in accordance with applicable Federal law); (8) Senior Community Service Employment Programs under title V of the Older Americans Act of 1965 (42 U.S.C. 3056 et seq.); (9) Employment and training activities carried out by HUD; (10) Employment and training activities carried out under the Community Services Block Grant Act (CSBG) (42 U.S.C. 9901 et seq.); and (11) Reintegration of offenders programs authorized under sec. 212 of the Second Chance Act of 2007 (42 U.S.C. 17532). When a State elects this option, the Combined State Plan will take the place of the Unified State Plan for that State. Coordination across multiple Federal programs provides a wider range of coordinated and streamlined services to the customer.

This part describes the submission process and content requirements for the Unified and Combined State Plans under WIOA. The major content areas of the Unified or Combined State Plan include strategic and operational planning elements. Strategic planning elements include State analyses of economic and workforce factors, an assessment of workforce development activities, formulation of the State's vision and goals for preparing an educated and skilled workforce that meets the needs of employers, and a strategy to achieve the vision and goals. Operational planning elements include State strategy implementation, State operating systems and policies, program-specific requirements, assurances, and additional requirements imposed by the Secretaries of Labor and Education, or other Secretaries, as appropriate.

State WDBs are responsible for the development, implementation, and modification of the plan, and for convening all relevant programs, partners, and stakeholders. The Governor must ensure that the Unified or Combined State Plan is developed in a transparent manner and in consultation with representatives of Local WDBs and chief elected officials (CEOs), businesses, representatives of labor organizations, community-based Start Printed Page 55797organizations (CBOs), adult education providers, institutions of higher education, other stakeholders with an interest in the services provided by the six core programs, and any Combined plan partner program included in a Combined Plan, as well as the general public, including individuals with disabilities. Other stakeholders include, but are not limited to, youth education and workforce development providers, disability advocates and service entities, youth-serving programs, and other advocacy organizations relevant to the programs covered by the Unified or Combined State Plan.

As noted in the NPRM, the Departments have chosen not to include all of the specific planning elements in the regulation. Instead, comprehensive State Plan requirements for both Unified and Combined State Plans are detailed in the WIOA Unified and Combined State Plan and Plan Modifications ICR, entitled “Required Elements for Submission of the Unified or Combined State Plan and Plan Modifications under the Workforce Innovation and Opportunity Act,” under the OMB Collection Number 1205-0522 (hereafter “WIOA State Plan ICR”). ICRs must be renewed every 3 years. In future years, the WIOA State Plan ICR may undergo revisions. Throughout this preamble, “WIOA State Plan ICR” refers to the WIOA State Plan ICR as published on February 19, 2016. The WIOA State Plan ICR went through two rounds of public comment before being finalized and future revisions will be subject to public comment as well, as required under the PRA. In addition, the Departments jointly have issued guidance explaining the mechanics of how a State must submit its State Plan, through TEGL No. 14-15, Policy Directive RSA-PD-16-03, and Program Memorandum 16-1, all entitled Workforce Innovation and Opportunity Act (WIOA) Requirements for Unified and Combined State Plans, which were issued in March 2016. States must use the WIOA State Plan ICR to develop and submit the WIOA Unified or Combined State Plan and in accordance with instructions described in the jointly issued State Plan guidance.

In the section-by-section discussions of each Unified and Combined State Plan provision below, the heading references the DOL CFR part and section number. However, ED has identical provisions at 34 CFR part 361, subpart D (under its State VR program regulations) and at 34 CFR part 463, subpart H (under a new CFR part for AEFLA regulations). For purposes of brevity, the section-by-section discussions for each Department's provisions appear only once—in conjunction with the DOL section number—and constitute the Departments' collective explanation and rationale for each provision. When the regulations are published in the CFR, these joint performance regulations will appear in each of the CFR parts identified above.

Section 676.100 What are the purposes of the Unified and Combined State Plans?

Section 676.100 describes the principal purposes of the Unified and Combined State Plans, which communicate the State's vision for the State public workforce system and serve as vehicles for developing, aligning, and integrating the State public workforce system across Federal programs. Section 676.100(b) explains how the strategies articulated in the plan support the State's vision and overarching goals. The goals of the 4-year Unified and Combined State Plans are to align and integrate Federal education, employment, and training programs; direct investments to ensure that training and services are meeting the needs of employers and job seekers; apply consistent job-driven training strategies across all relevant Federal programs; and engage economic, education, and workforce partners in improving the workforce development system. The Departments received a few comments on this section, none of which necessitated substantive changes to the regulatory text. Section 676.100, as discussed below, remains unchanged from the NPRM except for minor technical edits.

Comments: Several commenters supported the Departments' stated purpose of the Unified and Combined State Plans. A commenter said the regulation should require that State WDBs be provided with regular (e.g., quarterly) program information and data, and at least annual analysis of the State's progress toward State Plan goals.

Departments' Response: The Departments considered these comments and concur that regular receipt and review of program information, data, and analysis will better enable effective decision-making by the State WDB. Section 677.160 of the joint performance regulations requires States to report data annually for all six core programs; however, some programs will report data quarterly, specifically the WIOA title I programs, the Wagner-Peyser Act Employment Service program, and the VR program, in accordance with part 677 of this Joint WIOA Final Rule. The State's quarterly and annual reports are publicly available, and State and Local WDBs are encouraged to review this information regularly. Therefore, the Departments have concluded that it is unnecessary to amend the final regulations to require that data be provided to the WDBs regularly as the commenter recommended.

Comments: A commenter requested confirmation that the references to “relevant” and “job-driven” education and training, in proposed § 676.100(b)(2) and (3), refer to “evidence-based” strategies identified in the Job-Driven Checklist (from Vice President Biden's report “Ready to Work: Job-Driven Training and American Opportunity” and the study of “What Works in Job Training: A Synthesis of Evidence”). The commenter urged the Departments to provide clarification on how to, and encourage States to, use the joint State planning process to ensure that these evidence-based strategies are incorporated into their newly energized workforce development systems.

Departments' Response: The Departments agree that evidence- based strategies are important for the strategic planning required by this section. Paragraph (b)(2) of § 676.100 requires, as part of the description of the purpose of the Unified and Combined State Plans, that the plans direct investments to economic, education, and workforce training programs that focus on providing relevant education and training. Section 676.100(b)(3) further requires that plans apply strategies for job-driven training consistently across Federal programs. The references to “relevant” and “job-driven” education and training, in § 676.100(b)(2) and (3), include the “evidence-based” strategies identified in the Job-Driven Checklist from Vice President Biden's report “Ready to Work: Job-Driven Training and American Opportunity” and the study of “What Works in Job Training: A Synthesis of Evidence.” Through the issuance of joint Departmental guidance and instructions, the Departments offered further clarification and encouragement to States regarding how the joint planning process can ensure that evidence-based strategies are incorporated throughout the workforce development system, including the priorities of the job-driven checklist. No change to the regulatory text was made in response to this comment.

Section 676.105 What are the general requirements for the Unified State Plan?

Section 676.105 describes the general requirements for the Unified State Plan that apply to all six core programs. These requirements set the foundation Start Printed Page 55798for WIOA implementation by fostering strategic alignment, improving service integration, and ensuring that the public workforce system is industry-relevant, responds to the economic needs of the State, and matches employers with skilled workers. The Departments envision a plan that describes how the State will develop and implement a unified, integrated workforce development system rather than a plan that discusses the State's approach to operating each core program individually.

Section 676.105(a) explains that Unified State Plans must be submitted in accordance with § 676.130 and sec. 102(c) of WIOA as explained in joint planning guidelines issued by the Secretaries of Labor and Education, with instructions to States on how to submit Unified State Plans.

Section 676.105(b) implements WIOA's statutory requirements in sec. 102(a), and requires that the State submit the Unified State Plan to the Secretary of Labor to receive funding for the workforce development system's six core programs. The Departments made an editorial change under § 676.105(b) to clarify that at a minimum States must satisfy the requirements of a Unified State Plan to be eligible to receive funding for the workforce development system's six core programs. However, if a State submits a Combined State Plan then it will, by including all the requirements of a Unified State Plan as mandated by the regulation, also satisfy the requirements of a Unified State Plan. WIOA sec. 103(b)(1) and § 676.140(e)(1) of this regulation state that a Combined State Plan must include all of the requirements of a Unified State Plan. Therefore, if a State submits a complete Combined State Plan, it also will satisfy all the requirements of a Unified State Plan.

Section 676.105(c) requires, in accordance with sec. 102(a) of WIOA, that the State outline its 4-year strategy for WIOA's core programs and meet the requirements of WIOA sec. 102(b). Paragraph (c) of § 676.105 remains unchanged from that proposed in the NPRM.

Section 676.105(d), which implements sec. 102(b) of WIOA, describes the strategic and operational planning elements that must be included in the Unified State Plan. The final regulation, consistent with that proposed in the NPRM, concerns major structural elements rather than enumerating all the statutory State planning requirements. States still must comply with each of the statutory requirements, regardless of whether they are repeated in regulation. In addition to minor technical edits throughout, the Departments made two substantive changes to § 676.105(d)(3). First, in § 676.105(d)(3)(iv), the Departments specifically mention the assurance that the lead State agencies responsible for administering the core programs reviewed and commented on the appropriate operational planning of the Unified State Plan and approved those elements as serving the needs of the individuals served by the programs. Second, the Departments added a new paragraph (d)(3)(v) that requires the Unified State Plan to include a description of the joint planning and coordination across the core programs and other required one-stop partners and other programs in the workforce development system. While these provisions are new in these final regulations, they do not represent new requirements on the States because each of these requirements are contained in sec. 102(b) of WIOA and were applicable to the States regardless of whether they were mentioned in the NPRM.

In these final regulations, the Departments have added § 676.105(e) to make clear that all of the requirements of part 676 (which implements the Unified or Combined State Plan requirements of secs. 102 and 103 of WIOA) apply to the outlying areas. As a result, the outlying areas must submit a Unified or Combined State Plan to receive funding for all of the core programs. This regulatory change is discussed at greater length below.

Outlying Areas

Comments: The Departments received several comments related to the applicability of Unified or Combined State Plan requirements to outlying areas. In the NPRM, the Departments sought comments specifically related to this issue and provided two options: Either (1) require outlying areas to submit Unified or Combined State Plans or (2) exempt outlying areas from the Unified or Combined State Plan requirement as a prerequisite for receiving funds for core programs. The commenters were unanimous in their support of explicitly requiring outlying areas to submit Unified or Combined State Plans as a prerequisite for receiving funding for all core programs. In so doing, these commenters said this approach would ensure consistency and a unified planning process, increase the relevance and validity of national program comparisons, and contribute to a fair and equitable distribution of funds. These commenters also noted that this approach would avoid the concern that outlying areas would submit Unified or Combined State Plans that include only the adult education and VR programs, since titles II and IV of WIOA require the submission of such plans as a prerequisite to receive funding.

While supporting the approach that would require outlying areas to submit a Unified or Combined State Plan as a prerequisite to receive funding for all core programs, one commenter expressed concern that ED permits outlying areas to receive adult education program funds under title II through the Consolidated Grant to Insular Areas application process (Consolidated Grant process). The commenter recommended that if ED continues to permit the award of adult education funds through the Consolidated Grant process, the Departments should require that outlying areas choosing to go through the Consolidated Grant process include title II activities as part of the planning process for the Unified or Combined State Plan, even though their funding is awarded through the Consolidated Grant.

Another commenter expressed concern that, if the outlying areas were not required to submit Unified or Combined State Plans for all core programs, a situation could exist in which the VR program would be the only component of such a plan if any of the outlying areas opted to include adult education program funds in its Consolidated Grant application process. The commenter suggested that, in such a situation, the Departments should ensure that outlying areas are not penalized and denied funding for the VR program, which is one of the six core programs under WIOA.

Other commenters expressed general support for requiring outlying areas to submit Unified or Combined State Plans, and one commenter noted that the inconsistency in the definitions of “State” and “outlying areas” in WIOA raised questions as to congressional intent on the issue of whether the Unified or Combined State Plan requirements should be applicable to the outlying areas. A commenter suggested, if the intent of differing definitions was to treat outlying areas differently than States, a more comprehensive delineation should be provided. In particular, the delineation should specify more than just a “competitive process” for the title I programs since outlying areas have historically received funding for these programs on a formula basis. The commenter suggested that the requirement for competitions is inconsistent with the need for a Unified or Combined State Plan because, under Start Printed Page 55799a competition, funds would come into question every year. The commenter further suggested that if outlying areas are not going to be treated differently for purposes of the State planning requirements, a reconciliation of terms should be provided by Congress, thereby eliminating all ambiguity and restoring formula funding for the outlying areas through submission of a Unified or Combined State Plan.

Departments' Response: The Departments agree that applying the Unified or Combined State Plan requirements to the outlying areas is most consistent with the vision under WIOA for all six core programs to provide an integrated and coordinated workforce development system.

The Departments want to make clear that the State Plan requirements in WIOA secs. 102 and 103 apply to outlying areas, not just to States. To that end, the Departments have added clarifying language in § 676.105(e) of these final regulations. The Departments have concluded that requiring the outlying areas to submit Unified or Combined State Plans that incorporate all of the core programs as a prerequisite to receive funding under any of the core programs is most consistent with the plain meaning of WIOA's planning and allocation of funds requirements when both are read together. Further, it is the only interpretation that gives full meaning to the unified strategic planning required across all core programs.

In resolving the apparent inconsistency and potential for confusion regarding the definitions of “State” and “outlying area,” as it was explained in the NPRM preamble, the Final Rule relies on the Secretary of Labor's general authority to regulate at sec. 189 of WIOA, and applicable provisions of titles II and IV of WIOA. In so doing, the Departments ensure that all core programs—and all grantees under each of those programs—are treated similarly, thereby achieving the vision of WIOA as an integrated and coordinated one-stop delivery system and a unified, strategic planning process encompassing all core programs.

The Departments also agree with the commenter that the option, which has existed for ED, for outlying areas to include the adult education program as part of a Consolidated Grant application, raises some unique concerns with regard to the Unified or Combined State Plan requirements of WIOA. When an outlying area submits a Consolidated Grant application, pursuant to 48 U.S.C. 1469a, the application is submitted in lieu of any other State Plan required by any of the programs included in the Consolidated Grant application. The Departments have considered the suggestion made by the commenter; however, resolution of this particular concern goes beyond the scope of these joint regulations. The ED will take the recommendation under advisement and will address this issue more fully in its administration of the Consolidated Grant to Insular Areas.

The Departments recognize that this interpretation raises additional questions with regard to the competition provisions that apply to the title I core programs in WIOA sec. 127(b)(1)(B). The DOL will address this issue in guidance.

Joint Planning Guidelines

Comments: Proposed § 676.105(a) is, in the NPRM, the first mention of joint planning guidelines to be issued by the Secretaries of Labor and Education. A number of commenters questioned whether the joint guidelines would be subject to public comment, and a few commenters challenged whether, in issuing the joint guidelines, the Departments would be in compliance with the Administrative Procedures Act (APA).

Departments' Response: The Departments' joint planning guidelines, issued March 2016, complied with the APA. The APA does not require notice and comment for interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice. See 5 U.S.C. 553(b)(A). The planning guidance falls under these exceptions, and thus, was not subject to notice and comment rulemaking. Specifically, the guidance includes procedural rules explaining the mechanics of how a State must submit its State Plan, as well as interpretive rules as needed to explain the applicable statutory and regulatory requirement.

Comments: One commenter supported the inclusion of adult education as a core program in the Unified State Plan in § 676.105(b)(2), as well as the requirement that those who administer adult education programs be represented on State and Local WDBs. Multiple commenters asserted that any grant programs under the jurisdiction of DOL ETA and operated through the State Workforce Agency (SWA) or the one-stop delivery system should be required to be part of the State's Unified or Combined plan. As an example, the commenters said there should not be a separate planning process for the Jobs for Veterans' State Grant (JVSG) or Foreign Labor Certification. Another commenter said non-WIOA core program partners should be allowed to participate in the strategic portion of the planning process, even if they cannot fully align their program budgets and operational plans with a 2- or 4-year operational plan.

Departments' Response: The Departments acknowledge the commenter's support for inclusion of those who administer adult education programs on the State and Local WDBs in the regulation as proposed. State and Local WDB requirements, and related comments, are discussed in sections of the DOL WIOA Final Rule preamble, which is published elsewhere in this issue of the Federal Register (see 20 CFR 679.110(b)(3)(iii)(A) and 679.320(d)).

Regarding comments in support of including additional programs in the Unified State Plan, sec. 102(a) of WIOA and § 676.105(b) make clear that only the core programs (as defined in sec. 3(12) and (13) of WIOA) are to be included in such plan. Paragraph (b) of § 676.105 is consistent with the six core programs identified throughout WIOA. States may submit a Combined State Plan that could include the programs mentioned by commenters. If a State chooses to submit a Combined State Plan, the plan must include the six core programs and one or more of the Combined State Plan partner programs and activities described in sec. 103(a)(2) of WIOA, and § 676.140(d). The JVSG is a Combined State Plan partner program which States may include in a Combined State Plan as described under WIOA sec. 103 and § 676.140(d). Foreign Labor Certification is not a Combined Plan partner program under WIOA sec. 103; however, a State may include a description of Foreign Labor Certification in its State Plan among its description of other programs and activities.

Regarding the inclusion of non-WIOA core program partners in the strategic portion of the planning process, WIOA sec. 102(b)(2) requires State Plans to discuss alignment among core programs and the employment and training services within education and human services programs which operate in partnership with the one-stop delivery system, including those not authorized by WIOA. Although not described in the regulation for State Plans, this requirement is reflected in the WIOA State Plan ICR. The Departments agree that coordination with program partners and stakeholders to the fullest extent possible is vital for successful joint planning. In addition to the changes made to § 676.105(d)(3) as described above and relevant to these comments, the Departments revised § 676.140 regarding Combined State Plans, which Start Printed Page 55800will be discussed in more detail below in connection with that section. Further comments regarding the importance of public comment, review, input and coordination in development of the plan are discussed in this preamble in § 676.130(c) and (d)(1) for Unified State Plans and under §§ 676.140(e)(4) and 676.143(b) and (c) for Combined State Plans.

Comments: A couple of commenters responded to the authority granted to the Secretaries by WIOA sec. 102(b)(2) to create additional operational planning requirements beyond those already detailed in statutory language. These commenters requested that the Secretaries, in their discretion, keep to a minimum any additional planning requirements to reduce the burden placed on States and to provide States with ample opportunity to comply with statutorily established planning elements.

Departments' Response: The Departments have considered these comments and agree. WIOA contains a detailed description of planning requirements, and the Departments have chosen not to include all of the specific planning elements in the regulation. However, as made clear in the NPRM and this preamble, States must comply with all State planning requirements set forth in WIOA regardless of whether the requirements are repeated in these regulations. Comprehensive State Plan requirements for both Unified and Combined State Plans are detailed through the WIOA State Plan ICR. The Departments have endeavored to keep additional planning requirements to a minimum, while also attempting to ensure that the WIOA reform principles of program integration and alignment, job-driven training, accountability and transparency are reflected in the State Plans.

Comments: The Departments received a number of comments that requested plan requirements be added. In response to these suggestions, described in more detail below, the Departments have made no change to the regulatory text but have indicated whether the particular suggested requirements are indeed already included in the applicable WIOA State Plan ICR, published on February 19, 2016. In future years, the WIOA State Plan ICR may undergo revisions. The level of detail of the plan requirements suggested by the following comments is more appropriately addressed in the WIOA State Plan ICR than in the regulatory text. The Departments have declined to incorporate the following suggested changes in the regulatory text, but the discussion of the following comments points to various provisions of the WIOA State Plan ICR and other places in the regulation that are pertinent to the commenters' concerns.

Some commenters asserted that the regulation should require that States address priority of service for covered veterans, and for those veterans with service connected and non-service-connected (condition not as a result of military service) disabilities.

Departments' Response: The Departments have reviewed these comments. The WIOA State Plan ICR requires that States describe in their Unified or Combined State Plans how they will implement and monitor the priority of service provisions for all veterans in accordance with the requirements of 38 U.S.C. 4215. This provision applies to all employment and training programs funded in whole or in part by DOL. In addition, the WIOA State Plan ICR requires States to explain the referral process for veterans determined to have a significant barrier to employment, including certain disabled veterans, to receive services from the JVSG program.

Comments: One commenter said the Departments should unify the definition of “supportive services” across programs, thereby aligning adult education and literacy activities with other core programs and with one-stop partners. The commenter noted the disparity between the definition of “supportive services” under sec. 3(59) of WIOA and the definition of “other services” under career pathways programs. The commenter concluded that the quality and type of wraparound services offered should not be dependent on the program in which individuals participate, and the Departments should encourage States to develop comprehensive wraparound services that are available to adults, youth, dislocated workers, and adult education students whenever possible.

Departments' Response: WIOA sec. 3(59) provides a definition of “supportive services;” this definition applies to, and remains consistent across, all core programs. The WIOA State Plan ICR, which implements the statutory and regulatory requirements for Unified and Combined State Plans, requires States to describe how the entities carrying out the programs involved in the Unified or Combined State Plan including the core programs, any applicable Combined State Plan partner programs, and any mandatory and optional one-stop partner programs, will coordinate activities and resources to provide comprehensive, high-quality, customer-centered services. This requirement includes the provision of supportive services. However, the determination of need for, and the extent to which there is a need for, supportive services is within the State WDB's discretion, consistent with each of the individual program's authorizing statutes.

Comments: One commenter, in response to § 676.105(d)(1), said the Departments should ensure that consistent data definitions and comparable data are used to assess respective labor market areas.

Departments' Response: The WIOA State Plan ICR emphasizes the use of economic analysis and labor market information throughout and also addresses alignment of labor market information systems. The Departments encourage States to use a variety of accurate, reliable, and timely labor market information on which to base analyses in the State Plan. However, consistent with WIOA, the Departments will not require States to use a particular dataset and will leave the choice of data sources to the States' discretion, thereby allowing each State to meet its own unique needs and circumstances.

Addressing the Needs of Individuals With Barriers to Employment

Comments: A commenter suggested that the Departments require States to provide additional information regarding how they will address the needs of people with disabilities. Another commenter stated that WIOA requires that State and local planning efforts be informed by an analysis of various data, including data that include the education and skill levels of individuals with barriers to employment. A commenter said it would be helpful if the Departments explicitly required that States determine the number of individuals employed under 14(c) special wage certificates as part of the “analysis of the current workforce, employment and unemployment data, labor market trends, and the educational and skill levels of the workforce, including individuals with barriers to employment (including individuals with disabilities), in the State” pursuant to WIOA sec. 102(b)(1)(B). This commenter also stated that the strategic planning elements obligate the State to examine the specific employment related characteristics in their State and that this would be a valuable opportunity to gather information on employment statistics for individuals with disabilities.

Departments' Response: Consistent with WIOA and these final regulations, multiple sections of the WIOA State Start Printed Page 55801Plan ICR require the State to address the needs of individuals with barriers to employment. The term “individual with a barrier to employment,” as defined in sec. 3(24) of WIOA, encompasses the following groups of people: Individuals with disabilities, including youth with disabilities; displaced homemakers; low-income individuals; Indians, Alaska Natives, and Native Hawaiians; older individuals; ex-offenders; homeless individuals, or homeless children and youths; youth who are in or have aged out of the foster care system; individuals who are English language learners, individuals who have low levels of literacy, and individuals facing substantial cultural barriers; farmworkers (as defined at sec. 167(i) of WIOA and Training and Employment Guidance Letter No. 35-14); individuals within 2 years of exhausting lifetime eligibility under the TANF program; single parents (including single pregnant women); and long-term unemployed individuals. Therefore, States are required to address the needs of individuals with disabilities in the Unified or Combined State Plan.

Consistent with sec. 102(b)(1)(B) of WIOA and these final regulations, the WIOA State Plan ICR requires that State analysis related to individuals with barriers to employment include employment and unemployment, labor market trends, education, and skill levels of the workforce and any apparent gaps between the skills in demand by employers and the skill levels of the workforce. State and local planning efforts are informed by this analysis. Based on this analysis of workforce and labor market information required under sec. 102(b)(1)(B) of WIOA, § 676.105(d) and the WIOA State Plan ICR require State Plans to describe State's strategic vision and goals for developing its workforce and meeting employer needs in order to support economic growth and economic self-sufficiency. To that end, the State must describe its goals for preparing an educated and skilled workforce, including preparing youth and individuals with barriers to employment and other populations. Further, the WIOA State Plan ICR requires the State to assure that the State obtained input into the development of the Unified or Combined State Plan and provided an opportunity for comment on the plan by primary stakeholders, including organizations that provide services to individuals with barriers to employment and that the Unified or Combined State Plan is available and accessible to the general public.

Additionally, the Departments agree that the number of individuals employed under 14(c) special wage certificates may be helpful as part of the analysis by the State of workforce needs. However, the benefit of requiring the collection of sufficient data elements to satisfy the needs of every program must be balanced with the burden such a requirement would impose on State program operators and participants. For this reason, the Departments are not regulating such a requirement. While the collection of this data element will not be required of States, comparable data is publicly available. When an employer applies for a sec. 14(c) certificate from the Department of Labor's Wage and Hour Division, the employer is required to report on their application the number of workers with disabilities they employed at subminimum wages during their most recently completed fiscal year. The Department of Labor's Wage and Hour Division posts on its Web site (http://www.dol.gov/​whd/​workerswithdisabilities/​) lists of all employers who hold sec. 14(c) certificates and certain data elements reported on their applications, including the number of workers with disabilities who were paid subminimum wages.

Finally, the Departments agree that the strategic planning elements requirements present a valuable opportunity to gather information on employment statistics for individuals with disabilities, so long as States are mindful of Federal and State law protecting personally identifiable information (PII).

Comments: A couple of commenters said States should be required to include the following information in their State Plans: (1) Explicit activities focused on how they will work to ensure “low-level learners” and hard-to-serve populations are served by the State Plan, and (2) a report on the diversity of programs funded and the actions taken to ensure broad participation at the local level. A commenter urged the Departments to encourage States and localities to build activities into their State Plans specifically directed at raising awareness about older workers and dispelling stereotypes. This same commenter also urged the Departments to encourage States to create plans that ensure engagement of all players to help employers connect with older workers.

Departments' Response: The Departments have reviewed these comments. As noted above, States must address in their Unified or Combined State Plans the needs of “individuals with barriers to employment,” as defined in sec. 3(24) of WIOA, in the State's workforce analysis, goals for the public workforce system and in the State's stakeholder input and public comment assurances. As described above, the term “individual with a barrier to employment” includes individuals who have low levels of literacy and older workers. However, the Governors and State WDBs will determine the explicit activities appropriate for their individual States. For this reason, the Departments are not requiring in these regulations specific activities to satisfy these requirements, though we acknowledge that some states may elect to do so. In developing their Unified or Combined State Plans, States must conduct a thorough analysis of labor market statistics, which will address the needs of specific populations. The Departments do not have authority under WIOA to require a report on the diversity of programs funded and the actions taken to ensure broad participation at the local level, as recommended by commenters.

Comments: A few commenters recommended that the Departments encourage WDBs to establish effective operational partnerships with Continuum of Care bodies and State councils focused on homelessness. A couple of commenters also suggested that the Departments encourage State Plans to include specific strategies for using employment to prevent and end homelessness. One commenter provided examples of specific strategies for using employment to prevent and end homelessness, including HUD support for public housing residents, individuals with housing vouchers, and housing and community development projects. Lastly, this same commenter urged the Departments to work with HUD and other national experts and initiatives to identify and promote promising examples of where and how homeless services systems and workforce systems are working together for the benefit of increasing employment and economic opportunity for job seekers.

Departments' Response: The Departments have reviewed these comments. The Departments encourage State and Local WDBs to partner with appropriate entities to address the needs and concerns of individuals who are homeless or at risk of homelessness, including Continuum of Care bodies, State councils focused on homelessness, and programs administered by HUD. These are appropriate strategies for a State Plan in States with significant issues related to individuals who are homeless or at-risk of homelessness. As noted above, in developing its Unified or Combined State Plan, the State must Start Printed Page 55802address the needs of individuals with barriers to employment in the State's workforce analysis, goals for the public workforce system and in the State's stakeholder input and public comment assurances. An “individual with a barrier to employment” in WIOA sec. 3(24) includes homeless individuals. Because each State's needs and circumstances are unique, the Departments have not imposed the additional planning requirements suggested by commenters in these final regulations. The Departments agree with the commenter about the need for increased collaboration at the Federal level and, to that end, the Departments have collaborated with other Federal agencies, including HUD, in developing the WIOA State Plan ICR and will continue to do so to ensure full implementation of WIOA.

Comments: A few commenters stated that WIOA represents a substantial shift from the WIA because it increases the amount of title I youth funding dedicated to out-of-school youth to 75 percent (up from the prior 30 percent under WIA) and expands the age range to include those between 16 and 24 years old. The commenters said immigrants represent more than 1 in 10 youth in this age range nationwide. The commenters urged the Departments to explore ways to encourage States and Local WDBs to review their program design and recruitment strategies to ensure that they are reaching and effectively serving eligible immigrants and youth in their communities who are English language learners.

Departments' Response: Some guidance has already been released by DOL related to the change in the percentage of youth program (title I) formula dollars that must be spent on out-of-school youth, (see TEGL No. 23-14), and DOL plans to issue further guidance and technical assistance focused on strategies for complying with this requirement. The Departments agree that States should address their strategies for serving out-of-school youth in State Plans. The WIOA State Plan ICR requires States to describe the strategies the State will use to achieve improved outcomes for out-of-school youth as they are defined in WIOA sec. 129(a)(1)(B), including how it will leverage and align the core programs, any Combined State Plan partner programs included in this plan, required and optional one-stop partner programs, and any other resources available. In developing their Unified or Combined State Plans, States must address the needs of individuals with barriers to employment in their workforce analysis, goals for the public workforce system and in stakeholder input and public comment assurances. Under WIOA sec. 3(24), individuals with barriers to employment include youth with disabilities, homeless children and youths, youth who are in or have aged out of the foster care system, individuals who are English language learners, individuals who have low levels of literacy, and individuals facing substantial cultural barriers. In their Unified or Combined State Plan, States also must describe how the one-stop delivery system will ensure that each one-stop center is able to meet the needs of English language learners. The Departments encourage States with eligible immigrants and youth in their communities to revisit their program design and strategies to ensure that they are reaching and effectively serving these populations.

Comments: A couple of commenters recommended that the Departments require that State Plans provide for access for English language learners to all title I-funded services. If any title I-funded programs in a State or locality are not explicitly expected to provide access to English language learners, the commenters continued, the Departments should require that the State or locality demonstrate how it is complying with Federal anti-discrimination provisions and providing equitable access to title I services for English language learners.

Departments' Response: The Departments have reviewed these comments and agree that providing for the needs of English language learners through title I services, as well as other services, should be a component of all Unified and Combined State Plans. Sec. 102(b)(2)(C)(vii) of WIOA requires States to describe how the one-stop delivery system (including one-stop center operators and the one-stop delivery system partners) will comply with sec. 188 of WIOA. In addition, the WIOA State Plan ICR requires States to describe how the one-stop delivery system (including one-stop center operators and the one-stop delivery system partners) will ensure that each one-stop center is able to meet the needs of English language learners, such as through established procedures, staff training, resources, and other materials.

The Departments agree with the importance of ensuring that States address the needs of the specific populations mentioned by the commenters. As noted above, States must address, in developing their Unified or Combined State Plans, the needs of individuals with barriers to employment in their workforce analysis, goals for the public workforce system, and in stakeholder input and public comment assurances. It also should be noted that WIOA grant recipients are subject to all of the requirements of the sec. 188 WIOA Nondiscrimination and Equal Opportunity Regulations (29 CFR part 38).

Suggestions for State Plan Requirements

Section 676.105(d)(3)(i) through (v) lists the operational planning elements that must be included in a Unified or Combined State Plan. Section 676.105(d)(3)(ii) states that operational planning elements must include State operating systems, including data systems, and policies that will support the implementation of the State's strategy.

Comments: In response to these requirements, a commenter requested guidance on where to focus State efforts in technology planning. Specifically the commenter asked whether the State strategic plan can describe a schedule for developing a comprehensive technology plan and how States should prioritize investments in technology as funds become available. Another commenter requested guidance on the Departments' expectations regarding the States' development of a common intake system among one-stop partners.

Departments' Response: The Departments have considered these comments and agree that additional guidance regarding the operational planning elements contained in a State Plan is appropriate. The Departments plan to issue joint planning and operational guidance regarding the technology planning and data systems to be used for reporting and intake systems. Further, States are encouraged to utilize the Departments' available technical assistance.

Comments: A commenter recommended that the Departments require States to include and address the following five topics in their Unified State Plan: (1) Priority of Service, (2) Career Pathways, (3) Criteria for Selecting Employers for Work-based Training, (4) Youth Committees, and (5) Measurable Skill Gains. The commenter went on to detail how States should address each of the enumerated topics in the State Plans. Specifically, with regard to Priority of Service, the commenter recommended requiring that Unified State Plans include a description of how the Governor will ensure priority of service for title I adult career and training services for recipients of public assistance, individuals who are basic skills deficient, and other low-income individuals. Regarding career pathways, the commenter said Unified State Plans should be required to explain: How the Start Printed Page 55803WIOA definition of a career pathway will be applied to the programs in their State that align with industries in the regional economy; how the State will make accessible secondary and postsecondary education; how the State will include individual education and career counseling services; how the State will include integrated education and training; how the State is organized for acceleration; how the State will make available high school equivalency and at least one postsecondary credential; and how the State will promote career advancement. The commenter also recommended that Unified State Plans be required to demonstrate how they will track career pathway participants whose service happens not within one particular Federal program and funding stream, but across these programs through co-enrollment. In addition, this same commenter urged the Departments to require States to list the criteria they will use for selecting employers as an operational element of the Unified State Plan, and to ensure that local plans in their State similarly describe the criteria they will use for selecting employers. Regarding youth committees, the commenter recommended that the Departments require States to explain in their State Plans the State-directed format for local areas youth committee elections. Lastly, to ensure the effective implementation of the measurable skill gains indicator, the commenter recommended that Unified State Plans be required to ensure that local plans include: (1) A process describing how they will use the measurable skill gains indicator based on their service delivery strategies across programs, and (2) a list of the measurable skill gains that they will be utilizing in the coming year.

Departments' Response: The Departments considered this comment but did not revise the regulatory text. Many of the concerns are already addressed by sec. 102 of WIOA, these regulations, and the WIOA State Plan ICR. The WIOA State Plan ICR, consistent with sec. 134(c)(3)(E) of WIOA, requires States to address, in developing their Unified or Combined State Plans, priority in the delivery of career and training services to individuals who are low income, public assistance recipients, or basic skills deficient. With regard to the commenter's concern about career pathways, the WIOA State Plan ICR, consistent with secs. 101(d)(3)(B) and 102(b)(2)(B)(ii) of WIOA, includes requirements for the State to describe both its sector and career pathways strategy. Further comments regarding career pathways are discussed in detail below. With regard to the commenter's concerns about work-based training, the WIOA State Plan ICR requires States to address work-based learning approaches as a part of adult, dislocated worker, and youth activities under title I-B of WIOA. However, the Departments decline to require a specific policy on employer criteria because the description of the State's approach will provide sufficient information to the Departments and stakeholders. Regarding youth committees, WIOA eliminates the requirement for Local WDBs to establish a youth council; however, the Local WDB may choose to establish a standing youth committee, as described at 20 CFR 681.110 (see DOL WIOA Final Rule). States with Local WDBs that have chosen to form standing youth committees may describe this as a part of the State's operational planning elements, which are required in the WIOA State Plan ICR. However, the Departments have declined to require that States address standing youth committees because the creation of standing youth committees is determined by Local WDBs and the appropriateness of including such committees in the State Plan will vary from State to State. The DOL has issued guidance on standing youth committees, in TEGL No. 23-14 and in TEGL No. 8-15. Lastly, measurable skill gains is a required performance indicator under WIOA and it is defined in part 677 of this Joint WIOA Final Rule. That part further defines the specific allowable skill gains. The Departments addressed the data collection necessary to sufficiently measure skill gains and identify other indicators in the WIOA Joint Performance ICR. The Departments also provided further guidance on this particular issue. Therefore, the Departments decline to revise the regulatory text in response to the concerns discussed above.

Comments: Some commenters said the Departments should require the States to include in their Unified or Combined State Plans a demonstration of how they will ensure that eligible providers have direct and equitable access to apply and compete for grants or contracts.

Departments' Response: In response to this concern, the Departments direct the commenters to the WIOA State Plan ICR, which requires States to describe, with regard to the distribution of funds for title II programs in particular, how the eligible agency will ensure direct and equitable access to all eligible providers to apply and compete for funds. This provision in the WIOA State Plan ICR is consistent with sec. 231(c) of WIOA requiring direct and equitable access for all eligible providers under title II. Further, the WIOA State Plan ICR requires States to describe how the eligible agency will ensure that it is using the same grant or contract announcement and application procedure for all eligible providers. The guidance sufficiently addresses the commenters' concerns; no changes to the regulatory text were made in response to these comments.

Comments: One commenter remarked that throughout the “Career Services” section of the law, there are references to the “assistance” provided by the one-stop center or its contractor as it relates to financial aid eligibility and filing for unemployment compensation. Due to the significant decline in resources, the commenter requested that State Plans address how statewide resources will be utilized to ensure local areas have enough staff to meet this demand, including how the State will allocate funding and merit staff.

Departments' Response: The Departments have considered this comment and concluded that adopting a requirement such as that would result in substantial burden to the States. The purpose of WIOA is best served if the States retain flexibility to determine the best use of staff resources to deliver workforce services in the State.

Industry and Sector Partnerships

Comments: Several commenters recommended that the Departments require States to describe in the Unified State Plan how they will carry out the requirements under WIOA sec. 101(d)(3)(D) relating to the development of industry or sector partnerships. One of these commenters made several recommendations with regard to industry or sector partnerships. First, require regional plans to clarify the relationship between regional sector initiatives and any industry or sector partnerships in the regional planning area. Second, establish a new subpart H covering Industry or Sector Partnerships that, at a minimum, (a) describes the purposes of industry or sector partnerships, (b) reiterates the required partners for an industry or sector partnership as set forth in WIOA, (c) clarifies the role of Local WDBs in industry and sector partnerships, (d) identifies the ways in which States and local areas can evaluate the effectiveness of industry or sector partnerships, and (e) eliminates the current references to industry or sector partnerships in proposed § 678.435, which generally describes the business services that must be provided through the one-stop delivery system. Start Printed Page 55804Additionally, as noted in the portion of the DOL WIOA NPRM preamble addressing 20 CFR 675.300, commenters recommended that the Departments define the terms “Industry and Sector Partnership” and “Sector Strategy” and suggested specific components to include in such definitions.

Departments' Response: The WIOA State Plan ICR requires States to describe the strategies they will implement, including industry or sector partnerships related to in-demand industry sectors and occupations and career pathways, as required by WIOA sec. 101(d)(3)(B) and (D). It also requires States to address industry sectors and occupations throughout the analyses required in the State Plan. Additionally, WIOA sec. 3(26) defines “industry or sector partnership.” Due to the changing needs of the workforce and employers, and in order to maximize States' flexibility to develop strategies to address these changing needs, the Departments decline to change the regulation to be more prescriptive through changing the definition of “industry or sector partnership,” defining the term “sector strategy,” or adding a new subpart H on industry or sector partnerships. The Departments have provided technical assistance on sector strategies and plan to continue to do so while also issuing further guidance on industry and sector partnerships. Lastly, regional planning requirements are addressed in 20 CFR 679.510 (see DOL WIOA Final Rule published elsewhere in this issue of the Federal Register).

Comments: One commenter recommended that special emphasis be placed upon highlighting the importance of credentialing within industry and sector partnerships, especially for new high-growth industries. Specifically, the commenter recommended the following: (1) Funds be specifically allocated and used for State and local credentialing efforts within industry or sector partnerships, (2) DOL link credentialing to industry or sector partnerships and amend the proposed State Plan requirements to require States to use explicit language to clarify how they will integrate credentialing into the development of new industry or sector partnerships, where applicable, and (3) States should be required to explain their efforts to find industry-driven credentials as part of their Unified State Plans while providing a list of those credentials to DOL.

Departments' Response: The Departments agree that credentialing as a part of industry or sector partnerships is important. The WIOA State Plan ICR supports the inclusion of credentialing and its role in sector and career pathways strategies. Specifically, the WIOA State Plan ICR, consistent with sec. 102(b)(2)(B)(vi) of WIOA, requires States to describe how their strategies will improve access to activities leading to recognized postsecondary credentials, including registered apprenticeship certificates. The requirement in the WIOA State Plan ICR further includes credentials that are industry-recognized certificates, licenses, or certifications, and that are portable and stackable. The WIOA State Plan ICR also requires States to describe the strategies the State will implement, including industry or sector partnerships related to in-demand industry sectors and occupations and career pathways, as required by WIOA sec. 101(d)(3)(B) and (D). Such strategies may include the use of credentials or industry-recognized certificates. The Departments have concluded that these requirements adequately address the States' use of credentials within industry or sector partnerships. The Departments have declined to require States to use explicit language regarding how they will integrate credentialing and the State's efforts to fund industry-driven credentials, or to require that States provide a list of those credentials to the Departments to reduce planning burdens on States. Lastly, funding allocations for State credentialing efforts are outside the authority of this rule.

Career Pathways

Comments: Several commenters were pleased that WIOA sec. 3(7) codifies a definition of “career pathways” in Federal law, but they expressed concern that the rule includes little guidance on how career pathways are to be implemented. These commenters recommended that the Departments require States to describe how they will carry out the requirements under WIOA relating to the development of career pathways.

Departments' Response: The Departments considered the commenters' support for the WIOA definition of career pathways and the recommendation that States be required to describe how they will carry out the development of career pathways in the State Plan. Career pathways are designed to serve a diverse group of learners, including youth, dislocated workers, veterans, individuals with disabilities, individuals who have low levels of literacy or English proficiency, new immigrants, women, and minorities. Career pathways programs provide opportunities for more flexible education and training, allow people to earn industry-recognized credentials, and support the attainment of marketable skills that transfer into work for all. The Departments are choosing not to regulate further regarding the implementation of career pathways in order to promote maximum flexibility at the State and local level, and the Departments will continue to support career pathways programs locally and regionally through comprehensive technical assistance.

Comments: A number of commenters recommended that the rule clarify the minimum requirements that a Local WDB must satisfy in order to demonstrate successful implementation of career pathways.

A few commenters encouraged the Departments to use a forthcoming Career Pathways and Credentials Toolkit to amplify and build awareness of States' and localities' requirements for career pathways under WIOA.

Another commenter encouraged the Departments to expand the use of career pathways, especially for racial minorities and women, and to provide support to States and localities as they implement plans to improve career pathways available locally and regionally.

One commenter said the Departments should offer more specific guidance for operationalizing career pathways, such as acceptable strategies for braiding funding streams from titles I and II of WIOA and ways to identify and improve career pathways programs, with a particular focus on how to integrate wraparound services successfully into career pathways programs.

One commenter provided the following recommendations:

  • Unified State Plans should be required to demonstrate how to track career pathway participants whose service happens across Federal program and funding streams through co-enrollment.
  • The required elements for the Unified State Plan should specify the need to identify co-enrolled participants across the WIOA titles and in the CTE and human service partner systems.
  • Unified State Plans should illustrate roles for CTE partners in development and implementation of career pathways, including strategies for co-enrollment.
  • The Joint WIOA Final Rule should provide guidance to title I and title II providers on working with CTE in the design and implementation of career pathways, and should promote shared decision-making.
  • Unified State Plans should be required to address strategies for serving TANF recipients through career pathway programming, as part of the plan's description of how career Start Printed Page 55805pathway services will be provided to adults, youth, and individuals with barriers to employment.

Departments' Response: Consistent with sec. 101(d)(3)(D) of WIOA, the WIOA State Plan ICR includes requirements for the State to describe the career pathways strategies. The WIOA State Plan ICR, consistent with secs. 101(d) and 102(b)(2) of WIOA, also requires States to describe how such activities will be aligned across the core programs and Combined State Plan partner programs included in the State Plan and among the entities administering the programs, including using co-enrollment and other strategies, as appropriate. States have the option of including strategies that address TANF recipients as well as the option of including TANF as a Combined State Plan partner program in a Combined State Plan. Because career pathways, co-enrollment, and TANF recipients already are reflected in guidance, the Departments decline to regulate planning requirements regarding career pathways further. Regarding commenters' suggestions for specific strategies around implementation and requests for guidance, the Departments agree that additional guidance is necessary to describe WIOA requirements for incorporating career pathways into the State's strategies, although the Departments have concluded that additional regulatory text on career pathways is not necessary. The Departments are working in partnership with other Federal agencies to provide additional guidance on the implementation of career pathways in WIOA, and the Departments continue to take steps to incorporate career pathways approaches into a wide range of program investments, evaluation and research activities, and technical assistance efforts.

Combined State Plan Partner Programs

Paragraph (d)(2) of § 676.105 specifically requires that Unified State Plans include strategies for aligning the core programs with Combined State Plan partner programs and other resources to support the State's vision and goals (WIOA sec. 102(b)(1)).

Comments: A few commenters noted that the term “optional programs” is not used in WIOA sec. 102(b)(1), but the commenters also acknowledged that from the context it is apparent that the Departments intended to refer to the programs described at sec. 103(a)(2) and proposed § 676.140(d). The commenters supported this language, but they encouraged the Departments to clarify this intent explicitly by amending proposed § 676.105(d)(2) to include “as described in § 676.140(d)” after the words “optional programs.” One commenter stated that while the use of the term “optional programs” for other workforce development programs is understood to be in reference to the fact that they are not required to be part of Unified Plans, there is the danger that the term could inadvertently send a message about the value of these programs. The commenter recommended that guidance should clarify that “optional” only refers to the planning requirements and does not imply that other programs beyond the WIOA “core” programs are any less essential to workforce development.

Departments' Response: The Departments have reviewed these comments and agree that the term “optional program” was unclear. The term “optional,” as used in the NPRM, referred to the State's option of including these partner programs in a Combined State Plan. The Departments also agree that Combined State Plan partner programs are a valuable part of the workforce development system and the Departments encourage States to maximize the involvement of these programs in developing the State's strategies, goals, and vision for the one-stop delivery system in each State. The Departments revised § 676.105(d)(2), by replacing the term “optional programs” with “Combined State Plan partner programs” and also applied the suggested edit cross-referencing the term to § 676.140. The sentence now reads as “Strategies for aligning the core programs and Combined State Plan partner programs as described in § 676.140(d), as well as other resources available to the State, to achieve the strategic vision and goals in accordance with sec. 102(b)(1)(E) of WIOA.” Throughout this preamble to the Joint WIOA Final Rule, the Departments have generally used the term “Combined State Plan partner program” to refer to what were called “optional programs” in the NPRM.

Coordination in Plan Development

Comments: A number of commenters expressed concern about having an adequate voice and input into the State Plan development process. One commenter requested that the Departments issue a stronger or clearer regulation addressing which entities must be involved in the process.

Departments' Response: The Departments reviewed these comments and agree that the regulation would benefit from a more explicit statement regarding the role of core programs in the planning process. In response to these comments, the Departments have added a new paragraph (d)(3)(v) to § 676.105 to clarify that operational planning elements must include a description of joint planning methods across core programs and required one-stop partner programs and other programs and activities in the Unified Plan. Due to this addition, proposed § 676.105(d)(3)(v) has been redesignated as § 676.105(d)(3)(vi) in this Joint WIOA Final Rule. The Departments also have added a new paragraph (c) to § 676.130 to explain how stakeholder and core program providers should be involved in plan development, as well as the role of the State WDB in plan development. The Departments have made parallel revisions to §§ 676.140 and 676.143 for Combined State Plans, all of which will be discussed in connection with each of these provisions.

Comments: Several commenters supported the unified planning process in general but expressed concern about the lack of oversight and enforcement mechanisms regarding the requirement that the development of the plan is collaborative. The commenters urged the Departments to remind all the core programs that they must truly collaborate if WIOA is to succeed.

Similarly, a commenter said the rule's strategic approach will require constant collaboration between Federal, State, and local governments, as well as other community partners, but the willingness to collaborate among these actors must be present. This commenter said other challenges include resistance to change within the workforce system, procurement requirements in a single State area, and conflicting performance requirements from different funding streams.

Another commenter said research has shown that bundling multiple services leads to more successful outcomes in the workforce development field, and the workforce system provides an ideal platform to integrate financial capability services because they both are focused on ensuring individuals have the tools to participate in, contribute to, and benefit from the mainstream economy.

Departments' Response: The Departments issued this Final Rule jointly to lay the foundation, through coordination and collaboration at the Federal level, for implementing the vision and goals of WIOA. One of WIOA's principal areas of reform is to require States to plan across programs and include this planning process in the Unified or Combined State Plans, which promotes a shared understanding of the workforce needs of a State and a comprehensive strategy for addressing those needs. Unified or combined Start Printed Page 55806planning can support better alignment of resources, increased coordination among programs, and improved efficiency in service delivery. The Departments considered these comments and recognize the challenges mentioned by the commenters. WIOA placed heightened emphasis on coordination and collaboration at the Federal, State, and local levels to ensure a streamlined and coordinated service delivery system for job seekers. The WIOA State Plan ICR, consistent with the statutory and regulatory requirements, reinforces the importance of collaboration in the development of State Plans. However, to further address these comments and others relating to the issue of collaboration and stakeholder involvement, the Departments have added new paragraph (d)(3)(v) to § 676.105 to clarify that operational planning elements must include a description of joint planning methods across core programs and required one-stop partner programs in the Unified Plan. The WIOA statute and the WIOA State Plan ICR require the State to assure that core programs have “reviewed and commented on the appropriate operational planning elements of the Unified State Plan, and approved the elements as serving the needs of the populations served by such programs.” The Departments have amended § 676.105(d)(3)(iv) to emphasize this statutorily required assurance.

Lastly, the Departments note that some of the stated challenges, such as procurement requirements, are not relevant to the regulation of State Plans. Regarding the challenges cited by commenters regarding differing reporting requirements, WIOA has addressed this challenge by requiring the six core programs to report performance outcomes against the primary indicators of performance. The core programs will all use the same definitions and data elements. The Departments agree that aligning performance outcomes is a significant step toward aligning programs. WIOA sec. 116's performance requirements are addressed in the WIOA State Plan ICR Appendix 1, as well as the WIOA Joint Performance ICR and part 677 of this Joint WIOA Final Rule.

The Role of State Workforce Development Boards in Plan Development

Comments: Several commenters requested clarification about the role of the State WDB in approval of State Plans. One commenter said the Departments should require the State WDB to review and approve the State Plan before submission. This same commenter asked if core programs were required to sign off on the plan, or if their representation on the State WDB would serve that purpose. A commenter asked about the authority of a State WDB over specific programs' plans, specifically requesting clarification on whether the Board can, in effect, veto a portion of the plan.

Departments' Response: The Departments reviewed these comments and agree that the Joint WIOA Final Rule should provide additional clarification about the role of the State WDB in approval of State Plans. Accordingly, the Departments revised §§ 676.130(c) and 676.143(b) to clarify expected roles during plan development. More detail will be provided in the discussions related to these particular sections below. The Departments expect the States to recognize the importance of an inclusive and collaborative process in developing the State Plan. The Departments also have revised § 676.105(d)(3)(iv), which implements an assurance required by sec. 102(b)(2)(E) of WIOA. Under § 676.105(d)(3)(iv), States are required to assure that the lead State agencies responsible for the administration of the core programs review and comment on the appropriate operational planning sections of the Unified State Plan and approve that each element serves the needs of the population served by such programs.

Comments: A commenter requested clarification on the processes of State, regional, and local planning. Specifically, this commenter wondered how much direct influence local workforce boards will have in their State's respective State Plans. The commenter requested greater assurances that Local WDBs be systematically included in the State planning process. Similarly, a commenter recommended that Governors must have Local WDB and CEO consent before taking actions impacting Local WDBs, stating that most of the best innovations are developed based on local relationships. Another commenter recommended regulatory language that enables local areas to meet the needs of the State WDB in meeting their responsibilities under WIOA for statewide planning, but encourages and allows local areas to provide their own input, feedback, and strategies within the local plan.

Departments' Response: The Departments agree with the commenters that it is important for the Governor to include Local WDBs and CEOs in the State planning process. Section 679.110 of 20 CFR requires that State WDB membership include two or more CEOs (see DOL WIOA Final Rule published elsewhere in this issue of the Federal Register). The Governor has the flexibility to appoint more local elected officials to the State WDB as he/she sees fit. The Departments encourage 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 and also to ensure the involvement of these local representatives in the State planning process. WIOA does not require that Governors must have Local WDB and CEO consent before taking actions impacting Local WDBs. However, the Departments do expect engagement of Local WDBs in the development of the State Plan through public comment and input. This is further discussed below at § 676.130(d). The requirements for local plan development and input are discussed in 20 CFR 679.550 (see DOL WIOA Final Rule published elsewhere in this issue of the Federal Register).

Section 676.110 What are the program-specific requirements in the Unified State Plan for the adult, dislocated worker, and youth programs authorized under Workforce Innovation and Opportunity Act title I?

Section 676.110 indicates that program-specific requirements for the adult, dislocated worker, and youth workforce investment activities in the Unified State Plan are described in sec. 102(b)(2)(D)(i) of WIOA. Additional planning requirements may be explained in joint planning guidelines issued by the Secretaries of Labor and Education.

Proposed Additional Title I Program-Specific Requirements to State Plans

Comments: One commenter agreed with the proposed program-specific requirements in §§ 676.110 through 676.125. Another commenter stated that this section provides insufficient direction and accountability to ensure that the needs of individuals with a barrier to employment or who have priority of service are adequately included and addressed in a Unified or Combined State Plan. The commenter recommended that the Departments 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. The commenter said these data should be utilized in Federal reviews of State Plans to ensure that system designs and projected investments are Start Printed Page 55807equitably targeted to service-priority populations. The commenter further stated that the data also should be used to benchmark system performance in actual implementation of the priority of service from year to year.

Departments' Response: The Departments have considered these comments. The WIOA State Plan ICR, consistent with WIOA requirements for title I-B programs, requires States to address priority in the delivery of career and training services to individuals who are low income, public assistance recipients, or basic skills deficient. WIOA sec. 134(c)(3)(E) prioritizes these groups for the receipt of individualized career services and training services. The Departments encourage States to use a variety of accurate, reliable, and timely labor market information on which to base analysis and priority of service. Indeed, priority for use of adult funds can be made using a variety of available data, in addition to the use of Census data. However, to minimize the burden for each individual State, the Departments will not require States to use a particular dataset, leaving it to the discretion of the States to choose the appropriate data sources.

Section 676.115 What are the program-specific requirements in the Unified State Plan for the Adult Education and Family Literacy Act program authorized under Workforce Innovation and Opportunity Act title II?

Section 676.115 explains the additional planning requirements to which the AEFLA program is subject. Section 676.115 contains three specific program requirements. First, § 676.115(a) restates the statutory requirement that the eligible agency must explain in its Unified or Combined State Plan how it will align its adult education content standards with its State-adopted challenging academic content standards under the Elementary and Secondary Education Act by July 1, 2016. Second, § 676.115(b)(1) addresses the requirement that States describe the methods and factors the State will use to award multi-year grants on a competitive basis to eligible providers. Third, § 676.115(b)(2) requires that States describe the methods and factors used to provide direct and equitable access to funds using the same grant or contract announcement or application procedure. Based on comments, and as discussed further below, the Departments have deleted proposed regulatory text at § 676.115(c) concerning a requirement to describe the interoperability of data systems. Deletion of paragraph (c) is the only substantive change made to this regulatory provision from that proposed in the NPRM.

Timing of Plan Acceptance and Open Competitions

Comments: Many commenters expressed concern that States may have to issue requests for proposals (RFPs) for funds before the plans have been approved. Several commenters said that this would result in an RFP process that does not address the objectives of the State Plan. Some commenters asked that the Departments provide an additional transition year in order to allow for the time necessary for States to receive State and local plan approval and begin the implementation of the approved plans, after which the States could run their competitions in alignment with the approved plans.

Departments' Response: The Departments agree with the commenters' concerns and recognize the time that is required for State procurement processes. The ED understands that it would create difficulties to require States to issue RFPs prior to the State Plan being approved when the RFPs are intended to be based on the approved State Plan. Additionally local plans must be in place before the RFP can be issued so applications for subgrants can be aligned with local plans. The ED has issued guidance regarding the process for awarding subgrants to eligible providers authorized under title II, which provides information regarding the timing of competitions and their alignment with State and local plans. It is not necessary to address this concern in the regulation and the regulation is not revised in response to these comments.

Alignment With State Elementary and Secondary Education Act Standards

Comments: Numerous commenters stated that most States have adopted the College and Career Readiness Standards for adult education and will demonstrate in their State Plans how the College and Career Readiness Standards for adult education align with the standards that State established under the Elementary and Secondary Education Act of 1965, as amended (ESEA). These commenters also expressed concern regarding the unavailability of standards for adult education that focus on English Language Acquisition. Additionally, commenters raised concerns about the absence of assessments that measure performance on the College and Career Readiness Standards for adult education and recommended that the Departments provide a 3-year transition period during which States are held accountable based on the available assessments instruments. A commenter also recommended that the Departments integrate the English language descriptors into the current adult education National Reporting System Educational Functioning Levels descriptors. Finally, another commenter recommended that the Departments adjust accountability measurements to reflect separate English Language Acquisition tables in the National Reporting System from the standard adult basic education (ABE) standards.

Departments' Response: The Departments have reviewed the commenters' concerns related to having adequate time to establish English Language Acquisition content standards, as well as the lack of assessment mechanism to measure adult education content standards. The ED recognizes that English Language Acquisition content standards do not yet exist. The ED acknowledges that there are currently no National Reporting System-approved assessment instruments by which to measure student progress and achievement in relation to College and Career Readiness standards. However, based on our review of the comments, it appears that some commenters might have misunderstood the proposed requirement pertaining to content standards. The final regulations require the eligible agency to describe in the Unified State Plan how, by July 1, 2016, it will align its content standards for adult education with State-adopted challenging academic standards under the ESEA. The regulations do not require that the State implement those standards by July 1, 2016, or that the State implement assessments aligned to the standards by July 1, 2016. The ED intends to issue guidance pertaining to the alignment and implementation of standards; the standards for English language acquisition; and the aligned assessments for accountability in adult education. Finally, although the Departments reviewed the comments about the integration of the English Language Acquisition descriptors into the National Reporting System and the separation of the accountability measures in the English Language Acquisition table from the ABE tables, the Departments concluded that they do not have the statutory authority to address these in the final regulations. No changes to the regulatory text were made in response to these comments.

Interoperability of Data Systems

Comments: Numerous commenters sought clarification on the definition of Start Printed Page 55808“interoperability.” Several commenters stated that there is a national data integration workgroup at the Federal level; and recommended that, rather than each State expending time and funds to create an interoperable system, the Departments give the States the option to await the results of the national data integration workgroup before creating their State interoperable system.

Commenters stated that, due to the variety in State data systems, regulations that attempt to implement a “one size fits all” approach are impractical. These commenters recommended that the Departments convey expectations for interoperability via non-regulatory guidance (including guidance highlighting existing solutions and offering States options for reporting this data). A commenter recommended that DOL work with other Federal agencies to establish minimum national standards for how integrated data systems should be designed and interface with existing public systems to support the employment needs of adults and youth facing barriers to employment. The commenter also urged DOL to work with other Federal agencies to ensure that integrated data systems align with existing data being collected on employment, education, and training services across Federal programs.

A commenter said the requirement for a description of how the State will ensure interoperability of data systems in the reporting on core indicators of performance and performance reports is listed only under the AEFLA title II specific section (§ 676.115); however, in the law, the requirement for such information is listed under sec. 102(b)(2)(C) State Operating Systems and Policies of WIOA. Therefore, the commenter suggested § 676.115(c) should be moved to § 676.105, General Requirements. Another commenter said the regulations place the responsibility of ensuring interoperability of data systems on the title II adult education programs, which is not feasible because the various data systems are governed under different programs and frequently by different agencies. The commenter also said the rule seems to place the burden of supporting the cost of interoperability on title II adult education programs, which is not equitable because there will likely be a significant cost to creating such interoperability. The commenter recommended that the Departments restate this in regulation as a joint requirement of core programs and any programs included in a Combined State Plan.

Departments' Response: The Departments agree with commenters' concerns regarding the complexity of integration, including the amount of time, planning, and resources necessary to achieve such integration. The Departments agree with the commenters that the integration and interoperability of data systems is not limited to title II of WIOA. The Departments understand that performance and accountability data collection and systems integration is a long-term process that will involve additional costs and resources for all programs. The Departments will review reports from the national data integration workgroup, as well as information from the planning descriptions provided by States in the initial State Plan, to inform possible policy decisions and the development of guidance on this topic. The Departments also will look into similar data collection and system integration across Federal agencies that provide employment, education, and training services.

As a result of these concerns, the Departments have removed the language proposed in § 676.115(c), and instead have included in the WIOA State Plan ICR, consistent with sec. 102(b)(2)(C) of WIOA, a general requirement that States address fiscal and management accountability information system planning across all of the programs included in a Unified or Combined State Plan, as required by sec. 116(i)(1) of WIOA.

Direct and Equitable

Comments: Regarding § 676.115(b)(2), which specifies that all eligible agencies “will provide direct and equitable access to funds,” several commenters said that there is no specific mention of this requirement in § 676.140, which governs the Combined State Plan. One commenter sought clarification on whether this was intentional or an oversight.

Departments' Response: The Departments have reviewed these comments and agree that the omission of the requirement related to direct and equitable access of funds in the Combined State Plan was an error. The Departments have revised § 676.140(e)(1) to include this requirement in the regulations that address the Combined State Plan.

Request for Guidance

Comments: Several commenters said States should be required to identify the guidance they will provide to eligible providers for nominating an adult education representative to the Local WDB that would represent all eligible providers in the region as well as communicate board activities.

Departments' Response: The Departments have reviewed the comments supporting a requirement that States issue guidance for adult education representation on the Local WDB. States have the authority to issue such guidance and it is not necessary to revise the regulations to address this specific need.

Section 676.120 What are the program-specific requirements in the Unified State Plan for the Employment Service program authorized under the Wagner-Peyser Act, as amended by Workforce Innovation and Opportunity Act title III?

Section 676.120 states that Wagner-Peyser Act Employment Service programs are subject to the requirements in sec. 102(b) of WIOA, including any additional requirements imposed by the Secretary of Labor under secs. 102(b)(2)(C)(viii) and 102(b)(2)(D)(iv) of WIOA. This section requires States to include any information the Secretary of Labor determines is necessary to administer the Wagner-Peyser Act Employment Services programs. The Departments have provided additional information through jointly issued planning guidance and the WIOA State Plan ICR. Except for the addition of a reference to WIOA sec. 102(b)(2)(D)(iv) and other minor technical edits, this provision remains substantively the same as that proposed in the NPRM. WIOA sec. 102(b)(2)(D)(iv) refers to Wagner-Peyser Act program-specific requirements.

Proposed Additional Wagner-Peyser Act Program-Specific Requirements for State Plans

Comments: A commenter agreed with the proposed requirements specific to Wagner-Peyser Act Employment Services programs. One commenter stated that homeless persons should be a prioritized group for employment services, including those with no income or work history, and those with a criminal background. Also, this commenter recommended that serving higher barrier persons be incentivized.

Departments' Response: The Departments agree with the importance of ensuring that States address the needs of very low income and homeless populations in the State Plan. As discussed under § 676.105, the WIOA State Plan ICR, consistent with WIOA, requires that Unified and Combined State Plans address the needs of individuals with barriers to employment. As defined in sec. 3(24)(G) of WIOA, an “individual with a barrier Start Printed Page 55809to employment” includes homeless individuals or homeless children and youths. However, employment services under the Wagner-Peyser Act are universal and available to all; the Departments do not have the authority to prioritize use of Wagner-Peyser Act funds for specific populations.

Comments: Several commenters said the regulation should require State workforce agencies to include a clearly defined management reporting structure for State merit-based employees as part of the State Plan for each one-stop center to minimize confusion and protect the systemic integrity of Wagner-Peyser Act services.

Departments' Response: While the Departments recognize the importance of adhering to merit staffing requirements for Wagner-Peyser Act services, the Departments decline to require a reporting structure for merit staff in the regulation or in the WIOA State Plan ICR because it imposes an unnecessary burden on States. However, a State may elect to develop such a policy and include it in its State Plan.

Section 676.125 What are the program-specific requirements in the Unified State Plan for the State Vocational Rehabilitation program authorized under title I of the Rehabilitation Act of 1973, as amended by Workforce Innovation and Opportunity Act title IV?

Section 676.125 requires States to submit a VR services portion as part of the Unified State Plan that complies with all State Plan requirements set forth in sec. 101(a) of the Rehabilitation Act of 1973, as amended by title IV of WIOA. All submission requirements of the VR Services portion of the Unified State Plan are in addition to the jointly developed strategic and operational content requirements prescribed by sec. 102(b) of WIOA. Except for minor technical edits, this provision remains substantively the same as that proposed in the NPRM.

Individuals With Disabilities in the VR Program

Comments: A commenter agreed with the requirements specific to the VR program.

Some commenters stated that there should be greater emphasis on the VR program in the State Plans. The commenters encouraged Governor-mandated appointment of disability service providers on State WDBs to ensure proper representation for the development of this section of the plan. Similarly, other commenters urged the Departments to encourage greater inclusion of stakeholders within the disability community in the development, review, and implementation of the plans. One commenter further encouraged the Departments to issue guidance that will ensure that State executives will not ignore or under-represent the workforce development needs of people with disabilities in the strategic and operational planning outline in either the Unified or Combined State Plan.

Departments' Response: In response to the first concern, the Departments refer commenters to the WIOA State Plan ICR where the VR program is addressed at length in Section VI Program-Specific Requirements for Core State Plan Programs. This section overviews the descriptions and estimates that must be included in the VR Services Portion of a State Plan, as required by sec. 101(a) of the Rehabilitation act of 1973, as amended by WIOA, and sec. 102(b)(2)(D)(iii) of WIOA. State WDB membership requirements are addressed in 20 CFR 679.110 (see DOL WIOA Final Rule published elsewhere in this issue of the Federal Register). The Departments also note that beyond these requirements, the constitution of State WDBs and their membership has been left to the States. Although State Plans must include a State WDB Membership Roster and a list of Board activities as described in sec. III(b)(3)(B) of the WIOA State Plan ICR, the Departments have concluded that it is unnecessary to include additional regulatory text. With regard to greater stakeholder involvement in the review and implementation of State Plans, §§ 676.130(d) and 676.143(c), already require that States provide an opportunity for comment on and input into the development of a State Plan from representatives of Local WDBs and CEOs, businesses, labor organizations, institutions of higher education, other stakeholders with an interest in the services provided by the six core programs, and the general public, including individuals with disabilities. Thus, stakeholders with disabilities are required to have opportunity to engage in the development of State Plans. Finally, sec. 102(b) of WIOA and the WIOA State Plan ICR require the State to address the needs of individuals with barriers to employment within the State Plan's Strategic Vision and Goals and Operational Planning Elements. According to WIOA sec. 3(24), the term “individual with a barrier to employment” includes individuals with disabilities, including youth who are individuals with disabilities.

Interagency Cooperation

Comments: A commenter said the Departments should make explicit the importance of including State developmental disabilities agencies in cooperative agreements regarding individuals eligible for home and community-based waiver programs. Another commenter stated that, in addition to the cooperative agreement between VR and the State developmental disabilities agency, State Plans should be required to contain a cooperative agreement between Medicaid and the State mental health agency in order to promote effective collaboration between State agencies.

Departments' Response: While not stated in the regulation itself, the WIOA State Plan ICR describes how a State will incorporate interagency cooperation between VR and other State agencies providing assistance to or serving individuals with disabilities. In the WIOA State Plan ICR, consistent with sec. 101(a)(11) of the Rehabilitation Act, as amended by title IV of WIOA, the VR agency must describe the collaboration between the responsible State agency administering the State Medicaid plan, the State agency serving individuals with developmental disabilities, and the State agency responsible for providing mental health services. Nothing in this requirement restricts collaboration between agencies, as the goal is to develop opportunities for competitive integrated employment to the greatest extent possible. A more detailed discussion of the collaboration between the VR agency and other agencies serving individuals with disabilities is provided in ED's Final Rule related to the VR program published elsewhere in this issue of the Federal Register.

VR Program's Order of Selection

Comments: One commenter referenced a proposal to give State VR agencies operating under an Order of Selection the option to indicate that they will serve eligible individuals with disabilities outside the Order of Selection who have an immediate need for equipment or services to maintain employment. The commenter requested clarification in determining what services or equipment is allowed to be provided if identified as an immediate need if the individual is in jeopardy of losing his or her job.

Departments' Response: Section 101(a)(5)(D) of the Rehabilitation Act of 1973, as amended, indicates that State Plans shall, under an Order of Selection, permit the State, in its discretion, to elect to serve eligible individuals who Start Printed Page 55810require specific services or equipment to maintain employment. The WIOA State Plan ICR allows for the VR program to identify whether it will serve eligible individuals with disabilities outside the Order of Selection who has an immediate need for equipment or services to maintain employment. Services or equipment provided to eligible individuals under these circumstances must be determined on an individual basis according to the employee's need required to maintain employment, consistent with the Individualized Plan for Employment. A much more detailed discussion of this issue is provided in ED's Final Rule covering the VR program published elsewhere in this issue of the Federal Register.

Records and Data Collection

Comments: A commenter said the Departments should identify ways to allow State VR agencies to gain ready access to Federal employment data, such as the data that are available through the Federal Employment Data Exchange System funded by DOL.

Departments' Response: The Departments addressed this issue through the WIOA State Plan ICR process. Section III(b)(6)(A) of the WIOA State Plan ICR states that State agencies responsible for the administration of core programs (such as the VR program) shall describe plans to align and integrate available workforce and educational data systems for the core programs, unemployment insurance (UI) programs, and education through postsecondary education. This directive provides sufficient identification of the opportunities available to States to incorporate both State and Federal data into their State programs. For this reason, no changes to the regulatory text were made in response to this comment.

Independent Living for Older Individuals Who Are Blind Program

Comments: A couple of commenters opposed eliminating a requirement in the State Plan for the Independent Living for Older Individuals who are Blind program, stating that this elimination constitutes a great disservice to older persons with vision loss. The commenters recommended that an Independent Living for Older Individuals who are Blind section be added to the VR section of the Unified or Combined State Plans.

Departments' Response: The Independent Living for Older Individuals who are Blind program is covered under title VII of the Rehabilitation Act of 1973, as amended by WIOA, and is not among the six core programs that must submit a Unified State Plan pursuant to sec. 102 of WIOA. The VR services portion of the Unified or Combined State Plan is similar in content to the standalone VR State Plans that were submitted prior to the passage of WIOA and covers only the VR program requirements of title I of the Rehabilitation Act, as amended by WIOA. The Independent Living for Older Individuals who are Blind program requires submission of an application with assurances every 3 years that complies with the requirements for that program as set forth in title VII of the Rehabilitation Act, as amended by WIOA. A detailed discussion of the Independent Living Services for Older Individuals Who are Blind program (34 CFR part 367) is provided in ED's Final Rule of WIOA Miscellaneous Programs published elsewhere in this issue of the Federal Register.

Section 676.130 What is the development, submission, and approval process of the Unified State Plan?

In order to facilitate the State strategic planning process, and concurrent review by the relevant Federal program offices, this section requires the Unified State Plan to be submitted to the Secretary of Labor, according to the procedures established in sec. 102(c) of WIOA, which are clarified and explained through joint planning guidelines. Likewise, the Departments, upon receipt of a Unified State Plan, follow procedures established by this section. Section 676.130 also explains requirements for transparency, public comment, and submission, as well as the terms for approval of plans by the Secretaries of Labor and Education.

Section 676.130(a) requires that the Unified State Plan be submitted in accordance with the procedures set out in the joint planning guidelines, issued by the Secretaries of Labor and Education, which explains the submission and approval process described in sec. 102(c) of WIOA.

Sections 676.130(b)(1) and (2) reiterate the requirement at sec. 102(c)(1) of WIOA regarding the deadlines for submitting the initial and subsequent Unified State Plans to the Departments. The Departments developed a process for submission of Unified State Plans to ensure that ED receives the entire Unified State Plan submission concurrently. WIOA secs. 102(c)(1)(A) and 103(b)(1) require States to submit the initial Unified or Combined State Plan no later than 120 days prior to the commencement of the second full program year after the date of enactment (i.e., July 1, 2016), making the statutory submission date for the initial Unified or Combined State Plan March 3, 2016. However, pursuant to the orderly transition authority in sec. 503 of WIOA, the Departments considered the initial Unified or Combined State Plans timely if submitted by April 1, 2016.

Section 102(c)(1)(B) of WIOA requires subsequent Unified State Plans to be submitted not later than 120 days prior to the end of the 4-year period covered by the preceding Unified State Plan. In other words, WIOA Unified State Plans cover 4-year periods, and the subsequent plan must be submitted no later than 120 days before existing plan's 4-year period ends. The Departments have made clarifying edits to the regulatory text in § 676.130(b)(2) to more clearly align it with these statutory requirements. The Departments anticipate that the second Unified State Plans will need to be submitted in the spring of 2020. The official submission dates for the plans will be announced in the joint planning guidelines.

Section 676.130(b)(3) clarifies that, consistent with current practice for many of the core programs, a program year runs from July 1 through June 30 of any year. This clarification is particularly important, in this context, for the VR program since that program operates on a Federal fiscal year basis and will continue to do so, in accordance with title I of the Rehabilitation Act of 1973, despite the fact that the VR services portion of the Unified State Plan will align, for submission and performance purposes, with the other partners on a program year basis.

In order to more accurately reflect the content of § 676.130, the Departments have made a change to the title to include the word “development.” Additionally, in response to comments, described below, requesting clarity regarding the role of the State WDB, core program administrators and required one-stop partners, the Departments have added § 676.130(c). This additional paragraph explains the statutory requirement that the Unified State Plan must be developed with the assistance of the State WDB and must be developed in coordination with administrators with optimum policy-making authority for the core programs and required one-stop partners. The term “optimum policy-making authority” is defined in 20 CFR 679.120 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.” See DOL WIOA Final Start Printed Page 55811Rule published elsewhere in this issue of the Federal Register. Accordingly, § 676.130(c) through (h) have been renumbered at § 676.130(d) through (i). Other than these changes to paragraph (b)(2), the addition of paragraph (c), and the edit to paragraph (h) discussed below, no changes to the regulatory text have been made.

Deadlines

Comments: The Departments received a comment that supported the timeline for developing initial Unified State Plans. Several commenters requested clarification about the definition of program year, specified in § 676.130(b)(3), as it applies to VR, noting that the VR program operates on a Federal fiscal year. A couple commenters said the specified program year may put additional administrative burden and costs, especially in the startup, on State VR agencies. A commenter said the VR agencies should continue to report as they currently do. Due to the difference in fiscal year versus program year, one commenter recommended that the VR program be transferred to DOL to ensure seamless coordination of workforce activity at the Federal and State level and to ensure that the States operate unified, integrated programs. However, other commenters said it is unclear whether the change in program will be a burden for State VR agencies. In fact, one commenter anticipated a benefit for aligning State match, fiscal planning, and managing funds. One of these commenters said that ED should survey State VR agencies to see if this will prove to be a burden or an issue for administration of the State Plan.

A commenter remarked that performance data and plans will be on the program year basis and that Federal awards and reporting will remain on the fiscal year basis. The commenter sought clarification as to how reporting and performance timeframes will be integrated.

Departments' Response: The Departments acknowledge the concerns expressed by commenters. The VR program will utilize a program year, according to the § 676.130(b)(3) definition, for the purposes of reporting performance and identifying its goals and priorities as part of the VR portion of the Unified or Combined State Plan. Since data will be collected quarterly, RSA will have the flexibility to report performance data for each of the VR agencies for both the program year and the fiscal year. The Departments have not concluded that this will cause any additional burden to the VR agencies for the development of the VR portion of the State Plan, in particular, to establish and evaluate the State's performance measures. Further guidance about performance reporting for VR agencies will be provided in the final ICR for the RSA-911 report. Fiscally, the VR agencies will continue to operate on a Federal fiscal year basis as required statutorily pursuant to secs. 110 and 111 of the Rehabilitation Act of 1973, as amended. The WIOA State Plan ICR Appendix 1 clarifies what performance information States must include in the State Plan. The Departments provided further instructions through the WIOA Joint Performance ICR, the WIOA State Plan ICR, and related joint guidance. Finally, WIOA does not authorize the VR program to move to DOL.

Stakeholder Involvement

Comments: Numerous commenters expressed concern about having adequate voice and input into the State Plan development process, and a number of commenters requested stronger or clearer regulation on who must be involved in the State Plan development process. Commenters said the Departments should require a role in the planning process for core programs, one-stop partners, State and Local WDBs, and CEOs, among other entities.

Departments' Response: Although WIOA requires an inclusive planning process, and there are many references to inclusiveness in planning and program implementation throughout the Joint WIOA Final Rule, the Departments considered these comments and agree. The Joint WIOA Final Rule will continue to emphasize inclusiveness in planning and program implementation and will further benefit from a more explicit statement of the entities required to participate in the development of Unified State Plans. In response to the comments, the Departments have added regulatory text in a new paragraph (c) to § 676.130 to clarify that Unified State Plans must be developed with the assistance of the State WDB and in coordination with administrators with optimum policy-making authority for the core programs and required one-stop partners. In addition, to ensure consistency, the Departments have added regulatory text in a new paragraph (d)(3)(v) of § 676.105, discussed above, requiring that the Unified Plans include a “description of joint planning and coordination across core programs, required one-stop partner programs and other programs and activities included in the Unified Plan.” The Departments also have revised the title of § 676.130 to include the word “development” to clarify that this section describes the development of the Unified State Plan, as well as submission and approval. These changes are reflected in the WIOA State Plan ICR.

Collaboration and Input Into the Plan Process

Comments: A couple of commenters recommended that States should include title II adult education partners, as well as other immigrant-serving organizations, in their WIOA planning. A few commenters suggested that refugee programs and service providers be included in planning at the State and Local level and that the Departments should emphasize in the regulation's discussion of local governance the importance of providing expertise in serving linguistically and culturally diverse populations. Some commenters noted several organizations should have input into the development of State Plans, including: quality credentialing organizations, immigrant-serving organizations, State and local human service agencies, community and technical colleges, nonprofit community-based and nontraditional service providers, and State Departments of Education.

Departments' Response: The Departments considered these comments and note that collaboration in the planning process for Unified and Combined Plans is required of title II adult education program partners as they are among the core programs included in all plans. The WIOA State Plan ICR enables States to include human services, faith- and community-based organizations, and educational institutions in the State Plan, as well as other Federal programs, particularly as part of a discussion of innovative partnerships with the one-stop delivery system. These types of organizations may include immigrant-serving organizations and refugee programs. No change to the regulatory text was made in response to these comments.

Public Comment and Availability of Information

Comments: One commenter said the rule should reaffirm that, as one of its responsibilities, the State WDB must provide an environment for State Plan development that is conducive to participation and receptive to input. Further, this commenter stated that States should be required to describe how they will make this process accessible to individuals with disabilities.

Departments' Response: The State must provide an opportunity for comment and input into the State Plan. Furthermore, the Departments agree that Start Printed Page 55812the public comment process must be accessible to all concerned organizations and individuals, including individuals with disabilities. As described in § 676.130(d)(1), the State must provide an opportunity for public comment on and input into the development of the Unified State Plan prior to its submission which includes an opportunity for comment by representatives of Local WDBs and CEOs, businesses, representatives of labor organizations, community-based organizations, adult education providers, institutions of higher education, other stakeholders with an interest in the services provided by the six core programs, and the general public, including individuals with disabilities. Further, as discussed earlier, the WIOA State Plan ICR, consistent with WIOA, requires the State to address the needs of individuals with barriers to employment including the needs of English language learners.

Comments: Several commenters stated that the consultation requirement should accommodate Single States that have only a volunteer State WDB and no Local WDB to consult.

Departments' Response: Although single-area States have no Local WDB to consult, they still have stakeholders, including CEOs. In accordance with § 676.130(d)(1), single-area States must provide an opportunity for comment by CEOs and other stakeholders as a part of the opportunity for public comment on State Plans, which includes local officials and local stakeholders.

Comments: A couple commenters recommended a minimum notice period of 90 days for the opportunity for public comment on the development of the Unified State Plan. A commenter urged the Departments to require that States publicly post the plan electronically and that the Departments themselves create an electronic database where States, policy makers, advocates, and the general public can access all of the plans.

Departments' Response: The Departments have reviewed these comments and decline to set a number of days for public comment of Unified State Plans, leaving the decision of schedules for public comment and posting plans electronically to the discretion of the States. Many States' laws require a minimum number of days for public comment, and many States use online posting as a way of making the plans available for public comment. While the Departments are not adding a regulation regarding an electronic database, the Departments provide a centralized online access point for completed State Plans.

Review and Approval of Unified State Plans

Comments: A commenter stated that WIOA indicates that approval of the Unified State Plan will occur within 90 days after submission, but the NPRM stated that it will occur within 90 days of receipt. The commenter recommended a revision to the language making the terminology for establishing the timeframe for review and approval of plans be consistent and that a definition be provided for determining that start date.

Departments' Response: The Departments decline to change the regulatory text and retain the use of the word “receipt” in the renumbered § 676.130(h) in order to allow the Departments to have a full 90 days to review the plan in the event of any delay in transmission of the plan from the State to the Departments. However, the Departments have replaced the words “by the appropriate Secretary” in paragraph (h) with “the Secretary of Labor,” to clarify that the 90-day review period begins upon receipt of the plan by the Secretary of Labor. This wording is more closely aligned with the statute, at WIOA sec. 102(c)(1). As stated in paragraph (e) of this section, immediately upon receipt of a Unified State Plan from a State, the Secretary of Labor will ensure that the entire Unified State Plan is submitted to the Secretary of Education pursuant to a process developed by the Secretaries. At that point, the Secretaries will begin their review.

Comments: Several commenters said States whose Unified State Plans are rejected should be given detailed reasons why in writing so those States can focus on areas that need improvement.

Departments' Response: As a part of the approval process, the Departments intend to provide States with detailed reasons in writing if a plan is not approvable.

Comments: A few commenters asserted that there was lack of clarity in the NPRM regarding whether the Unified Plan submission process will change. These commenters recommended that DOL issue a TEGL on the submission process of the Unified Plan. Similarly, a commenter said more guidance is needed to understand how this process will work and differ from previous Unified Plan submissions.

Departments' Response: The Departments considered these comments and agree that additional guidance will assist States in understanding the submission and approval process for Unified State Plans. The Departments issued joint guidance, which describes the submission process in greater detail. This joint guidance included TEGL No. 14-15, “Workforce Innovation and Opportunity Act (WIOA) Requirements for Unified and Combined State Plans,” issued to DOL grantees, a Program Memorandum issued to AEFLA grantees, and a Policy Directive issued to VR program grantees, all of which contained identical content.

Rehabilitation Services Administration Approval of Plan

The renumbered § 676.130(g) states that before the Secretary of Labor and the Secretary of Education approve the Unified State Plan, the VR portion of the Unified State Plan must be approved by the Commissioner of the Rehabilitation Services Administration (RSA).

Comments: Several commenters requested clarification on whether the 90-day approval timeframe for the entire plan starts when the VR portion of the Unified State Plan is approved by the RSA Commissioner or when it is subsequently forwarded to the ED and DOL Secretaries for approval. A commenter suggested that the regulation require a timeline for the Commissioner of RSA to approve or disapprove the VR portion of the Unified State Plan.

Departments' Response: The 90-day review timeframe, which begins upon receipt of the State Plan by DOL, includes RSA Commissioner review and approval. The VR program is an ED program, and ED's and DOL's reviews of plan submissions are concurrent. However, the approval of the VR services portion of the plan by the RSA Commissioner must occur first, after which the plan, if it complies with all of the other requirements, will be officially approved by the Secretaries of Labor and Education. The Secretaries of Labor and Education have developed a process to ensure that both Departments receive the entire Unified State Plan submission concurrently to ensure timely review. The Departments have concluded that the existing regulatory text and preamble place adequate emphasis on the timely concurrent reviews of the plans by the Departments and no changes to the regulatory text were made in response to these comments.

Comments: Some commenters asked whether it is the responsibility of the State VR agencies or the Secretaries of Labor and Education to obtain approval from the RSA Commissioner. One of these commenters stated that placing the responsibility on VR agencies to ensure that this review is done Start Printed Page 55813(especially before submission of the plan to the Secretaries by the States) would be an unfair burden to place on VR agencies and States. This commenter further asked when the deadline is for the submittal of the VR portion of the State Plan to the RSA Commissioner, if it is the responsibility of State VR agencies to submit and obtain approval of the VR portion of the plan by the RSA Commissioner prior to submission to the Secretary of Labor.

Departments' Response: It is not the State VR agencies' responsibility to submit and obtain approval of the VR portion of the State Plan prior to submitting the Unified Plan to the Departments. Rather, the entire Unified State Plan, including the VR services portion of that Plan, should be submitted to the Departments, and the review and approval by the RSA commissioner will take place following that submission as a part of the 90-day Federal review of the plan. The ED, including RSA, and DOL will work together to ensure the timely review and approval of all portions of the State Plans, including the VR services portion. The Departments have developed a process for submission of Unified State Plans to ensure that the Departments of Labor and Education, including the RSA Commissioner, receive the entire Unified State Plan submission concurrently. The Departments have concluded that the existing regulatory text and preamble place adequate emphasis on the timely concurrent reviews of the plans by the Departments.

Comments: Some commenters requested clarification on what happens to the full Unified State Plan if the RSA Commissioner does not approve the VR portion of the State Plan.

Departments' Response: Approval of the Unified State Plan requires that the requirements of all core programs are met, including the requirements for the VR portion of the State Plan. No change to the regulatory text was made in response to these comments.

Guidance on Submission and Approval Process

Comments: Several commenters provided suggestions for potential joint guidance from the Departments and how the guidance should influence the submission and approval process for Unified State Plans. Some commenters recommended that the Departments issue guidance that provides recommendations for how States can develop appropriate outreach and engagement strategies for stakeholders. One commenter said the Departments should issue guidance that addresses whether the VR agency should hold separate public meetings on their portion of the State Plan or schedule a unified public meeting for the entire State Plan. One commenter welcomed guidance from the Departments that advises State and local areas on whether to submit workforce plans that cover additional workforce related programs besides the six core programs.

Numerous commenters requested that any guidance from the Departments that provides further details on the submission of the State Plans be released as early as possible. A few commenters said States may be waiting for guidance from the agencies before beginning their planning processes in earnest, which may cause some States to bypass key opportunities for stakeholder engagement or forgo pursuing a Combined State Plan in an effort to meet the statutory deadlines for plan submission.

A commenter said it would be useful if the Departments provided a template for the Unified and Combined State Plans, ideally several months before the plan is due. The commenter also said ensuring that the templates are available at least several months ahead of the submission deadline would make the process of completing the plan much more efficient for States.

Departments' Response: The Departments issued joint planning guidelines that address these and other topics regarding State Plan development, submission, and approval and the requirements of the WIOA State Plan ICR. For example TEGL No. 14-15, “Workforce Innovation and Opportunity Act (WIOA) Requirements for Unified and Combined State Plans,” was issued on March 4, 2016. The ED issued identical guidance to its grantees via Program Memorandum OCTAE 16-1 (http://www2.ed.gov/​about/​offices/​list/​ovae/​wioa-16-1.pdf) and RSA-PD-16-03 (http://www2.ed.gov/​policy/​speced/​guid/​rsa/​pd/​2016/​pd-16-03.pdf) on March 9, 2016. VR agencies must still meet the requirements for public participation prior to the submission or amendment of a State Plan in accordance with 34 CFR 361.20. Although not commonly referred to as a template, the WIOA State Plan ICR is a detailed and comprehensive set of requirements for developing and submitting State Plans. In addition to the written joint guidance, the Departments also have presented multiple webinars on the development and submission of the State Plans. No change to the regulatory text was made in response to these comments.

Section 676.135 What are the requirements for modification of the Unified State Plan?

Given the multi-year life of the Unified State Plan, States must revisit regularly State Plan strategies and recalibrate these strategies to respond to the changing economic conditions and workforce needs of the State. At a minimum, a State is required to submit modifications to its Unified State Plan at the end of the first 2-year period of any 4-year plan and also under other specific circumstances, examples of which have been included in this section. States may choose to submit a State Plan modification at any time during the life of the plan. Section 676.135 further describes the requirements for submission and approval of Unified State Plan modifications, which are subject to the same public review and comment requirements and approval process as the full Unified State Plan submissions.

Except for minor technical edits, such as corrections to cross-references to other sections that have been renumbered and edits to conform with changes to part 677 on the performance accountability system, this section remains substantively the same as that proposed in the NPRM.

Timeframe for Unified Plan Modifications

Comments: One commenter supported the 2-year timeline for modifying initial Unified State Plans specified in § 676.135(a). Another commenter said Federal agencies should use the State Unified Plan timeframe for submitting mandatory modifications to review the regulatory framework and other guidance under which WIOA is initially implemented. The Departments, this commenter continued, should use this time to review how the challenges and opportunities involved in WIOA's implementation have evolved.

Departments' Response: The Departments considered this comment and agree. The Departments intend to update existing and future regulations, ICRs, and guidance as appropriate and as needed for the continued effective implementation of WIOA.

Unified State Plan Modification Requirements

Comments: Regarding proposed § 676.135(b), several commenters stated that modifications to State Plans only should be necessary in the event of significant or substantial changes in labor market and economic conditions or other factors significantly affecting implementation of the plan.Start Printed Page 55814

Departments' Response: The Departments recognize the balance between the benefit of periodic modifications of State Plans and the potential burden of submitting State Plan modifications beyond those required at the end of the first 2-year period. The Departments agree that periodic review of State Plans aids in the continual update and improvement of State policies and that State Plan modifications other than those required at the end of the first 2-year period should be required only in the event of substantial changes impacting the plan. Paragraph (b) of § 676.135, which is consistent with WIOA, requires States to submit modifications at the end of the first 2-year period, and these modifications must reflect changes in labor market and economic conditions. Other than this 2-year modification, States are required to submit modifications only when changes in Federal or State law or policy substantially affect the strategies, goals, and priorities upon which the Unified State Plan is based, or when there are changes in the statewide vision, strategies, policies, State negotiated levels of performance (see § 677.170(b) of this Joint WIOA Final Rule), the methodology used to determine local allocation of funds, reorganizations which change the working relationship with system employees, changes in organizational responsibilities, changes to the membership structure of the State WDB or alternative entity, and similar substantial changes to the State's workforce investment system.

Public Comment on Unified State Plan Modifications

Comments: Several commenters stated that the VR regulations in 34 CFR part 361 already address when public comments are needed in the State Plan modification process. Specifically, any change to the VR portion of the State Plan that directly affects the provision of services, such as Order of Selection or the imposition of a financial needs test, would require public review and input before such a change is made. These commenters recommended that the Joint WIOA Final Rule here reflect the same high threshold for public comments on State Plan modifications for the other five core programs.

Departments' Response: Paragraph (c) of § 676.135 contains the same public review and comment requirements for all modifications to Unified State Plans as those for the development of initial Unified State Plans specified in § 676.130(d). In addition, States must adhere to any program-specific requirements for the core programs included in the State Plan, such as sec.101(a) of the Rehabilitation Act of 1973, as amended, and its implementing regulations under 34 CFR 361.10 and 361.20. The Departments do not require that the entire plan be subject to the program-specific public comment requirements of the VR rules in 34 CFR part 361. However, the Departments plan to issue further guidance regarding State Plan modifications.

Comments: Some commenters said States should have the flexibility to define what constitutes a major change, as plan modifications necessitated by minor changes are burdensome and expend valuable resources. One commenter stated that there was no definition of “substantial change” provided in the NPRM and suggested that the threshold for “substantive change” in proposed 34 CFR 361.20(a)(2) be used in the Joint WIOA Final Rule. Another commenter said “substantial change” should be defined as a change that involves a substantive change to service delivery or participating partners or substantial fiscal impact.

Departments' Response: The Departments agree that State Plan modifications other than those required after the first 2-year period for State Plans should be limited in order to avoid undue burden. However, the Departments also want to ensure State Plans are up to date and that States periodically review State Plans. Sections 676.135(b)(2) and (3) describe the circumstances where a Unified State Plan modification is required (other than at the first 2-year period). States are required to modify State Plans when changes in Federal or State law or policy substantially affect the strategies, goals, and priorities upon which the Unified State Plan is based; or when there are changes in the statewide vision, strategies, policies, State negotiated levels of performance, the methodology used to determine local allocation of funds, reorganizations which change the working relationship with system employees, changes in organizational responsibilities, changes to the membership structure of the State WDB or alternative entity, and similar substantial changes to the State's workforce development system. The Departments have not defined the term “substantial change” in this regulation and have instead outlined in the regulation the specific situations where modifications of Unified State Plans are required.

Section 676.140 What are the general requirements for submitting a Combined State Plan?

States have the option to submit a Combined State Plan that goes beyond the core programs of a Unified State Plan to include at least one additional Federal workforce, educational, or social service program from the programs identified in sec. 103(a)(2) of WIOA. Generally, the requirements for a Combined State Plan include the requirements for the Unified State Plan as well as the program-specific requirements for any Combined State Plan partner programs that are included in the Combined State Plan. To expand the benefits of cross-program strategic planning, increase alignment among State programs, and improve service integration, the Departments strongly encourage States to submit Combined State Plans.

Section 676.140 specifies the general requirements for submitting a Combined State Plan. Paragraph (a) of § 676.140 states that a State may choose to develop and submit a 4-year Combined State Plan in lieu of the Unified State Plan. The Departments have edited § 676.140(a), as well as § 676.140(e)(1), to correctly cite references to Unified State Plan requirements that must be included in a Combined State Plan. Paragraph (e) of § 676.140 specifies the information that a Combined Plan must contain. Paragraph (e)(2) of § 676.140 has been edited to include the words “and activities,” to clarify that the Combined Plan must provide the required information for any programs and activities included in the State Plan. Section 676.140(e)(3), consistent with WIOA, has been revised to expand the required description of joint planning and coordination to include core programs, required one-stop partner programs and other programs and activities included in the State Plan. Section 676.140(i) is a new paragraph that requires States that submit employment and training activities carried out by HUD under a Combined State Plan to submit any other required planning documents for HUD programs directly to HUD, according to the requirements of Federal law and regulations. Except for the changes described here, this section remains unchanged from that proposed in the NPRM.

Comments: One commenter said planning and implementation must be a thoughtful process, and system transformation cannot be rushed. This same commenter also said there should be increased interagency collaboration between the Departments. Specifically, Start Printed Page 55815the commenter stated that there should be more incentives for programs within the two Departments to be included in a Combined State Plan.

Departments' Response: The Departments considered these comments but did not make changes to the regulatory text based on them. The Departments agree that planning and implementation must be thoughtful processes and that system transformation is an ongoing process. WIOA does not authorize incentives for States submitting a Combined State Plan. However, the Departments encourage States to be as inclusive as possible in their State Plans because joint planning across programs, including between those in the two Departments, fosters greater alignment and coordination of services.

Planning Cycles

Section 676.140(a) allows States to choose to develop and submit a 4-year Combined State Plan in lieu of the Unified State Plan. In the NPRM, the Departments note that the Combined Plan's 4-year plan development and implementation cycle, with a 2-year modification deadline, is inconsistent with the planning cycles governing many Combined State Plan partner programs. The Departments sought comment on how to reconcile differing planning cycles across Combined State Plan partner programs that do not align with the 4-year planning required by WIOA. In response, commenters provided various recommendations.

Comments: A few commenters said an approved Combined State Plan should suffice to meet the planning requirements of Combined State Plan partner programs and that Federal agencies should address the issues of differing planning cycles at the Federal level through executive actions. Another commenter said the Departments should require Combined State Plan partner programs to describe their planning cycles for the upcoming 4 years, and to include when during the next 4 years they may need to submit modifications to their part of the Combined State Plan. Similarly, two commenters suggested that the Combined State Plan report on the progress of the mid-cycle plan submitted by the Combined State Plan partner program(s) and include language on how the Combined State Plan partner program's submitted plan includes integration with WIOA programs.

Departments' Response: WIOA does not authorize the Departments to change the planning requirements, including submission deadlines that are under other authorizing legislation. However, WIOA gives the States the ability to apply the 2-year WIOA modification provisions to the Combined State Plan partner programs included in the plan in addition to any modification timeline or interval required by the statute governing the Combined State Plan partner program as long as they do not overwrite those programs' required timelines. The Departments have concluded that for any Combined State Plan partner program included in the plan with a different planning cycle from WIOA, States should submit program-specific modifications that align with the natural planning cycles for that specific program, unless the 2-year WIOA modification cycle can accommodate that program's planning and modification cycle. For example, if a State chooses to include CTE programs under the Carl D. Perkins Career and Technical Education Act of 2006 (Perkins Act), as a part of its Combined State Plan, the State would submit plan modifications annually to align with Perkins' annual State Plan cycle. As another example, the TANF authorizing statute requires a State to have submitted a plan within 27 months of the end of the first fiscal quarter in order to receive TANF funds for that fiscal year. Accordingly, adopting the more frequent 2-year WIOA cycle for modifications should accommodate TANF's cycle, allowing a State to make all changes to each portion of the Combined State Plan concurrently. The State must submit such modifications to the relevant Secretary for that program, as well as to the Departments of Labor and Education. Special instructions apply to UI State Quality Service Plan and to JVSG as described below. The Departments have developed a process for submission of Combined State Plans that ensures that all relevant Secretaries receive the plan concurrently and, as part of this system, the Departments anticipate that State Plan modifications will be housed in an accessible format with that State's original State Plan. The State may choose to describe the planning cycles of the Combined State Plan partner programs that are included in the State Plan, and the State also may describe intentions to submit future modifications to comply with those planning cycles; however, in order to minimize burden, the Departments have chosen not to require these descriptions through regulation or through the WIOA State Plan ICR.

States that include, in their Combined State Plan, UI programs (UI Federal-State programs administered under State unemployment compensation laws in accordance with applicable Federal law) carried out under title III, sec. 302, of the Social Security Act including secs. 303(a)(8) and (9) which govern the expenditure of funds, should submit their UI State Quality Service Plan following the cycle, according to UI State Quality Service Plan Planning and Reporting Guidelines.

The JVSG programs, carried out under chapter 41 of title 38 of the U.S. Code, require both a JVSG State Plan and a separate annual application for funding. States that include the JVSG programs in their Combined State Plan must submit the JVSG State Plan information in their Combined State Plan, and submit their funding applications annually as required by current Veterans' Employment and Training Service guidance.

Comments: One commenter said the bifurcated nature of the WIOA State Plans could be adapted to allow non-WIOA programs to participate in the strategic portion of the planning process, even if they cannot fully align their budgets and operational plans with a 2- or 4-year operational plan. A commenter suggested that the Departments issue guidance on how States can incorporate existing and aligned planned activity with WIOA funded programs, as well as other related programs. The commenter concluded that several agencies that administer the Combined State Plan partner programs permitted have plans that align with partners outside of the six core programs, and States and local areas need a method of aligning existing effective plans. A commenter recommended adding Social Security Administration's Ticket to Work as a workforce program in the Combined State Plan. A commenter urged DOL to work closely with the Department of Justice to outline additional recommendations and considerations within guidance for working specifically with the Second Chance Act partners and State Departments of Corrections.

Departments' Response: The Departments received similar comments, in response to § 676.130, regarding the inclusion of program partners beyond the core programs and required one-stop partners in the development of the Unified Plan. As already discussed in the context of Unified Plans in the preamble section that discusses § 676.130, the WIOA State Plan ICR, consistent with secs. 102 and 103 of WIOA, allows States to include programs beyond the core programs, required one-stop partners, and Combined State Plan partner programs in a Combined State Plan. This is particularly true in the context of a discussion of innovative partnerships with the one-stop delivery Start Printed Page 55816system. These partners and programs could include human services, faith- and community-based organizations, educational institutions, and Federal programs not listed among the Combined Plan programs. These programs may be incorporated into the strategic portion of the planning process. As mentioned in the introduction, the Departments issued joint guidance to facilitate the inclusion of innovative partnerships and to foster alignment across partner programs outside of WIOA's core programs. States also are encouraged to utilize technical assistance, as the specific dynamics across program partners within States will vary. Because sec. 103 of WIOA provides an exclusive list of Combined State Plan partner programs, the Departments do not have the authority to expand the statutory list of Combined State Plan partner programs for inclusion in Combined State Plans.

Comments: One commenter said the Departments should keep the approval of the core programs separate from the approval of Combined State Plan partner programs, such that the implementation of what would otherwise be an approved Unified State Plan is not impacted or held up by decisions on Combined State Plan partner program cycles.

Departments' Response: The Departments agree with this comment and have added text to § 676.143(h) to clarify that approval or disapproval of Combined State Plan portions covering Combined State Plan partner programs does not impact approval of the common sections of the plan which cover the core programs. This change will be discussed in more detail in the preamble related to that section. The portions of the Combined State Plan related to the core programs are subject to the same approval requirements applicable to the Unified State Plan (WIOA sec. 102(c)). The Secretaries of Labor and Education's written determination of approval or disapproval of the portion of the plan for the six core programs may be separate from the written determination of approval, disapproval, or completeness of the program-specific requirements of Combined State Plan partner programs and activities described in § 676.140(d) and included the Combined State Plan. For example, if all the common planning elements and program-specific requirements for the core programs are met, approval and funding may proceed regardless of specific issues that may be identified in the program-specific sections for any Combined State Plan partner programs.

Temporary Assistance for Needy Families

Section 676.140(d)(2) specifies that TANF, authorized under part A of title IV of the Social Security Act, is a Combined State Plan partner program that may be included in the Combined State Plan.

Comments: One commenter said it appears that as a Combined State Plan partner program in a Combined State Plan TANF would be subject both to its own current statutory participation rate requirements and to the six performance measures specified in WIOA. The commenter stated that the performance accountability sections in both WIOA and the NPRM consistently refer to the six performance measures in relation to the core programs only and it is the core programs' funding alone that is tied to performance on these measures. The commenter requested that an exception be made such that when a State includes TANF as part of its Combined State Plan, TANF training and employment activities not be subject to WIOA required performance measures. The commenter requested that TANF training and employment activities only be subject to the performance measures under TANF, the same way that performance measures for CSBG employment and training activities are only those under CSBG.

Departments' Response: The Departments have reviewed this comment but did not make a change to the regulatory text. WIOA sec. 103 does not require the Combined State Plan partner programs to report on the WIOA sec. 116 primary indicators of performance. WIOA sec. 103(b)(1) only requires the Combined State Plan partner programs, which include TANF, to include the requirements, if any, applicable to that program or activity under the Federal law authorizing the program or activity. This means those portions of the plans related to training and employment. An explicit exemption for TANF is not required in these regulations. In referring to CSBG and to HUD employment and training activities, WIOA sec. 103(a)(2) does not refer to a specific program within those agencies but to employment and training activities in general. In contrast, WIOA sec. 103(a)(2) refers to TANF as a whole and does not limit this to the employment and training activities under TANF.

Comments: A commenter asked whether a separate TANF State Plan would be required even if the State opts to submit a Combined State Plan. If a separate TANF State Plan is required, the commenter asked what the advantage would be for a TANF entity in combining their State Plan with the WIOA Unified Plan. A commenter said the Departments should explicitly state that the Governor's option to determine that TANF will not be a required one-stop partner in a State is a separate and distinct decision from the option of including TANF in a Combined State Plan.

Departments' Response: If the State opts to submit a Combined State Plan under this rule that includes a TANF State Plan, the State would not be required to submit a separate TANF State Plan to HHS. Instead, HHS will receive the Combined State Plan under this rule. If a State submits a Combined State Plan that is approved, the State is not required to submit any other plan in order to receive the funds to operate the programs covered by that Plan. The Combined State Plan takes the place of the individual State Plans for the Combined State Plan partner programs that are covered by the plan and replaces the Unified State Plan. In this way, the Combined State Plan is meant to promote integrated planning across State programs in addition to the integration among the core programs that would occur under a Unified State Plan. While no additional plan is required, § 676.140(f) stipulates that each Combined State Plan partner program included in the Combined State Plan remains subject to the applicable program-specific requirements of the Federal law and regulations, and any other applicable legal or program requirements, governing the implementation and operation of that program. Finally, a Governor's option to determine that TANF will not be a required one-stop partner in a State is a separate and distinct decision from the option of including TANF in a Combined State Plan.

Perkins/Career and Technical Education Programs

Comments: Several commenters did not support the use of a Combined State Plan because, according to these commenters, the current Federal funding is essential for local CTE programs; the current Unified Plan model is working well by allowing local control of Perkins funds; the workforce board should not dictate course offerings or the curriculum provided; and the reporting/performance requirements for both WIOA and Perkins would conflict.

Another commenter stated that schools should have the ability to develop programs that align with each other and the resources to support Start Printed Page 55817program development. The commenter said Office of Superintendent of Public Instruction should be given the control to direct funds to support CTE program development and oversee the implementation of the Programs of Study.

Departments' Response: The Departments considered these comments. States have the option of including postsecondary programs, including programs of study described in sec. 122 (c) under the Perkins Act, as a part of their Combined State Plan. However, even if Perkins postsecondary programs are included as a part of a State's Combined State Plan, there will be no impact on the amount of Perkins postsecondary funds that are distributed at the local level, unless the State formally amends its Perkins Act State Plan to change its secondary and postsecondary split of funds pursuant to sec. 112(a)(1) of the Perkins Act. In the case where there is a change in the split, the formula established in sec. 132 of the Perkins Act, or the alternative formula established in sec. 133 of the Perkins Act, still applies.

In addition, under WIOA, Local WDBs cannot dictate course offerings or curricula. Local recipients retain the ability to develop programs and align resources to meet students' needs. Finally, as discussed above, WIOA sec. 103 does not require the Combined Plan partner programs to report on the WIOA sec. 116 primary indicators of performance. WIOA sec. 103(b)(1) only requires the Combined State Plan partner programs to include the requirements, if any, applicable to that program or activity under the Federal law authorizing the program or activity.

Comments: One commenter stated that the regulation should account for WIOA's statutory requirement that Combined State Plan partner programs remain subject to their original authorizing statutes. This is particularly important, according to the commenter, in instances where the Perkins eligible agency does not fall under the direct line of authority or control of the Governor. It is imperative to assure the Perkins eligible agency that it has full authority to carry out the responsibilities under sec. 121 of the Perkins Act when part of a WIOA Combined State Plan. The Perkins eligible agency is ultimately subject to the Federal government fiscal and accountability reporting requirements under Perkins regardless of whether the Perkins State Plan is separate or part of a WIOA Combined Plan.

Departments' Response: Reference to the original authorizing statutes and their requirements are made throughout the Joint Rule with respect to Combined State Plan partner programs included in Combined State Plans. There is no intention of removing or minimizing the authority of the Perkins eligible agency to carry out its Perkins' responsibilities under WIOA.

Comments: A commenter made the following remarks about the submission of a Perkins State Plan as part of the Combined State Plan:

  • The NPRMs do not address a reconciliation of the two separate and distinct submission requirements (2-year versus annual).
  • If a State submits the annual Perkins Plan separate from the Combined State Plan, the rules are not clear if the Perkins Plan must be approved by the State WDB.
  • The rules require two agencies to negotiate the level of performance on the core indicators of WIOA but do not indicate if the two agencies must negotiate the level of performance on the Perkins indicators.
  • The Perkins State levels of performance are dependent on local negotiations and levels of performance but the NPRMs do not indicate how the integrity, validity, and reliability of the local Perkins negotiations can be retained.

Departments' Response: As discussed previously, WIOA gives the States the ability to apply the 2-year WIOA modification provisions to the Combined State Plan partner programs included in the plan in addition to any modification timeline or interval required by the statute governing the Combined State Plan partner program as long as they do not overwrite those programs' required timelines. The Departments have concluded that for any Combined State Plan partner program included in the plan with a different planning cycle from WIOA, States should submit program-specific modifications that align with the natural planning cycles for that specific program. Section 676.140(f) stipulates that each Combined Plan partner program included in the Combined State Plan remains subject to the applicable program-specific requirements of the Federal law and regulations, and any other applicable legal or program requirements, governing the implementation and operation of that program.

If a State chooses to include Perkins as part of its Combined State Plan, the State will submit Perkins State Plan modifications annually, consistent with the Perkins annual State Plan cycle. If the Perkins State Plan modifications affect only the administration of Perkins and have no impact on the Combined State Plan as a whole or the integration and administration of the core and Combined State Plan partner programs, then such modifications may be submitted only to the Secretary of Education consistent with § 676.145(c)(2). Modifications to a Perkins State plan that impact the Combined State Plan as a whole or the integration and administration of the core and Combined State Plan partner programs are subject to the same public review and comment requirements that apply to the development of the original Combined State Plan. Under the Perkins-specific procedures, hearings may or may not be required depending on the specific facts presented.

In response to the commenters who raised concerns regarding performance negotiations, the Departments are clarifying that sec. 103 of WIOA does not require Combined State Plan partner programs to report on the primary indicators of performance in sec. 116 of WIOA. Section 103(b)(1) of WIOA only requires the Combined State Plan partner programs, which include Perkins, to include the requirements, if any, applicable to that program or activity under the Federal law authorizing the program or activity. Perkins program inclusion in a State's Combined State Plan will not impact the annual Perkins performance indicator negotiation process. See sec. 676.143(i). The WIOA State Plan ICR Appendix 1 clarifies what performance information States must include in the State Plan. The Departments provided further instructions through the WIOA Joint Performance ICR, the WIOA State Plan ICR, and related joint guidance. The Departments issued operational guidance on both performance and State Plan submission guidelines following the finalized Performance and WIOA State Plan ICRs.

Inclusion of Combined State Plan Programs Not Under Governor's Authority

Section 676.140(e)(4) requires States to provide assurance that all of the entities responsible for planning or administering an eligible program described in a Combined State Plan have a “meaningful opportunity to review and comment” on all portions of the plan.

Comments: Several commenters recommended strengthening the language in the regulation to ensure that States give assurances that all of the entities responsible for planning or administering a program described in a Combined State Plan have approved the inclusion of the programs in a Combined Plan, especially where such Start Printed Page 55818programs do not fall under the direct control of a Governor. According to these commenters, as the language currently stands, it could be interpreted as leaving this decision of whether to include a Combined State Plan partner program in the Combined State Plan up to the sole discretion of the Governor.

One commenter stated that, based on sec. 121 of the Perkins Act, the Perkins eligible agency should have the authority to determine whether CTE programs authorized under the Perkins Act are included in a State's Combined Plan. Section 121 of the Perkins Act states, in relevant part, that each “eligible agency . . . shall prepare and submit to the Secretary a State plan . . .” As mentioned above, the Perkins eligible agency maintains authority to carry out the responsibilities under sec. 121 of the Perkins Act under a Combined State Plan.

A few commenters said the Joint WIOA Final Rule should state the intent that the TANF program should have a meaningful influence in all stages of plan development and be a voting member of the State WDB.

Departments' Response: The Departments have concluded that no change to the regulatory text at § 676.140(e)(4) is necessary in response to these comments. The Departments have modified § 676.140(e)(3) to require States to describe joint planning methods in the Combined State Plan among the core programs, and with the required one-stop partner programs and other programs and activities included in the State Plan. The Departments acknowledge that not all programs identified in WIOA for potential inclusion in the Combined State Plan fall under the purview of the Governor. For some, the Federal funds go directly to local entities, such as several HUD programs administered by Public Housing Authorities. Others, such as the Reintegration of Ex-Offenders, are competitive grants that may be awarded to community-based organizations. Perkins funds flow directly to a State eligible agency by formula. In some States the Perkins State eligible agency is an independent agency not under the authority of the Governor. The Departments expect the Governor to work in collaboration with any Combined State Plan partner programs included in the plan and with the agencies that administer those programs consistent with these regulations and sec. 103(b)(3) of WIOA. The Departments expect that the State's joint planning methods across these programs ensure that the State has full cooperation from any such programs and agencies included in the Combined State Plan. Finally, in response to the comment that the TANF program should be a voting member of the State WDB, State WDB membership requirements are addressed in 20 CFR 679.110 (see DOL WIOA Final Rule).

Other Comments

Comments: Two commenters sought clarification on the primary indicators of performance relative to the inclusion of those partners beyond the core programs. If a State should choose the Combined State Plan option, one commenter asked whether all partners would be held to the standards of performance accountability identified in WIOA.

Departments' Response: WIOA sec. 103 does not require the Combined Plan partner programs to report on the WIOA sec. 116 primary indicators of performance. WIOA sec. 103(b)(1) only requires the Combined State Plan partner programs to include the requirements, if any, applicable to that program or activity under the Federal law authorizing the program or activity. The WIOA State Plan ICR Appendix 1 clarifies what performance information States must include in the State Plan. The Departments provided further instructions through the WIOA Joint Performance ICR, the WIOA State Plan ICR, and related joint guidance.

Comments: A commenter requested that the Departments ensure that partner programs will not have to submit additional or separate standalone plans.

Departments' Response: Partner programs, except for those carrying out employment and training activities carried out under CSBG, HUD programs, and the Food and Nutrition Act of 2008, will not be required to submit additional or separate standalone plans. Paragraph (h) and new paragraph (i) of § 676.140 explain the additional submission requirements for CSBG and HUD programs. Under paragraphs (h) and (i), the regulation explicitly limits the Combined Plan requirements for CSBG and HUD programs to “employment and training activities.” However, these activities are only a subset of a broad range of antipoverty activities provided under these two programs. In the case of CSBG programs, under § 676.140(h), the State would submit the remainder of the State Plan for CSBG (e.g., those parts that apply to the other antipoverty activities provided by CSBG that are not “employment and training activities”) to the Federal agency that administers the program. New paragraph (i) clarifies that, like the requirements under paragraph (h) for CSBG programs, only the components of the individual plans for HUD programs that pertain to employment and training should be submitted with the Combined State Plan. The State must submit any other required planning documents for HUD to the Federal agency that administers the respective program. The language in this new paragraph creates a consistent approach for the Combined State Plan partner programs that WIOA sec. 103(a) identifies by activities rather than by a specific program name. This change also makes the regulatory text relating to HUD consistent with instructions in the WIOA State Plan ICR for submission requirements for Combined State Plans.

For employment and training programs and work programs authorized under the Food and Nutrition Act of 2008, including those under secs. 6(d)(4) and 6(o), the State would similarly submit to the Departments of Labor and Education only the Supplemental Nutrition Assistance Program Employment and Training programs (SNAP E&T). The Departments declined to regulate an exception for SNAP E&T because State Plans for SNAP E&T, as described under 7 CFR 273.7(c)(8), are generally not comingled with the State Plans for the remaining activities under SNAP.

Comments: A commenter expressed concern that proposed § 676.140 does not require States to identify populations for Priorities of Service, though this is required at the local level. The commenter recommended that the regulation be revised to require that States identify populations for priority of service, and provide explanation of why those populations are named.

Departments' Response: As discussed earlier under § 676.105, in the title I-specific requirements, the WIOA State Plan ICR requires the State to address its policy for ensuring adult program funds provide a priority in the delivery of career and training services to individuals who are low income, public assistance recipients, or basic skills deficient. Otherwise, as with the Unified Plan Requirements, the Departments have chosen not to regulate the specifics of State Plan requirements, as these are explained in comprehensive detail in the WIOA State Plan ICR.

Section 676.143 What is the development, submission, and approval process for the Combined State Plan?

Section 676.143 implements WIOA's statutory requirements for submitting a Combined State Plan. These are similar to the requirements for submitting a Unified State Plan at § 676.130, with added considerations for review and approval by the Federal agencies that oversee the Combined State Plan partner Start Printed Page 55819programs. The heading for § 676.143 has been modified to include the word “development,” to more accurately reflect the content of this section. In response to comments, discussed earlier, regarding the role of State WDB, core programs, required one-stop partners, and other stakeholders in the development of the State Plan, the Departments have made several revisions to § 676.143 to mirror the requirements for Unified Plans related to coordination, public comment and input. A new paragraph (b) has been added to include information similar to the newly added § 676.130(c), clarifying that the Combined State Plan, just as the Unified State Plan, must be developed with the assistance of the State WDB and must be developed in coordination with administrators with optimum policy-making authority for the core programs and required one-stop partners. New § 676.143(c)(1) and (2) have been added to include information similar to § 676.130(d)(1) and (2) requiring that the State must provide an opportunity for public comment and input on the development of the Combined State Plan prior to its submission, and that these requirements apply to the portions of the plan that cover the core programs. Finally, § 676.143(c)(3) has been added to further clarify that the portions of the Combined State Plan that cover the Combined State Plan partner programs are subject to any applicable public comment requirements for those programs. Proposed § 676.143(b) has been renumbered to § 676.143(d), and remaining sections have been renumbered accordingly. Renumbered § 676.143(e)(1) has been revised to clarify that, before the Secretaries of Labor and Education approve the Combined State Plan, the VR services portion of the Combined State Plan must be approved by the RSA Commissioner. In response to comments requesting clarity around Combined State Plan approval, new § 676.143(h) states that the Secretaries of Labor and Education's written determination of approval or disapproval of the portion of the plan for the six core programs may be separate from the written determination of approval, disapproval, or completeness for program-specific requirements of Combined State Plan partner programs at § 676.140(d). Except for the changes described here, this section remains unchanged from that proposed in the NPRM.

Submission of Combined State Plan

Section 676.143(d) requires a State to submit to the Secretaries of Labor and Education and, if applicable, to the Secretary of the agency with responsibility for approving the program's plan or for deeming it complete under the law governing the program, as part of its Combined State Plan, any plan, application, form, or any other similar document that is required as a condition for the approval of Federal funding under the applicable program or activity.

Comments: A couple of commenters stated that, to reduce the burden on States, the Secretaries of Labor and Education should be responsible for distributing the plans to other appropriate Federal entities. One of these commenters said the Secretaries of Labor and Education may want to consider taking all of the Combined State Plans and submitting them as a batch to the other appropriate Federal entities.

Departments' Response: The submission process set forth in WIOA sec. 103(a)(1) for Combined State Plans requires that they be submitted to the “appropriate Secretaries,” which differs from the submission process for the Unified State Plan set forth in WIOA sec. 102(a). However, similar to what is required by § 676.130(e) for the submission of Unified State Plans, the Departments developed a process for the single electronic submission of Combined State Plans that allows for concurrent review of, and immediate access to, the plans by all the relevant Federal entities. As discussed in the introduction, the Departments issued guidance that explains the submission process for Combined State Plans, which is intended to streamline State submission of plans. No change to the regulatory text was made in response to these comments, but the Departments have issued further guidance regarding State Plan submission.

Timelines for Review and Approval

Section 676.143(e) stipulates the timelines for review and approval by the Secretary of Labor or Secretary of Education, or another appropriate Secretary.

Comments: A couple of commenters requested clarification on the different timelines for the review and approval of the Combined State Plan (90 days for core programs and 120 days for Combined State Plan partner programs).

Departments' Response: The Departments considered these comments and are implementing the regulation to reflect the statutory requirements. As required by WIOA sec. 103(c)(3), Combined State Plan partner programs that fall under an authority other than the Secretary of Labor or Secretary of Education have an approval timeline of 120 days, rather than 90 days. This additional time allows for review and approval of Combined State Plan partner programs that are administered outside the Departments of Education and Labor, such as programs administered by U.S. Department of Agriculture, HHS, and HUD. These are statutory requirements not subject to regulatory change.

Rehabilitation Services Administration Approval of Combined State Plans

Comments: Several commenters requested clarification on whether the VR portion of a Combined State Plan must be approved by the RSA Commissioner prior to the full Combined State Plan being approved by the Secretaries of Labor and Education, as the Unified State Plan process description explicitly states in § 676.130(g).

Departments' Response: The Departments considered these comments and agree that the rule needed to provide additional clarification regarding this requirement. Just as required for Unified State Plans, the RSA Commissioner must approve the VR services portion of the Combined State Plan prior to approval of the full Combined State Plan by the Secretaries of Labor and Education. The Departments have added regulatory text to clarify this requirement at § 676.143(e)(1).

Comments: One commenter said ensuring review by the RSA Commissioner should be the responsibility of the Secretaries, not VR agencies, and asked if this review would be part of the 90-day review timeframe.

Departments' Response: The Departments worked together to ensure the timely review of all State Plans, including the VR services portion of each plan. As discussed under § 676.130 for Unified Plans, it is not the State VR agencies' responsibilities to submit and obtain approval of the VR services portion of the State Plan prior to submitting the Combined State Plan to the Departments. Rather, the entire plan should be submitted to the Departments and review by the RSA commissioner will take place following that submission as a part of the 90-day Federal review of the plan. The Departments developed a process for submission of State Plans to ensure that all Departments, as appropriate, receive the entire submission concurrently. The Departments have concluded that the existing regulatory text and preamble place adequate emphasis on the timely concurrent reviews of the plans by the Departments.Start Printed Page 55820

Review, Approval, and Disapproval of Combined State Plans

Section 676.143(f) provides specifics on the approval process for Combined State Plans.

Comments: A few commenters stated that there appears to be little incentive for States to pursue a Combined State Plan. One commenter said States need assurances that the Departments will handle the Combined State Plan review in a manner different from how the Departments handled the Unified State Plan review under WIA, which was largely superficial in nature. The commenter recommended that the review process not only enforce statutory requirements but also consider the plan in a coordinated, cross-agency approach. The commenter said States need additional clarity on how the Federal agencies will manage the review process and make approval determinations, particularly when the statutes provide mixed or conflicting direction.

Departments' Response: Although States only are required, at a minimum, to submit a Unified State Plan that encompasses the six core programs under WIOA, the Departments encourage States to submit a Combined State Plan that includes additional Combined State Plan partner programs as described at § 676.140. Development of a Combined State Plan allows for coordination across multiple Federal programs, cross-program strategic planning, increased alignment among State programs, and improved service integration, which provides a wider range of coordinated and streamlined services to the customer. WIOA offers an expanded opportunity for States to create and implement a shared vision and strategy for the public workforce system within the State. The Departments have added language to § 676.143 in paragraphs (e)(1) and (h) to further clarify the review process for Combined State Plans. Review of Combined State Plans will take into consideration the strategic coordination, program alignment, integration, and cross-agency joint planning that is reflected in the Combined Plan. The Departments worked together to create a robust review process across all partner agencies and consider this review process to be integral to effective joint planning and implementation. The Departments have added regulatory text at § 676.143(h) to clarify that the Secretaries of Labor and Education's written determination of approval or disapproval of the portion of the plan for the six core programs may be separate from the written determination of approval, disapproval, or completeness of the program-specific requirements of Combined State Plan partner programs and activities included in the Combined State Plan.

Comments: One commenter requested guidance (1) that allows States to develop a Combined State Plan without the threat of a loss of funds if elements of the individual programs are not specifically identified, and (2) on how accountability metrics and reporting requirements for those programs included in the plan will not be a disincentive for inclusion. A commenter said it is not clear what benefit exists for the State or local Perkins recipients to attempt to address indicators that are not pertinent to their purpose of operation as outlined in State regulation as well as the “Federal Perkins regulation.” The commenter said if the Combined State Plan partner programs are not required to report on the WIOA indicators of performance, the benefit of a Combined State Plan is not clear.

Departments' Response: Regarding concerns about funding, the joint submission, or joint review process of the Combined State Plans will not impact funding because the Departments developed a process to ensure Combined State Plans are reviewed in a coordinated and timely manner across agencies. The Combined State Plan review process is further explained at § 676.143. Combined State Plan partner programs are not subject to the six common indicators for performance under WIOA, although they may be subject to the same or similar indicators under their own authorizing statute or under State law. Regardless of whether required indicators are identical, States will find that public workforce development system customers can benefit from the results of developing a Combined State Plan that fosters program integration and alignment and optimal use of resources. The Departments' worked together to implement a robust review process across all partner agencies and consider this review process to be integral to effective joint planning and implementation. Performance issues have been addressed through the WIOA State Plan ICR, the WIOA Joint Performance ICR, and related joint guidance.

Comments: One commenter said it is unclear how the rejection of one part of a Combined State Plan would affect funding for the other programs. A commenter stated that the regulation implies that disapproval by any Secretary of their respective program will result in disapproval of the Combined State Plan as a whole, which provides incentive to submit a Unified State Plan (instead of a Combined State Plan). Similarly, another commenter said disapproval of a section of the plan pertaining to a program not considered to be a core program should not result in the disapproval of the entire plan. Another commenter requested additional guidance on the process to follow if the RSA Commissioner does not approve the VR portion of the State Plan.

Departments' Response: Per § 676.143(h), disapproval of a section of a Combined State Plan pertaining to a Combined State Plan partner program does not impact the approval for the portions of the Combined State Plan that apply to the core programs. In the process mentioned above, the common planning elements and program-specific elements of Combined State Plans are reviewed concurrently across the Departments of Labor and Education and other relevant agencies, with the approval determination by RSA occurring first, and with additional time allowed for specific Combined State Plan sections that fall within the purview of U.S. Department of Agriculture, HUD, or HHS. A determination regarding approval or disapproval for the common elements and the core programs may be issued separately from the approval determination for program-specific requirements for Combined State Plan partner programs, including those that allow 120 days for review. The Departments have added a new § 676.143(h) to clarify that the Secretaries of Labor and Education's written determination of approval or disapproval of the portion of the plan for the six core programs may be separate from the written determination of approval, disapproval, or completeness for program-specific requirements of Combined State Plan partner programs specified in § 676.140(d) in the Combined State Plan. However, the portions of the Combined State Plans that cover the core programs must be approved by all core program agencies.

Special Rule for Perkins Act Programs

Comments: Several commenters referred to § 676.143(f) in the NPRM, which has been renumbered to § 676.143(i) in the Joint WIOA Final Rule, the special regulation for programs authorized by the Perkins Act, which directs the State to come to an agreement with the Secretary of Education regarding State performance measures. One commenter requested further clarification as to what accountability measures would take Start Printed Page 55821precedence under an agreement between the Secretary of Education and a State. The commenter stated that the Departments should specify that when a State chooses to include Perkins in a Combined State Plan, the State is required to include the totality of the Perkins State Plan in the Combined State Plan and cannot break off the parts relevant only to postsecondary CTE.

Departments' Response: WIOA sec. 103 does not subject the Combined State Plan partner programs to the WIOA sec. 116 primary indicators of performance. WIOA sec. 103(b)(1) only requires the Combined State Plan partner programs, which include Perkins programs, to include the requirements, if any, applicable to that program or activity under the Federal law authorizing the program or activity. The WIOA State Plan ICR Appendix 1 further clarifies what performance information States must include in the State Plan. As discussed in § 676.140 above, if a State chooses to include postsecondary CTE programs under the Perkins Act as a part of its Combined State Plan, the State would submit the entirety of the State Plan, including any annual revisions, pertaining to the CTE programs authorized under the Perkins Act. In addition, the State would submit plan modifications annually to align with Perkins' annual State Plan cycle, consistent with § 676.145.

Section 676.145 What are the requirements for modifications of the Combined State Plan?

Section 676.145 specifies requirements for modifying a Combined State Plan. Sections 676.145(a)(1) through (3) have been added to mirror the core program modification requirements specified for Unified State Plans in § 676.135(b). Section 676.145(a)(1) through (3) outline three instances in which a modification for the core programs is required. These instances include: (1) At the conclusion of the first 2-year period of a 4-year State Plan, (2) when changes in Federal or State law substantially affect the plan's implementation, and (3) when there are substantial changes to the State's workforce investment system. The Departments revised § 676.145(a)(3) to clarify that modifications to the Combined State Plans are required when States modify their negotiated levels of performance. This clarification was made for consistency with the changes to part 677 on the performance accountability system. The Departments have added a clarifying edit to § 676.145(c)(1) to explain that States have discretion to apply the plan modification requirements for core programs to Combined State Plan partner programs so long as it is consistent with any other modification requirements for that program. The Departments have incorporated proposed § 676.145(f) into § 676.145(c)(2) to clarify these provisions to address commenters' confusion in this area, and deleted paragraph (f). The Departments also have made technical edits at § 676.145(d). Except for the changes described here, this section remains substantively the same as that proposed in the NPRM.

Timeframe for Combined State Plan Modifications

Comments: A couple of commenters said the Departments should consider emphasizing the opportunity for States to submit Combined Plan modifications following submission of the initial plan to ensure that Combined Plan partner programs continue to be engaged in the planning and implementation process. Some commenters said the Federal agencies responsible for the Combined Plan partner programs should accept the Combined State Plan on the timeline outlined in WIOA and not prescribe more frequent updates or different timeframes for modifications and renewals. In addition, the commenters said the submission deadlines must align. These commenters also said the Departments should issue final guidance early enough that there is sufficient time to negotiate the levels of performance for State performance accountability measures before submission deadline.

Departments' Response: The Departments agree that modifications following submission of the initial plan are useful to ensure that Combined State Plan partner programs continue to be engaged in the planning and implementation process. Sections 676.135 and 676.145 enable States to continue to modify and improve the planning process of both core and Combined State Plan partner programs through Unified and Combined State Plans. The Departments are not prescribing more frequent updates beyond what is required under WIOA timeframes. However, the Departments have revised § 676.145(a) to clarify the circumstances under which a Combined State Plan must be modified for core programs, which are the same modification requirements that apply under Unified State Plans. The States have the discretion to apply these modification requirements to Combined State Plan partner programs or activities. The Departments have added regulatory text at § 676.145(c)(1) to clarify that a State may apply these modification requirements to Combined State Plan partner programs, as long as this is consistent with any other modification requirements for those specific programs. As discussed under § 676.140, the Departments do not have the authority to change the planning requirements, including submission deadlines, that are not under WIOA's jurisdiction. The Departments have provided additional clarity on the review and approval process through joint planning guidelines.

Combined State Plan Modification Requirements

Unlike § 676.135, which addresses modifications of Unified State Plans, proposed § 676.145, which addressed modifications for Combined State Plans, did not require modification of a plan when there are “substantial changes” to a State's workforce investment system.

Comments: The Departments received comments requesting that language similar to that in § 676.135(b)(2) and (3), requiring States to submit modifications when there are “substantial changes,” be added to the section pertaining to Combined State Plan modifications.

Departments' Response: The Departments considered these comments and agree. The Departments have revised proposed § 676.145(a) by adding new paragraphs (a)(2) and (a)(3) that are essentially identical to § 676.135(b)(2) and (3) to clarify that the same modification requirements that apply to the Unified Plan also apply to the portions of the Combined Plan covering the core programs. States are required to submit a modification for the portions of the Combined Plan covering the core programs when (1) changes in Federal or State law or policy substantially affect the strategies, goals, and priorities upon which the Combined State Plan is based, and (2) when there are changes in the statewide vision, strategies, policies, State negotiated levels of performance, the methodology used to determine local allocation of funds, reorganizations which change the working relationship with system employees, changes in organizational responsibilities, changes to the membership structure of the State WDB or alternative entity, and similar substantial changes to the State's workforce investment system. Under WIOA sec. 103(b)(1), it is at the discretion of the State to decide whether to apply these modification requirements to Combined State Plan partner programs or activities, as long as this is consistent with any other modification requirements for those specific programs. The Departments Start Printed Page 55822have added language at § 676.145(c)(1) to clarify this distinction.

Public Comment on Combined Plan Modifications

In the NPRM, the Departments sought comments on how to streamline the public review and comment process for Combined State Plan modifications. The Departments further sought comments in the NPRM on whether it is advisable to limit the requirement for public comment on plan modifications to significant or substantial modifications to the common planning elements and, if so, how the Departments might define “significant” or “substantial changes.”

Comments: One commenter indicated that historically, in-person meetings are poorly attended, so comments in relation to § 676.145 should be allowed via other methods, such as surveys, webinars, video conferences, and phone conferences. Another commenter said public review should not exceed 30 days.

Some commenters said the Departments should limit the comment process under § 676.145 to significant or substantial modifications, such as substantive change to service delivery or participating partners, adding or removing a Combined State Plan partner program, or discretionary changes within a program that would directly affect the provision of services and its collaboration with other programs (excluding programmatic changes required due to audit findings or sanctions). One commenter said the Departments should allow public comment on the shared planning elements to streamline this process significantly, particularly for States in which core program agencies have different governance and review processes.

Departments' Response: In the Joint WIOA Final Rule, the Departments have not included requirements related to the timing, method, or other specifics related to public review and comment. The Departments leave much of the process related to public review and comment to the discretion of the State so long as regulatory requirements for public comment are met. If, based on the regulatory categories described in § 676.145, a Combined State Plan modification is required, such a plan modification is subject to the requirements for comment as described in § 676.145(d). As described in § 676.145(d), modifications to the Combined State Plan are subject to the same public review and comment requirements that apply to the development of the original Combined State Plan as described in § 676.143(c) except that, if the modification, amendment, or revision affects the administration of a particular Combined State Plan partner program and has no impact on the Combined State Plan as a whole or the integration and administration of the core and other Combined State Plan partner programs at the State level, a State may comply instead with the procedures and requirements applicable to the particular Combined State Plan partner program. The Departments have made a technical edit to § 676.145(c)(2)(ii) for clarity by adding the word “other” before Combined State Plan partner programs in the phrase “has no impact on the Combined State Plan as a whole or the integration and administration of the core and Combined State Plan partner programs at the State level.” The Combined State Plan partner programs being referred to here are those other than the program that is the focus of the modification. States may determine, at their discretion, if these same plan modification requirements apply to Combined State Plan partner programs included in the Combined State Plan. States can further use their own discretion to provide a reasonable period of time for public comment. Many State laws also require a minimum number of days for public comment. Likewise, States may determine the best way to streamline the public comment process while ensuring that regulatory requirements for public comment are met.

In addition to the regulatory text changes discussed above, various non-substantive changes have been made for purposes of correcting typographical errors and improving clarity that have not been necessary to note elsewhere.

B. Performance Accountability Under Title I of the Workforce Innovation and Opportunity Act (20 CFR Part 677; 34 CFR Part 361, Subpart E; 34 CFR Part 463, Subpart I)

1. Introduction

Section 116 of WIOA establishes performance accountability indicators and performance reporting requirements to assess the effectiveness of States and local areas in achieving positive outcomes for individuals served by the workforce development system's six core programs described in sec. 116(b)(3)(A)(ii) of WIOA. These six core programs are the adult, dislocated worker, and youth programs under title I of WIOA; AEFLA program under WIOA title II; Employment Service program authorized under the Wagner-Peyser Act, as amended by WIOA title III (Wagner-Peyser Act Employment Service program); and VR program authorized under title I of the Rehabilitation Act of 1973, as amended by WIOA title IV.

The performance accountability system established in WIOA subtitle A (“System Alignment”) in sec. 116 requires that the performance accountability requirements apply across all six core programs with few exceptions. As such, the six core programs have an historic opportunity to align performance-related definitions, streamline performance indicators, integrate reporting, and ensure comparable data collection and reporting across all the core programs, while also implementing program-specific requirements.

Through this Joint WIOA Final Rule, the Departments are laying the foundation for a performance accountability system that serves all core programs and their targeted populations in a manner that is customer-focused and that supports an integrated service design and delivery model. In addition, WIOA requires additional DOL-administered title I programs, specifically Job Corps, Native American programs, the Migrant and Seasonal Farmworker programs, and the YouthBuild program, to comply with the same primary indicators as the core programs (see 20 CFR part 686 and 20 CFR part 684 of the DOL WIOA Final Rule published elsewhere in this issue of the Federal Register). The inclusion of these additional DOL-administered programs into the common performance accountability system will better align both the core programs and other education and training programs across the public workforce system. Further, DOL is including other workforce programs under its purview in this performance-related streamlining effort, including the JVSG program as authorized by the Jobs for Veterans Act and other appropriate formula and competitive grant programs.

In the section-by-section discussions of each performance accountability regulatory provision below, the heading references the DOL CFR section number. The ED is establishing in this Joint WIOA Final Rule identical provisions at 34 CFR part 361, subpart E (under its State VR program regulations) and at 34 CFR part 463, subpart I (under a new CFR part for AEFLA regulations). Although for purposes of brevity, the section-by-section discussions for each provision appear only once—in conjunction with the DOL section number—the discussions nevertheless constitute the Departments' collective explanation and rationale for each regulatory provision. When the Start Printed Page 55823regulations are published in the CFR, these joint performance regulations will appear in each of the CFR parts identified above.

2. Definitions (20 CFR 677.150; 34 CFR 361.150; 34 CFR 463.150)

Section 677.150 What definitions apply to Workforce Innovation and Opportunity Act performance accountability provisions?

Section 677.150 defines “participant,” “reportable individual,” “exit,” and “State,” which are key performance-related terms applicable to all six core programs for implementation of the performance accountability system under sec. 116 of WIOA and part 677 of these joint regulations. The definition of “participant” has been revised, as explained below, to distinguish clearly between participants and reportable individuals. The definitions of “reportable individual” and “exit” have been revised as explained below. The Departments also have added a definition of “State,” which includes the outlying areas for purposes of part 677, other than in regard to sanctions or the statistical adjustment model. These definitions establish the foundation of an integrated performance accountability system and support clarity and alignment of performance metrics and comparability among the programs, States, and outlying areas.

Definition of “Participant” (§ 677.150(a))

Comments: Numerous commenters responded to the Departments' solicitations for input on the joint NPRM regarding the proposed definitions of “participant,” “reportable individual,” and “exit.” While several commenters supported the definition of “participant” generally, many commenters raised multiple concerns regarding the distinction between self-service and staff-assisted service. A common concern was that the proposed definition of “participant” excludes self-service only individuals, which conflicts with WIOA's goal of leveraging technology to improve service delivery. Some commenters expressed concerns about the term “staff-assisted service,” stating that the term should either be defined or removed because it is critical to understanding the precise distinction between a “participant” and a “reportable individual.” Several commenters asserted that the Departments should remove “staff-assisted service” from the definition of “participant” because it is not defined in WIOA or regulations and can be misleading when providing upfront assessment services to youth. Other commenters encouraged the Departments to define “staff-assisted service” in order to provide clarification. One commenter indicated that the regulatory definition of “participant,” for purposes of the title I youth program, should reflect policy positions articulated by the Departments in the Joint WIOA NPRM's preamble.

Commenters also suggested additional terms and concepts that could be defined, including providing definitions for “qualifying services,” “facilitated self-service,” and “career and training services.” One commenter asserted that the Departments should issue timely guidance with additional definitions and clarifications or allow States to continue using definitions contained in WIA.

Departments' Response: The Departments agree that it is critical that these definitions be clear in order to ensure compliant data collection and reporting. Section 677.150(a) provides a definition of “participant” that applies to all six core programs because the primary performance indicators set forth in sec. 116(b)(2)(A)(i) of WIOA specifically base performance calculations on the participants in each of the core programs. The definition of “participant” establishes a common point at which an individual is meaningfully engaged in a core program and thus, it is appropriate for the person to be included in the primary indicators of performance. In the NPRM, the Departments attempted to distinguish “staff-assisted services,” which required more meaningful interaction with a core program, from “self-services” and information-only services and activities, where individuals engaged in these activities that require minimal interaction with the programs, by which the Departments mean minimal resources are spent on their behalf in most cases. While individuals who receive only self-service or information-only services and activities do not satisfy the definition of “participant,” these individuals are considered “reportable individuals” as defined in § 677.150(b) and discussed in more detail below.

The Departments considered each of the suggested revisions to the proposed definition of “participant” and have modified § 677.150 to clarify the application of this definition to requirements under WIOA. The Departments made the following changes to the definition of “participant” in § 677.150(a).

In § 677.150(a), the Departments replaced the phrase “staff-assisted services” with “services other than those described in § 677.150(a)(3).” In so doing, the Departments eliminate the confusion of what is meant by “staff-assisted services” and make clear that individuals who receive the services described in § 677.150(a)(3) will not be deemed to be “participants” for purposes of the performance accountability system requirements under part 677, but rather will constitute a “reportable individual” under § 677.150(b).

The Departments provided additional clarification in renumbered § 677.150(a)(3) to describe what does and does not constitute self-service and information-only services and activities. In so doing, the Departments have eliminated the confusion noted by commenters. Specifically, the revisions contained in § 677.150(a)(3) clarify that the difference between reportable individual and participant is the point when a reportable individual uses services other than those identified in renumbered § 677.150(a)(3). The Departments clarify what is meant by self-service and information-only services and activities, thereby avoiding use of the term “staff-assisted services” in this regulation, which raised concerns among commenters.

Because the Departments appreciate the concerns raised by commenters and recognize the changing landscape and advances in service delivery and design, the Departments added § 677.150(a)(3)(ii)(A) to describe self-service. The Departments recognize that not all electronic technologies are self-service and that individuals engaged in this type of service could potentially meet the definition of “participant.” For example, there may be some services that provide robust levels of assistance in assessing a person's skills and matching that person to a job that are provided using electronic technologies that involve one-on-one interaction with a one-stop center staff member, such as an Internet chat room, or interactive technology, such as video conferencing, that would result in the individual becoming a participant. Additionally, the Departments acknowledge how fast technology evolves and new technology emerges that could be used by States and local areas to maximize available resources and better serve job seekers, workers, and employers. The Departments will continue to assess the field and emerging innovative technologies that may provide more cost-effective services and inform the workforce system of such developments, and their allowable uses, through program guidance.

The Departments are continuing to examine staff-assisted virtual service Start Printed Page 55824delivery in order to determine its potential. Paragraph (a)(3)(ii)(B) of § 677.150 clarifies that virtual services providing support above an individual's independent job- or information-seeking efforts would not qualify as self-service, thus resulting in the individual becoming a “participant.”.

The Departments have concluded that the following revisions to § 677.150(a)(3), described in more detail below, add the clarity requested by commenters:

Self-service occurs when individuals independently access the workforce development system information and activities with very little to no staff assistance. This can be done in either a physical location, such as a one-stop center resource room or partner agency, or remotely via the use of electronic technologies, with very little to no staff assistance.

Importantly, if a service is virtual service it is not automatically a self-service. As many commenters pointed out, there have been great strides made in the area of virtual service design and delivery allowing for staff to provide support and services through a variety of in-person and virtual platforms. For example, there may be some services that are provided using electronic technologies that involve one-on-one interaction with a one-stop center staff member or interactive technology, such as video conferencing, that would trigger participation. Furthermore, individuals who receive self-service or information-only services and activities can still be participants if they receive services other than self-service or information-only activities.

Information-only services or activities are activities or services that provide readily available information that does not require an assessment by a staff member of the individual's skills, education, or career objectives. In a public workforce development setting, information activities or services may include both self-service basic career services and staff-assisted basic career services. Both are designed to inform and educate an individual about the labor market and to enable an individual to identify his or her employment strengths, weaknesses, and range of appropriate services. However, basic career services that require significant staff involvement are not considered information-only services or activities.

Applying the above guidance to determining when a reportable individual satisfies the definition of a “participant,” an individual is a reportable individual, but not a participant, when a staff member provides the individual with readily available information that does not require an assessment of the individual's skills, education, or career objectives, because the individual is a recipient of information-only services or activities. Such information could include labor market trends, the unemployment rate, businesses that are hiring or reducing their workforce, information on high growth industries, occupations that are in demand, and referrals other than referrals to employment. Information-only services or activities also occur when a staff member provides the individual with information and instructions on how to access the variety of other services available in the one-stop center, including tools in the resource room.

Significant staff involvement that would result in an individual qualifying as a participant includes a staff member's assessment of an individual's skills, education, or career objectives in order to achieve any of the following:

  • Assist individuals in deciding on appropriate next steps in the search for employment, training, and related services, including job referral;
  • Assist individuals in assessing their personal barriers to employment; or
  • Assist individuals in accessing other related services necessary to enhance their employability and individual employment related needs.

The Departments also added a new § 677.150(a)(2) to align the regulatory text definition of “participant,” for purposes of the title I youth program, with the intent expressed in the NPRM. New § 677.150(a)(2) clarifies the definition of a “participant” for purposes of the WIOA title I youth program.

The Departments did not add a definition of “staff-assisted service,” as suggested by commenters, because the revisions to § 677.150(a) described above resulted in the removal of the term from the regulatory text. In addition, the Departments declined to add the recommended definitions of “qualifying services” or “facilitated self-services,” because the modifications made to the definition of “participant”—particularly at § 677.150(a)(3) regarding clarifications of self-service and information-only services or activities—will address the needs of commenters. In addition, the Departments consider additional recommended definitions to fall within the scope of either the WIOA Joint Performance ICR (which identify performance calculations, definitions, and reporting parameters) or operating and programmatic guidance.

The Departments did not add definitions of “career services” and “training services” because WIOA sec. 134(c)(2) and (3) define “career services” and “training services,” respectively, and these terms are further defined at § 678.430 (“What are career services?”) in the Joint WIOA Final Rule and 20 CFR 680.200 (“What are training services for adult and dislocated workers?”), in the DOL WIOA Final Rule, both of which are published in this issue of the Federal Register. The WIOA Joint Performance ICR contains further specifications regarding the collection and reporting of career and training services under this section. The Departments intend to issue further clarifying programmatic guidance regarding these and other performance-related definitions in order to assist States and outlying areas in implementing them.

Comments: A commenter acknowledged the problems associated with outcome evaluations of participants who do not go through an intake process but stated that the performance metrics should give credit for the investment of resources and staff required to maintain effective self-service systems. Another commenter asserted that self-service individuals should be included in the definition of “participant” to allow States to fully convey the impact and return on investment for this large customer group.

Departments' Response: The Departments recognize commenters' concerns about the resources required to maintain effective self-service systems. Although performance calculations on the primary indicators of performance are limited to individuals who meet the definition of participant and do not include individuals who only use the self-service system, other information that captures resources and costs associated with those individuals served by the public workforce system at the self-service or information-only levels is collected and reported in the State annual performance reports under § 677.160, and additional elements are required through associated ICRs published by the Departments.

The Departments expect that because information about reportable individuals, including those who access self-service and information-only services or activities, will be included in the State annual performance reports and associated WIOA Joint Performance ICR or Department-specific ICRs, such investments by States and local areas will be recognized. The Departments note that the changes in the regulatory text maintain the policy expressed by Start Printed Page 55825the Departments in the NPRM. Individuals who only use the self-service system or who receive information-only services or activities are not defined as “participants.” No change to the regulatory text was made in response to these comments.

Comments: A commenter opposed the exclusion of self-service individuals in the definition of “participant,” asserting that it creates a bias against rural areas where one-stop centers are less accessible.

Conversely, a number of other commenters stated that individuals receiving self-service and information-only services should not be considered participants for performance purposes, stating that participation should not begin until an individual receives a staff-assisted service. A commenter agreed that self-service individuals should be excluded from the definition of “participant,” but suggested that a performance analysis be conducted to assess the impact of exclusion of self-service results on performance.

Departments' Response: The Departments recognize commenters' concerns about the delivery of services in rural areas and recognize the importance of leveraging virtual services technology to improve the delivery of services in such areas. As discussed above, the Departments do not consider all services provided virtually to be “self-service” and reiterate that such activities, even when delivered virtually, can trigger participation and subsequent inclusion in performance calculations. The Departments developed the proposed definitions in order to maintain a level of rigor and accountability that is consistently applied across programs, while also providing a platform that is flexible enough to accommodate changes in service delivery design and advancements in technology. As stated above, no changes to the regulatory text regarding individuals who only use the self-service system were made in response to comments, as these individuals are not considered “participants” for purposes of the performance accountability system.

With regard to the recommendation that a performance analysis be conducted to assess the impact of exclusion of self-service and information-only services or activities, the Departments analyzed a number of factors before proposing the definition of participant, including the relative impact of self-service exclusion and inclusion, and concluded that exclusion of such services had little to no impact on performance outcomes. Therefore, as stated above, the Departments decline to change the regulation's definition of participants based on these comments.

With regard to the recommendation that participation begin only when an individual receives a staff-assisted service, the Departments have concluded that to define such a precise attachment point in regulation would prevent the performance accountability system from being able to adapt and account for all the services that the programs are providing. For example, an individual could receive staff-assisted services in the form of an assessment in the WIOA youth program, or in the form of fewer than 12 contact hours of AEFLA services, yet still appropriately be excluded from the definition of a participant.

Comments: A few commenters suggested that self-service participants should be included in Wagner-Peyser Act employment indicators or measured separately.

Departments' Response: The Departments considered collection and reporting burdens of doing so and did not revise the regulatory text to require additional collection and reporting on reportable individuals beyond the associated counts and information already required under the WIOA Joint Performance ICR. However, States should feel free to conduct additional analysis beyond what is required to be submitted to the Departments, such as an analysis on outcome of Wagner-Peyser Act self-service individuals. No change to the regulatory text was made in response to these comments.

Comments: Several commenters remarked that, under the NPRM, a youth receiving an assessment could be considered as receiving a staff-assisted service and therefore be considered a “participant.” These commenters further stated that this proposed regulation would conflict with the discussion in the NPRM, which had proposed that a “participant” for performance calculation purposes of the WIOA youth program, would be a “reportable individual” who was determined eligible, received an assessment, and received a program element. These commenters asserted that an assessment alone should not be considered a staff-assisted service, and that the regulation should be revised to conform to the language in the preamble of the NPRM. Another commenter expressed similar concerns, stating that an assessment alone for any individual in any program should not trigger participation.

Departments' Response: The Departments agree with the numerous commenters who asserted the NPRM text regarding the definition of “participant,” as applied to the WIOA title I youth programs, could potentially conflict with the stated intent in the preamble. The Departments, therefore, revised the regulatory text by adding a new § 677.150(a)(2), which reflects the intent stated in the NPRM preamble. In so doing, the Departments have made clear that a WIOA program youth is not considered a “participant,” and subsequently included in performance calculations, until the youth has been determined eligible, received an objective assessment, developed an individual service strategy, and received 1 of the 14 youth program elements (as outlined in WIOA sec. 129(c)(2)). The Departments have concluded that this change is consistent with the general definition of a “participant” in § 677.150(a), as well as the application of the definition to all core programs. This differs from the NPRM only by additionally requiring the youth participant to have satisfied the applicable program requirement for provision of services, including eligibility determination, objective assessment, and the development of an individual service strategy, as required under WIOA sec. 129(c)(1)(B).

Comments: A few commenters suggested that co-enrollees be counted as participants in all of the core programs from which they are receiving services. A few commenters discussed the benefits of co-enrollment, particularly for youth populations, and supported the idea that eligible individuals may be co-enrolled in title I youth services and title II adult education programs. One commenter requested clarification regarding how to account for individuals enrolled in multiple core programs. Another commenter remarked that differences among programs and uncertainty about reporting co-enrollees create a disincentive for co-enrollment.

Departments' Response: The Departments recognize the value of co-enrollment across the core programs and greatly encourage efforts by the core programs in States to establish the data infrastructure and partnerships necessary to facilitate seamless enrollment in one or more core programs under WIOA. The Departments encourage co-enrollment between those programs that are required partners under WIOA, such as the Jobs for Veterans State Grant Programs, the Trade Adjustment Assistance (TAA) programs, and others as outlined in sec. 121(b)(1)(B) of WIOA.

However, the Departments have concluded there is no need for revision to the regulations to address these comments since WIOA sec. 116(d)(2)(I) Start Printed Page 55826and § 677.160(a)(1) require core programs to report the number of participants who are enrolled in more than one of the programs described in WIOA sec. 116(b)(3)(A)(ii), disaggregated by each subpopulation of such individuals. Therefore, individuals who are co-enrolled in more than one core program and who meet the definition of participant under each respective program must be included in each respective program's performance calculations.

These calculations, as proposed under the WIOA Joint Performance ICR, would be done independent of the participant's participation in another core program unless a State opted to implement such policies for co-enrollment that allows for a common participation or exit date based on entering any of the core programs. Under WIA title I, some States maintained similar policies. For example, under WIA title I, in those cases where an individual was initially enrolled in the Wagner-Peyser Act program and subsequently received services under another DOL-administered program, the participation date for each program was the same and the receipt of a program's service was recorded as the date of receipt for first service as named. Such practices are allowed to continue under WIOA. Irrespective of the dates for participation and exit, each program would account for the participants in its program, and would be accountable for the outcomes of such participants in their reporting. For example, a title I youth participant who is co-enrolled in a title II AEFLA program and who also meets the definition of participant under title II, would be included in the State performance report for both title I youth and the AEFLA program under title II. No change to the regulatory text was made in response to these comments.

Comments: Several commenters addressed the applicability of the “participant” definition to the VR program. A few of these commenters noted that the proposed definition of “participant” would inflate the number of individuals exiting the VR program without achieving an employment outcome. Of these, one commenter stated it is not clear how the definitions of “participant,” “exit,” and the calculation of the performance indicators that rely on quarterly wage data are being operationalized in the proposed VR ICR for the RSA-911, particularly as it relates to calculating the denominator, and numerator. Specifically, this commenter said that it appeared that quarterly earnings and Federal Employer Identification Numbers (FEINs) only should be supplied for those participants who achieve competitive integrated employment. As a result, this commenter stated this would mean a significant number of VR participants would be included in the denominator but would be automatically excluded from the numerator for performance calculations if they did not achieve a competitive integrated employment outcome, even though they received significant VR services before exiting the VR program. This commenter was concerned that this approach would not provide a consistent and equitable comparison across all core programs since the definition of “participant” means an individual who received staff-assisted services. For example, this commenter asserted that WIOA title I and title III (Wagner-Peyser Act Employment Service) staff-assisted services may be quite limited compared to the intensive and sustained services provided to VR customers under an individualized plan for employment (IPE), the development of which requires substantial VR counselor investment and is in itself a service that may improve employment prospects. Therefore, this commenter recommended that the denominator be likewise limited to those participants who achieved competitive integrated employment or, in the alternative, require quarterly earnings and FEINs for all participants, not just those who achieved competitive integrated employment. This commenter recommended that RSA provide the specific formula for calculating performance indicators and provide a comment period. A few commenters stated that the proposed definition of “participant” would exclude a potentially large number of students with disabilities who receive pre-employment transition services under the VR program. Another commenter urged the Departments to provide guidance regarding the application of the “participant” definition to the VR program.

Departments' Response: The Departments agree that the definition of “participant,” for purposes of the VR program, will include both those individuals who exit the VR program after achieving an employment outcome as well as those individuals who exit without achieving an employment outcome. While the Departments understand that this calculation is a departure from what was done by VR agencies under prior 34 CFR 361.84(c), § 677.150(a)(1) of the Joint WIOA Final Rule is consistent with the use of the term “participant” throughout sec. 116 of WIOA and its application to the primary performance indicators set forth in sec. 116(b)(2)(A)(i) of WIOA. Moreover, the definition of “participant,” for purposes of the VR program, at § 677.150(a)(1) is consistent with the definition as applied to all core programs in § 677.150(a). Specifically, the definition of “participant” is broad enough to account for programmatic differences but narrow enough to capture the same type of individual with respect to each of the core programs. As the commenter noted, Wagner-Peyser Act services are often characterized as self-services and information-only activities. In accordance with § 677.150(a)(3), individuals receiving those kinds of services would not meet the definition of “participant” and, thus, there would be no comparison in the performance calculations between these individuals and participants of the VR program. However, individuals receiving Wagner-Peyser Act services that go beyond self-services or information-only activities would meet the definition of “participant” in § 677.150(a). As such, there would be comparability between this participant and a participant of the VR program. The Departments recognize that VR services are provided in a much more intensive manner and for a more extended period of time than those provided by the Wagner-Peyser Act program. Such differences will be reflected in the performance levels established for each of the core programs.

With respect to performance calculations, the three employment-related indicators measure the percentage of participants who are employed in the second and fourth quarters after exit, as well as their median earnings in the second quarter after exit. The Departments provide further guidance regarding the performance calculations in the WIOA Joint Performance ICR.

The Departments also agree that students with disabilities who receive pre-employment transition services without having applied, or been determined eligible, for the VR program would not satisfy the definition of “participant” as set forth in § 677.150(a)(1), but rather would be tracked and reported as “reportable individuals,” as defined in § 677.150(b). However, if a student with a disability applies and is determined eligible for the VR program and develops an IPE that includes the provision of pre-employment transition services or any other VR service, such student would satisfy the definition of “participant” as Start Printed Page 55827set forth in § 677.150(a)(1) and would be included in the performance calculations as such. The Departments have provided additional guidance regarding the reporting of “participants” in the WIOA Joint Performance ICR. No change was made to the regulation at § 677.150(a)(1) in response to the comments.

Comments: Several commenters urged the Departments to adopt consistent definitions regarding point of enrollment across titles triggered by engagement in program activity, not just initial assessment. They expressed particular concern for the youth program.

Departments' Response: The definition of “participant” takes into consideration the unique purposes and characteristics of each program and the ways in which an individual may access, and ultimately engage in, services in each of the core programs, thereby focusing on the established common point in service design and delivery that an individual reaches regardless of the program. The Departments concluded that it was sufficient to revise the definition of “participant” for purposes of the WIOA youth program.

Comments: Several commenters sought clarification concerning the distinction between the data collected for reportable individuals and participants, particularly with regard to whether they are included in performance calculations for the primary indicators of performance.

Departments' Response: While the Departments will collect and track information on reportable individuals as well as participants, the Departments currently do not intend to require reporting of outcomes of reportable individuals. The Departments will notify States via the ICR process of any collection and reporting requirements for reportable individuals. No change to the regulatory text was made in response to these comments.

Comments: A commenter asserted that older individuals with barriers to employment may require priority in receiving staff-assisted services, since these individuals are not as likely to use self-service tools.

Departments' Response: The Departments recognize the unique challenges faced by the different populations with barriers to employment that affect both their access to and utilization of services within the public workforce system. WIOA provides for meaningful access to individuals seeking services, including individuals with multiple barriers to employment. The regulation no longer refers to staff-assisted services.

Comments: Several commenters stated that while the definition of “participant” is well suited for WIOA performance accountability purposes, it is not suitable for many education programs and postsecondary students. These commenters stated that postsecondary students may participate in the workforce system in ways that are not captured in the definition. For instance, students may take courses and determine a degree pathway but never officially enroll in a program of study.

Departments' Response: The definition of “participant” establishes a common point at which an individual is meaningfully engaged in a core program. This takes into consideration the unique purposes and characteristics of each program and the ways in which an individual may access, and ultimately engage in, services in each of these programs. For example, an individual who accesses postsecondary education through the VR program, as set forth in title IV of WIOA, would meet the definition of participant at the point at which the eligible individual has an approved and signed IPE. Likewise, an individual accessing a career pathway program funded through title II would meet the definition of participant once the individual has completed at least 12 contact hours. Therefore, because programmatic differences are already accounted for, including differences regarding educational programs, the Departments have made no change to this Joint WIOA Final Rule regarding the definition of “participant” as applied to an educational program. The Departments note that further clarity is provided through the WIOA Joint Performance ICR. No change to the regulatory text was made in response to these comments.

Comments: A few commenters stated that the definition of “participant” is problematic when applied to all individuals in a program of study for the purpose of the eligible training provider performance report.

Departments' Response: The Departments recognize the need for clarity on terms as they apply to the eligible training provider (ETP) performance reports applicable to the adult and dislocated worker programs. There is further discussion on this and associated issues in the preamble of § 677.230 below. The Departments do not consider all individuals in a program of study through an ETP as falling within the definition of participants as defined under § 677.150. No change to the regulatory text was made in response to these comments.

Comments: Although the Departments received no comments specifically on proposed § 677.150(a)(4), which requires that programs must include participants in their performance calculations, the Departments received comments with respect to other areas of performance accountability that highlighted the intersection between WIOA core programs and their partner programs. Some commenters addressed the general applicability of these provisions to the national programs authorized under title I, particularly with regard to those programs identified in WIOA sec. 121(b)(1)(B).

Departments' Response: The Departments reiterate that sec. 116 applies to other programs, including the national programs and the partner programs identified in WIOA sec. 121(b)(1)(B), to the extent provided for by provisions of WIOA pertaining to those programs and their authorizing statutes and implementing regulations. In some instances, these statutes or regulations invoke the performance accountability provisions of WIOA sec. 116. In other instances, a program has its own statutory or regulatory performance provisions that apply to the program. In the case of ETP programs authorized at 20 CFR part 680 and reported through § 677.230 of these joint regulations, the definitions under § 677.150 only apply to those individuals who are WIOA program participants who received training from an ETP. Where § 677.230 outlines required reporting for all individuals in a program of study, these definitions under § 677.150 do not apply. Further direction regarding the terms, calculations, and reporting is provided and discussed in the WIOA Joint Performance ICR. No change to the regulatory text was made in response to these comments.

Because of WIOA sec. 134's unique eligibility requirements, the Departments do not consider individuals who receive incumbent worker training to be participants required for inclusion in the WIOA performance indicator calculations. WIOA sec. 134(d)(4) requires the Local WDB to determine if an employer is eligible to have its employees receive incumbent worker training; there is no separate determination of the eligibility of any particular employee to receive incumbent worker training.

Definition of “Reportable Individual” (§ 677.150(b))

Section 677.150(b) defines “reportable individual” as an individual who has Start Printed Page 55828taken action that demonstrates an intent to use program services and who meets specific program criteria for reporting, which may include the provision of identifying information, the use of a self-service system, or receipt of information-only services or activities. This approach requires counting as a “reportable individual” those who use the self-service system, or who receive only information-only services or activities, as well as those who receive other services that may occur prior to an individual meeting the definition of “participant” in § 677.150(a).

A key difference between “reportable individuals” and “participants” is that reportable individuals are not included in performance calculations for primary indicators of performance. Furthermore, there currently is no requirement for the collection and reporting of outcome data for reportable individuals, but the Departments may propose an amended ICR through an additional PRA notice and comment period, to require such collections and reporting in the future if determined to be appropriate. The Departments intend to issue more detailed guidance on the tracking and reporting of reportable individuals under WIOA through the WIOA Joint Performance ICR, Department-specific ICRs, guidance, and technical assistance.

The Departments revised § 677.150(b) by deleting the word “core” to clarify that the definition of a “reportable individual” is not limited to core programs, as had appeared in proposed § 677.150(b). With this change, a “reportable individual” is one who has taken action that demonstrates intent to use program services and who meets specific reporting criteria of the program. The Departments also revised § 677.150(b) to emphasize that the listed examples of actions taken by a reporting individual (i.e., providing identifying information, using the self-service system, or receiving information-only services or activities) are neither exhaustive nor required. An individual may be properly treated as a reportable individual without having taken all of the actions identified at § 677.150(b). Similarly, an individual may take action demonstrating an intent to use program services by meeting specific program reporting criteria other than those identified at § 677.150(b).

Comments: Of the commenters who remarked on the proposed definition of “reportable individual,” most expressed support. Multiple commenters applauded the Departments for establishing a definition that is broad enough to cover students with disabilities who access pre-employment transition services under the VR program but do not subsequently apply for VR services.

Departments' Response: The Departments will continue to consider further clarification that can be provided in program guidance, the WIOA Joint Performance ICR, and Department-specific ICRs that support alignment and consistency of performance definitions across all programs and States. The final regulations for the VR program, which are published elsewhere in this issue of the Federal Register, contain specific provisions regarding the application of this definition as applied to students with disabilities receiving pre-employment transition services under the VR program.

Comments: A few commenters asserted that receipt of staff-assisted services should align with the type of activity, not the level of engagement of one-stop center staff.

Departments' Response: As discussed above with regard to the definition of a “participant,” the Departments modified § 677.150(a), particularly by adding § 677.150(a)(3), to explain that the point at which a person is a participant is when the person moves beyond self-service or information-only services or activities. In the NPRM, the Departments considered receipt of “staff-assisted services” to be the most common point across the core programs to define the transition to being a participant. However, in response to comments, the Departments modified the definition of participant to eliminate the use of the term “staff-assisted services” thereby aligning the definitions of “participant” and “reportable individual” and clarifying the progression from “reportable individual” to “participant.”

Comments: One commenter proposed that the appropriate point of receipt of staff-assisted services should be when initial assessment and eligibility documentation is complete.

Departments' Response: As noted above, the definition of “participant” no longer incorporates a reference to “staff-assisted” services, but the definition continues to require that the individual has received certain services after having satisfied all programmatic requirements for the provision of services, such as eligibility determination. The Departments note that the definition does not explicitly require completion of an initial assessment, but it does require satisfaction of all applicable programmatic requirements—which may include an initial assessment or an eligibility determination. No change to the regulatory text was made in response to these comments.

Comments: One commenter suggested that “reportable individuals,” should be those individuals who have a signed and approved IEP.

Departments' Response: The Departments decline to adopt the recommendation because to do so would be inconsistent with the distinctions between the definitions of “participant” and “reportable individual.” The Departments plan to provide more detailed guidance on the tracking and reporting of reportable individuals under WIOA through the WIOA Joint Performance ICR, Department-specific ICRs, guidance, and technical assistance.

Comments: Several commenters sought clarification concerning the proposed definition of “reportable individual.” Of these, a few commenters requested that the Departments clarify whether a pretest is required for individuals in the AEFLA program in order to be considered reportable.

Departments' Response: A reportable individual is an individual who has taken action that demonstrates an intent to use program services and meets the specific criteria of the program. Further explanation of this definition is available through the WIOA Joint Performance ICR. A pretest has no bearing on the status of an individual being a participant or a reportable individual.

Comments: A few commenters stated that a clearer description of the point at which an individual becomes “reportable” would enhance comparability among States. Multiple commenters suggested that individuals become “reportable” when an individual provides identifying information. A commenter remarked that it is unclear how agencies should track reportable individuals. This commenter stated that an individual should not be considered reportable without providing identifying information to enable tracking.

Departments' Response: The Departments note that the regulations simply require the reporting of reportable individuals. Someone can be considered a reportable individual without providing identifying information. The Departments intend to issue further program guidance to aid States in implementing the requirement to report on “reportable individuals.” No change to the regulatory text was made in response to these comments.

Comments: A commenter thought that the term “reportable individual” may not be easily understood by the general Start Printed Page 55829public and suggested “customer” as an alternative.

Departments' Response: The Departments have concluded that “customer” would not be an appropriate term for these purposes as all individuals who are served through a program would be considered customers. The terms in § 677.150 are consistent with the purposes outlined in this section and with the requirements of sec. 116 of WIOA. No change to the regulatory text was made in response to these comments.

Comments: A commenter inquired as to whether an individual could first be tracked as a participant and then tracked as a reportable individual if the person exited the program after receiving services and was subsequently determined to be ineligible.

Departments' Response: To do as the commenter suggests would be inconsistent with the definitions of “participant” and “reportable individual” at § 677.150(a) and (b). To be clear, an individual is a “participant” if he or she is a “reportable individual” who has satisfied programmatic requirements for the receipt of services, such as eligibility determination, and has received services that go beyond self-service or information-only services or activities. Therefore, once an individual crosses the threshold from “reportable individual” to “participant” by receiving such services, this does not change by virtue of the fact that the individual eventually exits the program because he or she is later determined ineligible. Neither the definition of “participant” nor “reportable individual” contain requirements related to the individual's exit from the program. Those requirements are set forth in the definition of “exit” at § 677.150(c), discussed in more detail below. The Departments will provide further guidance regarding the reporting of participants and reportable individuals in the WIOA Joint Performance ICR and Department-specific ICRs, as well as guidance and technical assistance. No change to the regulatory text was made in response to these comments.

Definition of “Exit” (§ 677.150(c))

Section 677.150(c) defines the term “exit” for purposes of the performance accountability system for the core programs under WIOA, as well as applicable non-core programs as described through regulation or guidance. Several of the primary indicators of performance require measuring participants' progress after they have exited from the program.

Generally for core programs, except for the VR program, “exit” is the last date of service. The last date of service means the individual has not received any services for 90 days and no future services are planned. For the purpose of this definition, “services” do not include self-service, information-only services or activities, or follow-up services. Therefore, as set forth in § 677.150(c)(1)(i), in order to determine whether an individual has exited, States will retroactively determine if 90 days have passed with no further services provided and no further services scheduled.

The definition of “exit” at § 677.150(c)(2) for the VR program is similar to that in § 677.150(c)(1) in that it marks the point at which the individual is no longer engaged with the program and there is no ongoing relationship between the individual and the program. However, because of specific programmatic requirements between the VR program and other core programs, it was essential that the definition of “exit” clarify when the individual's relationship with the VR program ends. Under the VR program, an individual is determined to have exited the program on the date the individual's case is closed in accordance with VR program requirements.

Even with this programmatic distinction, the calculations are essentially the same as with the other core programs because in all instances the “exit” count captures all persons who are no longer active participants in any of the core programs. In addition, for purposes of the VR program, the Departments exclude from the definition of “exit” those individuals who have achieved supported employment outcomes at subminimum wages. This provision is necessary to implement WIOA's heightened emphasis on competitive integrated employment. There are no substantive changes to § 677.150(c)(2).

Comments: The Departments received numerous comments, in response to both the NPRM and the proposed WIOA Joint Performance ICR, regarding whether an individual would be counted more than once in a program year if he or she met the definitions of “participant” and “exit” more than once in that same program year. The majority of these commenters opposed the Departments' position, set forth in the proposed WIOA Joint Performance ICR, which was that an individual only would count once in a program year.

Departments' Response: The Departments note that under WIA, DOL counted as an “exit” from its programs for performance accountability purposes each time in a program year a participant exited from a program, regardless of whether the participant exited more than once in that program year. This was referred to as calculating on a “period of participation” basis. Thus, the same individual could be counted as more than one “participant” and as having more than one “exit” in that same program year for the performance accountability calculations. Although States reported individuals similarly for the VR program, States reported an individual only once in a program year under the AEFLA program, regardless of whether the individual would meet the definitions of “participant” and “exit,” more than once in a program year.

The NPRM was silent as to whether “participants” and “exits” should count more than once in the same program year. However, the Departments proposed a different approach in the proposed WIOA Joint Performance ICR published on July 22, 2015 at 80 FR 43474. In the proposed WIOA Joint Performance ICR, the Departments proposed counting each individual once per program year regardless of how many times an individual met the definitions of “participant” and “exit” in § 677.150 within that same program year.

After consideration, the Departments agree with the concerns raised by commenters. In response to those comments, the Departments will include in the performance calculations each time a participant exits from a program during a program year, even though this could result in such a person being counted as more than one participant. This calculation method for performance accountability purposes maintains the reporting approach historically used by some programs, as discussed above, and by linking a set of services or interventions to outcomes for each exit during a program year, strengthens accountability.

However, the Departments will require States to provide unique identifiers for each individual “participant” so that the Departments will be able to calculate the number of unique participants in each core program during a program year. The Departments will provide technical assistance and guidance to States, including the WIOA Joint Performance ICR, as they take the necessary steps to modify their systems and processes to comply with these instructions.

Comments: Many commenters provided input regarding the proposed definition of “exit” and responded to the Departments' request for comments Start Printed Page 55830on the costs and benefits of taking either a program exit approach or a common exit approach. A number of commenters expressed support for utilizing a common exit in order to support career pathways and cross-program participation that would benefit participants. One commenter supported the use of a common exit, specifically phased in over a 4-year period. Conversely, other commenters opposed the use of a common exit and stated that the Departments should maintain program exits. Commenters cited numerous reasons for maintaining program exits including that: (1) Program exits are preferable to comply with sec. 504 of WIOA, which requires States to simplify and reduce reporting burdens; (2) States should be permitted to choose whether to use a program exit or a common exit, and indicate their selection in the Unified or Combined State Plan; (3) States should have the option to use integrated periods of participation with common program exit dates for some or all core programs; and (4) a common exit would be problematic if the services provided by multiple programs are sequential.

Departments' Response: Common Measures policies that included the use of common exit as a reporting structure were developed by ETA in 2005 for use in title I programs under WIA as an acknowledgment that integrated reporting was key to integrated case management. The efforts to promote the use of a common exit across WIOA title I and Wagner-Peyser Act Employment Service programs have significantly increased the use of common exit policies across States.

The Departments have concluded that continuing common exit policies would emphasize the importance of an individual receiving and completing all program services necessary to ensure a successful attachment to the labor market. The Departments also recognize that the use of a common exit is dependent on the ability of States to exchange data effectively and efficiently across core programs in order to determine outcomes for each of the programs. The Departments considered each of the commenters' concerns and suggestions with regard to the proposed definition of exit and have revised the definition by adding § 677.150(c)(3) to allow WIOA title I and Wagner-Peyser Act Employment Service (title III) programs to utilize a common exit policy. The decision to allow a common exit date for WIOA title I and Wagner-Peyser Act Employment Service programs—and not for the AEFLA and VR programs under WIOA titles II and IV, respectively—was based on a number of factors. In particular, under WIA and continuing under WIOA, DOL encouraged co-enrollment between the title I and Wagner-Peyser Act Employment Service programs resulting in many states developing a common exit policy or co-enrollment strategies which DOL does not seek to disrupt. The ED will explore the feasibility of the use of a common exit policy for its title II and VR programs.

The concept of integrated case management and common exit has extended beyond WIOA title I core programs and Wagner-Peyser Act Employment Service programs to their DOL partner programs, such as the TAA program and the JVSG program. Paragraph (c)(3)(i) of § 677.150 provides that where a State has implemented a common exit policy, the policy may extend to those required partner programs administered by DOL. As such, DOL encourages States to implement common exit policies consistent with these joint regulations.

Since 2009, co-enrolling TAA participants with WIOA title I and Wagner-Peyser Act Employment Service programs has continued to provide participants supportive services, such as childcare and local transportation costs, that are not available under TAA. Further, due to the variable geography of TAA certified worker groups, WIOA title I program services and Wagner-Peyser Act Employment Service are often essential in providing prompt assessments and follow up services that complement the more substantial training and other services funded under TAA.

Similarly, the Veterans Employment and Training Service worked to align its programs with WIOA as a key partner program. Currently, JVSG and Wagner-Peyser Act Employment Service have a common exit in multiple States. This ensures that program participants who may be co-enrolled exit all programs at the same point, and are measured and tracked for employment outcomes based on the same point. This approach is aligned with the idea that DOL's one-stop center programs offer seamless services to participants and that, despite referral to or from partner programs, employment outcomes are not measured until services are complete. The modifications to the definition of exit in this Joint WIOA Final Rule allow for these practices to continue and also allow States the flexibility to implement and move forward with existing common exit policies for programs administered by DOL.

Comments: A few commenters cited the challenge of matching and exchanging data across agencies. Multiple commenters recommended implementing a research study to examine the use of the common exit, rather than codifying this requirement in regulation. One commenter stated that a common exit would make it very difficult to track and conduct follow up services. A commenter stated that the cost of reporting a common exit is prohibitive for that State. A commenter remarked that a common exit would be the costliest option.

Departments' Response: The Departments recognize the challenges raised by commenters with regard to infrastructure and integration of data systems that would be required under a common exit policy. Under the current regulation, the States have the discretion to choose to adopt a common exit policy for DOL-administered programs. The Departments acknowledge that certain States are at different stages and may vary in their approaches and ability to adopt a common exit across multiple programs. The Departments also note, however, that common exit supports a customer-centric design that allows programs to leverage co-enrollment for individuals who are eligible for, and need, multiple services that cross program lines without penalizing programs that may have to delay outcomes for those individuals referred to or co-enrolled in a partner program. Further, common exit policies have allowed smaller pilot, discretionary, or partner programs to access data and outcomes at a level that would not be available through their grant or program alone.

With WIOA's focus on integration, common exit is a natural progression where appropriate infrastructure, and integrated data systems exist across programs. The DOL envisions full implementation of a common exit across the States for the DOL core programs. The DOL understands this is a long-term goal and intends to support States from where they are at in terms of capacity and structure towards achieving this goal. With this in mind, the Departments will require the States to develop a plan for implementing a common exit policy and will require States to share that plan with the Departments. The Departments anticipate modifying the requirements for State Plans through the information collection request process and will require the States to share their plans for implementing a common exit policy through the State Plan and will also require the States to conduct an examination and analysis of their capacity and structures that would support a common exit policy for the DOL core programs under title I and the Start Printed Page 55831Wagner-Peyser Act Employment Service program. This will allow DOL to support the States as they move towards implementing a common exit policy.

The Departments will continue to work with State and Local WDBs, one-stop center operators, and partners to achieve an integrated data system for the core programs and other programs to ensure interoperability and standardized collection of program and participant information, particularly for those States that have a common exit policy. Paragraph (c)(3) of § 677.150 allows for the use and implementation of common exit policies for DOL administered-programs. The Departments encourage the use of common exit for DOL-administered programs, but do not currently require its immediate implementation, due partially to the commenters' concerns about potential difficulties and costs in implementing common exit. The Departments have concluded that this approach is responsive to both commenters who supported common exit as well as to commenters who supported program exits and appropriately allows States flexibility to choose to continue their use of common exit or to plan for the full implementation of common exit as a policy for WIOA title I and Wagner-Peyser Act Employment Service programs. Additionally the Departments will seek to collect information through the appropriate information collection vehicles on existing common exit policies, the programs included in those common exit policies, and their impacts on program design and outcomes.

Comments: Many commenters supported the use of common exit in theory, but expressed reservations about the implementation of a common exit to title I youth programs, asserting that the use of a common exit would delay reporting of multiple performance indicators, harming the performance of the youth programs. These commenters suggested that the Departments encourage co-enrollment without a common exit, provide instruction for the identification in the participant record of individuals who are co-enrolled, and afford local programs the flexibility to use a program-specific exit or a common exit.

Departments' Response: In response to the concerns raised about common exit and its effect on the performance of WIOA youth programs, predominately concerning the short-term or self-service nature of some programs as opposed to other programs providing longer-term or more intensive services, the Departments have clarified that the definition of “participant” at § 677.150(a)(3)(ii) and (iii) excludes individuals who receive only “self-service” or “information-only services or activities.” As noted above, States—not individual programs within a State—are afforded the flexibility to use program-specific exit or common exit. It does not appear feasible or preferable for individual programs within a State to choose the type of exit to implement.

Comments: A number of commenters made additional suggestions specific to youth programs. One commenter stated that title I youth programs should have a defined end date, at which point participants should be considered to have exited, rather than waiting 90 days. Another commenter stated that local programs currently believe that no title I youth funds may be spent on youth once they exit, and requested clarification concerning follow-up services for youth conducted after an individual has exited. In addition, several commenters suggested that a hold status be maintained for youth who are not receiving services due to documented hardships. These commenters stated that a hold status would avoid counting these individuals as having exited if they reengage after the 90-day window.

Departments' Response: While the Departments understand the concerns raised by commenters, the Departments decline to modify the definition of “exit” at § 677.150(c) with regard to the 90-day period of no services. This definition maintains consistency with the definition of exit applied across other programs. Paragraph (c)(1)(i) of § 677.150 requires that 90 days of no services (except for self-service, information-only services or activities, and follow-up services) must have elapsed, and no future services, other than follow-up services, may be planned in order for a participant to satisfy the definition of “exit.”

Conversely, § 677.150(c)(3) adds flexibility for States that have or are pursuing common exit policies and strategies for their programs under WIOA titles I and III (Wagner-Peyser Act Employment Service) as well as other required partner programs that are administered by DOL. The clarification in this Final Rule that self-service and follow-up services do not delay exit should allay the commenters' concerns regarding delayed reporting. By definition, follow-up services are provided to youth following exit and as a result, title I youth funds may be spent on participants once they exit in order to provide such follow-up services.

For the sake of clarification, such expenditures of title I youth funds on participants for follow up services after exit do not result in delaying an individual's exit from the program. Section 681.580 (see DOL WIOA Final Rule published elsewhere in this issue of the Federal Register) clarifies which youth formula program elements may be provided during follow-up. Additionally, DOL will issue guidance on providing effective follow-up services for the programs it administers. Although the Departments are not implementing a “hold status” as suggested by the commenters, DOL will clarify through guidance the circumstances under which a “gap in service” may be appropriate in order to delay exit for those States that implement a common exit strategy for DOL-administered programs.

Comments: Numerous commenters responded to the Departments' solicitation for comments regarding the effect of self-service activities on a participant's exit date. Most of the commenters asserted that self-service should not be used to delay the date of exit or count as re-enrollment in a program. However, other commenters asserted that individuals who access self-service activities should continue to qualify as participants because the use of these services indicates that participants have not completed their search for employment. One commenter suggested that self-service participants should continue to be tracked as reportable individuals.

Departments' Response: The Departments acknowledge commenters' recommendation that self-service not be used to delay the exit date or qualify as re-enrollment. With regard to individuals who continue to use self-service, the Departments note that individuals access self-service tools for a variety of reasons, but the decision to retain an exclusion of self-service from the definition of “participant” at § 677.150(a)(3)(ii) is consistent with the decision in the NPRM to establish a uniform program attachment point in service delivery and design from which to compare programs. See the extensive discussion regarding the definition of “participant” and § 677.150(a), above.

Comments: Commenters raised a number of questions regarding various aspects of the proposed definition of “exit,” including requests for clarification regarding whether exit means exiting a core program or exiting all WIOA services.

Departments' Response: Whether “exit” means from a specific program or a common exit from multiple programs depends on whether a State has implemented a common exit policy for DOL-administered programs. As discussed in more detail above, the Start Printed Page 55832Departments have modified the definition of exit at § 677.150(c)(3) to allow WIOA title I and Wagner-Peyser Act Employment Service programs to apply a common exit policy. States that lack a common exit policy across title I and Wagner-Peyser Act Employment Service programs will be required to conduct an assessment and develop a plan towards implementing a common exit policy. Additionally, States that retain or develop a common exit policy across title I and Wagner-Peyser Act Employment Service programs may extend such a policy to DOL-administered required partner programs identified in WIOA sec. 121(b)(1)(B). Further, States with common exit policies that include WIOA title I core programs and Wagner-Peyser Act Employment Service programs should ensure those policies align with the criteria in § 677.150(c).

Comments: Several commenters expressed concerns regarding the definition of “exit” for purposes of the VR program since individuals served by VR typically require lengthier service delivery and follow-up activities than the other core programs. A few commenters also stated that a common exit would better protect individuals in the VR program from exiting the program before receiving the services they need.

Departments' Response: As other commenters have noted, the VR program typically requires lengthier period of service delivery than the other core programs. While not common, it is possible for a single VR participant to receive services for 10 years, and service durations of 3 to 5 years are not unusual. If there were a single exit, it would mean that other programs would not be able to exit these co-enrollees until the VR case was closed. The VR program is not included under the common exit provision at this time, because if they were incorporated into the common exit provision, programs under other WIOA titles would not be able to report exit achievements until the time of the VR closure, no matter how much time had elapsed since participation in those programs. With the VR program having a separate closure process, individuals are shielded from the entreaties of other programs that may wish to close the case. The ED will explore the feasibility of the use of a common exit policy for its title II and VR programs. No change to the regulatory text was made in response to these comments.

Comments: Some commenters expressed support for expanding the proposed definition of “exit” to reference the termination of staff-assisted services.

Departments' Response: The definition of “participant” at § 677.150(a) no longer references the term “staff-assisted” services due to concerns raised by many commenters about the confusion such term raises. Section 677.150(a) now describes the services as being those other than self-service and information-only services or activities, which are described further in § 677.150(a)(3). See the response to comments related to the definition of “participant” above regarding the Departments' elimination of the term “staff-assisted” services from the definition; therefore, it is not necessary to expand the use of that term with regard to the definition of “exit” as the commenters suggest.

Comments: Several commenters remarked on the application of the definition of “exit” to education programs, noting that the definition does not account for a transfer between institutions or participants not taking a class during the summer term that could exceed the 90-day timeframe.

Departments' Response: Section 677.150(c)(1)(i) makes clear that a participant “exits” a program only if 90 days of no services have elapsed and there are no future services planned. Please see the analysis of comments regarding § 677.230, below, for further discussion of these and other terms as they apply to eligible training providers.

Comments: Some commenters suggested the Departments revise the definition of “exit” at § 677.150(c) to lengthen the proposed 90-day period of no services to 120 days, citing the challenges of sporadic engagement in services in which youth cycle in and out of services. In such cases, service delays can extend an exit beyond the 90 days. One commenter suggested doubling the 90-day window to 180 days. Other commenters suggested shortening the 90-day period.

Departments' Response: Although the Departments recognize that out-of-school youth, among other examples, may be a population that is difficult to engage in continuous services, the Departments have concluded that it is important to maintain consistency across all core programs regarding the definition of exit. The 90-day period has a basis in historical application. Under WIA, the DOL-administered programs and the AEFLA program under title II used 90 days of no service as a benchmark for determining when services had ended. Similarly, prior to WIOA the VR program closed an individual's service record after services had ended and the individual had maintained employment for 90 days.

The Departments have not revised the definition of “exit” at § 677.150(c) since lengthening the timeframe would delay outcomes for indicators that are already lagged behind the actual time period of exit, such as employment-related primary indicators that measure a participant's employment at the second and fourth quarters after exit and the median earnings of a participant in the second quarter after exit. The Departments have concluded that the 90-day period of no service strikes the appropriate balance for knowing how the programs are performing while providing enough time to account for sporadic participation. No change to the regulatory text was made in response to these comments.

Comments: Some commenters expressed support for retaining the current “neutral” exits. Other commenters urged the Departments to adopt a more flexible exit policy that would allow participants who were “negative” exits due to loss of contact with the program, to reengage and positively exit if performance outcomes are achieved.

Departments' Response: There are a number of reasons why individuals exit from the programs in which they are enrolled. The current definition of “exit” allows for performance accountability that can uniformly translate across programs, while also retaining critical programmatic differences and the policy-based flexibility for States in their program engagement and design. The Departments have concluded that the definitions in § 677.150, including that for “exit” at § 677.150(c), are consistent with their applicability to the performance accountability system set forth in sec. 116 of WIOA.

A “neutral” exit, as it relates to the performance accountability provisions, allows the State to exclude certain participants from the calculation of the primary indicators. The Departments have concluded that there is sufficient statutory authority to permit certain exclusions, as appropriate, from the performance calculations for the primary indicators of performance. The Departments have implemented these exclusions through the WIOA Joint Performance ICR. The Departments have concluded that it is important to account for premature exits from the program and that modifying the definition of “exit” to allow neutral exits would undermine program accountability intended by WIOA. The Departments intend to provide guidance on how to calculate the primary Start Printed Page 55833indicators of performance and provide guidance on other performance-related requirements through the WIOA Joint Performance ICR, programmatic guidance, and technical assistance. No change to the regulatory text was made in response to these comments.

Comments: A commenter emphasized the need for guidance regarding the transition from active programming to follow-up services, particularly as it relates to the definition of “exit.”

Departments' Response: The Departments will provide further guidance regarding the transition from active programming to follow-up services as it relates to the definition of “exit.”

Definition of “State” (§ 677.150(d))

The Departments have added a definition of “State” as § 677.150(d) to specify that the outlying areas are subject to the performance accountability provisions of part 677. This provides that, for purposes of part 677 other than in regard to sanctions or the statistical adjustment model, “State” includes the outlying areas of American Samoa, Guam, Commonwealth of the Northern Mariana Islands, the U.S. Virgin Islands, and, as applicable, the Republic of Palau. In so doing, as discussed in detail immediately below regarding outlying areas, the Departments ensure that the performance accountability requirements apply to the outlying areas as well. This regulatory change is essential to ensuring consistency with the Departments' decision to require outlying areas to submit Unified or Combined State Plans which, pursuant to sec. 102 of WIOA must include expected levels of performance, thereby making the performance accountability system applicable to the outlying areas.

In the NPRM, the Departments specifically requested comments about the applicability of WIOA sec. 116 performance accountability system requirements to the core programs administered by the outlying areas, namely American Samoa, Guam, Commonwealth of the Northern Mariana Islands, the U.S. Virgin Islands, and, as applicable, the Republic of Palau (80 FR 20574, 20583-20584 (April 16, 2015)). The Departments explained the ambiguity that was created by differing terms and definitions for outlying areas and States, for purposes of the title I core programs, but made clear that titles II and IV specifically subject adult education and VR grantees, including outlying areas, to the common performance accountability system set forth in sec. 116 of WIOA.

Sections 189(a) and (c) of WIOA provide the authority to impose planning and performance reporting requirements on outlying areas, which is being accomplished through this definition. The decision to treat outlying areas as States for purposes of the common performance accountability system dovetails, and is consistent with, the Departments' decision to treat outlying areas the same as States for purposes of the Unified and Combined State Plan requirements, as discussed elsewhere in this preamble with respect to part 676 of this Joint WIOA Final Rule.

Although the Departments will hold the outlying areas accountable for complying with the performance accountability system requirements of sec. 116 of WIOA and part 677, the Departments will not impose monetary sanctions against the outlying areas pursuant to sec. 116(f)(1)(B) of WIOA for two reasons. First, the sanctions are imposed against the Governor's Reserve under sec. 128(a) of WIOA, which the outlying areas do not receive. Second, the sanctions are imposed when a State fails to satisfy the adjusted levels of performance or fails to report. The adjusted performance level is based on several required factors set forth in sec. 116(b)(3)(A)(v) of WIOA, including, among other things, the use of a statistical adjustment model. The performance output data provided by the core programs in the outlying areas yield too small a sample size; thus, applying an adjustment model to the outlying areas will not yield a valid result. In addition, there are cases in the outlying areas where required data are not available to run the statistical adjustment model. Despite the fact that the Departments will not impose monetary sanctions against the outlying areas in accordance with sec. 116(f)(1)(B) of WIOA, the Departments want to make clear that the Departments will hold outlying areas accountable for poor performance or failure to report through technical assistance and the development of performance improvement plans in accordance with sec. 116(f)(1)(A) of WIOA.

3. State Indicators of Performance for Core Programs (20 CFR Part 677, Subpart A; 34 CFR 361.155 Through 361.175; 34 CFR 463.155 Through 463.175)

Section 677.155 What are the primary indicators of performance under the Workforce Innovation and Opportunity Act?

Section 677.155 implements the primary indicators of performance as set forth in WIOA sec. 116(b)(2)(A)(i). These primary performance indicators apply to the core programs described in sec. 116(b)(3)(A)(ii) of WIOA, and administered by ED's OCTAE and RSA, and DOL's ETA. These primary indicators of performance create a common language shared across the programs' performance metrics, which the Departments anticipate will support system alignment, enhance programmatic decision-making, and facilitate consumer choice. The Departments implement the requirements of sec. 116 of WIOA through this Joint WIOA Final Rule, as revised and described in this preamble.

Comments: A commenter expressed concern about the cost and time it would take to establish and operate a fiscal and management accountability information system.

Departments' Response: The Departments recognize the concerns raised with regard to the infrastructure, and resulting cost, required to implement the performance, fiscal, and management accountability information systems. No changes to the regulatory text were made in response to this comment because the performance accountability provisions outlined within sec. 116 of WIOA clearly mandate States and local areas to collect and report on the information contained in part 677. The Departments want to make clear that all core programs were required, even prior to the enactment of WIOA, to operate fiscal and management systems pursuant to WIA, former OMB Circular A-87, OMB's Uniform Guidance (2 CFR part 200), and programmatic requirements. It is important to note that WIOA's requirements for States to operate such systems are very similar to those required under WIA, which is why the Departments do not consider these to be new requirements. However, the Departments acknowledge an integration of such systems would be a departure from that required under WIA and recognize that time and resources combined with guidance and technical assistance will be necessary before an integration of fiscal and management systems could occur.

The Departments have concluded that system integration will, in the long-term, reduce administrative and reporting burden while supporting alignment and comprehensive accountability across all of the core programs. The Departments will work with State and Local WDBs, one-stop center operators, and partners to achieve an integrated data system for the programs covered by WIOA to ensure interoperability and the accurate and Start Printed Page 55834standardized collection of program and participant information. Integrated data systems will allow for unified and streamlined intake, case management and service delivery, minimize the duplication of data, ensure consistently defined and applied data elements, facilitate compliance with performance reporting and evaluation requirements, and provide meaningful information about core program participation to inform operations. Data integration may be accomplished through a variety of methodologies including data sharing, linking systems, or use of data warehouses.

Comments: A commenter urged State and local planning efforts to use the most current Census and administrative data available to develop estimates of each priority service population.

Departments' Response: The Departments note that the WIOA State Plan ICR provides guidance as to what information should be included in the analysis and the State Plan requirements. No change to the regulatory text is being made in response to this comment.

Comments: A commenter recommended creating data systems to separate participants by program and local area and allowing the progress measures to be skills based using goal setting rather than time intervals. A commenter recommended adding self-sufficiency as an indicator of performance. Commenters supported workforce system performance that addresses the needs of veterans with disabilities.

Departments' Response: Changing the primary indicators of performance to a skills-based measurement system, rather than one based on time intervals, would not be consistent with the primary indicators of performance set forth in sec. 116(b)(2)(A)(i) of WIOA, which require the measurement of employment in the second and fourth quarters after exit, the attainment of a credential during participation in the program and up to 1 year post exit, and the attainment of measurable skill gains during the program year. WIOA clearly establishes timeframes for each of these primary indicators of performance.

However, sec. 116(b)(1)(A)(ii) of WIOA and § 677.165 permit States to develop additional indicators of performance. If a State were to do so, the State could implement skills-based indicators or indicators that measure self-sufficiency or services to veterans with disabilities as suggested by commenters. The Departments encourage State and Local WDBs to work in collaboration to identify and implement additional indicators of performance that aid in the management of workforce programs in their State. No change to the regulatory text is being made in response to this comment.

Comments: In the preamble to the NPRM, the Departments requested comments on using the performance indicators identified in § 677.155 for additional programs beyond the core programs. The Departments postulated that this broader use of the six primary indicators of performance could streamline reporting on other DOL-administered programs, such as the JVSG program and other discretionary grant programs. Commenters supported the use of common metrics across education and workforce programs wherever appropriate. Commenters also raised questions about alignment with various specific programs, such as Migrant and Seasonal Farmworkers, Job Corps, Indian and Native American, Family Literacy, Integrated English Literacy and Civics Education, Wagner-Peyser Act Employment Service, Adult Education, and JVSG.

Departments' Response: The Departments acknowledge that WIOA has introduced unprecedented opportunities for alignment and as such, envision integration across workforce programs to the maximum extent feasible. The core programs, described in sec. 116(b)(3)(A)(ii) of WIOA, are covered under this Joint WIOA Final Rule and the WIOA Joint Performance ICR. National programs such as Job Corps, the National Farmworker Jobs Program, and the Indian and Native American adult and youth programs that are authorized under title I of WIOA are also aligned under this regulation, as well as their respective program regulations at 20 CFR parts 686 (Job Corps), 685 (National Farmworker Jobs Program), and 684 (Indian and Native American Program). Additionally, the Departments intend that DOL-administered partner programs authorized by statutes other than WIOA and not covered under these joint regulations, such as the JVSG programs and the TAA programs, will be aligned with the performance accountability system under WIOA through both legislative and policy guidance. The Departments recognize the variety of interactions among programs under WIOA and programs authorized by other statutes. The Departments understand the need for further guidance and clarification, which will be issued throughout the workforce development system and which will include information on how and where to report.

Comments: A commenter noted that many programs for out-of-school youth, including Job Corps, often use accredited online high school programs to provide education to youth participants. The commenter requested that any measure intended to capture progress on achieving or attaining a high school diploma or recognized equivalency degree should reflect any State-accredited standard.

Departments' Response: Details regarding accreditation are beyond the scope of this Joint WIOA Final Rule and will be addressed in guidance or in the WIOA Joint Performance ICR or DOL Performance ICR. No change to the regulatory text is being made in response to this comment.

Comments: Commenters requested guidance and examples on several subjects, such as: Measuring and reporting registered apprenticeship performance; how wages for successful and unsuccessful closures are used and measured; performance data for industry-driven credentials; students with degrees from another country; areas where net income can apply as a performance indicator; incorporating self-employment as a successful outcome; performance metrics; when enrollment occurs; operational definitions; determination of competitive wage; cross program impacts; individualized measurements of the six primary indicators as relates to VR consumers; and individual skills measurement. A few commenters asked that States be allowed flexibility in developing data sharing agreements and additional performance measures.

Departments' Response: The Departments acknowledge the need for clarification and examples to illustrate the methods that each of the core programs will use to determine performance on the primary indicators, including details regarding data collection for self-employment outcomes, as well as educational attainment and measurable skill gains. The Departments will address these issues in guidance and in the instructions for program-specific reporting requirements contained in the WIOA Joint Performance ICR.

With regard to requests for State flexibility in developing data sharing agreements and additional performance measures, sec. 116(b)(1)(A)(ii) of WIOA and § 677.165 permit States to implement, through their State Plans, additional indicators of performance and encourage States to also leverage their program collection and reporting to analyze and manage performance of their programs. With regard to data sharing agreements States have the flexibility to enter into data sharing agreements, ensuring that such Start Printed Page 55835agreements meet all applicable Federal and State statutory and regulatory confidentiality requirements. No change to the regulatory text is being made in response to this comment.

Section 677.155(a)(1) identifies the six primary indicators of performance that will be applied to the core programs identified in sec. 116(b)(3)(A)(ii) of WIOA. Where practicable, DOL intends to leverage these indicators to streamline reporting for other DOL-administered programs, such as the JVSG program, TAA and other discretionary grant programs.

Section 677.155(a)(1)(i) implements the first primary indicator as described in sec. 116(b)(2)(A)(i)(I) of WIOA. This primary indicator is a measure of the percentage of program participants who are in unsubsidized employment during the second quarter after exit from the program. There are no changes to § 677.155(a)(1)(i) from that proposed in the NPRM, which mirrors the statutory requirement of WIOA sec. 116(b)(2)(A)(i)(I).

Comments: A commenter recommended that calculated employment percentages should not include individuals who never received core program services.

Departments' Response: The issue raised by the commenter is more closely related to the definitions of “participant” and “reportable individual,” as set forth in § 677.150 and which are discussed in detail above. The Departments have concluded that these definitions are clear in setting the standards under which participants are included in performance calculations for purposes of the primary indicators of performance. Specifically, the definition of “participant” at § 677.150(a) ensures that an individual is receiving services of a substantive nature from any of the core programs before the individual is considered a “participant” and, thus, included in performance calculations. Because § 677.155(a)(1)(i) is consistent with sec. 116(b)(2)(A)(i)(I) of WIOA, no change to the regulatory text is being made in response to this comment.

Comments: A number of commenters expressed support for the WIOA requirements as proposed in § 677.155(a)(1)(i) and (ii). However, many commenters recommended that this section of the regulation and the section related to calculating performance should include the option for excluding participants who report that they are not working and not looking for work. These commenters cited data showing that 29 percent of AEFLA participants were “not in the labor force.” A commenter suggested adding the words “who are in the labor force at enrollment” after the word “participants” in § 677.155(a)(1)(i) through (iii). Another commenter stated that it would seem practical to include participants who are not looking for employment in the calculation of the employment performance outcome.

Departments' Response: The Departments acknowledge the concerns raised by commenters about being held accountable for those participants who enter the program and are not seeking employment, and about how participants not in the labor force might affect performance outcomes. However, WIOA secs. 116(b)(2)(A)(i)(I) through (b)(2)(A)(i)(III) measure the percentage of program participants in employment during the second and fourth quarters after exit and the median earnings of participants in the second quarter after exit. Therefore, the Departments disagree with commenters who believe that individuals who are not looking for work should not be included in the performance calculation. Having said this, the Departments recognize that there are very limited circumstances where certain individuals, such as those who are incarcerated and receiving services under sec. 225 of WIOA, should not be included in the performance calculations for this indicator. The Departments have decided to exclude incarcerated individuals served under sec. 225 of WIOA because they do not have the opportunity to obtain employment or participate in education or training programs in the same manner as other participants who are in the general population. The Departments consider additional determinations regarding the need for exclusions from performance calculations to be more appropriately made through the ICR process and, therefore, have added § 677.155(a)(2) to the regulatory text. This matter will be discussed in more detail with respect to that provision below.

Comments: Another commenter asked whether the State can use AEFLA funds to serve individuals who are not looking for employment.

Departments' Response: Section 203(4) of WIOA defines an eligible individual for the purposes of AEFLA. Eligibility does not include employment status. Whether or not an individual is seeking employment does not affect that person's eligibility status under title II. Further matters concerning AEFLA program implementation are in the program-specific final regulations published elsewhere in this issue of the Federal Register.

Comments: Several commenters opposed the suggestion in the preamble to the NPRM that the Departments plan to calculate an “entered employment rate” for participants who were not employed at the time of program entry, in addition to an employment rate for all program participants regardless of employment status at entry.

Departments' Response: Upon consideration of the various issues, the Departments have not made changes to these joint regulations to require the collection and reporting of an entered employment rate. Instead, the Departments intend to utilize the individual records available for the WIOA title I, Wagner-Peyser Act Employment Service, and VR programs (i.e., the disaggregated data submitted by the States) to calculate such a measure for comparative purposes. The Departments can calculate this entered employment rate from the information that is required to be collected under sec. 116 of WIOA. Therefore, no additional reporting burden will be imposed on the States for these programs for this additional calculation at the Federal level.

However, such entered employment rate calculations will not be possible at the Federal level for the AEFLA program under title II, because States report AEFLA program data only in an aggregate manner. Therefore, for the Departments to receive the data necessary to perform the entered employment rate calculation for the AEFLA program—and to produce such outcome data—would place an undue burden on title II programs.

Comments: Most commenters opposed including the entered employment rate as a performance indicator. A number of commenters recommended that only the employment rate should be counted for those employed during the second quarter after exit because less document retrieval would be required, and there are other indicators that can show whether program participants are better off after enrollment. Other commenters suggested that the employment rate should include job seekers who were both employed and not employed at the time of participation because this will help determine how effective the system is at helping both the unemployed and those looking for career progression. A commenter added that it is difficult to capture information about employees in part-time or multiple-employer jobs.

Several other commenters, however, supported calculation of an entered employment rate, particularly for youth programs.

The Departments also received numerous comments in reference to calculating the second quarter after exit employment indicator as an “entered Start Printed Page 55836employment measure,” as defined in WIA. A commenter only would support an entered employment calculation if the Departments modified the regulation to require submission of individual records under title II.

Departments' Response: The Departments have concluded that that the entered employment rate will provide a useful comparison of the public workforce system as it exists under WIA and WIOA. As stated above, the Departments will calculate an entered employment rate for the WIOA title I, Wagner-Peyser Act Employment Service, and VR programs using information collected through the WIOA Joint Performance ICR. This entered employment rate will not be a primary indicator of performance and, thus, it will not be a basis for sanctions. It is nonetheless useful information in evaluating the impact and efficacy of programs under WIOA. No change to the regulatory text is being made in response to this comment.

Comments: A commenter opposed measuring the employment rate in the second quarter after exit instead of the first quarter, as done under WIA, because the commenter suggested that 2 quarters after exit is too late to determine unsubsidized employment. Another commenter agreed that it is simpler to locate and re-engage a customer after the first quarter performance measure rather than waiting an additional 3 months. A commenter added that the time frame of 6 months for an individual working in an integrated setting to achieve a competitive integrated employment outcome is too fixed and arbitrary, and the time period should be increased to 18 months if needed by the individual. Another commenter warned that using the second and fourth quarters after exit for performance measures will negatively impact States with a highly seasonal workforce.

Departments' Response: The Departments acknowledge the concerns raised, but sec. 116(b)(2)(A)(i)(I) and (II) of WIOA specifically require that employment be measured at the 6- and 12-month mark (second and fourth quarters respectively). Given the specificity of the quarters to be measured for purposes of the performance accountability system, the Departments do not have the authority to implement a regulation inconsistent with the statutory requirement. No change to the regulatory text is being made in response to this comment.

Comments: A commenter opposed the provisions in §§ 677.155(a)(1)(i) and 677.175(a) because of a concern that these provisions would ask educators to store personal data, such as social security numbers (SSNs), that the students may be unwilling or unable to share.

Departments' Response: The Departments acknowledge the concerns about the retention of SSNs. The Departments concluded that, where available and possible, the use of wage records to fulfill reporting requirements is required in accordance with sec. 116(i)(2) of WIOA. Matching participant SSNs against quarterly wage record information is the most effective means by which timely and accurate data can be made available to the system. However, consistent with the Privacy Act, program services cannot be withheld if an individual is unwilling or unable to disclose a SSN. More specifically, program eligibility is not contingent on the provision of a SSN for any of the core programs.

Nevertheless, the use of quarterly wage records is essential to achieve full accountability under the WIOA performance accountability system to identify high performing States and localities, and, if necessary, to provide technical assistance to help improve performance or sanction low performing States and localities. Matching participant SSNs against quarterly wage record information is the most cost-effective means by which timely and accurate data can be made available to the system.

In consideration of the circumstances articulated by commenters in responses to both the Joint WIOA NPRM and the proposed WIOA Joint Performance ICR, the Departments will allow the collection and verification of non-UI wage data in the absence of available UI wage data obtained through wage record matching, as discussed more fully in the preamble to § 677.175 below. The Departments also intend to issue guidance and technical assistance regarding the collection and reporting of both quarterly wage record data and supplemental information. No change to the regulatory text is being made in response to this comment.

Comments: A commenter remarked that the indicators in § 677.155(a)(1)(i) through (iii) would require an unprecedented degree of interdependency between VR and other State and Federal repositories of employment data. Another commenter recommended that, given that several of the primary performance indicators for the core programs, including VR, require reporting on the percent of exiters who are in “unsubsidized employment,” the Departments should clearly define “unsubsidized employment.” In particular, the commenter requested clarity regarding whether individuals in competitive integrated employment who receive supported employment services following VR case closure are considered to be in “unsubsidized employment.”

Departments' Response: The Departments acknowledge that the use of wage record data for the employment and median earnings indicators will require a greater level of cooperation between the State VR and UI agencies. The Departments are developing guidance to facilitate this process and also are developing a new State wage record interchange system data sharing agreement to aid in the exchange of wage record data to enable all core programs to meet the performance reporting requirements outlined in these regulations and sec. 116 of WIOA.

The Departments have considered the comments regarding the VR program and “unsubsidized employment.” Section 116 of WIOA describes the primary performance indicators for all core programs, including the VR program. Three of the performance indicators pertain to the employment status or median earnings of participants who exit a program in unsubsidized employment. In response to the commenter regarding supported employment and unsubsidized employment, the Departments want to clarify that supported employment means, in general for purposes of the VR program, employment in competitive integrated employment or in an integrated setting in which the individual is working towards competitive integrated employment on a short-term basis. Once an individual achieves supported employment as an employment outcome under the VR program and exits that program (in other words, his or her VR record of service is closed), the individual typically receives extended services from another provider. Receipt of extended services after the VR record of service is closed does not affect the nature of the employment. Supported employment is considered unsubsidized employment because the wages are not subsidized by another entity. Individuals in supported employment at subminimum wage who are working on a short-term basis toward competitive integrated employment would not satisfy the definition of “exit” for performance accountability purposes.

Comments: A commenter recommended that adult education providers receive student-level disaggregated wage or UI data for compliance and input into the Student Information System tracking and Start Printed Page 55837monitoring application and that MOUs and guidance from the Departments must authorize access. Commenters concluded that States may need to use alternative methods for tracking employment outcomes for participants and need to be provided with options for databases and data sharing.

Departments' Response: As mentioned above, the Departments are aware of the necessity for pathways to match wage record data to exit data in order to have complete outcome information on a program. The Departments reiterate their intent to issue guidance and facilitate a new data sharing agreement in order to facilitate wage record data matching required for all core programs in meeting their performance reporting requirements under WIOA. These agreements will be executed under the authority of WIOA sec. 116(i)(2) and consistent with all applicable Federal and State privacy and confidentiality laws and regulations. The Departments cannot require the sharing of individual level PII from wage records with entities that do not meet the requirements of 20 CFR part 603. It should be noted that the Departments are aware of and recognize that a variety of structures exist within States affecting levels of access to certain types of information required to comply with WIOA and efforts are underway to issue joint guidance on data access and how to obtain what is necessary to comply with WIOA reporting requirements.

Comments: An individual expressed concern that the performance indicators in § 677.155(a)(1)(i) and (ii) may act as a disincentive to making progress in further education and training after exit. A commenter asked for clarification about the calculations for employment in the second and fourth quarters after exit, inquiring as to the time period for measurement and the individuals to be included in the measure.

Departments' Response: The Departments have considered commenters' concerns regarding the disincentive the employment performance indicators may create for furthering education and training after exit. However, sec. 116(b)(2)(A)(i)(I) of WIOA establishes a statutory requirement for a performance indicator measuring the percentage of program participants who are in unsubsidized employment during the second quarter after exit from the program. Subsequent guidance providing the time periods for measurement and other operational parameters pertaining to calculations will be issued by the Departments.

Comments: In the preamble to the Joint WIOA NPRM, the Departments asked for public comment on whether and how to collect information on the quality of employment. A commenter suggested that while the Departments are proposing some metrics that attempt to assess the quality of employment, specifically mentioning median wage, retention, and training-related outcomes, the Departments should consider looking at quality of employment once the current performance indicators are implemented. Other commenters asserted that information on the quality of employment should not be collected because it is redundant, costly, and too subjective. Another commenter described several factors contributing to the quality of employment: Fair, attractive, and competitive compensation and benefits; opportunities for development, learning, and advancement; wellness, health, and safety protections; availability of flexible work options; opportunities for meaningful work; promotion of constructive relationships in the workplace; culture of respect, inclusion, and equity; and provisions for employment security and predictabilities. Other commenters added the importance of wages sufficient to sustain the worker and dependents, work-based training, changes in net income, worker input into schedules, and employment outcomes consistent with the consumer's education and employment goal. One of the commenters discouraged making inappropriate comparisons across programs.

Departments' Response: The majority of commenters did not support collecting information on the quality of employment because it would be too subjective to collect consistently, overly burdensome, and costly. At this time, the Departments have decided not to include such a measure because it would be too burdensome to implement a measure that would have to be developed in the absence of an existing metric. The Departments will consider in the future whether there is a suitable mechanism to measure the quality of employment. No change to the regulatory text is being made in response to this comment.

Section 677.155(a)(1)(ii) implements the second statutory indicator as described in sec. 116(b)(2)(A)(i)(II) of WIOA. This indicator is a measure of the percentage of program participants who are in unsubsidized employment during the fourth quarter after exit from the program. This section, which mirrors WIOA sec. 116(b)(2)(A)(i)(II), remains unchanged from what was proposed in the NPRM.

Under WIA, the common measures included a retention measure based on individuals who were employed in the first quarter after exiting from WIA services, and who were also employed in the second and third quarters. WIOA does not have an equivalent to the WIA retention measure. Instead, WIOA requires a second—separate and distinct—employment indicator for the fourth quarter after exit, which measures the employment rate in that quarter, regardless of whether those participants also were employed in the second quarter after exit from the program. In other words, a participant would be counted as a positive outcome for this indicator if he or she was employed in the fourth quarter after exit regardless of whether he or she was also employed in the second quarter after exit.

Comments: In the preamble to the NPRM, the Departments sought comment on the advantages and disadvantages of collecting or reporting the employment retention rate. A commenter expressed support for a retention rate because it would be an important measure to know, for example, when comparing Job Corps to other youth programs. A few commenters reasoned that a retention rate would represent the quality of the initial job placement. Many commenters supported using a retention rate as long as programs would not be held accountable to negotiated goals for employment retention and States would not be required to capture, report, or calculate additional values. Some commenters opposed highlighting measures of employment retention because they would be confusing for the system and impede the transition from the measures in WIA to the indicators in WIOA. A commenter stated that there was no benefit to calculating this measure for WIOA title I programs; however, another commenter supported the proposed provision to calculate a retained employment rate in the fourth quarter after exit. An individual commented that if fourth quarter employment is not used as a retention measure, then the growth or reduction of the employment rate of the cohort can be used to evaluate occupational skills training, particularly for those who are underemployed.

There were a few commenters who articulated a preference for the requirement under WIA. Commenters stated that employee retention is based on market conditions and dependent on factors such as company working conditions. Commenters also asserted that a retention measure should take into account a change or advancement Start Printed Page 55838in occupation and quality or levels of work. A commenter remarked that by collecting or reporting the retention rate, the Departments could compare performance under WIOA with performance under WIA, but the commenter also suggested this was not necessary. A few commenters asked whether the individual had to be working with the same employer or at the same job between the second and fourth quarters. Other commenters recommended that employment retention should be measured regardless of whether the employer or job title has changed.

Departments' Response: As stated above, retained employment rate would not be counted for the purpose of performance calculations and, thus, would not form the basis for sanctions because it is not among the primary performance indicators set forth in sec. 116(b)(2)(A)(i) of WIOA. The Departments have concluded that calculating a retained employment rate would provide useful information about the effectiveness of services that lead to sustained attachment to employment. The Departments will calculate a retained employment rate for participants who were employed at the second quarter after exit for informational purposes at the Federal level for those programs for which the Federal offices collect individual (i.e., disaggregated data) records (i.e., for the WIOA title I, Wagner-Peyser Act Employment Service, and VR programs). For the AEFLA program, for which ED does not collect individual (i.e., disaggregated) records, the Departments will not require States to calculate and report a retained employment rate in addition to an employment rate at the fourth quarter after exit.

Comments: With regard to this indicator and partner program metrics, one commenter remarked that in States where TANF is a required one-stop partner, a performance metric that is limited to 1 year after exit from the program may not align with outcomes that are significant for TANF customers, resulting in positive outcomes of TANF employment services that will not be captured. Another commenter suggested that the fourth quarter employment information could be obtained more easily by the local DOL office rather than the State VR administration and as such, State VR agencies should not be required to report this data.

Departments' Response: The Departments acknowledge the commenters' concerns regarding the capture of outcomes for TANF employment services and the difficulty some programs will face in the collection of the data necessary to calculate this indicator. However, if an individual is a participant in a WIOA core program as described in sec. 116(b)(3)(A)(ii) of WIOA, sec. 116(b)(2)(A)(i)(II) of WIOA explicitly requires the Departments to measure the employment rate for that participant in the fourth quarter after exit, regardless of whether that individual is also a participant in TANF or any other required partner program. With regard to comments that maintain that VR agencies should not have to report data on the fourth quarter after exit due to issues of data access and availability, the Departments reiterate the intent to renegotiate the wage record data sharing agreements and issue joint guidance on accessing such data in order to meet the requirements laid out in WIOA sec. 116. The Departments strongly encourage the development, enrichment, and enhancement of partnerships at the State and local levels to leverage such connections in obtaining relevant performance information. No change to the regulatory text is being made in response to this comment.

Section 677.155(a)(1)(iii) implements the third statutory indicator as described in sec. 116(b)(2)(A)(i)(III) of WIOA. This indicator is a measure of the median earnings of those program participants who are in unsubsidized employment in the second quarter after exit. This section remains unchanged from that proposed in the NPRM.

Comments: Several commenters requested guidance on how to match wage records or collect employment-related data without the use of SSNs, because some States cannot collect SSNs and some students do not have them. A commenter suggested that the regulation should provide States with the authority to require SSNs as a condition of program participation. Another commenter asserted that WIOA only should require SSNs when customers are directly receiving some form of financial assistance. A commenter discussed the challenge of tracking the progress of individuals without SSNs. A commenter urged the Departments to provide ways for agencies to share long-term wage and employment information to enable the commenter to report on the indicators.

Departments' Response: The Departments considered the concerns raised by commenters in light of the statutory provisions at WIOA sec. 116(b)(2)(a)(1)(iii) and concluded that, where available and possible, the use of wage records to fulfill reporting requirements is required in accordance with sec. 116(i)(2) of WIOA. Matching participant SSNs against quarterly wage record information is the most effective means by which timely and accurate data can be made available to the system.

Nevertheless, the Departments want to make clear that neither WIOA nor this Joint WIOA Final Rule allows or requires States to request or require SSNs as a condition of program participation or for receipt of any form of financial assistance. As such, program eligibility under WIOA is not contingent on the provision of a SSN. Additionally, depriving such an individual of service would be in violation of the Privacy Act of 1974, which establishes a code of fair information practices that govern the collection, use, dissemination, and maintenance of information about individuals contained in systems of Federal records. Specifically, sec. 7(a)(1) of the Privacy Act (5 U.S.C. 552a Note, Disclosure of Social Security Number) provides that unless the disclosure is required by Federal statute, “It shall be unlawful for any Federal, State, or Local government agency to deny to any individual any right, benefit, or privilege provided by law because of such individual's refusal to disclose his social security account number.” In consideration of the circumstances articulated by the commenters in public comments received on both the Joint WIOA NPRM and the WIOA Joint Performance ICR, the Departments are allowing the use of supplemental information to augment the performance information obtained through wage record matching when necessary because critical information (such as a SSN) is not available. More information can be found in the preamble to § 677.175 discussed in more detail below. The WIOA Joint Performance ICR also will provide for the collection of such supplemental wage information in those circumstances where quarterly wage records are not available or may not apply. The Departments also intend to issue guidance and technical assistance regarding the collection and reporting of both quarterly wage record data and supplemental information on employment-based outcomes.

Comments: Some commenters supported the use of median earnings rather than average (mean) earnings, used under WIA, noting that averages can be skewed by a few numbers. One commenter stated that the indicator data should be collected at both the second and fourth quarters. Commenters suggested that the median earnings indicator should be based on all earnings and not just earnings related to the employment goals on the IPE for customers of VR services. With the Start Printed Page 55839change from an average earnings calculation under WIA to a median earnings calculation under WIOA, one commenter asked how to arrive at a baseline for determining performance numbers. A few commenters said they would prefer reporting both average and median wages and highlight the high-income employment outcomes they have historically achieved. The commenters also asked how to best verify and include incomes for self-employment outcomes in this indicator.

Departments' Response: WIOA sec. 116(b)(2)(A)(i)(III), which forms the basis for § 677.155(a)(1)(iii), requires States to collect data regarding median earnings of participants who are in unsubsidized employment during the second quarter after exit from a core program. The Departments have the authority to collect additional information that provides context for the primary indicators of performance. Such information is important to understand and manage public workforce programs. The Departments note that the primary indicators identified in § 677.155 are the only indicators subject to the performance accountability sanctions. Additionally, pursuant to sec. 116(b)(1)(A)(ii) of WIOA and § 677.165, States may develop additional performance indicators which could include median earnings in the fourth quarter, as the commenter suggests.

With regard to inclusion of all earnings and not just those earnings related to employment goals on the IPE for customers of VR services, the individual records collected under the RSA-911 can be used to determine median wages at exit. The Departments acknowledge that wages may vary over time and that median earnings at exit may not reflect median wages in the second and fourth quarters after exit. With regard to baseline data for median earnings, the Departments recognize that some programs may not have the historical data necessary to establish a baseline for median earnings while other programs can review the data collected under WIA to establish an approximate baseline for this indicator. The Departments acknowledge the concerns raised regarding such employment outcomes that would not be captured through a pure match against State UI wage records, such as self-employment. The Departments will promulgate guidance regarding the collection and verification of supplemental employment information, as noted in the preamble to § 677.155(a)(1)(iii) and more fully discussed in the preamble to § 677.175. The Departments recognize there is a need to further clarify and provide guidance regarding transitioning to the WIOA performance indicators and intend to provide further clarification and guidance on the establishment of baseline data. No change to the regulatory text is being made in response to these comments.

Comments: A few commenters recommended that the value of benefits received should be included in the participants' median earnings indicator. Commenters urged reporting of wages expressed as dollars per hour to reflect outcomes for part-time workers accurately.

Departments' Response: Since the value of benefits clearly does not constitute earnings, adopting this recommendation would be inconsistent with the statutory provision calling for measuring earnings. Further information and clarification regarding the operational parameters of each indicator will be provided through both the WIOA Joint Performance ICR and program guidance. No change to the regulatory text is being made in response to these comments.

Comments: A few commenters stated that individuals participating in an education or training program should be excluded from the calculation of this indicator. Commenters especially expressed support for not including youth who were enrolled in postsecondary education in the median earnings indicator because such youth would not necessarily have an income. Some commenters warned that as many individuals are simultaneously enrolled and employed part time, they tend to work fewer hours at lower hourly wage rates. In these instances, the earnings measure serves as a disincentive for programs to provide further education and training. One of the commenters added that exiting applicants with entrepreneurship training may not reflect well on the earnings measures because a new business often takes time to become profitable.

Departments' Response: In response to the comments regarding exclusions from the median earnings indicator, sec. 116(b)(2)(A)(i)(III) of WIOA requires the collection of data regarding the median earnings for all participants who exit the program and are employed during the second quarter after exit, regardless of whether the participants are simultaneously enrolled in an educational or training program. The Departments understand the commenters' concerns regarding the decreased likelihood of full-time employment while enrolled in an education or training programs, but the Departments expect the levels of performance for different programs will vary based on the results of the statistical adjustment of the performance levels for those programs. Furthermore, States will have the ability to disaggregate performance data in order to gain an understanding of the effect of including youth in performance outcomes. No change to the regulatory text is being made in response to these comments.

Comments: Other individuals requested guidance on how to treat missing earnings information for particular participants and whether the participant may be excluded from the dataset used to determine the median earnings.

Departments' Response: In State wage record systems, a missing wage means that no wages for an individual were reported by any firm residing in that State. The missing wage only indicates that the individual is not in employment covered by the quarterly wage records for performance accountability purposes. The Departments have determined that collection and verification of supplemental employment data is allowed for the performance indicators where a wage is not present in quarterly wage data. Supplemental information that is used to establish employment must include earnings information and be counted in the employment indicators and the median earnings indicator. This calculation is meant to represent the median quarterly wage of all individuals who are employed in the second quarter after exit, therefore, “missing earnings information” will not be included in the median earnings calculation. Further, the Departments have elected to permit non-wage record matches (supplemental information) in the performance calculations. More information about this is in the preamble to § 677.175 discussed in more detail below. The Departments note that the use of supplemental information must be uniform across performance indicators. In other words, if a participant is included in the employment in second quarter after exit indicator based on information obtained through supplemental information, wage information must be collected and that data must also be used for the median earnings indicator. Likewise, if the collection and verification of employment and wages cannot be obtained for such a participant through either wage record matching or through supplemental wage information, then the participant cannot be included as being in unsubsidized employment during the second quarter and fourth quarters after exit, as measured by the Start Printed Page 55840first and second performance indicators. The Departments will issue guidance regarding the collection and verification of supplemental employment information, as noted in the preamble to §§ 677.155(a)(1)(iii) and 677.175.

Section 677.155(a)(1)(iv) implements the fourth statutory indicator as described in sec. 116(b)(2)(A)(i)(IV) of WIOA, subject to sec. 116(b)(2)(A)(iii). This indicator is the percentage of program participants who obtain a recognized postsecondary credential or a secondary school diploma or its recognized equivalent, during participation in or within 1 year after exit from the program. The Departments are implementing § 677.155(a)(1)(iv) as revised and described here. The regulation, consistent with the statutory requirements, limits inclusion of participants who obtain a secondary school diploma or its equivalent in the percentage counted as meeting the criterion by only including those participants who are employed or are enrolled in an education or training program leading to a recognized credential within 1 year after exit from the program. The Departments specifically sought comment on clarifications necessary to implement this indicator.

Comments: Many commenters expressed concerns about including all program participants in the indicator and asked whether the indicator is limited to those in an education or training program.

Departments' Response: The Departments revised § 677.155(a)(1)(iv) to clarify that this indicator only applies to those participants who are or were enrolled in an education or training program. The purpose of the indicator is to measure performance related to attainment of a recognized postsecondary credential or a secondary school diploma or its recognized equivalent. As such, it would not fulfill the purpose of this indicator to measure a State's performance on the credential attainment indicator against a universe of participants that includes individuals who are not in an education or training program through which they can obtain one of these credentials. The Departments decided that it is appropriate to include, for purposes of this indicator, only those participants enrolled in an education or training program. The Departments have excluded participants enrolled in work-based on-the-job training or customized training from this indicator because such training does not typically lead to a credential. This exclusion avoids creating a disincentive to enroll in work-based training. This section has been revised to clarify that only those participants in an education or training program are included in the performance calculations for this performance indicator, with the exception of those in on-the-job or customized training. The WIOA Joint Performance ICR also will explain that participants, for purposes of the credential rate performance indicator, are only those who are in an education or training program (excluding those in on-the-job training or customized training).

During the review period leading to this Joint WIOA Final Rule, the Departments noted an error in the NPRM related to the statutory requirement that participants receiving a secondary school diploma or its equivalent be included in the percentage of participants meeting the performance indicator only if the participant is employed or enrolled in an education or training program leading to a recognized postsecondary credential within 1 year of exit from the program. The NPRM incorrectly stated that a participant who has obtained a high school diploma or its equivalent only is included in the indicator if the participant is employed or is enrolled in an education or training program leading to a recognized credential within 1 year of exit from the program. The Departments have corrected § 677.155(a)(1)(iv) to make it consistent with WIOA's requirement so that a participant who obtains a secondary school diploma or its recognized equivalent only counts as having met the performance indicator if the participant is also employed or is enrolled in an education or training program leading to a recognized postsecondary credential within 1 year after exit from the program.

Comments: A few commenters stated that they fully supported the proposed provision. Some commenters remarked that WIOA presents a great opportunity to learn more about the credentials being earned by participants in the workforce system. The commenters suggested that regulations on the reporting of credential attainment should strike a balance between incentivizing the collection of better data and unfairly penalizing States that do not have the ability to measure attainment of all types of credentials, and that the Departments should consider a phased approach for making licenses and certifications part of performance levels.

Departments' Response: The Departments are not planning a phased implementation of the credential attainment indicator because such data generally were collected and reported under WIA. With regard to the full performance accountability provisions under WIOA sec. 116, which include the application of an objective statistical adjustment model and the implementation of sanctions, the Departments did modify § 677.190 to allow for a phased-in approach for assessing performance success or failure for the purposes of sanctions in order to provide programs time to collect and report at least 2 full years of data required to develop and run a statistical adjustment model on those indicators. More information can be found on this in the preamble to § 677.190 below.

Comments: In the preamble to the NPRM, the Departments sought comments on clarifications that would be necessary to implement the credential attainment indicator. Many commenters requested clarification about accepted credentials; how to collect and track credentials; the definitions of enrollment and postsecondary credential; the determination of “within 1 year after exit” from the program; the achievement of a secondary degree or General Education Diploma (GED); and whether the indicator applies to the VR program. A commenter recommended consideration of apprenticeships as postsecondary credentials, but other commenters suggested that employer-based work activities generally do not result in industry-recognized credentials but often result in permanent employment.

Departments' Response: The definition of “recognized postsecondary credential” is found in sec. 3(52) of WIOA, stating “a credential consisting of an industry-recognized certificate or certification, a certificate of completion of an apprenticeship, a license recognized by the State involved or Federal Government, or an associate or baccalaureate degree.”

With respect to one comment, the Departments note that this definition includes completion of an apprenticeship. In addition, the statutory language of the credential attainment indicator in WIOA sec. 116(b)(2)(A)(i)(IV) includes participants' attainment of a secondary school diploma or its recognized equivalent in performance calculations, subject to the requirement that those participants also are employed or in an education or training program leading to a recognized postsecondary credential within 1 year after exit from the program. The credential attainment indicator applies to all core programs, including the VR program, except for the Wagner-Peyser Act Employment Service program, as Start Printed Page 55841specified in sec. 116(b)(2)(A)(i) of WIOA. To be counted as having met the indicator, a participant must have obtained a credential at any point during participation in the program or up to 1 year after exit from the program.

The Departments will issue joint guidance that further illustrates what constitutes a recognized postsecondary credential for the credential rate indicator, including definitions for each type of credential. The Departments recognize burden concerns for tracking credential attainment. However, as noted, WIOA requires the collection of data for purposes of reporting on the credential attainment indicator for all core programs, except for the Wagner-Peyser Act Employment Service program. The Departments also will provide joint guidance and technical assistance for tracking and reporting with respect to this performance indicator.

Comments: A few commenters expressed concern that the value of a secondary diploma would be reduced. One commenter suggested the regulations should clarify that employment is at any time during the year after exit. Commenters recommended including alternative, standards-based certificates of high school completion for students with disabilities among the credentials recognized for achievement of the credential attainment indicator. Commenters cautioned that this indicator may not be appropriate for students in English language acquisition programs, and one of these commenters requested that postsecondary credentials include completion of Career and Technical Education programs. A commenter encouraged the reporting of credential type in addition to the attainment of a credential.

Departments' Response: The Departments do not agree that a secondary school diploma would be devalued because a participant's attainment of a secondary school diploma can be included in performance calculations for purposes of the credential attainment indicator. For those who obtain a secondary school diploma or its recognized equivalent, such participants must also be employed or in an education or training program leading to a postsecondary credential within 1 year after exit from the program. Such employment or enrollment in an education or training program only needs to be for some period during the 4 quarters after exit, not for the entire 1-year period after exit. The types of secondary school diplomas and alternate diplomas that would satisfy this performance indicator are those recognized by a State and that are included for accountability purposes under the ESEA, as amended by the Every Student Succeeds Act. The types of recognized equivalents, for those not covered under ESEA, that would satisfy this performance indicator are those recognized by a State. No change to the regulatory text is being made in response to these comments.

Comments: Several commenters also expressed concern that State VR and other programs do not track whether a participant is enrolled in postsecondary education after program exit and that to do so would represent a significant burden. One of the commenters recommended that educational attainment data could be reported as it occurs by the appropriate State educational authorities and matched to participant data. A commenter suggested that sharing information should be mandatory between workforce agencies and secondary and postsecondary educational and other training institutions. One commenter stated that national access to postsecondary records and earnings not covered by UI wage records are needed for implementation of the provision.

Departments' Response: The Departments recognize that, in cases where information was not previously collected or reported on, there is an initial burden associated with establishing such collections for reporting. However, the Departments have concluded that WIOA sec. 116(b)(2)(A)(i)(IV), read in conjunction with sec. 116(b)(2)(A)(iii), requires that the indicator applies to all core programs and necessitates tracking enrollment and employment up to 1 year after exit. With regard to the comments raised concerning real-time tracking and matching of educational attainment, the Departments note that tracking and reporting on participants is an obligation of the program. A State educational authority would not necessarily have information on all participants enrolled in education programs, public or private, non-profit or for-profit. The Departments do not currently have the authority to mandate sharing of information between workforce agencies and secondary and postsecondary educational and other training institutions in the manner proposed. In regards to the comment about national access to postsecondary records and earnings, the Departments do not think that implementation requires national access because States have the authority to implement appropriate mechanisms, including data sharing agreements, at the State level to fulfill these reporting requirements. The Departments are developing guidance to help the States meet their obligations. No change to the regulatory text is being made in response to this comment.

Comments: One commenter stated that participants who were in occupational training designed to lead to employment in a specific occupation and who do not achieve the credential because they have become employed in the occupation should be removed from the indicator. Some commenters suggested that the credential attainment indicator should not be calculated as the percentage of all participants who earn a credential, but the indicator only should calculate the percentage of participants receiving education or training services who earn a credential. A commenter recommended that the indicator only should apply to participants who were enrolled in a program leading to a postsecondary credential or secondary diploma. One commenter cautioned that many students are currently unavailable to the job market. Another commenter reasoned that cross-enrollment may lead to participants furthering their training in one program after leaving another, and this may not be completed within 1 year.

Departments' Response: With respect to the comment that the credential attainment indicator should calculate only the percentage of participants receiving education or training services who earn a credential, the Departments reiterate, as noted above, that § 677.155(a)(1)(iv) has been revised, as contained in these final regulations, to address this concern. With respect to the comment that those who do not earn a credential because they become employed should not be included in the calculation for the credential attainment indicator, the Departments note that the reason that a participant fails to attain a credential, including participating in further training, is not a basis for excluding that participant from the performance calculations for the credential attainment indicator. No change to the regulatory text is being made in response to these comments.

Comments: Commenters also suggested that the indicator would result in a strong disincentive to enroll participants in title I programs that would not result in an industry-recognized credential. An individual mentioned that the indicator may discourage participation in training programs that take several years to complete. Commenters also suggested that prospective workers enrolled in TANF and other hard-to-serve populations may require more than 1 Start Printed Page 55842year to achieve positive outcomes and that States have varying requirements for attaining credentials.

Departments' Response: The Departments note that because the credential attainment indicator is an exit-based indicator, there is no requirement for a participant to attain a credential within 1 year of enrollment in the program. There is no time limit on how long participants are in the program, and the measurement point for credential attainment is not until 1 year following exit from the program. If participants are in a program multiple years before attaining a credential they are still counted as a success in the indicator if the credential is attained during participation in the program or within 1 year of program exit. Thus, the Departments do not think that this indicator will discourage participation in training programs that take several years to complete. It should be noted that in instances where participants are enrolled in an education or training program that is not intended to result in a credential, the measurable skill gains indicator can capture progress made by participants.

Section 677.155(a)(1)(v) implements the fifth statutory indicator as described in sec. 116(b)(2)(A)(i)(V) of WIOA. This indicator is a measure of the percentage of participants who, during a program year, are in education or training programs that lead to a recognized postsecondary credential or employment, and who are achieving measureable skill gains toward such a credential or employment. The Departments are defining measurable skill gains as documented academic, technical, occupational, or other forms of progress toward the credential or employment. After seeking and considering all comments on the measurable skill gains indicator proposed at § 677.155(a)(1)(v), the Departments added five measures of documented progress that specify how to show a measurable skill gain.

Comments: The preamble of the NPRM identified six examples of standardized ways States could measure documented progress during participation in an education or training program, and sought public comment on these and other ways progress may be measured. Some commenters generally supported the examples as well as the preamble language that stated, “Documented progress could include such measures as . . .” because it provided the State with flexibility. Another commenter recommended a menu system similar to the proposed but recommended the progress measure be attached to participant characteristics rather than a funding stream. Other commenters asserted that it would be difficult to standardize measures and documentation across all core programs as proposed by the Departments, and there would be little benefit for the VR program where individuals often seek to maintain their current occupation. Another commenter recommended that Local WDBs should be required to write into their local plans an exhaustive list of the documented progress measures they will use.

Departments' Response: The Departments noted the suggested ways in which the States could measure documented progress. The Departments disagree with commenters that recommend against standardized methods, across States and core programs, to measure documented progress for purposes of the measurable skill gains indicator. Section 116(b)(4)(A) of WIOA requires the Secretaries to issue definitions of the primary performance indicators in order to ensure national comparability of performance data. Defining the measurable skill gains indicator to include standardized methods to measure documented progress across programs helps to ensure this comparability. With regard to the VR program, although a State VR agency may provide services to individuals with disabilities that enable them to maintain their current occupation, the Departments note that the majority of individuals served by the VR program receive assistance in obtaining or advancing in employment. With regard to local plan content and the recommendation that it include “an exhaustive” list of the documented progress measures, the Departments encourage States and local areas to consider the service provisions and applicable progress measures in the development of their plans but have determined that it is beyond the scope of part 677 to regulate concerning such requirements. State and local plans are discussed more fully in 20 CFR part 679 (see DOL WIOA Final Rule, published elsewhere in this issue of the Federal Register). The Departments reiterate that States will be required to report on the measurable skill gains indicator as set forth in § 677.155(a)(1)(v), consistent with program guidance. No change to the regulatory text is being made in response to these comments.

Comments: Many commenters strongly supported the fact that the proposed regulations recognize the intent of Congress to “encourage local adult education programs to serve all low-skilled adults,” and stated that the measurable skill gains indicator will help to achieve that goal. One commenter suggested that measurable skill gains should be the only indicator of performance required for students functioning below the ninth grade level.

Departments' Response: The Departments do not agree with the suggestion that the measurable skill gains indicator be the only indicator of performance for students functioning below the ninth grade level since WIOA requires that the indicators of performance apply across all core programs in order to assess the effectiveness of States and local areas in achieving positive outcomes for participants served by those programs.

There is no basis for a blanket exclusion from all performance indicators except the measurable skill gains indicator for participants functioning below the ninth grade level. Such participants have the potential to receive services under a program, be included in performance calculations, and be counted as having met one of the other indicators. Therefore, unless a student functioning below the ninth grade level is otherwise appropriately excluded from participants included in the performance calculations for a particular indicator under § 677.155(a)(2), the Departments will not categorically exclude such students functioning below the ninth grade level from the other five indicators of performance. No change to the regulatory text is being made in response to these comments.

Comments: The majority of commenters endorsed continued use of educational functioning levels (EFLs) and encouraged eventual refinement of EFLs or the development of other potential measures that can document participants' progress toward educational goals. Other commenters expressed concern because in high intensity programs, students may advance two or more EFLs; therefore, the proposed language would not capture the full impact of adult education instruction. The commenters recommended that the requirement should be “the achievement of the EFLs of the participant.”

Departments' Response: As set forth in the preamble of the NPRM, the first standardized way States could measure and document participants' measurable skill gains is the documented achievement of at least one EFL of a participant in an education program that provides instruction below the postsecondary level. The Departments agree with comments that supported the continued use of EFLs to measure progress towards the measurable skill gains indicator. The Departments also Start Printed Page 55843recognize that in some cases, students may advance more than one EFL during a program year. However, for purposes of the performance calculations, programs will be permitted to report only one EFL measureable skill gain per a participant's exit from the program through the WIOA Joint Performance ICR. This means that if a participant exits a program more than once in a program year and attains an EFL measureable skill gain prior to exiting each time, then the program will be able to report, for performance calculation purposes, more than one EFL measureable skill gain for the participant in a program year. In so doing, participants, for purposes of performance calculation purposes with respect to the measureable skill gains indicator, will be treated the same as for any other performance indicator. Having said this, through the WIOA Joint Performance ICR, the Departments will require States to provide unique identifiers for participants. Thus, there will be a unique count of participants under the core programs regardless of how many times the participant exits the program (see discussion in this preamble regarding the definition of “exit” in § 677.150(c) above). The Departments have added § 677.155(a)(1)(v)(A) to include “documented achievement of at least one educational functioning level of a participant receiving instruction below the postsecondary education level,” as one way of measuring documented progress under the measurable skill gains indicator. Options for measuring educational functioning level gain are described in the WIOA Joint Performance ICR.

Comments: A commenter recommended that attainment of a high school diploma not be included as one of the measures of documented progress for purposes of the measurable skill gains indicator.

Departments' Response: The Departments disagree with the assertion and consider attainment of a secondary school diploma a valuable measure of progress and have therefore revised § 677.155(a)(1)(v)(B) to include “documented attainment of a secondary school diploma or its recognized equivalent.”

Comments: Commenters stated that a lower requirement of six credit hours per semester better reflects the capability of adults who must work to provide for their families. Another commenter suggested that the measure should be expanded to include a demonstration of semester-to-semester retention, which is a key indicator of academic success.

Departments' Response: As proposed in the preamble of the NPRM, the third standardized way States could measure and document participants' measurable skill gains is through a transcript or report card for either secondary or postsecondary education. The Departments had proposed a measure requiring a transcript or report card for 1 academic year or for 24 credit hours. The Departments agree with the concern that a transcript for 1 academic year or 24 credit hours is too onerous for part-time students and have changed this measure to require that the transcript or report card reflect a sufficient number of credit hours to show a participant is achieving the State's academic standards. The Departments' current standard for a sufficient number of credit hours is at least 12 hours per semester or, for part-time students, a total of at least 12 hours over the course of 2 completed consecutive semesters during the program year that shows a participant is achieving the State unit's academic standards. The Departments have added § 677.155(a)(1)(v)(C) to read “secondary or postsecondary transcript or report card for a sufficient number of credit hours that shows a participant is meeting the State unit's academic standards.” Clarification regarding the progress measures and the specific requirements for collection and reporting will be provided through the Departments' WIOA Joint Performance ICR, Department-specific ICRs, and programmatic guidance.

Comments: A commenter suggested that the Joint WIOA Final Rule identify progress reports from training providers as an acceptable measure of documented progress for purposes of the measurable skill gains indicator.

Departments' Response: As proposed in the NPRM, the fourth standardized way States could measure and document participants' measurable skill gains is through a satisfactory or better progress report towards established milestones from an employer who is providing training. Such milestones to be achieved could include completion of on-the-job training (OJT) or completion of 1 year of an apprenticeship program. The Departments agree with the commenter that progress reports from training providers as to achievement of established milestones also could be acceptable and note that when participants are enrolled in training programs, the training providers are in the best position to report on participants' progress toward established milestones. The Departments emphasize that rigor is expected in determining whether a progress report is satisfactory, whether from an employer or a training provider. The Departments have added § 677.155(a)(1)(v)(D) to include “satisfactory or better progress report, towards established milestones, such as completion of OJT or completion of 1 year of an apprenticeship program or similar milestones, from an employer or training provider who is providing training.”

Comments: Several commenters requested information on how progress shall be measured under the VR program.

Departments' Response: With regard to the VR program, there may be several methods for obtaining documentation related to measuring progress. For example, documentation such as standardized reports of progress from training providers, provided to the State VR agency, may be used to substantiate progress. To adequately document progress, programs should identify appropriate methodologies based upon the nature of the service being provided. For example, VR agencies frequently use grade reports from postsecondary educational institutions to document a student's progress toward achieving a degree. For OJT, where the individual is being trained on site by either the employer or by a vendor, VR Counselors receive regular training reports that include the OJT milestones completed as the individual masters the job skills required. More broadly, for apprenticeship programs, the milestones are already incorporated into the process. The steps required to complete the apprenticeship and the increases in pay that occur can be used to document progress.

Comments: Some commenters recommended that successful completion of an exam, as recommended in the preamble of the NPRM as a way of measuring documented progress, be understood as achieving a passing score on the exam.

Departments' Response: As proposed in the preamble of the NPRM, the fifth standardized way States could measure and document participants' measurable skill gains is through successful completion of an exam that is required for a particular occupation, or through progress in attaining technical or occupational skills as evidenced by trade-related benchmarks such as knowledge-based exams. The Departments agree with the commenters that this measure documenting a measurable skill gain should require that a participant achieve a passing score on an exam and thus have added § 677.155(a)(1)(v)(E), which requires “successful passage of an exam that is Start Printed Page 55844required for a particular occupation, or progress in attaining technical or occupational skills as evidenced by trade-related benchmarks such as knowledge-based exams.” Joint guidance will be issued about what qualifies as a trade-related benchmark to show documented progress for purposes of the measurable skill gain indicator.

Comments: Commenters expressed concern about another measure of documented progress proposed in the preamble to the NPRM—measurable observable performance based on industry standards. Commenters indicated that it would be very challenging to identify a way to document this type of gain.

Departments' Response: The Departments agree with the commenters' concerns that it would be difficult to articulate a method for documenting progress using measurable, observable performance based on industry standards. The Departments did not include this measure in § 677.155(a)(1)(v).

Comments: Commenters recommended using other measures of progress including achievement of passing grades, completion of high school equivalency (HSE) subtests, receipt of postsecondary education or training, completing some adult diploma requirements, and obtaining U.S. citizenship to document measurable skill gains. A commenter suggested that employment-related indicators of skill gains, such as employment in the participant's program of study, advancement in job titles, and performance-based wage increases, recognize that skills attainment correlates with career progression. One commenter recommended that a high school credential from another country should be treated as sufficient in meeting the requirement. Some commenters suggested that the metric should measure completion of something easily definable such as a degree, certification, or entrance into a program. A commenter asked the Departments to measure interim progress, including documented gains in achieving “soft skills,” such as program attendance, timely arrival, gains in proper behavior, and creating an IPE. Another commenter asked whether proceeding through a prescribed program toward a secondary degree would be considered “achieving measurable skill gains.” One commenter cautioned about subjectivity in deciding positive gains. One commenter stated that the measurement should be simply “making progress—yes or no.”

Departments' Response: The Departments reviewed all of the additional suggestions for measurement of documented progress under the measurable skill gains indicator and concluded that none of the additional suggestions would be included in the Joint WIOA Final Rule or WIOA Joint Performance ICR. The Departments concluded that subjectivity should not be a part of determining skill gains and have included five objective progress measures that States may use in implementing the measurable skill gains indicator of performance. These indicators are sufficiently broad as to provide flexibility that addresses some of the commenters' concerns, while maintaining rigor. Several of the measures suggested by commenters (e.g., achieving soft skills) do not share the same level of rigor or objectivity. The Departments will provide further clarification, definition, and specification in the WIOA Joint Performance ICR.

Comments: Another commenter suggested the Departments empanel expert working groups to assist in developing measures of skill gains. A commenter suggested that regional or local workforce boards be allowed to assign the WIOA defined skill gains indicator to particular education or training programs based on program curriculum and goals. One commenter recommended allowing the Local WDB to define industry-related credentials or eliminating work-based learning from the measurable skill gains indicator. Another commenter agreed that work-based training activities, such as on-the-job training, should be exempt from this indicator.

Departments' Response: The Departments acknowledge the various points raised with regard to objective measures that are implemented in a rigorous manner. The Departments have, through the WIOA Joint Performance ICR, jointly coordinated the development of the underlying calculations, specifications, and operational definitions of the documented progress measures under this indicator. This will ensure measures uniformly are implemented in a rigorous and objective way. In addition to the WIOA Joint Performance ICR, each core program will define through guidance, the types of skill gains that are appropriate for the services provided and whether the program is an education or training program that leads to a recognized postsecondary credential or employment. For example, work experience in the WIOA title I youth program may not be considered an education or training program and, therefore, the measurable skill gains indicator may not apply to those participants engaged only in work experience under the WIOA title I youth program. More guidance regarding education and training programs is provided in 20 CFR part 680 (see DOL WIOA Final Rule published elsewhere in this issue of the Federal Register). No change to the regulatory text is being made in response to these comments.

Comments: Commenters asked for specificity and guidance about the “comparator group/cohort;” how to most efficiently collect documentation (such as confirmation by phone or email); industry-specific recognized credentials; how time intervals would be used for skill gains; how the measure applies to shorter-term training programs that are completed within 1 year; how different measures could be used for different trainings; whether Indian and Native American youth are included in this indicator; and definitions and timing regarding when a measurable skill gain must have occurred in order to be counted.

Departments' Response: The Departments recognize that the regulation poses broad parameters for these indicators. Many concerns and requests for clarity by commenters were identified and will be explained within the WIOA Joint Performance ICR or Department-specific ICRs, which are designed to operationalize such aspects of collection and reporting as time periods, specific calculations, details regarding who is included, and where to record positive outcomes. In addition to the WIOA Joint Performance ICR, the Departments will provide further guidance on acceptable source documentation, and the definitions recommended by commenters. In addition, the Departments will provide program-specific guidance for programs, such as the Indian and Native American youth program, on the application of performance indicators in their respective regulations and in guidance.

Comments: In the preamble to the NPRM, the Departments sought comments on whether time intervals should be required when implementing the measurable skill gains indicator and if so, what time intervals might be. One commenter suggested that specific time intervals should not be required because of variation in services across and within core programs and because individuals at different levels take different amounts of time to show gain. Other commenters agreed that a time requirement should not be used for determining measurable skill gains. Certain commenters, however, recommended that time intervals be established in a manner that is flexible Start Printed Page 55845enough to meet the varying durations of service across core programs, from 1 month to an academic year, but those time intervals should not adversely affect the provision of services based on the particular needs of a customer. One commenter stated that, for youth under WIA, the skill gains and literacy/numeracy gains are effective for a participation year. However, if a customer enrolls in education or training toward the end of a program year, it will result in a negative outcome due to the customer not having enough time to obtain the skill gain before June 30. This commenter recommended that any participants, adult or youth, who were enrolled less than 90 days prior to the program year end, and are continuing services into the next program year be allowed to continue as an active participant, and considered enrolled in Year 1, and in progress in Year 2, with expected completion in Year 2. Another commenter supported a minimum program duration threshold, and suggested that measurable skill gains generally should not be available to programs that are shorter than sixteen weeks. Another commenter suggested a time period of measurement set at the first anniversary of enrollment and each year thereafter.

Departments' Response: The Departments considered whether a minimum time threshold should be incorporated into the measurable skill gains indicator. The Departments have concluded that, given the diversity of participant needs and program services, imposing a time period by which progress is to be documented would be somewhat arbitrary and difficult. Such practice could result in excluding a number of participants from performance accountability reporting requirements, even if those participants would achieve a gain under one of the measures of progress. The Departments recognize that participants enrolling late in the program year may not have enough time to achieve a measurable skill gain prior to the end of the first program year, and the Departments recognize this could be perceived as negatively impacting performance. However, the negotiation process can and should take into account enrollment patterns and lower baseline data when setting targets for the measurable skill gains indicator. The Departments are concerned about incentivizing behavior that discourages service providers from enrolling disconnected youth in particular when they first approach programs, or that purposefully attempts to focus service on individuals who are more likely to obtain a positive outcome. The Departments emphasize that programs must not delay enrollment or prohibit participants from entering a program late in the program year. All participant outcomes, regardless if achieved at the end of the reporting period in which they enrolled or in the next reporting period, count as positive outcomes for the program. No change to the regulatory text was made in response to these comments.

The Departments will define, through program guidance, the types of services and trainings that constitute “an education or training program that leads to a recognized postsecondary credential or employment,” applicable for each of the core programs. All participants who enrolled during a program year in an education or training program that leads to a recognized postsecondary credential or employment are counted each time the participant exits the program during a program year.

Comments: In the preamble of the NPRM, the Departments also asked for comments on whether the negotiated levels of performance for this indicator should be set at the indicator level or the discrete documented progress measure (e.g., attainment of high school diploma) level. Setting the negotiated levels of performance at the indicator level would aggregate results for all documented progress measures (i.e., achieving any or several of measurable skill gains would be recorded as a success). Setting the negotiated levels of performance based on discrete documented progress measures would separately set targets for each indicator and each measurable skill gains. The vast majority of these commenters preferred that the performance targets for this indicator be set at the indicator level rather than at the documented progress level. Other commenters, however, suggested that standardization is more easily achieved by linking the target to a documented progress measure level, stating that targets based on documented progress, versus an indicator, may be easier to collect. Another commenter suggested that performance targets should include both indicator and documented progress measures.

Departments' Response: After considering the comments received, the Departments agree with the majority of commenters that supported setting the target (or the adjusted level of performance) at the indicator level. The Departments have concluded this will provide a more streamlined and user-friendly approach to using progress measures and will result in a more uniform application of the measurable skill gains indicator. Guidance on negotiating adjusted levels of performance that contains specific information about setting targets for Measurable Skill Gains will be issued by the Departments. No change to the regulatory text is being made in response to these comments.

Section 677.155(a)(1)(vi) implements the sixth statutory indicator as described in sec. 116(b)(2)(A)(i)(VI) of WIOA, subject to sec. 116(b)(2)(A)(iv). This indicator measures program effectiveness in serving employers. Under WIOA, the Departments must consult with stakeholders and receive public comment on proposed approaches to defining the indicator. As part of this requirement, in addition to seeking public comment through the NPRM and the WIOA Joint Performance ICR, the Departments previously sought public input on performance indicators generally and on the business indicators specifically through several avenues, including a town-hall meeting that addressed all of the primary indicators, a town-hall meeting convened with employers, and additional town-halls and webinars on WIOA across the country as well as consultations with State Administrators for AEFLA programs and VR stakeholders. As described more fully below, the Departments received many comments regarding the three proposed definitions of this indicator. After considering the responses received through all venues, the Departments are initially implementing this indicator in the form of a pilot program to test the rigor and feasibility of the three proposed approaches, and to develop a standardized indicator. The performance indicator for effectiveness in serving employers will not be included in sanctions determinations until the standardized indicator is developed.

Proposed Approaches to Measuring Employer Satisfaction

Comments: The preamble to the NPRM described three approaches to measure employer satisfaction (i.e., effectiveness in serving employers). In the first approach, States would use wage records to identify whether or not a participant matched the same FEIN in the second and fourth quarters. Many commenters opposed this approach because participants may have relocated, joined the military, or found a better job, although these circumstances do not mean the employer was not satisfied. They also opposed this approach because the mere fact that an individual is employed with the same employer does not mean that Start Printed Page 55846the employer is satisfied. Many other commenters, however, favored the approach because it would be the least disruptive to employers. A commenter agreed that employee retention can be measured, but that measure does not take into account the quality of the placement. Commenters suggested piloting a limited demonstration using existing data to determine if the variability in the types of occupations in a particular local area has a more profound impact on retention than the value added by the services provided under a WIOA program, and to determine whether there is a correlation between retention and effectiveness.

The second approach to define this indicator would measure the repeated use rate for employers' use of the core programs. Many commenters did not support this approach because some employers may not have many hiring needs during a program year, or an employer may have a need but the program has no students who are ready to graduate and go to work. Also, this approach would encourage programs to protect their individual employer relationships rather than working collaboratively through sector partnerships. Several commenters recommended use of this measure along with the number of workers employed by businesses participating in sector partnerships. Other commenters supported the approach because it represents increased use, retention, or growth of business engagement, although some commenters would use the number of workers employed, not the number of businesses served. The preamble to the NPRM specifically sought comments on how States could capture this data, the feasibility of capturing and reporting this data, and queried whether this indicator would measure the efficacy of services provided to employers. The Departments received both positive and negative comments regarding this approach.

The third approach would use the number or percent of employers that are using the core program services out of all employers represented in an area or State served by the system (i.e., employers served). A large proportion of commenters opposed this approach and warned that this saturation method only would work if all participants come from the local market area; for a number of programs, it is usually not the case that most of the participants come from the local market area. Also, the commenters asserted that this option would focus too much on the breadth of employer involvement, rather than the depth or quality. Some commenters supported this approach when used with another approach. The preamble to the NPRM specifically sought comments on how States could capture this data, the feasibility of capturing and reporting this data, and queried whether this indicator would measure the efficacy of services provided to employers. The Departments received both positive and negative comments regarding this approach.

Departments' Response: After further review, analysis, and consideration of public response, the Departments have concluded that too little is known with regard to the validity and reliability of each of the proposed approaches. In concurrence with multiple commenters, the Departments have concluded that the retention method, using wage record FEIN matches to be the least burdensome method to employers for measuring the quality of service provided to employers given that the outcome is concluded solely by the use of wage-match data, which prevents outside factors from influencing the way success is measured within the reporting system. The Departments concluded, however, that there was not enough evidence that this point of measurement would encompass the intent of this indicator. Therefore, the Departments have proposed a pilot allowing all three approaches, and any additional measure that the Governor may establish relating to services for employers, with the intent of assessing each approach for its efficacy in measuring the effectiveness in serving employers.

The Departments have included these approaches in the WIOA Joint Performance ICR and will require each State to choose two of the three approaches set out in the NPRM as well as any additional measure that the Governor may establish related to services to employers, with results to be included in the first WIOA annual report due in October 2017. This approach provides States flexibility in selecting the measures that best suit their needs, while providing partner Agencies the opportunity to evaluate States' experiences in using these measures during PY 2016 and PY 2017, and additionally allows the Departments to obtain employer feedback regarding the extent to which these indicators measure effectiveness in serving employers. The Departments will evaluate State experiences with the various indicator approaches and plan to use the results of that evaluation to identify a standardized indicator that we anticipate will be implemented no later than the beginning of PY 2019. In this process, the Departments intend to engage the National Association of State Workforce Agencies (NASWA) and the States to inform the evaluation design; communicate how States fare in operationalizing the measures; and contribute to the development of technical assistance activities and tools.

The Departments acknowledge the dissatisfaction expressed by commenters with using each of the NPRM proposed measures as a sole indicator of successful service to employers and agree with comments discussing the utility of piloting multiple alternative measures to ensure that States are being required to report on employer satisfaction in the most effective manner. As such, the Departments will work to implement a pilot program, the details of which will be further delineated in joint Departmental guidance. The Departments have opted to implement a pilot program using all of the approaches in order to assess the States' experiences with these and evaluate the efficacy of such approaches in measuring this construct. Further guidance regarding the pilot program will be provided.

Effectiveness in Serving Employers across Programs

Comments: The NPRM also sought comment on using effectiveness in serving employers as a shared indicator across programs, as many employers are served by multiple programs. Many commenters supported using effectiveness in serving employers as a shared indicator across programs because it would foster collaboration rather than competition among the core programs. One commenter stated that using effectiveness in serving employers as a shared indicator would mitigate concerns regarding measuring effectiveness in serving employers for the Wagner-Peyser Act program. Commenters stated that there are too many indicators already and a single metric should suffice. Commenters also suggested that the Departments should engage the employer community, such as using a short survey or task force, to discover methods of measuring effectiveness. One commenter, however, opposed employer surveys and burdensome employer contacts. A group of commenters recommended that agency directors conduct a study on how effectively workforce development aligns with business needs. Others favored having States create and submit for approval an indicator that meets the State's current needs, including targeted sectors and partner collaboration. A commenter suggested that the workforce system offer one point of contact or Start Printed Page 55847“account executive” to each employer. However, one commenter opposed the use of a shared indicator, and recommended measuring at an individual program level in order to measure the impact on each core program.

One commenter developed a novel approach for measuring effectiveness and provided details in a concept paper, which was expressly supported by some commenters. The approach includes a customizable point-menu system that would award varying levels of points to WDBs based on the degree of intensity and the value of services provided. Services earning high points would clearly reflect deeper relationships with employers and activities that are the result of longer-term relationships. The Departments will consider this approach in the course of the pilot program. A separate commenter suggested using tiers to measure employer engagement with concrete examples. The Departments also will further consider this suggestion of a tiered approach.

The preamble to the NPRM also requested feedback regarding whether a single metric for this indicator would sufficiently capture effectiveness in serving employers or if this indicator should encompass a combination of metrics, as well as how these metrics could most effectively be combined. A number of commenters expressed concern or disinterest with using a single metric to measure effectiveness in serving employers.

A few other commenters who expressed support for using multiple metrics for this indicator recommended a list of core functions to indicate the effectiveness in serving employers, with the list of core functions including strategic planning with business to identify business needs; outreach and recruitment; hiring; retention; training, consultation services, and other customized services; and business customer satisfaction with services provided. One commenter added preparing workers for in-demand industries and occupations and the percentage of participants who earn an industry credential. Some commenters also mentioned fill rate—the number of job seekers placed against the number of open job orders in the system—and employer referrals. A few commenters stated that there is insufficient clarity on the employer satisfaction indicator and the meaning of effectiveness.

Departments' Response: The Departments have concluded that implementing the effectiveness in serving employers indicator as a shared indicator across all core programs to be the most useful approach based on the collaborative nature of this method and the overwhelming majority of commenters who were in favor of this option. In doing so, States and local areas are better positioned to provide a single point of contact to each employer, making it easier for the differences between specific core programs to become invisible and enable the programs to serve together as a unified front. Measurement at the program level would be contrary to WIOA's efforts to streamline reporting across programs, reduce burden on employers, and decrease the likelihood of duplicated employer counts. In keeping with such efforts, the Departments have opted not to require employers to fill out any additional surveys. The Departments had, however, prior to the publication of the NPRM, engaged in multiple meaningful exchanges with the employer community to receive feedback on the most appropriate ways to assess the utility of the public workforce system for businesses.

In addition, through the implementation of the previously mentioned pilot program, the Departments will seek to discover the best methods for assessing how well workforce development aligns with business needs. There were a number of noteworthy measures suggested by State workforce agencies and nonprofit organizations, some of which will be included in the pilot, giving the Departments an opportunity to review some of the alternative methods that would help States to improve current relationships and establish strong future relationships with local employers, such as using the fill rate, employer referrals, the level of employer engagement, allowing any additional measure that the Governor may establish relating to services for employers, participation in targeted sector partnerships, the inclusion of recruitment, training, and other pre-hire services as part of the performance metric, using tiers to measure employer engagement, and the use of already existing electronic, or wage record data along with a myriad of other valuable recommendations. The Departments acknowledge the value of using a combination of metrics as pointed out by a number of commenters and will seek to delve further into the benefits of such an option through the use of the upcoming pilot program. No change to the regulatory text is being made in response to these comments.

Comments: One commenter stated that the provision is not applicable to the INA program because it is not a core program. Another commenter requested that the measurement of effectiveness of serving employers be eliminated as a measure for Adult Education and Literacy because the program already works closely with Career and Technical Education, the workforce system, and industry to ensure that it is providing programs and services to meet the needs of employers. A commenter recommended that any finalized measure not allow a program to be penalized because of factors beyond its control. Another commenter requested information about feedback obtained at the stakeholder meetings that involved employer partners.

Departments' Response: The Departments recognize that the INA program is not a core program. However, WIOA sec. 116(e)(5) requires that the performance accountability indicators (which include effectiveness in serving employers) be used to assess performance, and WIOA sec. 116(h)(2) requires agreement on the adjusted levels of performance for all of the primary indicators be reached between the Secretary of Labor and the entity carrying out activities under this section.

In response to the comment requesting that the measurement of effectiveness of serving employers be eliminated as an indicator for the AEFLA program, the Departments have no authority to exempt AEFLA programs from the indicator regarding effectiveness in serving employers. WIOA sec. 116(b)(2)(A) explicitly requires that the State primary indicators of performance for the AEFLA activities authorized under title II, as well as for other specified programs and activities, shall include indicators of effectiveness in serving employers. In response to concerns about programs being required to account for factors beyond their control, the Departments refer to § 677.170 and the associated discussions regarding factors to be considered when coming to agreement on negotiated levels of performance, including the objective statistical model. The Departments have provided a summary of comments raised at stakeholder meetings and during the regulatory process above. No change to the regulatory text is being made in response to these comments.

Comments: Commenters expressed a great deal of concern regarding the implementation of an indicator that would likely cause undue penalty.

Departments' Response: The Departments note that this concern weighed heavily in the decision to allow employee retention to serve as a means of measuring employer satisfaction. The Departments also note that concerns regarding penalties are an issue that will Start Printed Page 55848be greatly ameliorated with the use of benchmark target setting via the statistical adjustment model. The statistical adjustment model also will address issues such as size discrepancies across States and local areas, labor shortages, and other external factors and provide objective, realistic goals for improvement. Application of the statistical model to both set targets and apply sanctions is most effective when assessing quantitative metrics, with the use of qualitative metrics making both efforts exponentially more complex. It is for this reason that, although the Departments understand the significance of using such methods to evaluate quality service to employers, more qualitative metrics were not included as part of the effectiveness in serving employers indicator.

As previously stated, a great deal of discussion regarding these and other proposed methods for measuring this indicator took place during previous webinars and town halls with State workforce agencies, members of the employer community, and other stakeholders. The outcome of these discussions was the three options listed within the NPRM. Understanding the importance of receiving extensive feedback on this issue, the Departments requested further input via the NPRM and the proposed WIOA Joint Performance ICR, the responses for which can be found on regulations.gov. No change to the regulatory text is being made in response to these comments.

Section 677.155(a)(2). The Departments added a new paragraph § 677.155(a)(2) after considering public comments received in response to the proposed WIOA Joint Performance ICR, particularly with regard to discrete populations that would be excluded from performance calculations. As noted in both the preamble to the NPRM and the supporting statement to the proposed WIOA Joint Performance ICR, because of the close relationship between the two documents, the Departments informed the public that comments on either the NPRM or the proposed WIOA Joint Performance ICR would be used to form the basis for necessary changes in both the Joint WIOA Final Rule and the finalized WIOA Joint Performance ICR. After reviewing WIOA sec. 116, the Departments have concluded that the purpose of the performance accountability system is to measure a program's performance with respect to the populations served and the services provided. A program's performance should be measured in terms of populations it is designed to serve or services it is designed to provide. In so doing, the performance accountability system will measure a program's performance more precisely. Given that sec. 116(f) of WIOA imposes sanctions for poor performance, it is critical that the Departments receive data that accurately reflect a program's performance. Explicitly defining which participants will be included in performance indicator calculations will allow a program's performance to be assessed appropriately. It is for this reason that the Departments proposed certain “exclusions” in the proposed WIOA Joint Performance ICR.

The Departments have added language in the Joint WIOA Final Rule at § 677.150(a)(2)(i) to exclude individuals receiving services under sec. 225 of WIOA from all primary performance indicators for purposes of performance accountability, except the measurable skill gains indicator (§ 677.155(a)(1)(v)). This is because the measurable skill gains indicator is the only performance indicator applicable to this population. In so doing, the Departments ensure programs serving these individuals will not be inadvertently subject to low performance levels with regard to those indicators not applicable to sec. 225 participants.

Section 677.150(a)(2)(ii) allows the Secretaries of Labor and Education to make further decisions as to the participants to be included in calculating program performance levels for other purposes that are necessary with regard to any of the primary performance indicators. Further information about those exclusions is provided through the WIOA Joint Performance ICR and related guidance.

Section 677.155(b)—Indicators for the Employment Service Programs

Paragraph (b) of § 677.155 remains unchanged from that proposed in the NPRM. The Departments did not receive any comments regarding this provision.

Section 677.155(c)—Indicators for the Youth Program

Paragraph (c) of § 677.155 implements the primary indicators for the WIOA title I youth program, as described in sec. 116(b)(2)(A)(ii) of WIOA. No change to the regulatory text is being made in response to public comments.

Comments: A few commenters supported the fact that the common performance indicators for youth programs apply only to WIOA title I youth programs. Some commenters remarked that employment rate measures are different for youth and adults because the youth measure allows enrollment in education and training to be included in the indicator, that this difference is likely to work against co-enrollment. These commenters suggested that 18 to 24 year old individuals co-enrolled in the WIOA title I youth program and other WIOA programs only be included in the youth indicators.

Departments' Response: Although the Departments recognize that subjecting such youth to adult and youth employment rate indicators could serve as a barrier to co-enrollment, WIOA only authorizes the youth indicators for the WIOA title I youth program and does not authorize these indicators for any other WIOA core program.

Comments: One commenter suggested that the following outcomes count toward the first two youth statutory indicators as successful outcomes: (1) Unsubsidized employment, (2) military employment, (3) education (secondary or postsecondary), (4) advanced training (long-term licensed or credentialed, for example, registered nurse training), and (5) occupational skills training.

Departments' Response: The Departments agree that these suggested outcomes, and additionally registered apprenticeships, are among the successful outcomes for the first two statutory indicators, but do not think that any change to the regulatory text is necessary to accommodate such outcomes as successful. Specific references to particular successful outcomes will be included in the WIOA Joint Performance ICR.

Comments: One commenter suggested that supplemental data be allowed to measure employment in the second and fourth quarters after exit because UI wage record data alone do not capture the full spectrum of employment options.

Departments' Response: The Departments agree and have chosen to permit the States to use non-wage record matches (supplemental information) in calculating the performance indicators, subject to use consistent with the Departments' guidance on this issue. More information can be read about this in the preamble to § 677.175 below. That guidance regarding the use of supplemental wage data will be relevant to the use of supplemental data to determine employment status.

Comments: One commenter recommended consideration of planned short-term employment by youth as a positive outcome, such as internships. Another commenter requested that service programs such as AmeriCorps, NCCC, and Public Allies be counted as “unsubsidized employment.” A Start Printed Page 55849commenter recommended that placement in unsubsidized employment or postsecondary education count as a success regardless of the quarter in which it occurs, rather than focusing only on the second and fourth quarters after exit. Similarly, one commenter asked that attainment of initial employment count as a successful outcome (i.e., a placement rate).

Departments' Response: As required by sec. 116(b)(2)(A)(ii)(I) and (II) of WIOA, only unsubsidized employment will count as a positive outcome for employment in the first and second indicators. Internships that are subsidized would not count as a positive employment outcome, but they are an important service in preparing youth for unsubsidized employment. However, service programs, such as AmeriCorps, would count as a positive outcome in the first and second primary youth indicators because these service programs are considered training for the purposes of those youth indicators. The Departments will clarify the categorization of service programs in the WIOA Joint Performance ICR. The first and second primary youth indicators measure the percentage of participants in unsubsidized employment, or in education or training activities, during the second and fourth quarters after exit. The Departments do not have the authority to deviate from the WIOA statute by counting participants' status in the first and third quarters after exit, or by counting participants as successful simply upon attainment of initial employment.

Comments: A few commenters expressed concern that the requirement to track educational attainment up to a year after exit may prove infeasible. One commenter favored alignment of reporting that is required on post-school outcomes.

Departments' Response: Although the Departments recognize that tracking attainment up to a year after exit is difficult for an often-transient youth population, the WIOA title I youth program includes a follow-up services program element that is required to last not less than 12 months after completion of participation. The requirement to capture program outcomes 1 year after exit is consistent with the follow-up services program element. In addition, follow-up services help ensure youth receive the support they need as they transition to the world of work or postsecondary education. Regarding alignment of reporting on post-school outcomes, WIOA requires the specific indicators for youth programs identified in WIOA sec. 116(b)(2)(A)(ii). No change to the regulatory text is being made in response to these comments.

Comments: A number of commenters stated that the Departments only should measure status of employment or education in the second quarter after exit, rather than an entered employment or education rate that includes only those not employed or not in education prior to program enrollment. This commenter also asked for a clarification of the definition of education and training activities related to the two youth indicators that measure the percentage of participants in unsubsidized employment or in education or training activities. One commenter suggested that any type of education should count in the two youth indicators related to employment or education or training.

Departments' Response: The Departments agree that the first two indicators only should measure status of employment or education in the second and fourth quarter after exit, respectively, regardless of employment or education status at enrollment. The definition of education and training activities related to the two youth indicators will be included in the WIOA Joint Performance ICR. Both secondary and postsecondary education will count as successful outcomes for the two youth indicators related to employment or education or training. No change to the regulatory text is being made in response to these comments.

Comments: Many commenters addressed the third primary performance indicator, which measures median earnings in the second quarter after exit. The commenters reasoned that areas that are highly successful in exiting youth to postsecondary education and training should not be penalized; therefore, youth who are working part-time and are also in education or training activities should be excluded from the calculation of median earnings. In addition, a commenter suggested that the focus of services to youth is education and training and, therefore, a measure of median earnings does not seem appropriate.

Departments' Response: WIOA requires all participants with earnings in the second quarter after exit to be included in the earnings indicator, including participants engaged in education or training programs. Therefore, youth who are working part time while in education or training activities will be included in the calculation of median earnings. Those engaged in both employment and education and training will be taken into account in both the statistical adjustment model and through target setting. No change to the regulatory text is being made in response to these comments.

The fourth primary indicator for youth measures attainment of a recognized postsecondary credential, or secondary school diploma or its recognized equivalent, by participants who are enrolled in an education or training program (excluding those in on-the-job training or incumbent worker training), subject to the caveat that such participants only are measured as successes if the participant is also employed or enrolled in an education or training program leading to a recognized postsecondary credential within 1 year from program exit. The language of this indicator is the same as the indicator in § 677.155(a)(1)(iv). The Departments have provided an in-depth explanation of this in the preamble for § 677.155(a)(1)(iv) above and refer readers to this section for more information on this indicator. No particular comments were received regarding the implementation of the fourth primary youth indicator, other than discussed above. The Departments are implementing § 677.155(c)(4) as revised.

The fifth primary indicator documents measurable skill gains. The language of this indicator is the same as the indicator in § 677.155(a)(1)(v). The Departments have provided an in-depth explanation of these changes in the preamble for § 677.155(a)(1)(v) above. No particular comments were received regarding the implementation of the fifth primary youth indicator, other than discussed above. The Departments are implementing § 677.155(c)(5) as revised and discussed in more detail above with respect to § 677.155(a)(1)(v).

The sixth primary indicator measures effectiveness in serving employers. The Departments' approach for measuring this indicator and the resulting changes to the regulatory text are discussed in significant detail in the preamble discussion for § 677.155(a)(1)(vi) above and that approach is applicable for this indicator for purposes of calculating performance under the title I youth program.

Comments: A commenter suggested that the proposed youth indicators in § 677.155(d)(1) and (2) sufficiently measure employer satisfaction and that, to the extent that those measures do not sufficiently measure employer satisfaction, a brief survey could be developed and administered to measure employer satisfaction.

Departments' Response: The Departments have concluded that the effectiveness in serving employers Start Printed Page 55850indicator is statutorily required as a separate indicator from percentage of participants in education or training activities, or in unsubsidized employment, during the second and fourth quarters after exit from the program. The Departments will be implementing a pilot program, as discussed above, to assess measures of effectiveness in serving employers.

Comments: One commenter stated that the introductory description provided under this proposed section is confusing regarding the primary indicators, particularly when distinguishing between the adult and youth indicators. The commenter suggested that the indicators of performance for adults and youth be separately described so there is no confusion in the field as to which indicators apply to each population group.

Departments' Response: As suggested, the Joint WIOA Final Rule separates adult and youth indicators to avoid confusion.

Comments: One commenter suggested that the VR program report youth performance separately just as title I youth programs.

Departments' Response: Section § 677.155(d) of the NPRM contained the performance indicators set forth in sec. 116(b)(2)(A)(ii) of WIOA, which applies only to the title I youth program. These youth performance indicators are now found in the final regulatory text at § 677.155(c). WIOA sec. 116(b)(2)(A)(i) requires all other core programs, including the VR program, to comply with the primary performance indicators set forth in sec. 116(b)(2)(A)(i) of WIOA and § 677.155(a)(1). Therefore, there is no statutory authority for the Departments to do as the commenter suggests.

The Departments understand that the VR program pays for training and education needed for individuals, including youth, to obtain employment. Because the youth indicators in § 677.155(c) are not applicable to the VR program, State VR programs are not required to report outcomes under the youth indicators. Adult and youth performance outcomes can be differentiated in the RSA-911 data, as has always been the case, with no need for additional reporting burden.

Section 677.160 What information is required for State performance reports?

Section 677.160, which implements sec. 116(d)(2) of WIOA, identifies the information States are statutorily required to report in the State performance report, including levels achieved for the primary indicators of performance. No substantive changes have been made to this section.

Comments: Some commenters expressed concern that in many States and tribal nations it will be time-consuming and costly to collect the data and produce a report for all core programs.

Departments' Response: The Departments understand the concerns expressed by some of the commenters regarding the collection of data needed to produce the annual reports and have made every effort to minimize the burden and cost to States by incorporating only necessary data elements in the Departments' data collection instrument provided through the WIOA Joint Performance ICR. Prior to amending each Department's data collection instrument, considerable time was taken to ensure the required data elements collected would be consistent across all core programs and that the only elements added would be necessary to meet the requirements under sec. 116 of WIOA, thereby minimizing the burden as much as possible. Each core program will be responsible for submitting performance reports to their respective Federal agency, just as has been done prior to WIOA. Further, the Departments clarify in this response that there is no requirement in WIOA or the Joint WIOA Final Rule that data reporting be integrated among all core programs. As discussed in more detail with respect to the issue of “common exit” in the preamble for § 677.150(c) above, DOL intends to work towards developing an integrated reporting mechanism for the core programs it administers. The Departments are open to States wishing to submit integrated performance reports, but a single report submission across core programs is not required. If a State were to do this, it must ensure that it reports on all required reporting elements—both for the common performance accountability system under sec. 116 of WIOA and for each of the program-specific reporting elements.

Comments: Commenters recommended that the Departments develop guidance, technical assistance, or an integrated set of reporting specifications that will allow States to submit customer data in the same format for each of the six core programs.

Departments' Response: The Departments recognize the need for, and will develop and disseminate, guidance and associated technical assistance related to the preparation and submission of joint and WIOA title-specific performance reporting, and the WIOA Joint Performance ICR.

Comments: One commenter suggested that the Departments, working with State and local systems, should consider how core programs can collect and provide information on the amount of training provided to program participants.

Departments' Response: The Departments acknowledge the comment and have concluded that data that will be collected through the WIOA Joint Performance ICR associated with this Joint WIOA Final Rule are sufficient to meet the requirements of sec. 116(d)(2) of WIOA. Prior to imposing additional information collection requirements, the Departments must consider them in the context of associated burden and cost. The Departments have concluded that the final information collections meet the statutory requirement while minimizing reporting burden to the extent possible.

Comments: Commenters urged the Departments to allow the State and local agencies that administer the core programs to have access to the data they need, such as UI wage record data. A commenter added that in some States, a release of information form must be signed by the participant. Another commenter recommended that States should be given the option to await the results of the national data integration workgroup before creating their State interoperable system.

Departments' Response: With regard to the commenters' concerns about the availability of quarterly wage record information and the need for, in some cases, informed consent for the disclosures required under applicable privacy and confidentiality laws and regulations for all programs, the Departments did not modify this regulation. The Departments are developing, and will disseminate, guidance that covers the allowable disclosures and processes through which disclosures can be made under 20 CFR part 603, 20 U.S.C. 1232g and 34 CFR part 99 and 34 CFR 361.38. Additionally, work is underway to re-negotiate the Wage Record Interchange System Data Sharing Agreements to establish pathways to the wage record matching required for all core programs to meet their performance reporting requirements.

Paragraph (a)(1) of § 677.160 requires the total number of participants served and total number of participants exited, disaggregated by the number of individuals with barriers to employment and by numbers of participants co-enrolled in core programs. No change to the regulatory text is being made in response to these comments.Start Printed Page 55851

Comments: Commenters supported the provision in § 677.160(a)(1)(i) that would require reporting to be disaggregated by categories for individuals with barriers to employment. Commenters also urged that the requirement apply to “reportable individuals” as well as “participants.” Those commenters generally suggested that the information in the reporting requirements should be disaggregated based on each disability subset and not the entire group.

Departments' Response: The Departments acknowledge the identified potential benefits for State reporting of disaggregated data for “reportable individuals” in addition to “participants.” For the purpose of § 677.160, the Departments are addressing only the requirements for States' annual performance report as required under sec. 116(d)(2) of WIOA, which requires reports on only participants. It should be noted that the different core programs already collect and report information pertaining to “reportable individuals” through their separate individual reporting vehicles.

With regard to the discrete disability categories, RSA currently collects a number of data elements, including the primary and secondary disability type, for individuals who have been determined eligible for VR services and would be considered a “reportable individual.” The data can be disaggregated in different categories, including by disability type. The final RSA-911, which is published concurrently with this Joint WIOA Final Rule, has been revised to align with the additional WIOA requirements. No change to the regulatory text is being made in response to these comments.

Comments: A commenter recommended that the requirement to collect information on barriers to employment be tied to the point at which the initial IPE is signed.

Departments' Response: The Departments recognize that different State programs have a number of questions regarding how each of the core programs will collect the required data elements, including at what point required demographic information will be collected to produce the most reliable information and how the current consumer information will be updated to meet the new WIOA requirements. These issues will be addressed through guidance related to the WIOA Joint Performance ICR or the Department-specific ICRs. The Departments also note that § 677.150(a)(1) defines participants for the VR program as an individual who has an approved and signed IPE, and who has begun to receive services. Therefore, data elements required on “participants” must comply with the definition applicable to that term for the VR program. No change to the regulatory text is being made in response to these comments.

Comments: Commenters inquired about implementing a count of total participants and total exiters, disaggregated by co-enrollment in any of the core programs. A commenter expressed concern about being able to obtain the information. For disaggregated counts for those who participated by co-enrollment as required by § 677.160(a)(1)(ii), commenters warned that integrated case management and reporting systems would need to be in place, and the commenters requested technical assistance regarding how core programs housed in different agencies can share and compare participant data to meet reporting requirements. One commenter, however, supported the requirement to report data disaggregated for co-enrollment in any of the core programs.

Departments' Response: The Departments acknowledge that the absence of integrated case management or integrated reporting systems poses challenges to ensuring uniform and easy access to data across programs. The Departments have concluded that integrated data systems would allow for unified and streamlined intake, and case management and service delivery, and would overcome many such challenges. The Departments also note that such systems are not widely used or in place currently at the State level, and encourage States to examine ways in which this may be developed or implemented across core programs. The Departments note that data system integration ranges from data sharing between existing systems to employing consolidated systems. However, in the absence of such systems, the Departments encourage all programs to ensure strong partnerships and collaborative workspaces in which to ensure all programs can meet their reporting requirements. In addition to planning and conducting training and technical assistance on data sharing, the Departments will issue joint guidance for matching education and wage records in order to assist States in providing performance information required under WIOA. Additionally, the Departments will work with State and Local WDBs, one-stop center operators, and partners to achieve an integrated data system for the core programs and other programs to ensure interoperability and the accurate and standardized collection of program and participant information. No change to the regulatory text is being made in response to these comments.

Paragraph (a)(2) of § 677.160 requires disaggregated performance levels based on barriers to employment, age, sex, race, and ethnicity. Certain commenters favored this provision. No substantive change was made to this section.

Paragraphs (a)(3) through (a)(7) of § 677.160 require information on participants who received career services and training services. The Departments have revised § 677.160(a)(3), (4), (6) and (7) to specify that career services and training services are two different services, not one type of service. No change was made to § 677.160(a)(5).

Comments: Several commenters stated that tracking these detailed costs would be overly burdensome and exceed the value of the information gained.

Departments' Response: The Departments recognize the concerns identified by the commenters about the States' ability to collect data pertaining to career services and training services, including expenditures. However, the data elements contained in the State performance report, including the data elements on career services and training services, are required by statute. No change to the regulatory text is being made in response to these comments.

Comments: A few commenters recommended that reporting begin with a 1 year period and work up to 3 years.

Departments' Response: The Departments have concluded that these provisions are prospective provisions that do not require retroactive collection of information. Reporting begins in PY 2016, and by PY 2018 States will have reported 3 years of data. No change to the regulatory text is being made in response to this comment.

Comments: Commenters asked for a definition of “career and training service” and the relationship to “vocational and training services” in the VR program regulations.

Departments' Response: WIOA defines both career services and training services in sec. 134(c)(2) and (c)(3)(D), respectively. Additionally, further information is provided in § 678.430 of this Joint WIOA Final Rule about career services in the one-stop delivery system. Although the definitions are contained in statutory provisions relevant only to the title I core programs, sec. 121 of WIOA (which applies to all core programs) requires each of the core programs to provide career services and training services, as applicable to the program, thereby making those Start Printed Page 55852definitions relevant to all core programs, including the VR program. Furthermore, these services are consistent with the types of services provided by the VR program and with the data collected through the VR program's RSA-911 collection instrument.

With respect to § 677.160(a)(3) (4), (6), and (7), the Departments have revised the regulatory text to address commenter requests for clarity. The previous language at § 677.160(a)(3) referred to “the total number of participants and exiters who received career and training services for the most recent program year and the 3 preceding program years, as applicable to the program.” This has been revised to refer to “the total number of participants who received career services and the total number of participants who exited from career services for the most recent program year and the 3 preceding program years, and the total number of participants who received training services and the total number of participants who exited from training services for the most recent program year and the 3 preceding program years as applicable to the program.” In so doing, the Departments make clear that career services and training services are two different types of services, not one type of service. The revised language is also more consistent with the statutory provision by referring to “participants who exited” rather than “exiters” since these final regulations define “exit,” not “exiter.” A similar revision was made to § 677.160(a)(4). Likewise, proposed § 677.160(a)(6) previously referred to “the amount of funds spent on each type of career and training service for the most recent program year and the 3 preceding program years.” This language has been revised to refer to “the amount of funds spent on career services and the amount of funds spent on training services for the most recent program year and the 3 preceding program years, as applicable to the program.” A similar revision was made to § 677.160(a)(7). These changes clarify that the Departments interpret sec. 116(d)(2)(D) to require the collection and reporting on participants who receive career services and participants who receive training services, as well as participants who exited from career services and training services, as a single point of collection and thus does not require an itemized collection and reporting on each of the various career services or each of the various training services that a program provides. Instead, the amount to be reported is the total amount spent on career services and the total amount spent on training services.

Comments: Paragraph (a)(3) of § 677.160 requires reporting on the number of participants and exiters who received career services and training services. A number of comments were received regarding the difficulty of tracking costs associated with expenditures of funds on such services, as required in paragraph (a)(6).

Departments' Response: The Departments will provide technical assistance or guidance in regard to tracking costs associated with expenditures of funds on career and training services.

No particular comments were received in regard to § 677.160(a)(4).

Paragraph (a)(5) of § 677.160 requires reporting on the percentage of participants who obtained training-related employment through WIOA title I, subtitle B programs.

Comments: Some commenters warned that determining what constitutes training-related employment under paragraph (a)(5) is highly subjective and requires clarification.

Departments' Response: The Departments will provide more information regarding what constitutes training-related employment services through the WIOA Joint Performance ICR and through guidance. No change to the regulatory text is being made in response to these comments.

Paragraphs (a)(6) and (a)(7) of § 677.160 require reporting on the amount of funds spent on career services and training services, and the average cost per participant for participants receiving career services and training services.

Comments: Commenters requested guidance on whether the average cost per participant for career and training services refers to the cost to serve the individual or the costs of the career and training services, and whether administrative costs are included. Separately, one of these commenters also asked for the meaning of “type” of service needed for disaggregation in reporting under paragraph (a)(6).

Departments' Response: The Departments will provide guidance regarding calculations of costs in the WIOA Joint Performance ICR. The Departments have revised § 677.160(a)(6) to reflect the statutory language, as WIOA did not require reports on the amount of funds spent on career services and training services to be disaggregated by the type of career service or training service. The language of the regulation no longer refers to the “type” of service.

Paragraph (a)(8) of § 677.160 requires that States report on the percent of the State's annual WIOA allotment expended on administrative costs.

Comments: A commenter sought clarification on whether this means the percentage of each core program's annual allotment spent on administrative cost, or the State as a whole.

Departments' Response: The Departments want to clarify that § 677.160(a)(8) applies only with respect to the allotment under WIOA sec. 132(b) and not with respect to allotments under other core programs. No change to the regulatory text is being made in response to this comment.

Paragraph (a)(9) of § 677.160 requires information that facilitates comparisons with programs in other States.

Comments: Some commenters opposed a requirement for additional data collection and preferred, for example, development of shared tools/surveys for measuring the quality of services to one-stop center customers.

Departments' Response: The Departments note that WIOA allows consideration of information that is necessary to facilitate comparison of programs across States, which could potentially include the development of shared tools or surveys. No change to the regulatory text is being made in response to these comments. Further, the Departments note that implementation of this provision would be accomplished through the information collection request process.

Comments: The Departments also sought comments on the potential inclusion of a supplemental customer service measure, including suggestions on how to structure such a measure and whether the inclusion of such a measure would be valuable. Commenters did not favor developing a universal access point for customer feedback to be provided with regard to the one-stop centers, though other commenters expressed support for State or local measures of customer satisfaction. One commenter asserted that such information would serve as a foundation for substantive strategic planning, continuous improvement, program research and evaluation, and the dissemination of best practices nationwide.

Departments' Response: The Departments are considering various mechanisms available to produce a national measure of customer satisfaction, with particular interest in a measure akin to the net promoter score used commonly in business and industry. Additionally, the Departments intend to collect information on Start Printed Page 55853customer satisfaction efforts used by the State and local areas through the WIOA Joint Performance ICR as well as information on what States are doing to leverage such information in the management of their programs. The Departments continue to welcome input and participation from States and local areas on how to capture customer satisfaction as it pertains to usage of the public workforce system.

Comments: Other commenters also supported the provision and suggested customer service measures to assess the quality of services, but warned that guidance is needed. A few commenters reasoned that a customer service measure is valuable only if the local area receives the information and has a mechanism to reach out to the customer and make the experience better.

A few commenters warned that obtaining the data would be difficult and suggested that the measure should be left to the discretion of the State or local government. Commenters recommended that the provision should be part of the continuous improvement process at the local level. In addition to the approach described above, the Departments also are interested in the work that has been developed and used at the State and local levels with regard to customer satisfaction, as well as what actions States and Local areas have and will take in response to such feedback.

Departments' Response: At this time, the Departments are not modifying the regulatory text to regulate such activities. As discussed above, the Departments recognize that, a national, State or local customer satisfaction measure would require guidance and technical assistance that will be provided through the mechanisms available such as the information collection request process, which allows for notice and public comment, program guidance, and technical assistance. The Departments reiterate their intent to implement a uniform, national customer satisfaction survey, applicable to both participants and reportable individuals. While this customer satisfaction survey will not be tied to accountability provisions, and the survey results will not be factored into determinations of sanctions, customer satisfaction will be a factor considered in the certification of one-stop centers. The Departments anticipate the survey will encompass two elements: A national net-promoter score-type indicator will be issued through the amended WIOA Joint Performance ICR with a standard methodology; and a State-based methodology that States will develop and States and Local WDBs will use for one-stop center accountability and customer service improvement. A focus from the Federal level will be on understanding what States and local WDBs did with the results, which is critical to using the data and information gathered towards the betterment of service delivery and design. When the Departments collect information on these activities, such actions and instructions will be conveyed through the information collection process that is also subject to notice and public comment.

Comments: Paragraph (a)(10) of § 677.160 requires a State narrative report regarding pay-for-performance contracting. A local government recommended that the Departments provide a clear definition of pay-for-performance contracts.

Departments' Response: The Departments did not introduce a definition of pay-for-performance contracts under this section of the regulation. The Departments refer to 20 CFR part 683, subpart E, where the allowance and guidelines for pay-for-performance activities is more fully described (see DOL WIOA Final Rule, published in this issue of the Federal Register). Paragraph (a)(10) of § 677.160 remains unchanged from that proposed in the NPRM.

Paragraph (b) of § 677.160 prohibits the disaggregation of data for a category in the State performance report if the number of participants in that category is insufficient to yield statistically reliable information.

Comments: Commenters suggested that States are likely to have several “cell sizes” that do not meet the standard of statistical reliability; therefore, reporting requirements should include alternative methods for summarizing data into larger aggregates. A commenter requested guidance on an acceptable level of disaggregation of data.

Departments' Response: The Departments recognize that disaggregation can produce certain cell sizes that fall below the aggregation levels that are allowed in order to protect the data from yielding PII.

The Departments did not impose a minimum disaggregation level in this section of the NPRM or this Joint WIOA Final Rule and will provide additional clarity through guidance regarding aggregation that is statistically significant and reliable yet protects the identity of individuals served through the programs. In developing such guidelines and guidance, the Departments have considered industry standards such as those established by the National Institute of Standards and Technology (NIST), the Family Educational Rights and Privacy Act (FERPA), the confidentiality regulations for the VR program at 34 CFR 361.38, the UC confidentiality regulations found at 20 CFR part 603, the Social Security Act sec. 1137(a)(5) as well as State laws that govern aggregation levels and factors that can be used to affect the level of suppression required to maintain the privacy and confidentiality of participant data. No change to the regulatory text is being made in response to these comments. Furthermore, the Departments reiterate their interpretation of this statutory provision of WIOA, as noted in the NPRM at 80 FR 20474, 20589 (April. 16, 2015). As written, WIOA sec. 116(d)(2) requires the performance report to be subject to WIOA sec. 116(d)(5)(C). However, this section refers to Data Validation, and the Departments interpret this reference to requires States to comply with sec. 116(d)(6)(C), which ensures the Departments receive statistically reliable information and protects participants' privacy. The Departments are implementing this regulation as proposed.

Paragraph (c) of § 677.160 requires that the State performance report include a mechanism of electronic access to the State's local area and ETP performance reports. This provision does not require a State to submit the actual local area and ETP performance reports with its State report. Failure to provide a mechanism of electronic access to the State's local area and ETP performance reports will constitute an incomplete State performance report submission, and thus trigger sanctions. No comments were received regarding this electronic access reporting requirement. This section remains unchanged from that proposed in the NPRM.

Paragraph (d) of § 677.160 states that States and local areas must comply with the requirements in sec. 116 of WIOA as explained through joint guidance that the Departments will promulgate. This section remains unchanged from that proposed in the NPRM.

Section 677.165 May a State establish additional indicators of performance?

Section 677.165 reflects the WIOA provisions in sec. 116(b)(2)(B) that a State may identify in the Unified or Combined State Plan additional performance accountability indicators. For example, a State could add an indicator for attaining U.S. citizenship, work readiness, completion of work-based learning, or any other indicator of State significance. This provision of additional performance indicators proposed by the State remains Start Printed Page 55854unchanged from WIA. There were no comments on proposed § 677.165. There were no substantive changes made to this section.

Section 677.170 How are State levels of performance for primary indicators established?

Section 677.170 outlines the process that will be followed and the factors that will be considered in determining adjusted levels of performance. WIOA uses the term “adjusted levels” to refer to both the levels agreed to prior to the start of a program year, as well as the adjustment done using the objective statistical model at the close of the program year. In order to distinguish between the two adjustment processes described in statute, this section was revised to use two different terms for each process, specifically “negotiated levels of performance” and “adjusted levels of performance.” Section 677.170 was revised to provide specific distinctions among expected levels, negotiated levels, and adjusted levels of performance. The section explains the process under which levels of performance are negotiated, adjusted, and then calculated.

Section 677.170(a)(1) implements the requirement in sec. 116(b)(3)(A)(iii) that States provide expected levels of performance in the initial submission of the Unified or Combined State Plan for the first 2 years of the plan. In addition, the Departments are requiring in § 677.170(a)(2) that the States submit expected levels of performance for the third and fourth years before the start of the third program year covered by the Unified or Combined State Plan consistent with §§ 676.135 and 676.145, as part of the State Plan modifications under sec. 102(c)(3)(A) of WIOA.

Comments: One commenter questioned whether performance levels required in the State Plans are the proposed standards or the negotiated standards since the term “expected” is used. The commenter also recommended that the State WDB coordinate and participate in performance negotiations for each partner and that the negotiations be completed with States at least 45 days before the statutory deadlines for submission of the 4-year plans and the 2-year plan modifications.

Departments' Response: Section 116(b)(3)(A)(iii) of WIOA requires that each State identify expected levels of performance for each of the corresponding primary indicators of performance for each of the core programs for the first 2 program years covered by the Unified or Combined State Plan. The expected levels of performance are those submitted by the State in the initial submission of the State Plan prior to negotiation. The expected levels of performance will be used to reach agreement with the Departments on State negotiated levels of performance. Therefore, the expected performance levels are similar to proposed goals, reflecting the State's expectations for its performance. These expected levels, however, will be adjusted through negotiations between the State and the Departments in accordance with sec. 116(b)(3)(A)(iv) of WIOA. Once the negotiated levels of performance are agreed upon, these levels will be incorporated into the approved Unified or Combined State Plan. Section 677.170(a) reflects this statutory requirement. The Departments did not modify the regulation to require coordination across core programs with regard to the negotiations process, as recommended by the commenter. The Departments agree that the commenter's suggestions are important for the purposes and priorities of WIOA and strongly encourage coordination across the core programs and other partner programs with respect to negotiating performance levels for all programs operating in a State. This section is consistent with the statutory requirements; the timing of the negotiation is connected to the approval of the State Plan. The Departments will provide guidance about the negotiation process.

Section 677.170(b) requires that the State reach agreement with the Secretaries on negotiated levels of performance based on the factors in WIOA sec. 116(b)(3)(A)(v). The Departments reiterate that WIOA uses the term “adjusted levels” to refer to both the levels agreed to prior to the start of a program year, as well as the adjustment done using the objective statistical model at the close of the program year. This paragraph was revised to use the term “negotiated levels” as appropriate, to distinguish between the two processes.

The Departments sought comments on whether any additional factors, beyond those identified in the proposed regulation, should be considered in developing the statistical adjustment model, and the best approach to updating the model as necessary.

Comments: Several commenters requested clarification of the requirement for promoting continuous improvement, as set forth in paragraph (b)(3) of § 677.170. One commenter recommended that the Departments consider embracing the full concept of continuous improvement or eliminate the term from the regulations because a true continuous improvement measure may have nothing to do with increasing a performance measure and may seek to improve a process. Another commented that continuous improvement can be defined in a variety of ways, including as improvements in efficiency. Commenters also requested that continuous improvement be defined in the regulation.

Departments' Response: The Departments want to make clear that sec. 116(b)(3)(A)(v) of WIOA requires the negotiated levels of performance take into account four factors, including, among other things, how the levels of performance promote continuous improvement. The Departments recognize the complexities involved in using a continuous improvement factor in performance negotiations. However, the Departments are unable to remove the continuous improvement factor from the regulation because it is a statutory requirement. The Departments will issue guidance on the performance negotiations process that will provide additional information regarding how the factor will be applied. No change to the regulatory text is being made in response to these comments.

Section 677.170(c) provides that the Secretaries will disseminate an objective statistical adjustment model that will be used both to reach agreement on the State negotiated levels of performance and to revise the negotiated levels at the end of a program year, to establish the adjusted levels of performance. The objective statistical adjustment model will account for actual economic conditions and characteristics of participants, including the factors required by WIOA sec. 116(b)(3)(A)(v)(II). The Departments will consider identified statutory factors and other factors, which through empirical support are established to have an effect on employment or skill outcomes and are consistent with the factors identified in WIOA. The Departments also will publish guidance that includes how the model was developed, what factors were considered, and how the results are interpreted.

The regulation reflects the statutory requirement that the objective statistical model consider certain factors. The differences among States in actual economic conditions, as set forth in § 677.170(c)(1) for required inclusion in the statistical adjustment model, include the same economic conditions identified in WIOA sec. 116(b)(3)(A)(v)(II)(aa). The characteristics of participants, as set forth in § 677.170(c)(2) for required inclusion in the statistical adjustment Start Printed Page 55855model, include the factors identified in WIOA sec. 116(b)(3)(A)(v)(II)(bb).

Comments: One commenter expressed concern that including participants' disability status as a factor in the objective statistical model could unintentionally undermine the goal of increasing the number of participants with disabilities in integrated and competitive employment settings.

Departments' Response: The Departments note that disability status is a statutorily required factor for the objective statistical model. The Departments also note that continuous improvement is a factor in establishing the negotiated levels of performance.

Comments: In the preamble to the NPRM, the Departments requested comments specifically concerning additional factors to consider in developing the statistical adjustment model. Many commenters supported the commitment to use a statistical model and offered additional factors, including race, Hispanic ethnicity, age, gender, veterans in the area, severity of disability (e.g., receiving Social Security disability benefits), seasonal employment, self-employment, minimum wage and other economic data applicable to the local area, nature of predominant employers in the area, quality of educational and training facilities in the area, crime rate in the area, public transportation and geographic barriers in the area, unemployment rate applicable to young people, lack of a high school diploma, individuals not in the workforce, and ratio of earnings at program entry to child support arrearages.

Departments' Response: Upon consideration of comments regarding additional factors to be included in the model, the Departments concluded additional regulation is not required to include additional factors. The Departments intend, in accordance with the statutory requirements for the use of an objective statistical model, to consider those identified statutory factors along with any other factors either established within WIOA or through empirical support (and which are consistent with the factors in the statute) to have an effect on employment or skill outcomes as measured by the primary indicators of performance established in § 677.155. Factors that are included in the model will be based on the application of empirically supported statistical analyses used to determine the effect of a particular factor on participant outcomes. The statistical adjustment model will be reviewed periodically and may be revised with appropriate consultation to ensure its accuracy and utility.

Comments: A commenter asserted that adjusted performance levels should include a factor for small States, single-area States, and areas of generally lower population.

Departments' Response: The Departments are considering all potential factors in an effort to establish a model that is evidence-based and supported by the literature. Having conducted a review of the existing literature, the Departments have concluded that small States and single-area State structures would be accounted for by those variables that capture industrial structures, unemployment rates, and shares of the population represented by race and educational levels. No change to the regulatory text is being made in response to these comments.

Comments: One commenter suggested that the Departments be mindful of the potential burden that requiring additional data collection would create and urged reducing reporting burdens and simplifying reporting requirements.

Departments' Response: The Departments are mindful of the reporting burden that would result from requiring additional information on participants. In this case, the Departments aim to work with States as well as other agencies that may have administrative data that could be used to populate the model based on established, empirical evidence that such information is shown to have an effect on the outcomes being measured.

Comments: A few of the commenters suggested that the Secretaries may need to establish separate statistical models for different programs, such as those for youth and for adults, and suggested that the models should be tested over a trial period and re-examined. Commenters also recommended regular updates to the models.

Departments' Response: Section 116(b)(3)(A)(v)(II) of WIOA requires that adjustments be made using “the objective statistical model,” which the Departments will build on a common framework for all core programs to allow for programmatic differences between programs. The model will be examined and revised as necessary. No change to the regulatory text is being made in response to these comments.

Comments: One commenter raised concerns about the title II program not collecting individual records at the Federal level and stated that such records are absolutely necessary to develop and operate statistical models. The commenter urged the Departments to develop a common reporting mechanism. Other commenters noted that title II programs lack experience using adjustment models and requested additional guidance and technical assistance.

Departments' Response: The Departments acknowledge that the use of aggregate data for the title II AEFLA program creates shortcomings for developing an adjustment model because, among other things, the results only can be used to adjust performance at the aggregate level (i.e., State) and results from these models cannot be applied to any sub-level (e.g., city, county). However, the Departments disagree that individual data are absolutely necessary to develop a statistical adjustment model for State-level adjustments. Aggregate data may be used in statistical adjustment models when individual records are not available. The Departments have already developed statistical models for other program purposes that produce accurate results using aggregated data and show that results are comparable for State level adjustments, regardless of whether individual data (i.e., disaggregated data) or aggregate data are used. The Departments note that for the AEFLA program under title II, ED will provide technical assistance to States in applying the statistical adjustment model. The Departments will develop procedures to minimize burden to States when using the model to generate adjusted levels of performance. No change to the regulatory text is being made in response to these comments.

Comments: A few commenters warned that there is limited or no statistical tribal data available that captures economic circumstances for the various Indian and Native American geographic service areas. One of these commenters added that a regression model that factors in local economic conditions will need to be developed for the INA program.

Departments' Response: In response to the commenter's concern about developing an accurate regression model to establish levels of performance for INA program grantees, the Departments recognize that labor market information (LMI) for American Indian geographic service areas may not be as reliable as that for other areas. However, the regression model also factors in the characteristics of participants served by the grantee and is, therefore, not totally dependent on LMI. Despite the potential for inaccurate LMI data for American Indian geographic service areas, the Departments are confident a regression model can be developed that establishes fair and attainable levels of performance for each INA program grantee's service area. The Departments envision developing further guidance regarding Start Printed Page 55856INA adult performance indicators. No change to the regulatory text is being made in response to these comments.

Comments: Some commenters did not support the use of an adjustment model, or express concerns about the design of the State performance accountability systems, because of the temptation to serve those individuals who are more likely to achieve positive outcomes. This commenter also noted that the fact that the State has sufficient tools to evaluate current and projected performance to identify intervening occurrences that would trigger re-evaluation of performance.

Departments' Response: While the Departments understand the concerns expressed, sec. 116(b)(3)(A)(v)(II) of WIOA requires the use of an objective statistical model to adjust the State levels of performance based on actual economic conditions and characteristics of participants. The Departments caution that any service provider tempted to utilize the tactics described by the commenter should consider the impact on future performance levels, which may be affected because of relatively lower numbers or percentages of hard-to-serve populations and other populations with barriers to employment. No change to the regulatory text is being made in response to this comment.

Comments: Commenters added that the model will need to account for varying levels of impact of a particular demographic or local economic condition in different parts of the country, in particular race and ethnicity, offender status, dependence on public assistance, local minimum wage, and the local unemployment rates for young adults. Some commenters recommended these factors be explicitly mentioned in the regulation. One such commenter suggested that select CEOs participate in the selection of factors in different parts of the country.

Departments' Response: The Departments are considering a State fixed effect variable. Such a variable would account, in essence, for the quality of the programs and their services. The Departments, after consulting with various stakeholders and particularly in consultation with expert reviewers, identified that the most important piece of information that is not directly included within the statistical adjustment model for the purposes of the performance accountability system, is the quality of the programs and services. The model is being developed with consideration of all participant and student variables required by WIOA and the potential State specific factors that could be accounted for through a State fixed effect variable. This variable ultimately could serve the same purpose statistically as including additional individual characteristics and any other State characteristic not included in the model. With regard to participation of select CEOs in the selection of factors to be included within the statistical adjustment model, the Departments note that the methodology, including the factors in the model, will be available for public comment and review. Moreover, WIOA sec. 116(b)(3)(A)(viii) requires the Departments to develop an objective statistical model in consultation with a variety of stakeholders identified in sec. 116(b)(4)(B), who would include CEOs. No change to the regulatory text is being made in response to these comments.

Comments: Some commenters also suggested that States should be allowed to provide additional information specific to the State that may not be fully accounted for in the national statistical models when setting performance targets. Some commenters suggested that State and local areas should be able to document this information and use it in performance negotiations. Others stated that additional State information is critical because it is not feasible to develop a single statistical model with one set of demographic and economic variables that is equally accurate for all States and all boards.

Departments' Response: The Departments note that States are permitted to provide additional information concerning factors listed in sec. 116(b)(3)(A)(v) of WIOA during the negotiations process. The States may provide relevant documentation and research concerning these factors during the negotiation process. The Departments will ensure that each programs' data, its availability, and its specificity will be considered in developing the methodology and framework for the application of the model to each program. The Departments intend to continue to assess the quality and robustness of the statistical adjustment model since it plays such a key part in the adjusted levels of performance under this section. No change to the regulatory text is being made in response to these comments.

Section 677.170(d) requires the statistical adjustment model to be used before the beginning of a program year as a consideration in establishing levels of performance, and then used to adjust levels of performance at the end of a program year. The Departments reiterate that WIOA uses the term “adjusted levels” to refer to both the levels agreed to prior to the start of a program year, as well as the adjustment done using the objective statistical model at the close of the program year. This paragraph was revised to use the term “negotiated levels” as appropriate to the process.

Comments: Several commenters opposed having the goals adjusted twice a year, because it would make building strategic plans difficult, add additional burden, and create a moving target. Another commenter requested that the margin of error be published with the statistical models. A few commenters asserted that applying the formula at the end of the year creates the possibility of targets higher than planned outcomes, which could lead to local areas failing performance. The commenters stated that this approach does not lend itself to a strategic planning process. An individual suggested that the year-end adjustment process needs to allow room for additional factors that were not anticipated to be significant at the start of the year, and another commenter asked whether States will be able or required to negotiate the final targets or if the results of the model will be applied without discussion.

Departments' Response: Section 677.170(d) implements sec. 116(b)(3)(A)(iv) and (vii) of WIOA and requires the objective statistical model to be applied before the beginning of the program year as a consideration in establishing State levels of performance for the upcoming program year and be used again at the end of the program year based on actual circumstances. Therefore, there is no statutory authority to delete the requirement to use the objective statistical model at the end of the program year. The concern about margin of error is important in evaluating the results from the model. Consequently, the Departments will provide confidence intervals along with the adjusted performance measures for each State. The Departments also recognize that the effects of variables used in the adjustment model may change over time. No change to the regulatory text is being made in response to these comments.

Comments: Commenters requested that the model be made available for the States to install within their own information systems so that it can be made available to the local areas.

Departments' Response: The Departments acknowledge the commenters' interest in incorporating the model within their own systems. As required by WIOA, the Departments intend to make the statistical adjustment model available to States, local areas, and the public. No change to the Start Printed Page 55857regulatory text is being made in response to these comments.

Comments: Commenters sought guidance and technical assistance, including guidance on how to ensure that disadvantaged populations receive comparable services throughout the program with expectations that they will achieve outcomes leading to successful exits similar to all participants in the program. A commenter favored development of a common reporting mechanism, so that model development would not be delayed by claims that the necessary data are not available.

Departments' Response: The Departments intend to publish guidance that includes how the model was developed, what factors were considered, and how the results are interpreted. The Departments also share the commenters' concerns regarding comparable service for disadvantaged participants and commit to providing technical assistance and guidance on how to ensure an equal distribution of services. No change to the regulatory text is being made in response to these comments.

Comments: Many commenters suggested that, because data are lacking to set benchmarks for the new outcome measures, FY2017 should be a benchmarking year, or implementation should be lagged for 2 to 4 years to establish accurate levels of performance. A commenter expressed concern about the comparability of data across core programs and across States. Another commenter asked for clarification on whether there will be sanctions for low performance prior to the establishment of benchmarks and baselines.

Departments' Response: The Departments have revised § 677.190(c) in response to these comments; more information about the Departments' approach is set out below in the preamble to that section.

Section 677.170(e). The Departments added a new paragraph (e) to § 677.170, and renumbered the previous paragraph (e) as § 677.170(f). The new paragraph (e) specifies that the previously discussed negotiated levels, after being revised at the end of the program year based on the statistical adjustment model, are the adjusted levels of performance.

Section 677.170(f) requires States to comply with the requirements in sec. 116 of WIOA. The Departments intend to issue guidance, which may include information on reportable individuals as established by the Secretaries. No comments were received regarding this reporting requirement and no changes have been made to this section.

Section 677.175 What responsibility do States have to use quarterly wage record information for performance accountability?

Section 677.175 implements the requirement that States must, consistent with State laws, use quarterly wage record information to measure progress on State and local performance accountability measures, as required by sec. 116(i)(2) of WIOA. Such information includes the intrastate and interstate wages paid to an individual, the individual's SSN, and information about the employer paying the wages to the individual.

After further review of this provision, the Departments recognize that some participants may not be included in quarterly wage records held by the State, such as those participants who refuse to provide a SSN to the program or who may be self-employed. In light of this fact, the Departments have revised § 677.175(a) to make clear that States must use quarterly wage records to the extent they are available; however, States may use other information when such records are not available. In so doing, the Departments ensure that programs may track the participants for performance accountability purposes even if their information is not contained in the State's quarterly wage record system.

The Departments have revised § 677.175(c) to provide that the State agency or appropriate State entity designated to assist in carrying out the performance requirements is responsible for preventing disaggregation that would violate applicable privacy standards. The Departments added the words “applicable” and “standards” to § 677.175(c)(3) to require that the States must consider the privacy standards that apply to them.

Comments: A significant number of commenters raised concerns about the difficulty in matching wage records, citing concerns over FERPA privacy rules, that students often refuse to provide SSNs (for reasons such as concern about consumer fraud and uncertain residency status), some students do not have SSNs, and several States do not allow programs to collect SSNs. Some of these commenters asserted that there are other data matching mechanisms by which to track employee outcomes. Other commenters suggested not including participants without SSNs in the measure for computing the percentage for the performance target. Many commenters also urged the Departments to provide guidance on how to collect employment-related data without use of SSNs, acceptable forms of SSN validation, and on alternatives to using wage records. Many commenters added that data from the UI wage record system often do not present a complete picture of employment because it excludes the self-employed, those outside of an individual State, and risks over-representing Limited English Proficient individuals in the non-matching group. Some of these commenters recommended that States be given supplemental options such as follow-up calls or emails to verify employment status.

Departments' Response: The Departments considered the commenters' concerns about the obstacles to using wage record information and agree there are limited circumstances in which such information may not be available. The Departments want to make clear that sec. 116(i)(2) of WIOA requires that States use quarterly wage records when determining performance under the primary performance indicators that measure employment status and median earnings. Using its authority under sec. 189 of WIOA, the Secretaries are allowing States to use other information to verify performance of those individuals for whom quarterly wage records are not available, such as those who are self-employed. This flexibility is necessary to carry out the requirements of WIOA and its performance accountability system. To do otherwise would potentially result in programs not able to report on participants as required under WIOA. Therefore, where available and possible, States must use wage records to fulfill reporting requirements. Furthermore, the Departments understand that wage record information may not provide a complete representation of the employment outcomes. For all the reasons discussed here, the Departments will allow the collection and verification of supplemental wage information to demonstrate employment outcomes in the second and fourth quarters after exit in those instances where wage records are not available. However, if a State uses supplemental information to report on the employment rate indicators, the State also must use supplemental information to report on the median earnings indicators. The Departments will provide guidance on acceptable supplemental information to verify performance outcomes. Section 677.175(a) has been revised to reflect the changes described here.

With regard to acceptable forms of SSN validation, the Departments note Start Printed Page 55858that WIOA sec. 116(d)(5) requires the Departments to issue data validation guidelines, which the States must use to ensure that the information in the reports is valid and reliable. See the preamble to § 677.240 below for further discussion on this requirement.

In the NPRM, the Departments expressed the intent to engage in a renegotiation of the WRIS data sharing agreements with States, which will allow States to conduct interstate wage matches for all WIOA core programs. Like WIA, WIOA similarly provides authority for the Departments to facilitate data matching between the States.

Comments: Several commenters approved of this commitment and encouraged the Departments to clarify that all the core programs may use the Federal Employment Data Exchange System (FEDES) for WIOA performance reporting.

Departments' Response: Under WIA, DOL's Employment and Training Administration aided in the establishment and management of a system through which participating, signed States could access Federal employment records from the participating government agencies. The Departments have concluded that the authorities established in WIOA allow for the continuation of such an agreement to facilitate wage matching for Federal employment for States that become signatories to the established data sharing agreement. The Departments have concluded that such agreements should be entered into and conducted at the State level based on the language of WIOA sec. 116(i)(2), which requires that the use of wage records must be consistent with State law. Moreover, WIOA sec. 116(i)(2) requires the Secretary of Labor to facilitate such arrangements between States. Therefore, the Departments continue in their commitment to review and renegotiate the appropriate agreements with State government entities that provide the necessary wage data for complete and robust performance reporting across all core programs under WIOA.

Comments: One commenter recommended that, for private training providers who cannot access wage record information, regulations should provide that the data these entities submitted for training participants not found in the UI wage records be returned to the provider, indicating that the records do not match UI records.

Departments' Response: ETP access to wage records is governed by the UC Confidentiality and Disclosure regulations at 20 CFR part 603. Therefore, training providers seeking access to wage records must comply with these provisions. Because ETP access is governed by 20 CFR part 603, the Departments have not changed § 677.175 in response to this comment. However, the Departments will issue guidance regarding the process of matching wage records. No change to the regulatory text is being made in response to this comment.

Comments: Another commenter favored allowing performance to be reported disaggregated by industry.

Departments' Response: The Departments consider additional disaggregation, when it is not required by statute, to pose an additional and unnecessary burden on the States. Moreover, many States do not require the inclusion of the North American Industry Classification System codes within wage records. Therefore, its inconsistent availability makes requiring this kind of reporting infeasible. No change to the regulatory text is being made in response to this comment.

Comments: One commenter suggested that WDBs and AEFLA providers are entitled to know whether a participant they served was employed in a given quarter.

Departments' Response: The Departments reiterate that an entity's ability to obtain this information depends on their compliance with the confidentiality requirements of 20 CFR part 603 (covering UC records), 34 CFR part 99 (covering educational records protected by FERPA), and 34 CFR 361.38 (covering VR records), as well as any applicable State laws. However, the Departments want to make clear that States are responsible for ensuring the appropriate entities have access to the information required for reporting purposes under WIOA sec. 116 and these regulations.

Comments: The Departments received several comments related to the use of wage record information and the VR program. Another commenter asked whether the wage record provision will be tracked in the VR program differently than in the other core programs. A commenter requested that additional guidance on VR access to WRIS be issued so that States may plan any necessary changes to their IT systems.

Departments' Response: The Departments recognize the unique disclosure requirements that have to be navigated by various entities. Because of the importance of protecting PII while also obtaining the necessary information needed for States to comply with the performance accountability system requirements, the Departments will issue guidance to assist States in regard to accessing wage record information.

The Departments also refer these commenters to the UC Confidentiality and Disclosure regulations at 20 CFR part 603, which govern the confidentiality and disclosure of, wage record information. It should be noted that the confidentiality provisions apply to PII contained within a wage record and this extends to the absence of data for an individual level as well. The tracking of employment outcomes through wage record matching is subject to 20 CFR part 603 and any applicable Federal and State laws; therefore, there may be some variation in the mechanisms for matching wage record data via the State UC agencies and the process through which any core program enters into and engages under those agreements. Furthermore, regulating access to wage record information is beyond the scope of this part. No change to the regulatory text is being made in response to these comments.

Comments: A commenter asserted that if the VR program is to track progress on wages, then it would need ready access to longer-range employment data.

Departments' Response: The VR program is subject to the same outcome reporting requirements as the other core programs under WIOA. Thus the Departments have concluded that access to a different duration of employment data is not necessary. No change to the regulatory text is being made in response to this comment.

Comments: Another commenter requested clarification on how participants who are seeking to better themselves without entering the workforce or postsecondary education should be treated in the performance accountability system. This population includes retirees, the non-working disabled, and English language learners who are seeking to improve their language skills but are not in the labor force.

Departments' Response: The Departments interpret WIOA sec. 116(b)(2)(A)(i) to require all participants to be included in the primary performance indicators, with very limited exceptions, regardless of their employment status at program entry. No change to the regulatory text is being made in response to this comment.

Comments: A commenter requested clarification about whether the wage record information refers to wages paid or wages earned.Start Printed Page 55859

Departments' Response: The Departments clarify that the wage record information held by State UC agencies, from which wage record information is drawn, only contain the wages paid to an individual. See 20 CFR 603.2(k)(1). Moreover, sec. 1137(a)(3) of the Social Security Act, which creates the requirement that States provide quarterly wage reports, only requires that employers report wage information. Similarly, sec. 3306(b) of the Federal Unemployment Tax Act defines wages as all remuneration for employment. Because the records only include wages paid, the Departments interpret WIOA sec. 116(i)(2)'s requirement to use State UI wage records to mean that the States only are required to report on wages paid. No change to the regulatory text is being made in response to this comment.

Comments: Some commenters favored data sharing and record matching across departments and programs. Another commenter said that the Indian and Native American programs (INAP) do not have a mechanism to match participant SSNs with UI wage records. One commenter recommended that the Departments, in renegotiating the Wage Record Interchange System (WRIS) agreements, make it possible for States to access readily both intra- and interstate UI data beyond the fourth quarter after exit for longer-term program impact evaluations.

Departments' Response: The Departments recognize the variety of structures that exist for programs under WIOA; some programs are run through the States and others are run through sub-State level grantees. The Departments recognize the challenges faced by the INA programs in complying with WIOA performance reporting requirements and will be issuing guidance for and providing technical assistance to those programs. Under WIA the Secretary of Labor, working with States, established the WRIS to facilitate access to interstate wage data for State workforce agencies to fulfill their performance reporting requirements. In addition, DOL established the Common Reporting Information System (CRIS) in order to provide access to the aggregate wage data necessary for performance reporting, to those workforce programs that were not operated by State workforce agencies. These programs included the WIA national programs, such as INAP and NFJP, as well as competitive and discretionary grant programs operated under the jurisdiction of DOL.

Under WIOA, the WRIS, WRIS2, and CRIS are being reviewed and renegotiated to establish the mechanisms for programs, including those under the jurisdiction of ED, where applicable, to access the quarterly wage data necessary for grantees to fulfill their WIOA performance reporting requirements.

The Departments considered these comments and made no changes to the regulatory text. First, WIOA sec. 116(i)(2) already requires that the wage records of any State receiving program funds are available to any other State to the extent that such wage records are required by the other State in carrying out performance accountability for its State Plan. While the Departments are working to facilitate applicable programs' access to intra- and interstate UI data, the Departments have determined that the conditions and availability of the records outlined within these agreements are not appropriately included in this regulation.

Comments: A commenter suggested that DOL look at wage record pilots to research gaps in wage record use.

Departments' Response: The Departments will continue to give consideration to activities that identify gaps and improve on the usage of wage record information for the purposes of performance reporting. No change to the regulatory text is being made in response to this comment.

Comments: Several commenters suggested that Local WDBs have access to data that is timely and pertinent, citing surveys in which participants say that their job is unrelated to the training received.

Departments' Response: The Departments recognize the need for local areas to gain access to timely and accurate data and the Departments strongly urge States to provide the sub-State level local area reporting outcomes to their local areas along with the reporting that they submit to the Departments. No change to the regulatory has been made in response to these comments.

Comments: Commenters suggested that the wages should include all program participant wages, pre- and post-exit.

Departments' Response: The Departments have concluded that it is not necessary to include this level of specificity in the regulatory text. Such information and its required collection are handled through the WIOA Joint Performance ICR. No change to the regulatory text is being made in response to these comments.

4. Sanctions for State Performance and the Provision of Technical Assistance (20 CFR part 677, subpart B; 34 CFR 361.180 through 361.200; 34 CFR 463.180 through 463.200)

Section 677.180 When is a State subject to a financial sanction under the Workforce Innovation and Opportunity Act?

Section 677.180 outlines performance and reporting requirements that are subject to sanctions under sec. 116(f) of WIOA. Section 677.180 provides that the failure to submit the State annual performance report required under sec. 116(d)(2) of WIOA is sanctionable, and that sanctions for performance failure are based on the primary indicators of performance. The Departments have revised § 677.180 to correct a statutory citation error in the introductory paragraph (to change WIOA sec. 116(d) to sec. 116(f)). WIOA sec. 116(d) outlines the requirements for performance reports. The correct reference should be to sec. 116(f), which governs sanctions for State failure to meet State performance accountability indicators. No other substantive changes were made to this section.

Comments: Commenters expressed support for the imposition of sanctions for failure to report as well as for failure to meet a performance standard.

A few commenters stated that funding and sanctions should be tied to individual programs to ensure that a core program's poor performance does not negatively impact the funding of other core programs.

Departments' Response: The Departments recognize the commenters' concerns regarding funding and sanctions being tied to individual programs; however, WIOA sec. 116(f)(1)(B) makes clear that the sanctions are imposed against the Governor's Reserve for statewide activities under the title I adult, dislocated worker, and youth formula programs regardless of which of the six core program's performance constitutes a failure giving rise to the sanction. Therefore, given the explicit statutory requirement, the Departments do not have the authority to do as these commenters suggested. No change to the regulatory text was made in response to these comments.

Comments: Another commenter requested clarification regarding how individual core programs will be held accountable if they reside in different agencies.

Departments' Response: The Departments note that accountability for the State's performance rests with the Governor and State WDB, through Start Printed Page 55860which all core programs are represented. Therefore, even if the core programs are located in different agencies, there is no difference in how the States and core programs are treated. The Departments encourage and expect the core programs to work closely together regardless of the State agency in which they are located. No change to the regulatory text was made in response to this comment.

Comments: A commenter sought clarification concerning the process for submitting the State annual performance report and the manner in which sanctions will be enforced.

Departments' Response: The Departments consider the process of submitting State annual performance reports to fall under the purview of sub-regulatory guidance as it is implementation of the regulatory requirements. Therefore, the Departments will issue guidance clearly explaining how to carry out the annual reporting process. The Departments will impose financial sanctions consistent with WIOA sec. 116(f)(1)(B), which provides for a five percent reduction of the State Governor's Reserve for Statewide Activities from the amount allocated in the immediately succeeding program year. The Departments consider the logistics of how the financial sanction will work to fall under the purview of sub-regulatory guidance as it is implementation of the statutory and regulatory requirement. Moreover, the financial sanctions will be carried out consistent with financial management and rules already in place. Therefore, the Departments will issue further guidance on how this process will be conducted. No change to the regulatory text is being made in response to this comment.

Comments: One commenter requested clarification about whether WIOA or Perkins indicators of performance would take precedence in a Combined State Plan.

Departments' Response: The Departments clarify here that the Perkins program is subject to its authorizing statute's requirements on performance measurement. Should a grantee receive both Perkins and WIOA funds, it must report on both programs accordingly.

Section 677.185 When are sanctions applied for a State's failure to submit an annual performance report?

Section 677.185 outlines the circumstances under which a State may be sanctioned for failure to report under sec. 116(f)(1)(B) of WIOA. No substantive changes were made to this section.

Comments: A commenter stated that the 30-day deadline to request an extension should be removed as it does not allow for exceptional circumstances, such as a natural disaster, that may occur closer to the deadline.

Departments' Response: The Departments refer the commenter to § 677.185(c)(2) which allows for unexpected events within the 30-day period and provides a process by which exceptional circumstances may be addressed in less than 30 days. No change to the regulatory text was made in response to this comment.

Comments: A few commenters supported the enforcement of sanctions for failure to report.

A few other commenters requested clarification regarding what the Departments consider exceptional circumstances under which a State would be exempt from sanctions for failure to report.

Departments' Response: In response to the comments on enforcement of sanctions for failure to report, the Departments note that a State annual performance report is considered complete only when it provides a mechanism of electronic access to local area and ETP performance reports. Thus, the submission of a State annual performance report that does not provide a mechanism of electronic access to local area and ETP performance reports is a sanctionable offense. Section 677.185(b) provides a non-exhaustive list of examples that may qualify as an exceptional circumstance. The listed exceptional circumstances include natural disasters, unexpected personnel transitions, and unexpected technology related impacts. These are not the only circumstances that may be justified, but rather are examples of the types of circumstances the Departments would consider exceptional. The Departments expect that any request for delay or any failure to report timely information would not be based on a routine or predictable situation. The Departments interpret § 677.185(c) to require these exceptional circumstances to be fully documented by the States, supported by clear rationale, and include an estimation of when the performance reports will be made available. The Departments will determine the merits of each request based on exceptional circumstances in consultations with the States, and their respective regional offices. The Departments plan to issue guidance to provide further clarity with regard to exceptional circumstances. No change to the regulatory text is being made in response to these comments.

Comments: A commenter expressed concern that the guidance regarding exceptional circumstances is to be issued without public comment and at a point at which States may already incur sanctions.

Departments' Response: Any guidance issued by the Departments regarding exceptional circumstances would be interpretive and thus, is exempt from the notice and comment rulemaking requirements under the Administrative Procedure Act. See 5 U.S.C. 553(b)(A). The Departments intend to issue guidance prior to applying sanctions. No change to the regulatory text has been made in response to this comment.

Comments: A commenter requested the Departments focus on incentivizing timely submission of State annual performance reports rather than sanctions.

Departments' Response: WIOA sec. 116(f) requires that financial sanctions apply with regard to the timely submission of performance reports and does not provide for incentives within this context. No change to the regulatory text was made in response to this comment.

Section 677.190 When are sanctions applied for failure to achieve adjusted levels of performance?

Section 677.190 governs how States will be assessed for performance failure and when such failure will result in a financial sanction. Although the Departments have referenced other non-core programs in previous sections of this preamble for part 677, consistent with WIOA sec. 116(b)(2) and 116(f)(1)(B), performance success or failure will be based solely on the performance of the six core programs of WIOA—not other partner programs in the public workforce development system. The Departments have added two new provisions to § 677.190(c) to reflect a phased-in approach for applying sanctions for failure to achieve adjusted levels of performance. In addition, the Departments reiterate that WIOA uses the term “adjusted levels” to refer to both the levels agreed to prior to the start of a program year, as well as the adjustment done using the objective statistical model at the close of the program year. Paragraph (c) was revised to make clear that performance accountability will be based on a comparison of the State's performance with that determined to be the “adjusted levels of performance,” as appropriate. These revisions resulted in renumbering the subsequent paragraphs. Section 677.190(c)(2) provides that, until at least 2 years of complete data are available Start Printed Page 55861for each of the indicators, the Departments will assess the State's performance on the overall program score based on the indicators for which there are at least 2 years of data available. Section 677.190(c)(4) similarly provides that until at least 2 years of complete data are available for each of the indicators, the Departments will assess the States' performance on the overall indicator score, based on the indicators for which there are at least 2 years of data available. The Departments consider complete data to consist of, at a minimum, 2 full program years of performance data.

Comments: Many commenters discussed the timeline for implementing the full accountability system, with the majority of commenters supporting a 2-year benchmarking period to allow for the collection of baseline data to be used to assess performance moving forward. Other suggestions included a 1-year baseline period, a 3-year baseline period, and a 4-year baseline period. Still, other commenters supported a baseline period, but did not provide a specific timeline for implementing the full performance accountability system. Commenters supported using the PY 2016, PY 2017, and PY 2018 annual report as the first years to report on State adjusted levels of performance. A commenter suggested the PY 2016 annual report be the first used for all of the performance indicators except credential attainment and measurable skill gains. Some commenters asserted that a 2-year delay in the implementation of sanctions would allow for further calibration of the statistical adjustment model. Some commenters requested a 2-year transition period that would allow States to adapt to the new performance standards before sanctions are implemented.

Departments' Response: Section 677.190(c)(1) and (3) govern how performance on the overall State indicator score and the overall State program score will be assessed. As explained above, the Departments have revised the regulatory text in § 677.190(c) to reflect a phased-in approach for applying sanctions for failure to achieve adjusted levels of performance. Paragraphs (c)(2) and (4) of § 677.190 govern how performance on the overall State indicator score and the overall State program score will be assessed. Section 677.190(c)(2) provides that, until at least 2 years of complete data are available for each of the indicators, the Departments will assess the State's performance on the overall program score based on the indicators for which there are at least 2 years of data available. Section 677.190(c)(4) similarly provides that until at least 2 years of complete data are available for each of the indicators, the Departments will assess the States' performance on the overall indicator score, based on the indicators for which there are at least 2 years of data available. Pursuant to these provisions, the Departments consider complete data to consist of, at a minimum, 2 full program years of performance data.

The Departments acknowledge that, given the lag in reporting data and the amount of time needed for each indicator to be measured, 2 program years' worth of data for each of the indicators will occur at different times. However, the Departments consider it vital that performance accountability take effect as soon as possible to align with the vision and requirements of WIOA. These revisions provide for an assessment of the overall State program and indicator score when the States have reported at least 2 years of complete data for the indicators. For performance accountability determinations, including the determination of failure to achieve adjusted levels of performance, the Departments will not use data reported prior to July 1, 2016. The Departments note that where historical data that were reported under WIA provide a proxy for the new indicators (at least 2 years of data), it is possible to establish a statistical adjustment model for negotiation of those indicators. Such indicators will be included in the overall State program or overall State indicator score for performance assessment when States have reported 2 years of outcomes under WIOA. The States are still subject to a performance risk plan under § 677.200(b).

Comments: Several commenters urged the Departments to delay implementation of the full performance accountability system for reasons other than the collection of baseline data, including that the first annual State report should be coordinated with the development of data systems.

Departments' Response: The Departments recognize the challenges in unified reporting across the core programs. For this reason the Departments are exercising the transition authority in sec. 503 of WIOA to implement the requirements in a manner that allows for an orderly transition from the requirements of WIA to the requirements of WIOA. To the extent that data are available, States must comply by submitting the requisite data. Moreover, the Departments recognize that some States have the capability to currently report all of the data in one system and upload reports to the Departments, whereas other States may not have that capability. The Departments plan to provide guidance on the submission process for WIOA State annual reports through the WIOA Joint Performance ICR.

Comments: Several commenters stated that sanctions should not be implemented until the third consecutive year of performance failure, rather than the second, in order to allow improvement measures to be effective.

Departments' Response: Section 116(f)(1)(B) of WIOA provides that performance is assessed and sanctions are applied in the second consecutive year of failure. Therefore, the Departments cannot implement the commenters' suggestion.

Comments: Several commenters remarked that a definition of second year failure should be added to the regulatory text in order to prevent a State from incurring sanctions without adequate time to improve performance. Another commenter stated that sanctions should not be applied until a State has demonstrated that it is able to implement their performance improvement plan. While acknowledging the existing statutory constraints, a commenter expressed concern about the lack of time to intervene and allow program adjustments to demonstrate improvement.

Departments' Response: Section 116(f)(1)(B) of WIOA is clear that sanctions apply after 2 program years of consecutive performance failure; the statutory language does not permit the Departments to delay sanctions because the State has not been able to implement its performance improvement plan. The Departments encourage States to use their quarterly data to monitor progress on their performance improvement plan benchmarks without waiting until they submit their annual performance report. No change to the regulatory text was made in response to these comments.

Comments: Concerning the timing of performance outcome reporting, several commenters stated that performance outcomes for core programs should be reported by December 31 of each year.

Departments' Response: The Departments have concluded that the timing of reporting performance outcomes will be announced through joint guidance clarifying when and how States should provide their respective program performance reports. No change to the regulatory text was made in response to these comments.

Comments: A commenter asserted that to evaluate performance effectively, Start Printed Page 55862indicators should be reported on a quarterly basis.

Departments' Response: The Departments note that § 677.235 requires quarterly reporting for the WIOA title I, Wagner-Peyser Act Employment Service, and VR programs. No change to the regulatory text was made in response to these comments.

Comments: Commenters also addressed the limited availability of and timely access to data, which can significantly hinder a State's ability to identify areas of improvement and make the necessary program adjustments to avoid failing.

Departments' Response: The Departments acknowledge the commenters' concern regarding the limited availability of timely data that may assist in identifying areas of program improvement. The Departments have clarified the regulations regarding data availability and sanctions in § 677.190(c), above. Additionally, the Departments note that all States have access to their program data and can use it to assess at intervals of their own choosing to best manage their performance, without the Departments having to require such action.

Comments: Some commenters suggested using only the State average measure of the performance indicators rather than the average program scores for each State in order to incentivize partnerships among programs.

Departments' Response: Under these regulations, failure is determined by both individual program performance as well as overall State performance in the overall State indicator score. The Departments' approach is premised on ensuring accountability for the individual core programs while incentivizing the partnerships that the Departments have concluded are critical to WIOA's long-term success. No change to the regulatory text was made in response to these comments.

Comments: Several commenters suggested that the Departments award monetary incentives and public recognition in order to emphasize the importance of performance success, rather than setting unrealistic goals.

Departments' Response: The Departments note that WIOA, unlike WIA, does not authorize the use of incentives for successful performance. However, States may continue to utilize incentives to recognize successful local performance under WIOA sec. 134(a)(3)(A)(xi). Finally, requests for guidance concerning performance metrics were made in order to allow for proper administration of programs. The Departments intend to issue further details on performance accountability through the WIOA Joint Performance ICR, guidance, and technical assistance.

Comments: In addition to soliciting public comments on the NPRM text, the Departments posed several questions regarding the application of sanctions for failure to achieve adjusted levels of performance. Many commenters responded to the question about using a weighted average or a straight average for calculating State overall indicator scores. Some commenters supported the use of an unweighted average in order to support the goal of shared accountability among core programs. A commenter stated that performance measures should not be weighted until it is clear how weighted averages would be determined. Other commenters stated that a weighted average would take into account differences among programs and would prevent the misrepresentation of particular programs. Citing the enhanced accuracy of the system of performance, a commenter suggested that program performance be weighted by the number of participants served to avoid giving unequal weight to smaller core programs. Other commenters urged the Departments to weight the indicators in order to maintain the emphasis on job placement and employer partnerships as established in WIOA. A few commenters suggested that local areas be weighted less due to their lesser impact on wages paid within the area. A commenter supported the use of a weighted average if performance is to be determined regionally, in order to take into account the relative size of regional WDBs. In addition, several commenters stated that if a weighted average is pursued, a draft weighted average should be published for public comment. Similarly, a commenter suggested that the weights assigned to each program should be determined or agreed to by all partners. A few commenters suggested that, in addition to a public comment period, the weights should be reviewed at the end of each program year and adjusted as needed.

Departments' Response: The Departments considered the comments regarding the use of a weighted or unweighted average for the determination of performance outcomes across programs and individual indicators. The Departments have decided that using unweighted measures across the programs and indicators still ensures performance accountability across all core programs and individual indicators. The Departments conclude this, in part, because an average performance number weighted by the number of participants would essentially cause each State's performance under Wagner-Peyser Act Employment Service programs to have a disproportionate impact. The Wagner-Peyser Act Employment Service program served more than 14 million participants in PY 2014, which surpasses the number of participants served in all other core programs combined. Using a weighted formula would mean that the Wagner-Peyser Act Employment Service program's outcomes would be determinative of a State's failure to achieve performance requirements. The Departments do not consider this to be consistent with the performance accountability goal of WIOA, which provides for shared accountability across the core programs. The Departments have concluded that using unweighted outcomes across the programs and indicators properly implements WIOA in recognizing the importance of both employment-related and education outcomes of the participants. No change to the regulatory text was made in response to these comments.

Comments: Additionally, some commenters suggested the Departments weight the employment indicators more heavily than the credential and measureable skill gains indicators.

Departments' Response: The Departments considered these comments, but decided not to alter the regulation as the three employment-related indicators make up half of all of the WIOA performance indicators. The three employment related indicators are the second and fourth quarter employment rate and the second quarter median earnings indicator. Because these measures make up half of all WIOA performance indicators, the Departments concluded they already have a sufficient impact on a State's performance.

Comments: Many commenters addressed the proposed thresholds for performance failure of 90 percent for each of the State overall program scores and the overall State indicator scores, and 50 percent of the individual indicator scores. Numerous commenters opposed the 90 percent threshold, citing the current lack of core program performance data, the unrealistic nature of a 90 percent threshold, and the seemingly arbitrary assignment of the threshold. A few commenters stated that the 90 and 50 percent threshold for performance failure should not be established without the required statistical adjustment models. Many other commenters responded to the Departments' solicitation regarding the potential increase of the 90 percent threshold to emphasize the importance Start Printed Page 55863of performance success stating that the 90 percent threshold should not be increased. Other commenters urged the Departments to adopt alternate thresholds, ranging from 70 to 80 percent, with the majority supporting an 80 percent threshold. A number of commenters urged the Departments to establish thresholds in guidance rather than regulation so that they could be more easily adjusted in the future, as necessary. Many commenters stated that the Departments should establish a lower threshold than 90 percent to allow for a phased-in approach that gradually increases the threshold for performance failure over time. One commenter supported a tiered approach in order to promote continuous improvement. Although the vast majority of commenters supported maintaining or decreasing the proposed thresholds, one commenter stated that the 50 percent threshold for individual performance indicators should be increased because, as proposed, it would weaken the requirements of States and was not Congress's intent in WIOA.

Departments' Response: The Departments considered the comments regarding the overall 90 percent threshold and the 50 percent threshold for individual indicators for a program year. The Departments considered the various commenter-proposed threshold levels in light of historical performance data and historical thresholds for each of the core programs and have decided to maintain the thresholds as proposed. The new thresholds are an increase from the 80 percent threshold familiar to the title I programs and a decrease from the 100 percent threshold for title II programs under WIA. The Departments consider these thresholds to be reasonable due to the use and application of an objective statistical model to account for actual conditions experienced by a program. Previously, the title I and title II thresholds were applied to a negotiated performance level and performance was assessed in the absence of weighting for actual economic conditions or participant characteristics. With the structure of the performance accountability system in sec. 116 of WIOA, the Departments consider a 90 percent overall threshold to strike the appropriate balance between maintaining flexibility for unknown mitigating variables and the newer precision introduced by utilizing an objective statistical model. The 50 percent performance threshold ensures that significant performance failure on a single indicator cannot be compensated for by successful performance in any other indicator or set of indicators. The introduction of an overall State score across programs and indicators ensures that the performance accountability system as articulated in sec. 116 of WIOA maintains alignment and integration across all of the core programs. This overall score paradigm, which is set at the 90 percent threshold, and balanced with a 50 percent threshold on any single indicator, allows a State to account for mitigating factors that prevent it from achieving 100 percent of its adjusted levels of performance. It also provides that a State has not failed to achieve its negotiated levels of performance unless its average performance across all programs for one indicator or its performance for all indicators in one program falls below 90 percent of the State's adjusted targets. No change to the regulatory text was made in response to these comments.

Comments: One commenter expressed concern that a program could potentially pass the threshold for all of the individual indicators, but not meet the overall program or overall indicator threshold, which would send a mixed message to a program.

Departments' Response: In order to “pass” the threshold, each State must meet or exceed the 90 percent threshold for the overall State program score for each program and the overall State indicator score for each indicator. Furthermore, under § 677.190(d)(2), the State must not fall below 50 percent on any individual indicator. This is an additional safeguard against egregious failure by one indicator being outweighed by high scores elsewhere. Thus, there is no possibility of what the commenter suggested occurring. No change to the regulatory text was made in response to this comment.

Comments: Some commenters raised potential alternative metrics for evaluating success including: the use of statistical variation metrics instead of the proposed threshold framework; standard deviation units or variation against regression predictions; and confidence intervals rather than a point estimate.

Departments' Response: The Departments considered utilizing these methods, but concluded that a consistent threshold, which does not change from year to year based on the size of the dataset, is the most appropriate way to account for variations in the core programs or the indicators and the varying availability of data. By creating a consistent threshold, expected levels of performance will be easier for program staff to understand and allows for comparisons across program years. No change to the regulatory text was made in response to these comments.

Section 677.195 What should States expect when a sanction is applied to the Governor's Reserve Allotment?

Section 677.195 governs what will occur when a sanction is applied to the Governor's Reserve for failure to report or failure to meet adjusted levels of performance. It clarifies that the sanction will be five percent of the amount that could otherwise be reserved by the Governor.

Section 677.195(a)(3) was added so that this section contains the causes of failure as defined in § 677.190(e) by noting that States also are subject to a 5 percent reduction of the Governor's Reserve Allotment for the immediately succeeding program year if the State's score for the same indicator in the same program falls below 50 percent for the second consecutive year. A conforming edit was made to § 677.195(b).

Comments: Several commenters expressed general support for the Departments' interpretation of WIOA sec. 116(f) and the approach proposed. However, numerous commenters opposed this approach and requested clarification regarding the implementation of financial sanctions only on WIOA title I programs funded by the Governor's Reserve allotment. A commenter suggested that the burden of financial sanctions be applied to the specific programs not meeting the performance requirements. A few commenters requested clarification from the Departments concerning allocation of funding lost via sanctions. A number of commenters urged the Departments to permit the restoration of funds once the State meets its reporting responsibilities. Commenters also remarked that sanctioned funds should be spent on the Technical Assistance and Performance Improvement Plan.

Departments' Response: Section 116(f)(1)(B) of WIOA does not provide authority for the Departments to use, for other purposes, funds that are reduced as a sanction from the Governor's Reserve. Therefore, the funds may not be used for technical assistance, performance improvement plans, the restoration of the Governor's Reserve funding, or any other activity. In contrast, WIA provided that funds reduced due to sanctions were to be used by the Secretary for performance incentive grants to the States under sec. 503 of WIA, which was not carried over to WIOA.

The Departments considered the comments regarding the sanctions to WIOA title I programs being based on Start Printed Page 55864any program's failure. WIOA sec. 116(f)(1)(B) clearly requires that any performance sanction must apply to the Governor's Reserve allotment under title I for any core program or indicator failure. Therefore, the Departments do not have the authority to sanction the specific program not meeting its adjusted levels of performance. The Departments strongly encourage high levels of alignment and coordination to ensure all core partners are engaged at all levels. The Departments emphasize the role of State and local planning to ensure alignment and common goals in attaining integration and service delivery. Regarding the commenters' request for clarification concerning the allocation of funding lost via sanctions, the Governor's Reserve for the next program year will be reduced by five percentage points and money lost via sanction will not be reallocated. No change to the regulatory text was made in response to these comments.

Comments: Commenters also supported the elimination of proposed § 677.195(b) because a State could fail to meet 2 different indicators for 2 consecutive years and receive a 5 percent sanction, but if the State fails to meet one indicator for 2 consecutive years and fails to report one time, the State would receive a 10 percent sanction. These commenters stated that the latter scenario is a less significant infraction and should not prompt the imposition of a 10 percent sanction.

Departments' Response: The Departments considered the comments on imposing sanctions when in the same year the State fails to submit a performance report and is in its second year of failure to meet adjusted levels of performance. The Departments are maintaining the language in § 677.195(b) because the Departments conclude that failure to submit a State annual performance report is a serious compliance issue and should result in sanctions. Because the regulations provide for a 10 percent sanction on States that fail to submit performance reports as well as fail to meet the adjusted levels of performance for 2 consecutive years (5 percent for failure to submit report plus 5 percent for failure to meet adjusted levels of performance), States will have an incentive to report to the Departments even if they fail the adjusted levels of performance for 2 consecutive years because by doing so, they would receive only a 5 percent sanction for failure to meet adjusted levels of performance rather than the 10 percent sanction. No change to the regulatory text was made in response to these comments.

Comments: Several commenters addressed concerns regarding the insufficient funding of the Governor's Reserve allotment and stated that sanctions should be lessened or not implemented until the allotment is fully funded, as is statutorily required. One commenter suggested that the Departments scale sanctions according to the funding available in the Governor's Reserve allotment.

Departments' Response: The Departments considered the comments regarding the funding of the Governor's Reserve allotment and the use of sanctions. Statutorily, the Governor's Reserve is set at 15 percent of the WIOA adult, dislocated worker, and youth formula allocations to the States. For several years, the Governor's Reserve levels were restricted below 15 percent through the congressional appropriation, but were restored in the FY 2016 Consolidated Appropriations Act. The Departments support the full funding of the Governor's Reserve at 15 percent as envisioned in WIOA. The Departments note that if the Governor's Reserve amount is not fully funded, the amount of funds subject to sanctions will be proportionately less because the sanction is either 5 or 10 percent of the Reserve amount no matter how much the Reserve amount is. No change to the regulatory text was made in response to these comments.

Comments: A commenter stated that the sanctions for failure to report and failure to meet a State's adjusted levels of performance should be separated. Another commenter requested that the Departments provide guidelines for a process allowing for minor corrections to annual reports without incurring sanctions for failure to report.

Departments' Response: The Departments considered the comments regarding the separation of sanctions for failure to report and for failure to achieve performance. The Departments note that these two sanctions are applied separately. When a State fails to meet 90 percent of its adjusted levels of performance or fails to submit a report in the same year, the State would incur 2 separate 5 percent sanctions totaling 10 percent. Otherwise, a State may receive a sanction for failure to report based on the criteria described in § 677.185 or a State may receive a sanction for failure to achieve adjusted levels of performance per § 677.190. Regarding a process to allow for minor corrections to annual reports, the Departments will provide a process for this and details on the process in guidance. No change to the regulatory text was made in response to these comments.

Comments: A commenter urged the Departments to allow States flexibility in imposing sanctions on the State agencies responsible for the late submission.

Departments' Response: The Departments note that ultimately the Governor and State Workforce Board, which consists of representatives from all core programs, are responsible for the submission of the annual report. The Departments expect the State agencies to work together to ensure timely reporting and, if there are expected delays due to exceptional circumstances, that the State provides timely communication to the Departments. The Departments note the flexibility provided to States under § 677.185(b) and will work with States that are struggling to submit timely reports through guidance and technical assistance. No change to the regulatory text was made in response to these comments.

Section 677.200 What other administrative actions will be applied to States' performance requirements?

Section 677.200 outlines the circumstances under which a State will be subject to additional administrative actions when determined to be at risk due to low performance on an individual primary indicator, the overall State indicator score, and the overall State program score. No substantive change was made to this section.

Comments: A few commenters remarked that language in the NPRM indicated that the Departments would each issue their own guidance regarding performance risk or performance improvement plans. These commenters were concerned that the development of separate guidance documents signals a lack of long-term coordination between the Departments regarding performance accountability and reporting. A commenter urged DOL and WDBs to become familiar with setting measurable objectives, defining activities to meet the objectives, and determining if the objectives were achieved.

Departments' Response: WIOA provides a unique opportunity for the core programs to work together in new ways, and to the extent practical the Departments will use joint guidance so that all core programs are provided a clear and consistent message.

Regarding comments about DOL and WDBs setting measurable objectives, defining activities to meet objectives, and determining if objectives were achieved for purposes of the DOL-administered core programs, this will be communicated generally. WIOA articulates certain performance Start Printed Page 55865requirements, the Joint WIOA Final Rule operationalizes the provisions of WIOA, and the Departments will provide guidance and technical assistance to assist States and Local WDBs in achieving their performance goals.

5. Local Performance Accountability for Workforce Innovation and Opportunity Act Title I Programs (20 CFR Part 677, Subpart C; 34 CFR 361.205 Through 361.210; 34 CFR 463.205 Through 463.210)

Section 677.205 What performance indicators apply to local areas and what information must be included in local area performance reports?

This section governs which performance indicators apply to local areas and the information that must be included in the local area performance reports. While the arrangement of this section was revised no substantive changes were made to the regulatory text.

Comments: One commenter noted that the title did not fully convey what was contained within this section of the regulation.

Departments' Response: The Departments concur and modified the title of this section to clarify that this section also governs what information the local area must include in its local area performance reports.

Proposed § 677.205(a), (b), and (c) are implemented as proposed.

Comments: One commenter recommended removing section § 677.205(d) of the NPRM as unnecessary and duplicative of the requirements of § 677.175.

Departments' Response: The Departments agree that this section is duplicative, and is removing it. As a result, the Departments are renumbering subsequent sections to conform to this deletion.

Comments: One commenter recommended revising proposed § 677.205(e)(2) to clarify that in addition to reporting on the performance indicators, the local area report must also include the other program information required in the State annual performance report, such as average cost information.

Departments' Response: The Departments agree that further clarification would assist States and local areas in complying with their reporting requirements. The Departments note that as finalized, this has been renumbered as § 677.205(d)(1). Since § 677.205(d)(1) includes all of the information previously in § 677.205(e)(1) and (2), the Departments removed proposed § 677.205(e)(2) from this Final Rule and have renumbered the remainder of § 677.205(d).

Comments: One commenter encouraged adding a parallel provision to the one that is included in § 677.160(b) to clarify that the disaggregation of data in the local area performance report is also subject to WIOA sec. 116(d)(6)(C).

Departments' Response: The Departments have added a parallel provision at § 677.205(e).

The Departments made a technical edit to proposed § 677.205(f) to state that States must comply with any requirements from sec. 116(d)(3) of WIOA as explained in guidance. The Departments made this revision to clarify our expectations that, to the extent that either Department's guidance merely explains in plain terms the requirements that stem directly from WIOA, the Departments expect States to comply with those statutory requirements.

Comments: Several commenters from various stakeholder entities questioned the applicability of local performance indicators to core programs outside of WIOA title I. Many of these commenters specifically requested clarification on whether other core programs were exempt from local reporting requirements. One commenter also acknowledged some confusion regarding local-level requirements and offered several suggestions on reorganizing this subpart to enhance clarity. Additionally, the Departments received a number of comments pertaining to additional indicators of performance, with commenters suggesting that language be added to the Final Rule requiring States to develop any additional indicators of performance only in consultation with Local WDBs and CEOs.

Departments' Response: The Departments acknowledge that there may be some confusion across the core programs regarding local-level performance-related requirements and are taking this opportunity to specify that local-level accountability requirements contained in WIOA sec. 116 pertain solely to title I adult, dislocated worker, and youth programs. As provided by WIOA sec. 116(b)(2)(B) and § 677.165 of this regulation, the Governor has discretion to add additional indicators of performance.

The Departments recognize that Local WDBs and CEOs are critical partners in the establishment of additional indicators of performance and strongly encourage States to engage and consult with Local WDBs and CEOs in their development. No change to the regulatory text was made in response to these comments.

Section 677.210 How are local performance levels established?

Section 677.210 explains how the local performance levels are established. This section has been revised and renumbered in accordance with the distinctions among expected, negotiated, and adjusted levels of performance as described in the preamble to § 677.170. This has resulted in the introduction of the terms “negotiated levels” and “adjusted levels” as it applies appropriately within the process. Additionally, the Departments have added language to mirror provisions in § 677.190 that require 2 years of complete data for any local core program before applying the objective statistical model and establishing adjusted levels of performance.

Comments: Several comments pertained to the negotiations process in response to proposed § 677.210(b). A few commenters were unclear why Local WDBs are included in the negotiations process described in sec. 116(c) of WIOA but are not included in the negotiations process described in sec. 116(b). Many commenters also expressed a desire that the negotiations process be meaningful, with one commenter noting that the negotiations process under WIA was often subjective with performance standards dictated on a take it or leave it basis. Similarly, a commenter emphasized that the process should not simply be a matter of setting a target independently and passing it down to Local WDBs. Another commenter also suggested that the overall negotiations process would be enhanced if local areas were allowed to provide additional information not accounted for in the statistical models. One commenter suggested that the regulations contain an appeal mechanism for Local WDBs in cases where the State does not negotiate performance with the Local WDB and CEO as required by WIOA.

Departments' Response: The Departments note that local areas are permitted to provide additional information during the negotiations process. This allows the negotiations process to take into account other information that local areas consider important when establishing the negotiated levels of performance. The Departments also note that under WIOA sec. 116(g)(2)(B), the local areas may appeal the Governor's decision to impose a reorganization plan under WIOA sec. 116(g)(2)(B)(i). Therefore, if the Governor fails to negotiate with the Start Printed Page 55866Local WDBs, the Local WDB fails to meet its local performance accountability indicators as described in WIOA sec. 116(g), and the Governor imposes a reorganization plan, then the Local WDB may exercise its right to appeal under WIOA sec. 116(g)(2)(B). For further discussion, the Departments refer readers to the preamble to 20 CFR 679.130 on the functions of the State WDB (see DOL WIOA Final Rule published elsewhere in this issue of the Federal Register).

WIOA sec. 116(c)(2) requires the Local WDB, CEO, and the Governor to negotiate and reach agreement on local levels of performance. The Local WDBs are not included in the process outlined in sec. 116(b) because that process pertains to State accountability, with negotiations occurring between the State and the cognizant Federal agency for the core program. The Departments agree that WIOA requires a meaningful negotiation. The Departments encourage the parties to negotiate which the Departments interpret as requiring open-communication between the parties for the purpose of reaching an agreement on the local performance targets. The Departments emphasize that the purpose of the statistical adjustment model required under sec. 116(b)(3)(A)(viii) is to enhance objectivity in the development of performance targets as part of the negotiations process. However, because the Departments have concluded that the requirement to negotiate is already conveyed through WIOA and the regulation, the Departments do not consider additional regulatory text necessary to ensure States comply with the requirements contained in sec. 116(c) that pertain to inclusion in the negotiations process. Therefore, no change to the regulatory text has been made in response to this comment.

The Departments also agree that the statistical adjustment model may not adequately account for all of the economic and demographic variables that may affect a local area's performance. Section 677.210(c) requires the negotiations between the Governor, Local WDB, and CEO to include a discussion of the circumstances not accounted for in the model. Because this is already required by the regulation, the Departments did not make a change to the regulatory text in response to this comment.

Comments: Another commenter recommended that local areas have access to the models in order to run local targets.

Departments' Response: The Departments note that it will publish the methodology of the statistical adjustment model, and the Departments invite the public, including local areas, to review, and access the model, as appropriate.

Comments: The Departments received a number of comments on the statistical adjustment model. Some commenters expressed concern that using the model as proposed at the end of the program year would result in targets being applied retroactively. Similarly, commenters expressed concern that targets set through the model may not reflect service to hard-to-serve populations, such as foreign-born participants often served by title II programs or other populations with barriers to employment. Some commenters suggested that the model needed to be updated on a regular basis in order to reflect the barriers of enrolled participants and the participants actually served.

Departments' Response: With respect to the utilization of the model at the end of program year in order to account for actual circumstances, this would not be a retroactive application of a performance target, but rather an adjustment to an already established target based on what actually transpired during the program year. This would take into account, as a commenter suggested, service to hard-to-serve populations, such as those with barriers to employment. In other words, the model will increase the performance levels required if a State or local area were to serve lower-than-anticipated percentages of hard-to-serve populations with barriers to employment because it would presumably be easier to serve these individuals. Similarly, performance levels (or targets) would be decreased if a State or local area were to serve a higher-than-anticipated percentage of individuals with barriers, because these individuals are harder to serve. Given the importance both Departments place on consistent understanding, application, and implementation of these complex yet critical requirements, the Departments are committed to providing joint and substantive technical assistance in addition to detailed policy guidance. Furthermore, commenters' expressed need to update the model to reflect the participants who are actually being served is one of the hallmarks of the statistical adjustment models as envisioned. Because the model addresses the commenters' concerns, no changes to the regulatory text were made in response to these comments.

Comments: One commenter recommended a national workgroup with broad participation across core programs and other WIOA stakeholders in order to address the statistical model, as well as other aspects of WIOA performance accountability because of the significance and impact of this Joint WIOA Final Rule. One commenter recommended that local areas be given an opportunity to review any detailed methodology utilized for setting performance targets prior to implementation.

Departments' Response: The Departments understand the significance of these joint regulations on performance accountability that implement sec. 116 of WIOA. It is for this reason that the Departments have convened multiple stakeholder dialogues to address the intricacies of the statistical adjustment models as they are developed, consistent with, and as required by WIOA sec. 116(b)(3)(A)(viii). In addition, once the statistical adjustment methodology has been approved, there will be a comment period to ensure broad stakeholder input into its finalization.

Comments: Another commenter remarked that CEOs of each local area in a planning region should be permitted to choose to develop, rather than be required to develop, regional performance measures in addition to local area measures and recommended a revision to 20 CFR 679.510 to reflect this suggested flexibility, remarking that Local WDBs and CEOs already have a significant responsibility regarding their own local area performance targets; requiring regional targets in addition to local area targets would be unduly burdensome.

Departments' Response: WIOA sec. 108(b)(1) requires the CEOs to develop the regional performance indicators and the Departments' regulations are consistent with this statutory requirement. Therefore, the regulatory text has not been changed in response to this comment.

Comments: A commenter requested that the Departments provide additional information regarding the requirement to promote continuous improvement through performance target setting, adding that neither the Preamble nor the NPRM text discuss the requirement beyond the fact that it exists. The commenter opined that the Departments seemed to interpret continuous improvement under WIA as requiring improvement on every measure, every year, and offered their own interpretation of continuous improvement, which could be defined as achieving the same results with fewer resources or serving a population with more barriers (or simply a larger population) with the same resources (i.e., increased efficiency). A commenter Start Printed Page 55867recommended, based on the context of an optimal return on investment in Federal funds, that setting targets focusing on improvement of measures with lower performance, while setting targets consistent with existing performance levels on measures with higher performance, is consistent with the requirement to set targets that promote continuous improvement and an optimal return on investment of Federal funds.

Departments' Response: The Departments agree that continuous improvement can be defined in multiple ways based on the circumstances and context. Because the meaning of this term varies significantly based on the circumstances and context in which it is used, the Departments do not think it is appropriate for inclusion in the regulation and will be providing additional information on continuous improvement during guidance development. Therefore, no change was made to the regulatory text in response to this comment.

6. Incentives and Sanctions for Local Performance for Workforce Innovation and Opportunity Act Title I Programs (20 CFR Part 677, Subpart D; 34 CFR 361.215 Through 361.225; 34 CFR 463.215 Through 463.225)

Section 677.215 Under what circumstances are local areas eligible for State Incentive Grants?

This section of the regulation governs when local areas are eligible for incentive grants.

Comments: The Departments received a comment asking under what circumstances local areas are eligible for State incentive grants. Another commenter remarked that the question posed by the rule regarding possible circumstances for eligibility is not actually answered by the rule, which instead goes on to discuss pay-for-performance strategies.

Departments' Response: The Departments agree that the regulatory text in this paragraph should be revised to ensure understanding and consistent application. Therefore, paragraph (a) has been revised to specify that Governors are not required to award incentive funds based on local performance on the primary indicators, although they have the flexibility to do so using State set-aside funds based on WIOA at sec. 134(a)(3)(A)(xi). Paragraph (b) has been revised to clarify that Governors also have the flexibility to create incentives for the Local WDBs to implement pay-for-performance contract strategies to provide training services as described in sec. 134(c)(3) or youth activities as described in sec. 129(c)(2). However, these incentives must be paid for with non-Federal funds.

The Departments have chosen not to regulate under what specific circumstances a local area be eligible for incentive grants using WIOA funds given that this is at the discretion of the Governor. However, the Departments are considering providing guidance on this topic. No change to the regulatory text was made in response to this comment.

Comments: Other commenters remarked that separate funds should be made available for States as an incentive for meeting or exceeding statewide performance targets as was the case under WIA, with commenters expressing concern that the dedicated incentive grants to States were utilized to leverage other funds and programs and the lack of this provision in WIOA presents a funding gap. These commenters requested further clarity on the issue and recommended that funds be made available to target system development needs.

Departments' Response: The requirement under WIA that high-performing States be rewarded with State incentive grants within specified Federal parameters no longer exists under WIOA. Rather, sec. 134(a)(3)(A)(xi) provides States with the flexibility to utilize Governor's Reserve funds to provide incentive grants to local areas for performance by the local areas on local performance accountability indicators. Further, the Departments would like to emphasize that, in addition to the statewide capacity building efforts that are a required use of the funds allotted to States, both Departments are committed to providing substantive technical assistance on a national, regional, and statewide basis in order to target specific development needs, including needs around performance accountability. No change to the regulatory text is being made in response to this comment.

Comments: One commenter expressed confusion about the programs included in pay-for-performance contract strategies and inquired as to whether the provision applies to title II providers, which the commenter recommended.

Departments' Response: The Departments interpret the statutory provision for pay-for-performance contract strategy incentives at WIOA sec. 116(h) as only permitted for WIOA title I programs because of the specific reference to title I training services for adults and dislocated workers as well as the reference to title I youth services. Moreover, WIOA references Local WDBs, which are responsible for title I programs and providers, as the other programs do not have Local WDBs. However, there is nothing prohibiting the adoption of pay-for-performance contract strategies by other programs that is consistent with other Federal, State, and local policies. No change to the regulatory text has been made in response to this comment.

Section 677.220 Under what circumstances may a corrective action or sanction be applied to local areas for poor performance?

This section explains when a corrective action plan or sanction may be applied to a local area. This section has been revised and renumbered in accordance with the distinctions among expected, negotiated, and adjusted levels of performance as described in the preamble to § 677.170. This has resulted in the introduction of the terms “negotiated levels” and “adjusted levels” as it applies appropriately within the process. Additionally, the Departments have added language to mirror provisions in § 677.190 that require 2 years of complete data for any local core program before applying the objective statistical model and establishing adjusted levels of performance. The Departments also have revised § 677.220(b) to specify that failure occurs when a local area fails to meet the adjusted levels of performance for the same indicator for the same core program authorized under WIOA title I for the third consecutive program year.

Comments: Several commenters indicated that more clarity is needed regarding how sanctions would apply locally to other programs and funding streams besides WIOA title I. One commenter remarked that the impact of local sanctions should be spread across the other core programs. Another commenter noted that all potential sanctions would be placed squarely on the shoulders of the Local WDB regardless of fault, creating a situation it viewed as inequitable.

Departments' Response: Any financial sanction applied to the Governor's Reserve Allotment is based on State performance across the core programs, and not local performance. This is governed by WIOA sec. 116(f) and subpart B of this part. Specifically, §§ 677.180 through 677.200 govern when the Departments will sanction a State. The Departments note that the local area provisions under WIOA sec. 116(c) only apply to WIOA title I programs. The other core programs may participate, partner, and provide services in a local area, but, there is no local area performance accountability Start Printed Page 55868provision for those programs. However, local areas are held accountable for performance on the primary performance indicators for title I programs. Local-level accountability and any sanctions imposed are determined by the State, consistent with WIOA sec. 116(g) and subpart D of this part. Therefore, the Departments are not changing the regulatory text in response to these comments.

Comments: Several commenters responded to the Departments' request for feedback regarding what other actions in addition to those already in statute should be considered by the Governor for local areas that continue to fail to meet performance for 3 consecutive years. Many commenters offered suggestions but stated the need for clarification first on what is meant by “failure to meet adjusted levels of performance on required indicators for a third consecutive year,” recommending that local area failure for a third consecutive year be based on the same indicator and not any indicator.

Departments' Response: The Departments have defined “failure to meet” adjusted levels of performance at the State level across the core programs based on the primary indicators of performance and criteria delineated in § 677.190 of these regulations. Determining what is meant by “failure to meet adjusted levels of performance on required indicators for a third consecutive year” at the local level is within the Governor's discretion per § 677.220(a)(1), which is similar to the historical requirements that existed under WIA. Because defining these terms is within the Governor's discretion, the Departments think this is not appropriate to be addressed in these regulations. No change to the regulatory text was made in response to these comments.

Comments: One commenter proposed another reason for the Departments to define “failure to meet adjusted levels of performance” arguing that a local area could be making significant progress towards improving performance but could potentially miss the required level by a fraction of a point. The commenter added that the lagged performance data complicates matters further and that some systemic performance issues may take more than 3 years to correct. For these reasons, this commenter suggested changing the regulatory language of “fails to meet” to “fails to make satisfactory progress.”

Departments' Response: The Departments' requirement to determine when a corrective action or sanction can be applied to a local area is based on statutory language and the Departments will not modify this requirement. Therefore, no change to the regulatory text was made in response to this comment.

Comments: Several commenters offered suggestions for additional actions that might be taken by the Governor in addition to those already specified in regulatory text. Some commenters suggested that the Governor should be authorized to apply a financial sanction, with one commenter adding that the Governor should be authorized to dissolve a local area for continued failure, and other commenters recommended that the Governor also be authorized to consolidate local areas. Another commenter supported the Governor's flexibility, noting that redesignation of a local area is an inequitable penalty when compared to the penalties WIOA prescribes for State workforce agencies that fail to meet required performance levels. Other commenters, including a number of Local WDBs, expressed concern that the language in the regulatory text allowing Governors to take significant actions as deemed appropriate was too broad in scope and could be used to redesignate or eliminate local areas, suggesting at a minimum that parameters be specified at the Federal level. These commenters also stated that any additional actions taken by the Governor should be required to include consultation with the local elected official, although one commenter suggested the mandatory consultation with local elected officials should extend to any actions related to technical assistance. One commenter also inquired about the absence of any reference to failing performance for 2 consecutive years, stating it was clear that technical assistance was required after the first year, and it was clear a reorganization plan was needed after the third consecutive year, but the regulations were silent on what would take place after the second consecutive year of failure.

Departments' Response: The Departments considered the comments regarding additional significant actions that might be taken by a Governor for continued local performance failure and concluded that there is nothing prohibiting a State from considering financial sanctions as a potential “significant action” as part of the reorganization plan. Therefore, no Federal action is needed to permit this. The Departments also agree that significant actions taken by the Governor pursuant to § 677.220(b)(3) would be most effective if they included a consultation with the local elected official and other local stakeholders, and therefore, recommend the Governor do so. However, the Departments do not think a change in regulatory text is necessary as WIOA and regulation do not preclude the Governor from doing this. The Departments do not agree that regulatory text is necessary requiring consultation with local elected officials occur prior to the provision of any technical assistance as this is not required by WIOA and the process for providing technical assistance is at the Governor's discretion. Therefore, the Departments have chosen not to regulate this. Regarding the comment pertaining to failure for a second consecutive year, WIOA sec. 116(g)(1) makes clear that failure “for any program year” will trigger the provision of technical assistance; therefore, if failure occurs in the second consecutive year, the Governor is obligated to provide technical assistance, or request the Secretary of Labor to do so. In response to comments that the Governor could consolidate, redesignate, or dissolve a local area through the reorganization plan, the Departments note that WIOA sec. 116(g)(2) leaves what actions are most appropriate to take when a local area fails to meet its local performance accountability indicators, to the Governor's discretion. Therefore, the Departments will not change regulatory text in response to these comments.

Comments: One commenter requested clarification on § 677.220(b)(2), which allows the Governor to prohibit the use of eligible providers and one-stop partners that have been identified as achieving poor levels of performance as an action that may be taken as part of a reorganization plan. The commenter pointed out that neither WIOA nor proposed regulations addressed poor performance levels of one-stop partners, such as TANF, and suggested that the NPRM was referring to a competitively procured contractor or one-stop center operator.

Departments' Response: The language in the regulation is statutory language from WIOA sec. 116(g)(2)(A)(ii), and the Departments do not have authority to change the requirements of WIOA. No change to the regulatory text was made in response to this comment.

Comments: The Departments also received a number of general comments pertaining to this paragraph. One commenter wanted to ensure that any technical assistance for youth programs be developed by experienced youth experts that also could include youth who have successfully navigated the system and who are now employed. This commenter also cautioned against assumptions that a particular youth program may be causing the Start Printed Page 55869performance failure. Another commenter strongly recommended that the Departments delay enforcement of the sanctions provisions for at least 2 years to further calibrate the statistical adjustment model, during which time States could approach implementation in a methodical manner that allowed for the application of lessons learned without strict penalties. Other commenters offered a similar suggestion, recommending that an additional 2 years was needed to implement these requirements, during which time the Departments should launch an intensive and nationwide technical assistance effort. Another commenter recommended transitional implementation in conjunction with the development of a national workgroup of broad stakeholders and experts to tackle each aspect of performance accountability, including the imposition of sanctions.

Departments' Response: The Departments expect the technical assistance the Governor provides pursuant to § 677.220(a) will be well-informed and developed with input from subject matter experts and agrees that former youth participants can offer a valuable perspective on technical assistance needs based on their own experience. In response to comments requesting delayed implementation of performance at the local level, the Departments received similar comments on the State-level performance accountability. In response to those comments, the Departments have revised § 677.190(c) to provide that the Departments expect full implementation of the performance accountability requirements to take some years, given the complexity of WIOA's requirements and the timing of the availability of data necessary to populate the statistical adjustment models, for instance. At the local level, the decisions on performance implementation are at the Governor's discretion and subject to the requirements of 20 CFR part 679 (see DOL WIOA Final Rule, published elsewhere in this issue of the Federal Register). Therefore, no change to the regulatory text is being made in this part in response to this comment. Additional information on implementation will be provided by the Departments in guidance.

Section 677.225 Under what circumstances may local areas appeal a reorganization plan?

This section of the regulation governs the process for an appeal if the local area wishes to appeal a reorganization plan. The Departments received few comments on the proposed text for this paragraph of the regulations. The Departments are implementing this regulation as proposed, except for a revision to § 677.225(d) which is described below.

The Departments revised paragraph (d) of § 677.225, replacing “to impose a reorganization plan” with “on the appeal” for consistency with the relevant WIOA provision. WIOA sec. 116(g) governs the consequences for a local area's failure to meet local performance accountability indicators for the youth, adult, or dislocated worker programs. WIOA sec. 116(g)(2) requires the Governor to develop a corrective action plan if the local area's failure continues for a third consecutive year. The local area and CEO of the local area may appeal this decision to the Governor. The Local WDB and CEO may appeal the Governor's decision on the appeal to the Secretary of Labor. The proposed version of this paragraph stated that the Governor's decision to impose a reorganization plan becomes effective at the time it is issued. However, WIOA sec. 116(g)(2)(C) provides that it is the Governor's decision on the appeal, not the reorganization plan, that becomes effective unless the Secretary of Labor rescinds or revises the plan.

Comments: One commenter recommended a revision to the regulatory text to clarify that if the Secretary of Labor does not respond to a joint appeal pursuant to § 677.225(c) within 30 days, then the Governor's decision to impose a reorganization plan automatically results in the reorganization plan becoming effective.

Departments' Response: Section 677.225(c) clearly requires the Departments to respond within the specified timeframe. The statutory text does not provide for automatic effectiveness of the plan if the Secretary of Labor does not respond within the 30-day timeframe. No change to the regulatory text was made in response to these comments.

7. Eligible Training Provider Performance for Workforce Innovation and Opportunity Act Title I Programs (20 CFR Part 677, Subpart E; 34 CFR 361.230; 34 CFR 463.230)

Section 677.230 What information is required for the eligible training provider performance reports?

Section 677.230 implements the requirements of sec. 116(d)(4) of WIOA, which requires annual ETP performance reports. The ETP performance reports provide critical information, including the employment, earnings, and credentials obtained by individuals in the program of study eligible to receive funding under the adult and dislocated worker formula programs under title I of WIOA. This information will be of significant benefit in assisting WIOA participants and members of the general public in identifying effective training programs and providers. The information will also benefit providers by widely disseminating information about their programs increasing awareness of the program and potentially as a tool to enhance their programs.

Section 677.230(b) has been revised to specify that the registered apprenticeships programs referred to are those registered under the National Apprenticeship Act. This section, in conjunction with 20 CFR 680.400 through 680.530, establishes the minimum requirements for performance information to be provided in the ETP performance reports. Additional information on these requirements and the data to be collected is provided through the WIOA Joint Performance ICR. The Departments inserted “mechanism of” into § 677.230(c) to clarify that the State must provide a mechanism of electronic access to the public ETP performance report in its annual State performance report. This edit was made for consistency with § 677.160(c).

Comments: The Departments sought specific input on how the Departments could best support ETPs in meeting the requirements of this section as well as on how to make the ETP reports a useful tool for WIOA participants, ETPs, interested stakeholders, and the general public. Multiple commenters suggested the Departments could support ETPs in meeting the requirements of subpart E by providing reporting formats and instructions in order to establish the basis for data collection. A commenter remarked that guidance to States would help streamline performance reporting for training providers and minimize the associated burden.

However, other comments suggested the Departments avoid being too prescriptive in order to maximize the accessibility of the reported data. A few commenters suggested that the increased volume of data collection necessitates technical assistance and funding support from DOL.

Departments' Response: The Departments recognize that in many cases the ETP reporting provisions will be different from what was standard under WIA. In recognition of this, the Departments are issuing definitions on the elements required under this provision through the WIOA Joint Performance ICR in accordance with the Start Printed Page 55870PRA. The Departments crafted the definitions as they pertain to ETP reporting with consideration of commenter suggestions, industry standards, and statutory requirements while balancing the need for clarity and flexibility. Although the Departments agree these definitions are needed, they are appropriately handled through the aforementioned WIOA Joint Performance ICR.

Comments: Several commenters asserted that the Departments must permit an alternate definition of “participant” and/or “exit” for use in ETP reporting. These commenters noted that they would require considerable local flexibility in the application of these definitions. Commenters further articulated a need for technical assistance around the data collections associated with these definitions.

Departments' Response: As mentioned above, through the WIOA Joint Performance ICR, the Departments are issuing definitions of how these terms are used in ETP reporting. These definitions balance the needs for consistency and flexibility. No change to the regulatory text was made in response to these comments.

Comments: A few commenters suggested that the performance metrics, which are required to be reported for all individuals in a program of study, be waived for non-WIOA participants for the first 2 years to provide sufficient time to establish the required data systems to collect and report on these elements.

Departments' Response: The Departments have given consideration to the systems readiness to implement these provisions and understand that implementation will require guidance and technical assistance in order to assist States in this implementation. No change to the regulatory text was made in response to these comments.

Comments: A commenter stated that data collected should align with existing data collected on educational programs from other sources in order to maximize its usefulness to consumers.

Departments' Response: The Departments considered this concern, however, the data being collected are required by WIOA sec. 116(d)(4). Therefore no change to the regulatory text has been made in response to this comment.

Comments: A few commenters stated that since many training providers serve small populations, the data they report would not be statistically reliable indicators of performance. Similarly, a commenter requested clarification regarding the application of the disaggregation requirements to individual ETPs.

Departments' Response: The Departments recognize the contribution of ETPs that may serve smaller populations. The Departments note that the data disaggregation requirement in WIOA sec. 116(d)(6)(C) also applies to the ETP performance reports. The Departments will provide additional information on the parameters of the collection and reporting of this information through the WIOA Joint Performance ICR and program-specific guidance. This information is required to be collected under WIOA sec. 116(d)(4); therefore, no change to the regulatory text has been made in response to these comments.

Comments: A commenter urged the Departments to provide States maximum flexibility in displaying provider performance data in order to allow for State experimentation and to ensure compatibility with technology platforms. Another commenter suggested that the “scorecards” already developed by Local WDBs should be considered as a model.

Departments' Response: WIOA sec. 116(d)(1) and (4) require the use of `a template' developed by the Departments to report on outcomes for eligible training providers and this template must be used consistent with the requirements of WIOA sec. 116 and this regulation. However, the use of this template does not preclude the States from additionally displaying performance data in a manner of their choosing and the Departments welcome innovative approaches to displaying this information in a user-friendly manner. No change to the regulatory text was made in response to these comments.

Comments: A commenter stated that if this data were a Federal requirement collected through ED, there would be a more consistent national approach.

Departments' Response: WIOA sec. 116(d)(4) requires the collection and reporting of this information on eligible training providers therefore no change to the regulatory text has been made in response to this comment.

Comments: A few commenters suggested that the possible barriers to employment be standardized for the purpose of the ETP performance report.

Departments' Response: The Departments recognize the importance of standardized and uniform definitions to provide data that are comparable across programs and States. The Departments note that specific calculations, definitions, and reporting parameters will be provided through the WIOA Joint Performance ICR; therefore, no change has been made with respect to defining barriers to employment in this section. No change to the regulatory text was made in response to these comments.

Comments: A commenter identified the most important data to be reported as training program completion rates, wage rates, and job placement rates.

Departments' Response: The Departments acknowledge the suggestions raised regarding information that is valuable to understanding the outcomes of training programs. WIOA provides specific collection requirements at sec. 116(d)(4), which includes much of the data suggested by the commenter, and further information as it pertains to the reporting requirements for these programs can be found in the WIOA Joint Performance ICR. No changes to the regulatory text were made in response to this comment.

Comments: A commenter stated that the performance outcomes only should be collected on those participants receiving services under WIOA title I, subtitle B.

Departments' Response: WIOA sec. 116(d)(4)(a) requires reporting on the primary indicators of performance for all students in the program of study, therefore no change has been made in response to this suggestion. No change to the regulatory text was made in response to this comment.

Comments: A commenter asserted that the ETP reporting requirements should be kept flexible to provide local providers the greatest choice in training providers. Commenters urged the Departments to allow ETP eligibility to last more than 1 year in order to generate enough participants and exits to provide a useful outcome measurement. A commenter remarked that WIOA authorizes Governors to establish a transition period for ETPs under WIA to remain on the list through 2015. A commenter suggested that the Departments require States to list credentialing programs on ETP lists (ETPLs) in order to provide the most comprehensive information.

Departments' Response: WIOA sec. 122 governs this process; therefore, the Departments refer readers to the discussion of 20 CFR part 680 in the DOL WIOA Final Rule (published in this issue of the Federal Register) for responses to these comments and more information regarding these issues. No change to the regulatory text was made in response to these comments.

Comments: The Departments received numerous comments requesting clarity and further information on the interaction between the provisions in WIOA sec. 116(d)(4) Eligible Training Provider performance report and the Start Printed Page 55871performance reporting required for training provider eligibility under WIOA sec. 122 (20 CFR part 680, see DOL WIOA Final Rule).

Departments' Response: WIOA sec. 116(d)(4) requires that the ETP performance report must be prepared annually and the States must provide electronic access to this report in their State annual performance report pursuant to § 677.160(c). WIOA sec. 122 governs the process for determining training provider eligibility; this process requires calculation of certain performance information. As many commenters noted, there is significant overlap in what must be included in the WIOA sec. 116(d)(4) report and the information providers must provide for the eligibility determination under WIOA sec. 122. The Departments recognize this overlap may provide opportunities for States to collect this information for both purposes. Further information concerning ETP reporting requirements and performance reporting requirements is available through the WIOA Joint Performance ICR. The Departments will also be providing technical assistance in regard to these reporting requirements. No change to the regulatory text was made in response to these comments.

Under 20 CFR 681.550, DOL allows the use of individual training accounts (ITAs) for out-of-school youth ages 16 to 24. The parameters for this allowance are discussed in the preamble to that section. The Departments clarify here how youth are reported on in the WIOA sec. 116(d)(4) eligible training provider performance reports. The Departments clarify that such out-of-school youth are reported on in both the eligible training provider performance report as well as in the State and Local annual reports. Because WIOA sec. 116(d)(4) does not describe such youth, the Departments are clarifying here as well as in the WIOA Joint Performance ICR how these youth program participants are reported on in these reports. When such youth are reported on in the eligible training provider performance reports, their performance is reported using the same performance indicators as prescribed for WIOA adult and dislocated worker participants. Using the same metrics minimizes the burden on ETPs. The Departments note that such youth are excluded from the required reporting identified at § 677.230(a)(1)(i) through (iii) but are included in the counts required by § 677.230(a)(2) through (a)(4). The Departments further note that such youth are additionally reported on in the State and Local annual reports in accordance with §§ 677.155(d), 677.160, and 677.205, as described in those sections. The Departments will provide additional guidance on the treatment of these individuals through the WIOA Joint Performance ICR and in guidance.

Comments: A number of commenters responded to the Departments' request for comments regarding support for registered apprenticeship programs interested in providing performance information. A few commenters suggested that registered apprenticeship programs should report on the same performance outcomes as other training programs. Another commenter urged the Departments to require registered apprenticeships to publish performance data. Other commenters suggested there is value in having a comprehensive list of registered apprenticeship providers, but opposed additional reporting requirements for these programs. A commenter stated that if pre-apprenticeship programs are to be included in the ETP system, they will likely require separate criteria. Another commenter stated that performance information for registered apprenticeship programs should be clearly described.

Departments' Response: The Departments have concluded that WIOA sec. 116(d)(4) does not require registered apprenticeship programs to provide performance information for the ETP report. However, the Departments note that including information for a registered apprenticeship in these reports would provide a benefit to those individual seeking training through registered apprenticeships in that they will gain visibility and access to a broader applicant pool by voluntarily participating in this reporting. Therefore, the Departments are implementing § 677.230(b) as proposed to allow for the voluntary submission of performance information from registered apprenticeship program sponsors and their providers of related technical instruction. Any such information must be published in the State's annual ETP performance reports. With regard to the creation of a comprehensive list of registered apprenticeships the Departments note that such a requirement is beyond the scope of this regulation. No change to the regulatory text was made in response to these comments.

Comments: A commenter supported the creation of incentives for registered apprenticeship programs to submit performance information.

Departments' Response: The Departments are not creating additional incentives but notes that incentive for reporting already exists as explained above. No change to the regulatory text was made in response to this comment.

Comments: A commenter encouraged the Departments to account for positive outcomes from registered apprenticeship programs, even if the outcome is not necessarily completion of the program because programs could be several years in length.

Departments' Response: To the extent that the registered apprenticeship is actively reporting the information required under these provisions includes such information as measureable skill gains, which accounts for progress made during participation of a registered apprenticeship. No change to the regulatory text was made in response to this comment.

Comments: The Departments received multiple comments on how to calculate the average cost per participant for those who received training services for the most recent program year and the 3 preceding program years as required by WIOA sec. 116(d)(4)(E) and § 677.230(a)(3). One commenter noted that this metric is not currently collected. Such suggestions included: Calculating at the education or training program level, rather than the participant level; aligning calculations with existing national reporting standards, such as the Integrated Postsecondary Education Data System; calculating based on the tuition plus any support services (e.g., books, supplies, transportation) necessary to succeed in the training; calculating based on actual training costs for a student, including portions paid for with government subsidies; and calculating based on the direct cost paid under WIOA title I funding.

Departments' Response: The Departments considered these proposals; however, the Departments have concluded that the cost per participant is more appropriately addressed in the WIOA Joint Performance ICR, which provides more specificity around what underlying data are necessary and how such data will be used in calculating this information. The Departments will provide additional information on how this metric is calculated through the WIOA Joint Performance ICR, guidance, and technical assistance. No change to the regulatory text was made in response to these comments.

Comments: Commenters expressed concern that the ETP performance report does not provide sufficient cost information because it does not take into account other factors such as, textbooks, supplies, transportation, etc.

Departments' Response: WIOA sec. 116(d)(4) and § 677.230 mandate the collection of specific information for each program of study for each eligible Start Printed Page 55872provider of training services under title I as outlined in § 677.230(a). The Departments are cognizant of the reporting burden the ETP performance report places on ETPs and do not want to place additional burden on these entities. However, WIOA sec. 122 and 20 CFR part 680 require States to develop procedures for determining the eligibility of training providers and programs and to make information about the provider and program available to participants and members of the public. The WIOA sec. 116(d)(4) ETP performance report is only one component of an overall consumer product. States are not precluded from developing additional resources for consumers and the Departments encourage States to identify additional information that would be most helpful for students to have as they are evaluating a program or provider. No change to the regulatory text was made in response to these comments.

Comments: Numerous commenters raised issues on the burden posed for training providers. Such as:

  • A commenter asserted that many small training providers, particularly those in rural areas, would be unable to comply with ETP performance reporting requirements, which would limit available trainings.
  • A commenter expressed concern regarding the burden associated with collecting data reliant on SSNs, stating that many community colleges do not collect student SSNs.
  • A commenter described the increased data collection burden associated with obtaining the SSNs for all enrolled students, and, if deemed necessary, establishing data sharing agreements with each of the individual ETPs.
  • A commenter asserted that the costs associated with collecting, maintaining, and reporting out data are unknown and will vary depending on the entity responsible for these processes.
  • This commenter also suggested that entities applying for inclusion on the State ETPL may not capture the required demographic and programmatic data that would allow for the production of the performance report.
  • A few commenters suggested that many of the reporting elements would not be valuable and would impose a significant burden at the State and local level.

Multiple commenters suggested that many training providers do not have the capability or desire to report the proposed level of data on a regular basis, and this will lead to a decrease in training provider participation.

Departments' Response: The information required to be reported is required by WIOA sec. 116(d)(4). The Departments reiterate that the ETP performance reports provide critical information, including the employment, earnings, and credentials obtained by individuals in the program of study eligible to receive funding under the adult and dislocated worker formula programs under title I of WIOA. This information will be of significant benefit in assisting WIOA participants and members of the general public in identifying effective training programs and providers. The information will also benefit providers by widely disseminating information about their programs and potentially as a tool to enhance their programs. No change to the regulatory text was made in response to these comments.

Comments: Many commenters addressed § 677.230(e)(3) which contains the provisions allowing the Governor to designate one or more State agencies such as a State Education Agency or State Educational Authority to assist in overseeing the eligible training provider performance. Several commenters suggested designating the State as responsible for ETP data collection, coordination, and dissemination. These commenters suggested that their proposed approach would ensure local staff time is spent serving participants and that the data are consistently collected and reported across the State. A few commenters also stated that the burden on training providers would be minimized by not requiring collection of any data the State already has. A few commenters suggested aligning the ETP eligibility determination process with the data reporting process in order to minimize burden. A commenter sought clarification regarding the role of training providers in generating ETP performance reports and collecting data on participants.

Departments' Response: The Departments note that § 677.230(e) allows many such actions as recommended by the commenters. Additionally, the Departments reiterate that to the extent that there is overlap between data collected to meet requirements under WIOA sec. 122 and WIOA sec. 116 this overlap may provide opportunities for efficiency in collection and reporting of this information for both purposes. No change to the regulatory text was made in response to these comments.

Comments: Commenters expressed concern regarding the level of burden to eligible training providers for collecting the required data.

Departments' Response: The Departments acknowledge the need to identify the most effective data collection strategies and have reviewed the comments received through the WIOA Joint Performance ICR. Based on comments received, the Departments have concluded that State grantees are best situated to make the ETP performance reports available to ETA given their existing familiarity with the reporting structure. Grantees are required to establish a process to collect the data from the eligible training providers. The Departments will provide additional guidance on the ETP performance report.

Comments: In order to facilitate the reporting process, a commenter suggested that all training providers should report outcomes in the same format to facilitate cross-program comparisons and identify underperforming vendors.

Departments' Response: The Departments agree that reporting data in the same format would facilitate cross-program comparisons and WIOA sec. 116(d)(1) requires the Departments to develop a template for the annual ETP performance report. This section of WIOA requires the ETPs to use this report; therefore, all annual ETP performance reports will have outcomes listed in the same report to facilitate cross-program comparisons. Because this is already accomplished through WIOA and the regulation, the Departments did not make any changes to the regulatory text based on this comment.

Comments: Another commenter suggested that each program of study that a provider wants to be eligible to serve WIOA-funded students should be required to report.

Departments' Response: Under WIOA sec. 116(d)(4), the required reporting on a program of study only applies to those eligible training providers who are already on the State list of Eligible training providers and programs. Additional information on eligibility requirements is found in 20 CFR part 680, subpart D. The Departments also note, however, there is nothing in WIOA that precludes a State or an Eligible Training provider from providing or publishing similar information. No change to the regulatory text was made in response to this comment.

Comments: A commenter pointed out that entrepreneurship training would not score well on the performance indicators unless a recognized credential is developed.

Departments' Response: The Departments acknowledge concerns raised with regard to training that is Start Printed Page 55873targeted at self-employment and recognizes that individuals who are self-employed would not be accounted for in State UI wage records. However, the Departments note that WIOA sec. 116(d)(4) identifies more than just employment or credential based outcomes. Such indicators as measurable skill gains combined with the allowance to collect and verify employment information through supplemental means as described more fully in the preamble to § 677.175 provides alternative points of information on outcomes associated with such trainings. The Departments have not made any revisions to this section with regard to this comment. Further clarification on the allowed sources of data and calculations for these provisions will be provided through the WIOA Joint Performance ICR. No change to the regulatory text was made in response to this comment.

8. Performance Reporting Administrative Requirements (20 CFR Part 677, Subpart F; 34 CFR 361.235 Through 361.240; 34 CFR 463.235 Through 463.240)

Section 677.235 What are the reporting requirements for individual records for core Workforce Innovation and Opportunity Act (WIOA) title I programs; the Wagner-Peyser Act Employment Service program, as amended by WIOA title III; and the Vocational Rehabilitation program authorized under title I of the Rehabilitation Act of 1973, as amended by WIOA title IV?

This section of the regulations requires all of the core programs—except for the title II program—to report using individual records, as opposed to aggregate data. While the NPRM would have required that records submitted to DOL must be submitted in one record that is integrated across all core DOL-administered programs, the regulatory text has been revised to read that such records “may” be submitted in an integrated format.

Comments: Many commenters expressed a range of concerns regarding the proposed reporting requirements that appear to be based on incorrect or incomplete information. For instance, one commenter asserted that WIA required an SSN for program participation, whereas the Wagner-Peyser Act Employment Service program did not, thereby resulting in data deficiencies regarding the matching of wage records, which should be addressed under WIOA.

Departments' Response: The provision of a SSN is strongly encouraged to facilitate objective performance measurement through the use of wage records; however, requiring an SSN as a condition of program participation has been and remains a violation of the Privacy Act of 1974, 5 U.S.C. 552a Note, which DOL has previously clarified in policy guidance. See TEGL No. 5-08, “Policy for Collection and Use of Workforce System Participants' Social Security Numbers.” No change to the regulatory text was made in response to these comments.

Comments: Another commenter suggested that, because one integrated record was required for each participant across all core programs, sufficient time should be provided to implement this paragraph, and it should be implemented no earlier than July 1, 2018. One commenter noted that State VR agencies are not part of the Workforce Investment Streamlined Performance Reporting (WISPR) system and suggested that States should be allowed to file separate reports for the VR program.

Departments' Response: While the Departments want to make clear that there is no requirement that performance reporting for the Departments of Labor and Education be integrated, the Departments encourage moving in that direction. For States that have integrated reporting of WIOA title I core programs and Wagner-Peyser Act Employment Service programs, DOL strongly encourages those States to submit an integrated report. This provision regarding the submission of integrated reports does not extend to the AEFLA and VR programs administered by ED. However, the Departments note that as previously discussed, DOL intends to work towards developing an integrated reporting mechanism. No change to the regulatory text was made in response to this comment.

Comments: Another commenter disagreed with the Departments' intention to have States integrate and submit their performance reporting as a single, comprehensive, aggregate report because it would incur an undue and unrealistic burden.

Departments' Response: As explained above, this is not a current requirement. The Departments understand that there would be a burden with submitting a single, aggregate report to be submitted by one State agency when the different programs may currently be housed in different departments or agencies.

Comments: Several commenters were also under the impression that all of the core programs currently utilize individual records, with one commenter asserting that the comment had been validated by WIOA staff across multiple States.

Departments' Response: The Departments also would like to clarify that five of the six core programs currently transmit individual records to their respective Departments. The ED's OCTAE, which administers title II programs, does not receive individual records from State Adult Education Agencies. It is noted that for title II, State eligible agencies are required to collect individual records on a quarterly basis and submit annually aggregated data using individual records. The Departments acknowledge the need for guidance on program reporting as well as technical assistance needed to ensure consistent understanding for implementation. No change to the regulatory text was made in response to these comments.

Comments: Many commenters expressed opposition to the exclusion of title II programs from the individual records reporting requirements. Several articulated that the expectations for system alignment through integrated reporting discussed in the NPRM would be undercut by the proposal to exclude title II from the same quarterly reporting requirements as the other five core programs. One commenter remarked that title II programs should be included in these reporting requirements in the spirit of true integration. And, and as previously noted, some commenters were under the impression that all of the core programs already use individual records, thereby making the exclusion of title II unwarranted.

Departments' Response: Although ED's Office of Career, Technical, and Adult Education does not collect individual records at the Federal level, States are required to maintain individual record systems that meet strict standards. States are required to collect such data quarterly and aggregate the data to meet performance requirements in an annual submission. No change to the regulatory text was made in response to these comments.

Comments: Several commenters suggested that the burden for the proposed reporting requirements was considerably underestimated and should reside at the Federal level, with some suggesting the additional requirements constitute an unfunded mandate, particularly for the VR program, which must incur the significant cost and staff training needed to transition from annual reporting of the RSA 911 to the proposed quarterly reporting of the RSA 911. Many of these commenters recommended that a currently available tool be utilized to validate RSA 911 data on a quarterly Start Printed Page 55874basis without the requirement for full quarterly report submission. Additionally, there were concerns raised regarding data that are collected through the VR program, which falls under the confidentiality requirements under 34 CFR 361.38 that may prohibit the release of social security information.

Departments' Response: The ED's RSA acknowledges that additional time and resources as well as staff training will be needed to accomplish statutory requirement while ensuring consistent understanding and nationwide implementation. There is no provision in 34 CFR 361.38 that prohibits the release of SSNs for reporting purposes since the reporting requirements are necessary for the administration of the VR program. Therefore 34 CFR 361.38(b) does not require informed written consent for the release of PII for this purpose. However, there may be other Federal or State laws that would govern such releases. Further, the Departments refer to the VR Performance ICR for the RSA-911 form where burden for collection and reporting this information in the RSA 911 are further addressed. No change to the regulatory text was made in response to these comments.

Comments: The Departments received comments on aspects of this part related to calculations for indicators and performance information, structure and compilation of individual records, and formatting for the collection of underlying data for the reports.

Departments' Response: Because of the level of detail these comments sought on the more specific technical aspects of this part, the Departments, as discussed throughout this regulation, reiterate that such information will be provided through the WIOA Joint Performance ICR or Department-specific ICRs, as well as associated program guidance. No change to the regulatory text was made in response to these comments.

Section 677.240 What are the requirements for data validation of State annual performance reports?

Section 677.240 provides the requirements for data validation of State annual performance reports. It has been revised to specify that performance reports should be consistent with the requirement for data validation in WIOA sec. 116(d)(5).

Comments: Several commenters requested guidance for conducting data validation across core programs. Commenters specifically asked for guidance concerning where the responsibility for data validation lies when participants are co-enrolled in two or more partner programs. Commenters also asked for clarification regarding the distinction between State and local roles in annual reporting. Multiple commenters supported either the postponement of the effective date for data validation requirements until July 2017 or the gradual implementation of data validation requirements, particularly if the validation pertains to new data that are required to be collected. Some of these commenters expressed concern regarding potentially retroactive data validation requirements whereby States would have to go back in order to capture newly required data elements on periods of participation that began before the new requirements were implemented. Several commenters also suggested that the starting point for data validation guidance be based on existing data validation methods and procedures used under WIA, with one commenter specifically suggesting that a comprehensive review of the data elements currently included in WIA data validation be undertaken to ensure the appropriate data are being validated, eliminating those elements that are either duplicative or no longer necessary.

Departments' Response: The Departments concur that joint guidance for conducting data validation across the core programs is necessary in order to provide the level of detail and specificity required to implement these provisions. As noted above, § 677.240(a) has been revised to specify that reporting should be consistent with guidance issued pursuant to WIOA sec. 116(d)(5) concerning data validation. The guidance to be developed will be based on a comprehensive review of the methodology, data elements, and source documentation that have been utilized under WIA. It will clarify State and local roles in annual reporting and the associated validation process, and the co-enrollment of participants across two or more core programs will be addressed. The Departments do not expect to issue guidance that includes the need for retroactive data collection. In terms of implementation timeframes, the Departments anticipate a phased-in approach, which is particularly important for those programs that have not conducted data validation under WIA. Expectations will be articulated through the Departments' joint policy guidance, and technical assistance will be provided to ensure consistency in understanding and implementation. No change to the regulatory text has been made in response to these comments.

Comments: Commenters shared specific suggestions for source documentation to be used to validate personal identity, with one commenter arguing that applicant and counselor statements should be acceptable for SSN validation to eliminate the need to copy social security cards, thereby minimizing the risk of file breach. Another commenter requested clarification on accuracy standards, inquiring as to whether the Departments will follow the “five percent rule” used for WIA data validation.

Departments' Response: Source documentation requirements will be clarified in policy guidance to be issued jointly by the Departments, including documentation to validate personal identity. The Departments agree with one commenter who suggested that allowing staff verification is not consistent with data quality standards. The Departments acknowledge the proposed suggestions by commenters and will further clarify such procedures through the guidelines. No change to the regulatory text was made in response to these comments.

The “five percent rule” referenced in the comment pertains to an accuracy standard utilized under WIA by DOL for its programs whereby critical data elements with an error rate exceeding five percent were flagged as potentially symptomatic of larger reporting and data quality issues. This will be addressed in guidance.

In addition to the regulatory text changes discussed above, various non-substantive changes have been made for purposes of correcting typographical errors and improving clarity that have not been necessary to note elsewhere.

C. Description of the One-Stop System Under Title I of the Workforce Innovation and Opportunity Act (20 CFR Part 678; 34 CFR Part 361, Subpart F; 34 CFR Part 463, Subpart J)

1. Introduction

In the section-by-section discussions of each one-stop system provision below, the heading references the DOL CFR part and section number. However, ED has identical provisions at 34 CFR part 361, subpart F (under its State VR program regulations) and at 34 CFR part 463, subpart J (under a new CFR part for AEFLA regulations). For purposes of brevity, the section-by-section discussions for each Department's provisions appear only once—in conjunction with the DOL section number—and constitute the Departments' collective explanation and rationale for each provision. When the regulations are published in the CFR, these joint one-stop regulations will Start Printed Page 55875appear in each of the CFR parts identified above.

2. General Description of the One-Stop Delivery System (20 CFR Part 678, Subpart A; 34 CFR 361.300 Through 361.320; 34 CFR 463.300 Through 463.320)

WIOA reaffirms the role of the one-stop delivery system, a cornerstone of the public workforce development system, and subpart A describes the one-stop delivery system. Although there are many similarities to the system established under WIA, there are also significant changes under WIOA. This subpart, therefore, restates WIA requirements governing one-stop centers, to the extent they are still applicable under WIOA, and embodies a set of reforms that, when implemented effectively, are intended to make significant improvements to the public workforce delivery system. These regulations set forth requirements of the one-stop delivery system as established under WIOA, requiring partners to collaborate to support a seamless customer-focused service delivery network. The regulations require that programs and providers colocate, coordinate, and integrate activities and information, so that the system as a whole is cohesive and accessible for individuals and employers alike. These regulations provide a detailed framework for implementation; however, the Departments acknowledge additional written guidance and technical assistance to the public workforce system is needed to implement the provisions and intentions of WIOA fully. Such guidance and technical assistance was provided during PY 2015 and will continue to be provided and updated with the future development of policies regarding the one-stop delivery system. The ultimate goal is to increase the long-term employment outcomes for individuals seeking services, especially those with significant barriers to employment, and to improve services to employers.

Subpart A describes the one-stop delivery system. It establishes the different types of one-stop centers allowable in each local area, the need for both physical and programmatic accessibility in the one-stop delivery system, and also addresses the use of technology to provide services through the one-stop delivery system. As discussed in §§ 678.305 and 678.310, a local area's one-stop delivery system may be made up of a combination of a comprehensive one-stop center and a network of affiliated sites. When designing the one-stop delivery system, States and Local WDBs must ensure that information on the availability of career services is available at all one-stop center physical locations and access points, including electronic access points, regardless of where individuals initially enter the local one-stop delivery system. The Departments acknowledge that some comments of support were included among comments in this subpart. No changes to the regulatory text were made in response to these comments.

The Departments made several changes to regulatory text in response to comments on subpart A. Most notably, changes were made to § 678.305(d) that clarify what it means to make available a “direct linkage” through technology to provide access to program services and information for those partner programs not physically located in a comprehensive one-stop center.

Section 678.300 What is the one-stop delivery system?

This section provides that there are responsibilities at the local, State, and Federal levels relative to the establishment and maintenance of the one-stop delivery system.

Comments: Several commenters addressed the accessibility provisions in this subpart. A few commenters stated that VR agencies must work closely with workforce systems to ensure accessibility for individuals with disabilities. Another commenter said that each local area must have at least one comprehensive one-stop center that is accessible. A few commenters said that there are one-stop centers located in buildings that are not fully accessible, and the regulations should emphasize in this section that full accessibility is required.

Departments' Response: The Departments agree with commenters that accessibility to one-stop centers and the program and services provided at those centers is of the utmost importance. Section 188 of WIOA, the corresponding regulations at 29 CFR part 38, and the regulations in this part at §§ 678.305, 678.310, and 678.800 require that all one-stop centers and affiliated sites be physically and programmatically accessible to disabled individuals. The Departments have concluded that the numerous instances of directly addressing this or cross-referencing another section of regulation or WIOA throughout part 678 is sufficient emphasis on this point. No change to the regulatory text was made in response to these comments.

Comments: One commenter asked which entity is responsible for ensuring one-stop center accessibility.

Departments' Response: The decision as to which entity will be responsible for ensuring accessibility at a one-stop center is ultimately the Local WDB's to make, appropriately specified in the MOU.

Comments: Another commenter said this subpart should describe the procedure for when a one-stop center is found not to be physically and programmatically accessible.

Departments' Response: The procedures that must be followed when a one-stop center is found not to be physically or programmatically accessible are described in 29 CFR part 38. The Departments have added cross references to those regulations in §§ 678.305 and 678.310 to clarify that these are the controlling regulations in such instances, replacing references to § 678.800.

Comments: A commenter asked, given the long-standing separation between one-stop centers and adult education programs, how soon the Departments expect these entities to fulfill the requirement to provide a “seamless customer-facing service delivery network.”

Departments' Response: While the Departments understand that adapting to the new one-stop delivery system structure will take time for all partners involved, partner programs are expected to work as expeditiously as possible to reach the goal of providing a “seamless customer-facing service delivery network.”

Comments: A few commenters requested guidance on how certain partners, like libraries, are expected to measure enrollment.

Departments' Response: A WIOA program carries the responsibility for reporting and ensuring such data are available to fulfill their reporting requirements. In the case where a partner program is receiving WIOA funds to provide services for any program, a mechanism for tracking and reporting such services and individuals will need to be established between the local one-stop partner and the program responsible for making such reports. Where a local one-stop partner is providing services beyond those funded under WIOA, reporting requirements would not extend to such services. In the case of a local one-stop partner, such as a local library, who may only be providing space for a program or programs to operate within, or providing access to public computers by which participants access programs, reporting is the responsibility of the program operator.Start Printed Page 55876

Comments: A few commenters said that this section will require the UI program to change its business model.

Departments' Response: The Departments do not agree that the UI program will require a change to its business model, and see the program as completely adaptable to the new regulations' plan and vision for the one-stop delivery system. New requirements, such as the requirement to provide “meaningful assistance” to claimants who need help filing a claim, do not translate into a move away from primarily on-line or phone claims filing. They simply assure that claimants who need assistance accessing the program receive it.

Section 678.305 What is a comprehensive one-stop center and what must be provided there?

Access and Direct Linkage

Providing one-stop center participants with access to program activities and services is the keystone of the one-stop delivery system. “Access” is defined in § 678.305(d), which provides three ways each partner program may meet this requirement: (1) Having a program staff member physically present at the one-stop center; (2) having a staff member from a different partner program physically present at the one-stop center appropriately trained to provide information to customers about the programs, services, and activities available through partner programs; or (3) making available a direct linkage through technology to program staff who can provide meaningful information or services. Options two and three offer a wide range of possibilities to partners. Option two could require varying levels of assistance depending on the program's needs, but this could be as simple as providing a hardcopy TANF benefit application to a participant or directing them to an online form. Direct linkage can take many forms as well, and the Departments received many comments on the definition of this term, as discussed below.

Comments: A few commenters disagreed with the definition of “direct linkage,” specifically because it does not include providing a phone number or Web site that individuals can use at home. These commenters said this is an unnecessary restraint on how States can serve customers and does not take into account the usage of mobile apps and other technology. The commenters also said that the definition of “direct linkage” exceeds what is required in WIOA. Further, the commenters stated that proposed technologies, such as live Web chat systems, are expensive.

Departments' Response: Maintaining the option of connecting to a well-trained program staff member at the one-stop center is extremely important to the success of the one-stop delivery system. The Departments recognize that the language defining “access” and “direct linkage” may have been too restrictive and also could make it appear that every interaction required a human component, not just the availability of the option to speak with a person. Many one-stop customers may only require services provided electronically or may not be ready for a direct interaction with a staff member. For these reasons, the Departments have changed the regulatory text in paragraph (d)(3) of this section, replacing “providing direct linkage . . .” with “making available a direct linkage . . .,” in order to reflect that communicating with an individual must remain an option, but is not required for every one-stop customer interaction.

Comments: Several of the previously mentioned commenters joined other commenters who said that it is not realistic to expect that every customer can receive services at the time of arrival at the one-stop center, and suggested that the regulation should not prohibit arranging for customers to receive services at a later time.

Departments' Response: The Departments agree that the proposed regulation was not intended to prohibit arrangements to serve customers at a later time. Accordingly, the Departments have deleted the language prohibiting arranging for customers to receive services at a later time, thereby providing what the Departments see as more flexible service delivery options. Specifically, paragraph (d)(2) was changed by striking the phrase “or making arrangements for the customer to receive services at a later time or on a different day.”

Comments: A few commenters commented that the definition of “direct linkage” implies that all customers entering a one-stop center have a computer with Internet access at home. The commenters recommended revising this section to indicate that providing a computer with access to enrollment or eligibility services does qualify as a direct linkage.

Departments' Response: While providing such a service is of value and should be encouraged, a “direct linkage,” pursuant to these final regulations, must be the availability of a direct connection to a program staff member by phone or through real-time Web-based communication, an element seen by the Departments as critical to the service. As mentioned above, however, not all one-stop customer interactions require the use of a “direct linkage;” rather, the regulations require only that a “direct linkage” remains available to the customer. The language of paragraph (d)(2) was changed from “[a] `direct linkage' does not include providing a phone number or computer Web site that can be used at an individual's home . . .” to “[a] `direct linkage' cannot exclusively be providing a phone number or computer Web site . . . .” This means that providing a phone number or Web site, as mentioned by the commenters, would still be considered serving an individual, as long as more involved access was available to that customer if desired.

Comments: Another commenter also disagreed with the NPRM, saying that States should have flexibility to determine how and when to deliver virtual services.

Departments' Response: The Departments have concluded that, with the above-mentioned changes to the definitions of “accessibility” and “direct linkage,” States and local areas are provided a reasonable amount of flexibility to determine how and when to deliver virtual services, as long as the option of a “direct linkage” remains open to customers if another form of “access” is not available. The Departments have not made further changes to the regulatory text in response to this comment.

Comments: A few commenters requested clarification on the definition of “timely manner” and “within a reasonable time.”

Departments' Response: The Departments decline to define “within a reasonable time” in this section. The Departments consider what is “reasonable” will fluctuate based on demand and resources in a specific local area. However, to ensure quality customer service, the Departments encourage States and local areas to minimize the time during which an individual must await a direct linkage to services and to coordinate direct services effectively.

One-Stop Center Partner Staffing

Comments: A commenter asked whether the title I program staff person needs to be present full-time or may be present on a part-time basis. Another commenter asked whether there must also be at least a part-time title II staff presence. Additionally, one commenter said that electronic linkage should be permissible instead of requiring a physical staff presence.Start Printed Page 55877

Departments' Response: At least one title I staff person must be present when the one-stop center is open for operations, although this requirement does not have to be met by a full-time staff person and can be met by the physical presence of different staff trading off throughout the one-stop center's times of operation.

No such requirement exists for the physical presence of a title II staff person at the one-stop center. However, such physical presence may be appropriate as a means to provide access to the title II program, depending upon the particular local area's needs.

Lastly, as long as there is a physical presence of at least one title I program staff member at all times of operation, all other programs have the option to provide “access” through a “direct linkage” that leverages available technologies according to the definitions provided in this section. The Departments, however, encourage partners to strive for a physical presence at one-stop centers to serve customers' needs better.

Comments: A few commenters asked if it is the intent of the regulations to have all required partners colocated in the one-stop centers.

Departments' Response: As stated in § 678.305(a), “[a] comprehensive one-stop center is a physical location where job seeker and employer customers can access the programs, services, and activities of all required one-stop partners.” As providing services through “direct linkage” is an allowable form of “access,” as defined in § 678.305(d), not all required partners must be physically present at a comprehensive one-stop center as long as “access” to their services, programs, and activities is provided. However, the Departments encourage as much physical presence of partner staff persons that is feasible.

Comments: Another commenter said that it will be logistically difficult to ensure that 50 percent of required partners are located in the one-stop centers, particularly with regard to adult education programs and the volume of customers that they serve.

Departments' Response: This comment seems to stem from a misunderstanding of the colocation requirements. While all required one-stop partners must provide “access” to their programs and activities through a comprehensive one-stop center, at least one title I program staff person must be physically present. However, the Departments encourage as much physical presence of other one-stop partners' program staff persons as is feasible. States and local areas should be aware of the requirement in § 678.315 that, if Wagner-Peyser Act services are provided at an affiliated site, at least one or more other one-stop partner programs must be located in the affiliated site, and there must be a physical presence of combined staff from the other program(s) over 50 percent of the time that the site is open.

Comments: Another commenter said that the ability of the VR program to participate through technology instead of through a physical presence will greatly expand the VR program's participation in the one-stop delivery system.

Departments' Response: As stated above, as long as this technology meets the definition of “direct linkage” as stated in § 678.305(d), the VR agencies are able to substitute this for a physical presence at a comprehensive one-stop center.

Comments: One commenter asked if it is the intent of the regulations to require NFJP grantees to be located in the same one-stop center as other entities that provide one-stop services. The commenter said that colocating these grantees would be logistically very difficult. A couple of commenters stated that the decision to colocate services can be beneficial but should consider financial viability. If it is more beneficial to locate NFJP programs outside of a one-stop center, these commenters reasoned that grantees should be given the flexibility to do so, and commented that the grantee can still develop a close partnership with the one-stop delivery system without necessarily being colocated.

Departments' Response: Because NFJP is an entity that administers a program authorized by title I of WIOA, sec. 121(b)(1)(B) and § 678.400(b)(1) require NFJP to be a comprehensive one-stop center partner. This does not necessarily mean, however, that NFJP staff must be physically present at the one-stop center. There are multiple examples in the regulations for providing access to a program and its services through the one-stop center (such as providing a “direct linkage”), as discussed in paragraph (d) of this section. It should be noted, however, that an NFJP staff member placed at the local area's comprehensive one-stop center could serve as the required title I staff member when present.

Comments: Another commenter remarked that, traditionally, there has been a cost increase associated with operating NFJP services in conjunction with a one-stop delivery system that leaves less funding available for training programs and participant services. This commenter said that the increase in operating costs would be due to high rent, assignment of personnel to other duties in the one-stop delivery system, and cooperative spending.

Departments' Response: The Departments determined that while there may be cost increases in some areas, there may be savings in others due to the infrastructure cost contribution plan laid out in the local area's MOU in accordance with §§ 678.700 through 678.755.

Comments: One commenter suggested that one-stop centers should receive guidance about how to calculate co-occupancy rates so that partners are aware if there is inadequate space to provide colocated services.

Departments' Response: The Departments recognize the importance of quality facilities, including adequate physical space, to deliver services across one-stop partner programs. However, the Departments do not consider this level of detail necessary in regulations and have not made changes to the regulatory text in response to this comment. The Departments encourage the use of State and local administrative data to guide negotiations regarding colocation and shared infrastructure costs.

Comments: Some commenters said that the regulation implies that operating one-stop centers beyond normal business hours will lead to a higher evaluation during the certification process. These commenters expressed concern about the fairness of this practice, stating that some one-stop centers many not be able to stay open past normal business hours due to lease agreements or security concerns (e.g., needing to hire an additional security guard).

Departments' Response: Providing nontraditional hours of operation, such as on Saturdays or after 5 p.m. on weekdays, is seen as a critical element in servicing difficult to reach populations, such as low-wage, low-skill, and other employed workers, and homeless individuals. Therefore, this will remain one of the required elements to be taken into account when evaluating the effectiveness of one-stop centers. The Departments have revised the regulatory text at § 678.800(b) to reflect that such hours should be provided where there is such a need by the workforce population, as identified by the Local WDB. It should be noted that this is only one factor to take into consideration when evaluating a one-stop center for certification, and while operating a one-stop center beyond normal business hours will count positively toward a center's evaluation, this will in no way negatively affect the Start Printed Page 55878evaluations of other one-stop centers in the State that may not be able to offer such services.

Comments: Another commenter asserted that the regulation's emphasis on expanding operating hours would require additional staff and relocations to larger facilities to accommodate these staff.

Departments' Response: In some instances, this may be true, but the Departments encourage creative ways of implementing these nontraditional hours with the resources the one-stop centers and Local WDBs have available to them. Innovation is one of the driving principles behind WIOA, including in how services are delivered to difficult to reach populations and individuals with barriers to employment.

Other Comments

Comments: Another commenter said that States should determine standards for one-stop centers with input from Local WDBs.

Departments' Response: Under sec. 101(d)(6) of WIOA, State WDBs are responsible for assisting the Governor in developing statewide policies affecting the coordinated provision of services through the one-stop delivery system, including developing objective criteria and procedures that Local WDBs will use to assess the effectiveness and continuous improvement of one-stop centers. In addition, one-stop centers must adhere to the requirements in sec. 121 of WIOA and these implementing regulations.

Comments: A commenter suggested amending this section to encourage States to develop technology-based strategies to ensure that wraparound, or comprehensive, services are available outside of normal business hours.

Departments' Response: The Departments encourage the development of technology-based strategies to deliver services to customers in innovative and comprehensive ways, both during normal business hours and nontraditional hours, and the Departments have concluded that the regulations support such activity as written. No changes to the regulatory text were made in response to this comment.

Comments: Another commenter said that the NPRM does not provide enough guidance on how to decide the number and location of comprehensive one-stop centers, explaining that these decisions require significant collaboration among several stakeholders.

Departments' Response: While sec. 121(e) of WIOA and § 678.300(c) require that at least one comprehensive one-stop center be established in a local area, many local areas will require the establishment of multiple centers to serve their populations properly. This is highly dependent on individualized factors in each local area. This determination is best carried out at the State and local planning level. WIOA sec. 121(a) requires the establishment of the one-stop delivery system, consistent with the approved Unified or Combined State Plan, through the Local WDB for a local area and with the agreement of CEO for the local area. It is these entities that should determine the proper number and location of one-stop centers, by drawing on their knowledge of the area's needs. The Departments made no change to the regulatory text in response to the comment.

Section 678.310 What is an affiliated site and what must be provided there?

In addition to the requirement for a physical center in each local area where all required one-stop partners must provide access to their programs, services and activities, consistent with sec. 121(e)(2)(B) of WIOA,,§§ 678.310 and 678.320 provide that the one-stop delivery system may also provide partner programs, services, and activities through affiliated sites or through a network of eligible one-stop partners that provide at least one or more of the programs, services, and activities at a physical location or through an electronically or technologically linked access point, such as a library. The Departments added a reference to 29 CFR part 38, the implementing regulations of WIOA sec. 188.

Comments: A commenter recommended that affiliated sites not be required to have operators; however, the commenter also said that the entities delivering services at these sites should be signatories to the MOU.

Departments' Response: As required by sec. 121(c) of WIOA, an MOU is an agreement among the one-stop partner programs and the Local WDB; therefore, the entities delivering services—i.e., the partner programs—will be signatories to the MOU. A local area's one-stop operator may be in charge of running affiliated sites as well as the comprehensive one-stop center. In other cases, other arrangements for operations of the affiliate sites may be specified in the MOU. The operator may be assigned different responsibilities, which are dependent on the terms of the selection process and the operator agreement(s) reached between the operator(s) and the Local WDB.

Comments: One commenter suggested that affiliated sites should not have to provide access to all required partners, since physical staffing is determined locally.

Departments' Response: Since affiliated sites are not required to provide access to all partner programs, as stated in § 678.310(a), no change to the regulatory text is necessary.

Comments: Another commenter asked whether VR agencies are required to participate in affiliated sites.

Departments' Response: To clarify, neither the VR program, nor any other partner program, is required to participate in affiliated sites by these regulations or by statute; partner programs are required only to participate in the operation of the one-stop delivery system and must provide access to their programs through the comprehensive one-stop centers. The Departments encourage the use of affiliated sites to serve a local area's population better, but decisions concerning this implementation are ultimately made by the local areas. These affiliated sites should, first and foremost, supplement and enhance customer access to services, and should be seen as access points that are in addition to the local area's comprehensive one-stop centers.

Comments: One commenter asked whether an adult education provider in a CBO is considered an affiliated site.

Departments' Response: Yes, an adult education provider, or any other partner program, located in a CBO, may be considered an affiliated site. If any partner program in a CBO is considered an affiliated site, that program must follow all of the requirements of this section.

Section 678.315 Can a stand-alone Wagner-Peyser Act Employment Service office be designated as an affiliated one-stop site?

This section sets forth the prohibition against standalone Wagner-Peyser Act Employment Services offices. WIOA requires that the Wagner-Peyser Act Employment Service program be colocated with one-stop centers. A Wagner-Peyser Act Employment Service office cannot, by itself, constitute an affiliated site. In those cases where the Wagner-Peyser Act Employment Service program is located in an affiliated site, there must be staff of at least one other partner in that affiliated site that is physically present more than 50 percent of the time the center is open.

Comments: A commenter asked whether one partner agency that administers multiple partner programs can satisfy the 50 percent presence requirement. This commenter reasoned that multiple partners should be able to Start Printed Page 55879meet the 50 percent requirement collectively.

Departments' Response: In light of the comments and upon considering the requirement for physical presence of non-Wagner Peyser program staff more than 50 percent of the time, the Departments have concluded that it is appropriate to allow a combination of partner program staff members to meet this requirement, and the Departments have revised the regulatory text to reflect this.

If there is only one qualifying partner program (i.e., partner programs other than local veterans' employment representatives, disabled veterans' outreach program specialists, or UC programs) in addition to the Wagner-Peyser Act program at an affiliated site, then that partner program alone must meet the more than 50 percent threshold. If there is more than one qualifying partner program in the affiliated site, such programs together must have staff present to provide coverage more than 50 percent of the time the site is open.

Comments: A commenter also recommended that electronic access should be included to meet the more than 50 percent requirement. Another commenter agreed, and also added that it may not be financially feasible to have staff in affiliated sites more than 50 percent of the time.

Departments' Response: While the Departments appreciate and encourage partners' use of technology to better, and more comprehensively, serve customers of the one-stop delivery system, the Departments have not revised the regulatory text to permit such activities in order to meet the more than 50 percent physical presence requirement for non-Wagner-Peyser Act partner programs. Doing so would defeat the purpose of this requirement, which is to have staff other than Wagner-Peyser Act staff physically present for a majority of the time that an affiliated site is open.

Comments: A few commenters requested flexibility in determining staffing at affiliated sites to meet local needs best, stating that the 50 percent threshold may result in some programs being overstaffed while Wagner-Peyser Act services are understaffed. Another commenter agreed that this requirement is burdensome and does not take into account existing long-term lease agreements.

Departments' Response: In determining the number and placement of affiliated sites, Local WDBs should consider how their one-stop delivery system could deliver services most effectively across the local area with the resources that are available. In making these adjustments, Local WDBs should consider the services that are needed in each location, how services are delivered in the comprehensive one-stop center, where the one-stop center is located, and where current affiliated sites are located. This may require the opening of new affiliated sites, or the consolidation of existing offices that would be considered affiliated sites under WIOA. The Departments recognize that such adjustments take time, but the Departments expect this process to begin as soon as possible.

Comments: Another commenter asked how this requirement would affect existing standalone Wagner-Peyser Act offices.

Departments' Response: This requirement will mean that either a non-Wagner-Peyser Act partner program will need to colocate at the formerly standalone Wagner-Peyser Act office; the Wagner-Peyser Act program will need to move to another space that can support colocation with a non-Wagner-Peyser Act partner program; or the Wagner-Peyser Act program will need to shift operations to a comprehensive one-stop center, of which the program is a required member, or to another affiliated site. As stated in § 678.315, Wagner-Peyser Act programs may no longer exist in standalone offices.

Comments: One commenter recommended strengthening the language about how required partners are to operate in integrated partnerships with Wagner-Peyser Act services. The commenter stated that many local areas have flexibility to determine whether to colocate with Wagner-Peyser Act services.

Departments' Response: The Departments are not altering the regulatory text to address the language concerning how required partners are to operate in partnership with Wagner-Peyser Act services. WIOA recognizes the Wagner-Peyser Act program's role in the one-stop delivery system and has made Wagner-Peyser Act one of the core programs. The Departments have determined that Wagner-Peyser Act services are vital to the successful operation of one-stop centers, and have, through administrative guidance, strongly encouraged access to these services throughout the public workforce system.

Comments: A few commenters expressed concern about the lack of specific instructions for how State workforce agencies are supposed to fund the colocation of Wagner-Peyser Act services. The commenters recommended that States do not need to use their Wagner-Peyser Act program allocations for this action.

Departments' Response: Given the diversity in how States have structured their Wagner-Peyser Act employment services, the regulation provides States with discretion in developing an appropriate plan for relocation. Any plan, including the identification of funding to be used to carry out relocation, must comply with applicable Federal cost principles. The Departments did not make changes to the regulatory text in response to this comment.

Comments: One commenter recommended that States be required to have a conflict-resolution process in place for on-site staff disputes, which may help alleviate one of the major challenges of program colocation.

Departments' Response: While the Departments recognize the utility of such a process and may recommend the implementation of such a process in many instances, the Departments have decided it is best to provide Local WDBs with flexibility in determining how to operationalize the colocation of programs, as well as integrated service delivery. For this reason, the Departments will not require a conflict-resolution process for on-site staff disputes, and have made no changes to the regulatory text.

Section 678.320 Are there any requirements for networks of eligible one-stop partners or specialized centers?

The Departments received no comments for this section and made no substantive changes to the regulatory text. However, the Departments have rephrased the first sentence of the paragraph to improve clarity and readability. The phrase “such as having in place processes to make referrals to” was stricken from its original position; “one-stop center” was added after “comprehensive;” and the phrase “for example, by having processes in place to make referrals to these centers and the partner programs located in them” was inserted at the end of the first sentence. The new sentence reads as follows: “Any network of one-stop partner or specialized centers must be connected to the comprehensive one-stop center and any appropriate affiliate one-stop centers, for example, by having processes in place to make referrals to these centers and the partner programs located in them.” The Departments have made these changes to make this sentence more understandable than originally phrased and do not intend to change the meaning of the sentence or paragraph.Start Printed Page 55880

3. One-Stop Partners and the Responsibilities of Partners (20 CFR Part 678, Subpart B; 34 CFR 361.400 Through 361.440; 34 CFR 463.400 Through 463.440)

The public workforce system envisioned by WIOA seeks to provide all participants with access to high-quality one-stop centers that connect them with the full range of services available in their communities, whether they are looking to find jobs, build educational or occupational skills, earn a postsecondary certificate or degree, obtain guidance on how to chart careers, or are employers seeking skilled workers. A genuinely seamless, one-stop experience requires strong partnerships across programs that are able to streamline service delivery and align program requirements. In this subpart of the regulation, the Departments describe requirements relating to such one-stop partnerships. Specifically, this subpart identifies the programs that are required partners and their roles and responsibilities, the other entities that may serve as partners, and the types of services provided.

The Departments changed several sections of this subpart in response to comments. While small changes to the regulatory text were made in § 678.410, much more significant changes were made to § 678.415(e), which changed the default one-stop partner under the Perkins Act from the State agency administering that program to a local postsecondary recipient of Perkins funds. Changes to the requirements for local TANF partners have also been made in § 678.430(a)(2) and (d). Two additions were also made to the human services that may be provided as business services in § 678.435(b)(4).

Section 678.400 Who are the required one-stop partners?

This section lists the one-stop partners required under sec. 121(b)(1)(B) of WIOA. Beyond the partners previously required under WIA, WIOA adds the TANF program, administered by HHS, and the Ex-Offender program, administered by DOL under sec. 212 of the Second Chance Act of 2007, to the list of required partners.

Comments: A commenter requested clarification on participation for career and technical education programs and also a clearer definition of employment and training programs. The commenter expressed concern that without a clear definition of these terms, nearly any entity can claim to be an employment and training program. Further, the commenter requested that States be able to define these terms.

Departments' Response: Within the context of these regulations, these terms are used in reference to programs authorized under specific Federal statutes. The “career and technical education programs” referred to in § 678.400(b)(6) are those authorized by the Perkins Act at the postsecondary level. The “employment and training activities” listed in this section are either those carried out under the CSBG or those carried out by HUD, as provided in § 678.400(b)(9) and (10), respectively. Under these categorical restrictions, the Departments are not concerned that nearly any entity could claim to be an employment and training program. Section 121(b)(1)(B) of WIOA, as implemented by § 678.400, lists intentionally broad categories of required partners so as to bring more local partner programs into the comprehensive one-stop center and the broader one-stop delivery system to provide more comprehensive services for the one-stop centers' customers. For this reason, the Departments are not changing the regulatory text concerning these terms. The Departments have determined that it is within the best interests of the one-stop delivery system and its customers for States to adhere to these broad categorical definitions. Furthermore, narrowing these definitions would exclude some programs explicitly included by Congress as the regulatory language mirrors the statutory text in WIOA secs. 121(b)(1)(B)(vi), (ix), and (x).

Comments: A commenter asked whether CSBG programs have to be physically located at the one-stop center.

Departments' Response: If a CSBG program carries out employment and training activities, then these activities must be accessible at the comprehensive one-stop center, either through a physical presence or through another means of “access” as defined by the regulations in § 678.305(d), because these programs are required one-stop partners under sec. 121(b)(1)(B) of WIOA. Section 678.305(c) specifically requires customers to have access to one-stop partner programs in a comprehensive one-stop center, including employment and training activities carried out under the CSBG program. Furthermore, § 678.305(d) defines “access” as including, but not limited to, having partner program staff physically present at the one-stop center. That is, one-stop partner programs do not need to be physically present in a comprehensive one-stop center, but they must provide access to their services in the ways described in § 678.305(d).

Comments: One commenter said that the Perkins program needs to determine who the Perkins one-stop partner will be. Another commenter stated that § 678.400 needs to be reconciled with the Perkins Act and asserted that career and technical education programs do not have authority to enter into an MOU, although a postsecondary entity does have such authority.

Departments' Response: The NPRM specified that the State Eligible Agency serves as the one-stop partner for the Perkins program. As discussed below in this preamble, the Departments have determined that an eligible recipient at the postsecondary level, or a consortium of eligible recipients at the postsecondary level in the local area is the most appropriate entity to serve as the one-stop partner in a local area. This change is reflected in § 678.415(e) and is discussed in the corresponding preamble section below.

Comments: Another commenter recommended that all Federal grantees that have employment and training components in their grant should be required one-stop partners.

Departments' Response: While the Departments encourage the inclusion of such entities as additional one-stop partners, the list of required partners in § 678.400(b) is the statutorily mandated list of required partners. The Departments do not have authority to require additional programs to be one-stop partners. However, several entities such as those mentioned by the commenter are explicitly listed in sec. 121(b)(2)(B) of WIOA and § 678.410 as acceptable additional one-stop partners, subject to approval of the Local WDB and CEO.

Section 678.405 Is temporary assistance for needy families a required one-stop partner?

This section provides further clarification that the Governor may determine that TANF will not be a required one-stop partner in a local area(s), but must notify the Secretaries of Labor and HHS in writing of this determination. This implements sec. 121(b)(1)(C) of WIOA. It should be noted that the Governor's decision to exclude TANF from being a required one-stop partner is distinct and separate from the decision to include or not to include TANF in a Combined State Plan. TANF remains one of the many options of programs to be included in a Combined State Plan. Its status as a required one-stop partner does not mean it is required to be included in a Combined State Plan. For all sections regarding TANF, the HHS, which administers the program, was consulted extensively.Start Printed Page 55881

Comments: A few commenters expressed support for TANF being a required one-stop partner. Other commenters remarked that adding TANF as a one-stop partner will lead to improved services for job seekers. However, one commenter recommended that the Departments include stronger language about including TANF as a required one-stop partner. This commenter said that if TANF is such an important partner, it should not be so easy for Governors to opt out.

Departments' Response: While the Departments agree that TANF is an important partner in the one-stop delivery system, WIOA requires—at sec. 121(b)(1)(C)—that Governors be able to determine that TANF will not be a required one-stop partner through written notice to both the Secretary of Labor and the Secretary of HHS. It should be noted, however, that even if the Governor decides not to require TANF to be a one-stop partner, local TANF programs may still work in collaboration or partnership with the local one-stop centers to deliver employment and training services to the TANF population, unless inconsistent with the Governor's direction. Additionally, the local TANF program also may find other avenues of providing TANF services to one-stop customers that may not reach “partner” status.

Comments: One commenter recommended that the regulations should clarify that TANF employment and training activities must be offered at one-stop centers, with other TANF-funded activities included at the discretion of the local TANF agency and Local WDB. This commenter reasoned that requiring all TANF activities at one-stop centers would be a substantial cost and administrative burden.

Departments' Response: Access through the one-stop delivery system is required only for TANF activities related to work, education or training, the initiation of an application, and career services as specified in § 678.430(a)(2). TANF is a required one-stop partner unless the Governor opts not to require TANF participation in either a specific local area or the entire State. The cost of the various activities associated with the one-stop operators should be one of the factors considered by the Governor in making this decision.

Comments: A commenter stated that even if the Governor opts out, local TANF programs might still be required to be one-stop partners. Other commenters expressed support for local TANF programs to be permitted to opt in as one-stop partners, even if the Governor opts out. Another commenter expressed concern that the proposed regulations would permit a local TANF agency official to defy a Governor's decision not to include TANF as a required one-stop partner. The commenter recommended that this clause should be deleted, stating that a Governor's decision regarding TANF as a required one-stop partner must be respected.

Departments' Response: While local TANF programs are allowed to be one-stop partners, they cannot be required to do so if the Governor has determined that TANF is not required to be a partner. However, the Departments agree that local TANF programs should be permitted to work in collaboration and partnership with the local one-stop centers and have determined that allowing local TANF programs to make this decision, in conjunction with Local WDBs, is in the best interest of serving one-stop customers to the fullest extent possible, unless doing so is inconsistent with the Governor's direction. The Departments recognize the importance of increasing access to TANF programs, and have determined that allowing these programs' voluntary inclusion, when not required by a Governor and when not prohibited by the Governor's direction, is consistent with the spirit of WIOA. The Departments have modified the regulatory text to indicate that local TANF programs may become partners at the local one-stop centers unless the Governor directs or orders otherwise. While a Governor may choose not to require TANF programs to be one-stop partners, the Departments do not want to create barriers to local TANF programs becoming partners in the local one-stop center when there is a mutual desire to do so. The Departments have concluded that the availability of TANF services to one-stop customers is an important element of the one-stop vision. Furthermore, the Departments have interpreted WIOA sec. 121(b) as providing separate authority to local areas to include additional one-stop partners, including TANF, which is not overridden by a Governor electing to exclude TANF from being a required partner. However, as administrator of the State TANF program, the Governor is empowered under the Social Security Administration (SSA) to direct the actions of local TANF programs and may choose to limit a local program's ability to opt in. It should be noted here that any additional partners not required by sec. 121(b)(1)(B) of WIOA, but permitted by sec. 121(b)(2)(B), can participate as a one-stop partner only with the agreement of the CEO and Local WDB.

Comments: A commenter urged the Departments to ensure that a decision regarding whether TANF is a required one-stop partner should be separate from the decision regarding including TANF in a Combined State Plan.

Departments' Response: The Governor's decision to exclude TANF as a required one-stop partner must be made through direct written notification of such a decision from the State's Governor to the Secretaries of Labor and HHS. By contrast, at any time, a Governor can opt to include or not include TANF in a Combined State Plan, whether or not TANF is a required one-stop partner in the State.

Comments: Another commenter asked how TANF being a required partner instead of a core partner translates into level of service delivery for clients.

Departments' Response: The regulations do not differentiate between core programs and required one-stop partners with respect to level of service delivery. All required one-stop partners are expected to provide comparable levels of service delivery to one-stop customers, regardless of whether they are core programs under WIOA. No changes to the regulatory text were made in response to this comment.

Comments: One commenter stated that this is an opportunity for the TANF program to partner with schools.

Departments' Response: While the TANF program's inclusion in a State's one-stop delivery system may, in fact, provide an opportunity for TANF programs to partner with schools, this is a decision that should be made at the local level and will not be required by the Departments. As such, no changes to the regulatory text were made in response to this comment.

Section 678.410 What other entities may serve as one-stop partners?

Partnerships across programs are critical to supporting the one-stop vision for service delivery. Section 678.410 reinforces sec. 121(b)(2)(B)(vii) of WIOA, which states that other Federal, State, local, or private sector entities that carry out workforce development programs may serve as additional one-stop partners if the Local WDB and CEOs approve.

Comments: A few commenters recommended that the regulations should strongly encourage partnerships with disability service providers, as increasing the employment of persons with disabilities is a key goal of WIOA. Another commenter stated that SNAP employment and training programs would include the Basic Food Start Printed Page 55882Employment and Training (BFET) and Able-Bodied Adults Without Dependents (ABAWD) programs. The commenter also asked whether § 678.410(b)(6) includes programs funded by the Office of Refugee Resettlement (ORR). Another commenter urged one-stop centers that have youth services to partner with Runaway and Homeless Youth (RHY) providers. The commenter explained that RHY providers have best practices for dealing with traumatized youth. One commenter looked forward to working with refugee English language training organizations and other organizations as potential one-stop partners.

Departments' Response: Each one of the comments above suggests including programs as one-stop center partners. Local partners representing any one of these programs that provides services or serves participants who are in need of the career development or job placement services of the one-stop delivery system would be appropriate additions to the one-stop delivery system in a given local area and could be added as additional partners under § 678.410(b)(6). Inclusion in the one-stop center of these and other programs is outlined in the local area strategic plan, and in the specifications for the selection of one-stop operators and service providers in the local areas. In response to these and other comments, which are addressed below, wording has been added to this section to clarify that the list of optional one-stop partners is not exhaustive. The Departments have determined that no additional specific regulatory language is needed.

Comments: A commenter recommended that the Departments add a reference to local or regional labor market information, which should be used to drive strategic planning and one-stop partner decisions regarding the appropriate mix of services required in local areas.

Departments' Response: Many factors, including labor market information, can inform what local partners should include in a one-stop center. The Departments have not changed the examples of optional one-stop partners in the regulation, but have clarified that the list in § 678.410 is not exhaustive, by changing “including” to “including, but not limited to” in the catch-all provision of paragraph (b)(6). It should be noted that the term “including” is, by definition, nonexclusive, and that this addition is made for the sake of emphasis and should not to be interpreted as suggesting that any other use of the term “including” in these or any other regulations denotes exclusivity. The Departments agree that partners suggested by commenters can be appropriate and useful one-stop partners but have concluded that it is easier to communicate this flexibility by clarifying that the list is not exhaustive, rather than trying to list every potential partner.

Section 678.415 What entity serves as the one-stop partner for a particular program in the local area?

This section provides a general definition of the entities that carry out the programs identified in §§ 678.400 and 678.410 and serve as the one-stop partners. The regulation defines an entity as the grant recipient, administrative entity, or other organization responsible for administering the funds of the specified program in the local area. The term “entity” does not include service providers that contract with, or are subrecipients of, the local administrative entity. The regulation notes that for programs that do not have local administrative entities, the responsible State agency should be the one-stop partner.

Section 678.410(d) lists the entity that acts as the WIOA title I one-stop partner for national programs in any particular local area. While YouthBuild was listed in the NPRM as one of these national programs, the paragraph failed to list which entity would serve as the one-stop partner. Just as for the Indian and Native American and Migrant and Seasonal Farmworker programs, the grantee of the YouthBuild program is the entity that will serve as the one-stop partner in a local area. The regulatory text has been amended to convey this and correct the omission in the NPRM.

Comments: A commenter asserted that proposed § 678.415(e), which designates the Perkins State eligible agency as the local one-stop partner for purposes of negotiating the MOU, “lacks any support in the text of the law and would make an already complicated negotiation process that much more complex.” Several commenters recommended revising the paragraph to state that the entity that carries out the program is the local area's Perkins eligible institution, rather than the State eligible agency. Further, this commenter recommended that the Departments remove the clause about the State eligible agency delegating its responsibilities.

Departments' Response: In response to these comments, the Departments agree that the local eligible recipient is a more appropriate one-stop partner for the Perkins program and have changed the regulatory text in § 678.415(e) to provide that the Perkins one-stop partner is the eligible recipient at the postsecondary level, or a consortium of eligible recipients at the postsecondary level in the local area. This change is aligned to the statutory text in WIOA sec. 121(b)(1)(B)(vi). The regulatory text also has been revised to state that the Perkins one-stop partner may request assistance from the State eligible agency in completing its responsibilities as a one-stop partner.

Comments: A few commenters interpreted proposed § 678.415(c) to mean that if the State's VR program is under an umbrella agency that is not primarily concerned with vocational rehabilitation, the designated VR partner will be the director of the designated State unit.

Departments' Response: Under § 678.415(c), if the designated State agency—which these commenters refer to as an “umbrella agency”—is not primarily concerned with VR, then the designated State unit for the VR program would be the local partner.

Comments: One commenter stated that it is unclear from this section whether the Local WDB or its chosen title I provider is the entity that serves as the one-stop partner and recommended that the Local WDB not be considered the one-stop partner in this case.

Departments' Response: The Departments agree with the commenter that the Local WDB is not a one-stop partner, unless it is a specific program provider as well. The Departments have concluded that the proposed regulatory text is clear on this issue and have made no changes to the regulatory text.

Comments: Another commenter agreed with the Job Corps center being the one-stop partner, but suggested also including the providers who conduct recruitment for the Job Corps program.

Departments' Response: Determination of such an inclusion in the local one-stop delivery system is best left to the Local WDB. These providers will remain permissible one-stop partners but will not be required, and the Departments decline to change the regulatory text in response to this comment.

Comments: One commenter suggested allowing the State TANF agency to delegate its responsibilities under § 678.415(a), as other mandatory partners are permitted to do.

Departments' Response: The Departments' interpretation of WIOA is that the local TANF program is the required one-stop partner that, therefore, holds the responsibilities mentioned by this commenter. Matters concerning the roles of entities in Start Printed Page 55883carrying out TANF must be addressed under the TANF authorizing statute.

Comments: Some commenters expressed support for not requiring the one-stop partner to have responsibilities in local areas where that program or activity is not carried out.

Departments' Response: The final regulation continues to reflect this policy.

Section 678.420 What are the roles and responsibilities of the required one-stop partners?

This section describes and elaborates upon the statutory responsibilities of the one-stop partners. These responsibilities and corresponding WIOA provisions are identified and summarized in paragraphs (a) through (e) of § 678.420. Jointly funding services is a necessary foundation for an integrated service delivery system. All partner contributions to the costs of operating and providing services within the one-stop delivery system must be proportionate to the benefits received and also must adhere to the partner program's Federal authorizing statute and to Federal cost principles requiring that costs are reasonable, necessary, and allocable. The requirement in § 678.420(e), to provide representation on State and Local WDBs, is new in WIOA and is required only of core programs; WIA only required one-stop partner representation on Local WDBs, and required it for all one-stop partner programs. The Departments have begun issuing guidance and providing the system with technical assistance on matters related to this section and will continue to do so.

Responsibilities Related to Infrastructure Cost Contributions

Comments: A commenter asked whether the statement in this section that references Federal laws on administrative costs refers to the established ceilings on the infrastructure contributions that can be expected from certain programs, such as VR.

Departments' Response: This is the intent of the rule and, as such, the Departments have made no changes to the regulatory text in response to this comment.

Comments: A commenter stated that partner programs would be more likely to contribute to infrastructure costs if the individual programs' authorization were amended to include that expectation.

Departments' Response: Revisions to the authorizing statutes and regulations of individual programs are beyond the scope of this regulation.

Comments: Another commenter stated that it would be very challenging to establish equitable funding to support a one-stop delivery system without stronger language and guidance governing the required one-stop partners.

Departments' Response: The Departments have released, and will continue to release, guidance relating to this and many other issues. The Departments concluded that the guidance will be sufficient in assisting one-stop partners in supporting a one-stop delivery system and decline to make a change to the regulatory text.

Comments: A few commenters said that § 678.420(b) can be construed to mean that YouthBuild programs must contribute money to their local one-stop delivery system. The commenters expressed concern that YouthBuild programs would have to pay into the one-stop delivery system for infrastructure support when the money is needed to operate the program.

Departments' Response: As a statutorily required one-stop partner program, YouthBuild is required by sec. 121(b)(1)(A)(ii) of WIOA to contribute to the infrastructure costs of any one-stop center in which it participates, based on proportionate use and relative benefit received. The Departments do not have authority to change this requirement and have made no changes to the regulatory text in response to these comments.

Comments: A commenter requested additional guidance on proportional benefits received and also on costs associated with title II providers contributing to one-stop infrastructure.

Departments' Response: The portion of this preamble addressing public comments and changes made to the provisions in subpart E relating to “One-Stop Operating Costs” also addresses many of these issues.

Other Comments

A few commenters recommended rewording this section to state that not all one-stop partners are required to be members of the State and Local WDBs.

Departments' Response: After considering this comment, the Departments have concluded that the language of the proposed regulatory text is clear that not all one-stop partners are required to be members of the State and Local WDBs. No changes to the regulatory text were made in response to this comment.

Comments: One commenter asked what recourse a Local WDB would have if States allocate the majority of their program funding to more populous areas, leaving rural areas underfunded.

Departments' Response: The allocation of funds by programs is beyond the scope of this regulation and WIOA. As such, the Departments have no ability or authority to create such a recourse mechanism. As good faith partners in the one-stop delivery system, however, the Departments expect that programs will operate in a manner that best serves the needs of a State.

Section 678.425 What are the applicable career services that must be provided through the one-stop delivery system by required one-stop partners?

WIOA requires one-stop partners to deliver applicable program-specific career services. This regulation clarifies that an applicable career service is a service identified in § 678.430 and is an authorized program activity.

Comments: A few commenters requested clarification on what services must be physically available in one-stop centers. Another commenter said that proposed § 678.425 does not describe how or where these services must be provided and suggested that customers should be able to receive in-person assistance with the required partners. Another commenter expressed support for eliminating the sequence of services, as this would provide staff with greater flexibility to serve customers.

Departments' Response: The Departments have not made changes to § 678.425. Section 678.305(b)(1) specifically states that comprehensive one-stop centers must provide career services described in § 678.430. The language is not qualified by the phrase “access to,” meaning that career services must actually be provided in the comprehensive one-stop centers. With respect to programs and activities to which the one-stop partners must provide access, as set forth in § 678.305(b)(2) through (4), the regulations describe requirements concerning physical presence of staff and in-person assistance in § 678.305(a), (c), and (d). Paragraph (a) of § 678.305 requires that at least one title I staff person be physically present in a comprehensive one-stop center. Paragraph (c) of § 678.305 requires customers to have access to one-stop partner programs in a comprehensive one-stop center, and paragraph (d) defines “access” as including, but not limited to, physical presence of partner program staff appropriately trained to provide information to customers about the programs, services, and activities available through partner programs. That is, one-stop partner programs do not need to be physically present in a comprehensive one-stop center, but they Start Printed Page 55884must provide access to their services in the ways described in § 678.305(d).

Section 678.430 What are career services?

Unemployment Insurance Claims Filing and Assistance. Section 678.430 specifies the career services that one-stop partners must provide through the one-stop delivery system. Paragraph (a)(10) provides that core services include providing meaningful assistance to individuals seeking assistance in filing a claim for unemployment compensation.

Comments: Several commenters addressed the proposed definition of “meaningful assistance.” In particular, one commenter expressed support for the definition as it allows for technology to be used to provide the assistance. However, this commenter joined many others in expressing strong disagreement with the discussion in the preamble to the NPRM that one-stop customers referred to a phone-based service for UI claims be sent to a dedicated phone line for one-stop customers, rather than the general State UI queue. These commenters asserted that this requirement is not in WIOA; would be costly and difficult to maintain during times of high call volume; fails to take advantage of existing UI claims filing and assistance technology infrastructure in many States; and gives priority to individuals who are able to travel to one-stop centers, thereby disproportionately affecting individuals who are unable to travel to one-stop centers due to distance, lack of transportation options, or disability. A few commenters also stated that this requirement conflicts with the fact that most UI claims are done remotely through self-service options, including mobile applications and Web sites. One commenter asked for the definition of “within a reasonable time.” Another commenter said that the definition of “meaningful assistance” is not clear.

Departments' Response: The Departments disagree with the comments regarding a dedicated phone line for one-stop customers using UI services. States are not required to have a dedicated phone line for one-stop customers, but a phone line would provide a direct linkage for providing services remotely as required by § 678.305(d). More importantly, simply referring one-stop customers to the general UI queue, without otherwise making trained staff available does not qualify as “meaningful assistance.” Therefore, if local areas choose to provide meaningful assistance through technological means, trained staff must be available such as through a dedicated phone line.

In response to the comments regarding concerns that the “meaningful assistance” requirement to help individuals file UI claims is overly burdensome, the Departments note that § 678.430(a)(10)(i) provides flexibility to States regarding implementation by providing a menu of options for States to meet the requirement. The regulation does not mandate the service delivery methodology. Options include the ability to provide the service remotely as long as it is provided by trained and available staff within a reasonable time. The Departments also note that this requirement is targeted to individuals who need assistance and is not intended to replace State processes for taking claims remotely, either online or by phone. The Departments have not provided a definition of reasonable time because that varies by circumstances. The Departments have made no changes to the regulatory text in response to these comments.

Comments: Many commenters raised concerns about private entities or contractors providing assistance with filing UI claims, asserting that this should be considered an inherently governmental function that must be conducted by State merit staff. These commenters said that if UI staff is not present in one-stops to fulfill this function, Employment Services staff could do so. A few commenters also recommended that “State merit” be inserted before “staff” in proposed § 678.430(a)(10)(i)(A) and (B). A commenter expressed concern regarding the definition of “filing,” suggesting that it should not be the function of one-stop or Wagner-Peyser Act staff to file UI applications.

Another commenter asked for guidance on defining “and assistance” in the requirement to provide “information and assistance regarding filing claims for unemployment compensation.” Another commenter expressed support for the proposed expanded definition of “enhanced career services” including UI claims filing assistance and eligibility assessments.

Departments' Response: The Departments decline to make changes to § 678.430(a)(10) to refer to State merit staff. The assistance requirement only encompasses helping the individual navigate the State's claims filing process and providing the individual with general information on their responsibilities as a claimant. These functions are informational in nature and not directly connected to determining the claimant's eligibility for benefits. The requirement does not encompass speaking specifically to the individual's potential eligibility for benefits or making any determinations regarding the individual's eligibility for benefits, which are inherently governmental functions that must be provided by UI merit staff. The Departments note that it has been permissible for non-State merit staff to carry out similar functions, for example, reviewing compliance with State work search requirements as part of the Reemployment and Eligibility Assessment program for many years. The Departments reiterate the importance that, if these functions are carried out by non-UI staff, States must ensure that the staff is well trained. The Departments expect to provide additional guidance and technical assistance to States on the implementation of these provisions. For the reasons stated above, the Departments are not revising the regulatory text in response to these comments. For more information about the impact of WIOA implementation merit staffing for the Wagner-Peyser Act, see 20 CFR 652.215.

Temporary Assistance for Needy Families

Comments: Several commenters addressed the Departments' request for comment regarding the identification and inclusion of TANF employment, related supported services, and TANF intake functions as career services that must be provided in one-stop centers. For example, some commenters suggested that because there are so many ways of delivering TANF intake services (e.g., electronically), States should have flexibility in determining whether TANF intake services should be physically located in the one-stop centers.

Departments' Response: The Departments recognize the need, and utility, of providing States flexibility in implementing TANF intake services and have added two paragraphs to § 678.430. Paragraph (a)(2) of § 678.430 states, in pertinent part, that “[f]or the TANF program, States must provide individuals with the opportunity to initiate an application for TANF assistance and non-assistance benefits and services . . .” This provides States with flexibility as to how this is achieved. As a required partner, however, TANF must still provide access (as defined by § 678.305(d)) to employment services and related support services. To this end, paragraph (d) has been added to § 678.430, stating that “[i]n addition to the requirements in paragraph (a)(2) of this section, TANF Start Printed Page 55885agencies must identify employment services and related support being provided by the TANF program (within the local area) that qualify as career services and ensure access to them via the local one-stop delivery system.”

Comments: Another commenter suggested that required partners should be required to provide TANF outreach and intake at one-stop centers.

Departments' Response: As TANF is a required one-stop partner by default, and only is excluded from the one-stop delivery system through a decision by the Governor, TANF outreach and intake services must be provided at any one-stop center for which TANF is a partner.

Comments: One commenter asserted that including TANF intake functions as career services would require significant cross training of other program staff in their State. For these reasons, the commenter supported the continuation of the colocation/co-enrollment model for TANF services at one-stop centers. Another commenter asked whether State agency staff were properly cross trained to conduct TANF intake.

Departments' Response: The Departments recognize that some services come at higher costs than others, and this is one of the many factors that must be weighed in determining how best to deliver services. In addition, the question of what constitutes “proper” training on the TANF program for local one-stop workforce staff will depend on the TANF benefits and services that are offered at the local one-stop center.

Comments: A few commenters stated that requiring one-stop centers to process TANF applications that are not related to employment is unhelpful and should not be considered career services.

Departments' Response: As mentioned above, the Departments' review and consideration of comments made on the NPRM, particularly the language regarding intake, application processing, and initial eligibility determinations for TANF assistance and non-assistance benefits at one-stop centers, prompted the Departments to modify the requirement from how it was proposed in the NPRM. This modified requirement, found in final § 678.430(a)(2), requires that, at a minimum, the one-stop centers must enable a family to initiate an application (as defined by the State agency) for TANF assistance and non-assistance benefits and services. One-stop centers could accomplish this by having paper application forms available at the one-stop center or by having information or links to the application on the one-stop center's Web site.

The Departments have determined that allowing customers in need of career services to have the opportunity to initiate an application for TANF benefits at one-stop centers is not counterproductive or unhelpful. On the contrary, providing for a family's unmet needs via a TANF benefit is crucial to ensuring progress and success in meeting career service objectives.

The Departments affirm the NPRM preamble explanation on the identification and delivery of career services (restated below) absent a definition of career services in the TANF statute.

The TANF statute does not include a definition for career services. Accordingly, the TANF State grantees must identify any employment and related support services that the TANF program provides (within the particular local area) that are comparable with the career services as described in this section.

Comments: A few commenters remarked that there is no universal English as a Second Language (ESL) test under TANF or other employment and training programs and suggested that ESL providers are better at conducting language proficiency testing than employment service providers. Another commenter suggested that one-stop providers should be expected to provide services to linguistically and culturally diverse populations.

Departments' Response: The regulations do not require a specific ESL test as part of the initial assessment of skills, or to gain meaningful access to TANF or other Federal programs. They leave the selection and use of assessment tools, and qualified administrators of such tools, up to the partner program or service provider, as appropriate to individual participants. If any one-stop partner or service provider receives funds directly or indirectly from HHS or other Federal agencies, it is required under title VI of the Civil Rights Act of 1964 and its implementing regulations, to take reasonable steps to ensure meaningful access to its programs by persons with limited English proficiency. Title VI also prohibits Federal grant recipients from utilizing methods of administration that have the effect of discriminating against persons based on their race, color, or national origin. In some cases, a provider's failure to provide language assistance to linguistically or culturally diverse populations could be a violation of title VI. However, the title VI requirement to take reasonable steps to ensure meaningful access does not mean that jurisdictions are required to provide universal ESL training. While individual jurisdictions may need to provide ESL training and testing to TANF family members in some cases, universal ESL training is not a statutorily mandated requirement.

Other Career Services

Comments: A commenter suggested that career services also should include a pre-screening for eligibility for supportive services such as the Children's Health Insurance Program (CHIP), SNAP, the Earned Income Tax Credit, TANF, and transportation services alongside the initial assessment of skill levels.

Departments' Response: Paragraph (a)(2) of § 678.430 requires that, along with intake, an orientation to the other services and programs provided at the one-stop center must be given to participants, and paragraph (a)(5) requires referrals to, and coordination of, activities with other programs and services. The Departments have determined that this strikes a balance between the burden on one program's staff to be knowledgeable about other partner programs and the benefit that this knowledge can be to participants. Requiring all staff to do pre-screening for the programs identified by the commenter would take time away from providing actual programmatic assistance to participants, as well as delay other participants from receiving services.

Comments: Other commenters requested additional guidance on the initial assessment process. The commenters asked whether there is a specific point in service delivery when initial assessments should be provided to customers, what the vision and intent is of this assessment, and how the assessment is to be used. Another commenter asked whether there are any standardized tools to be used to conduct this assessment.

Departments' Response: The Departments intend to issue joint guidance on this subject in the near future.

Comments: One commenter said that the assessment should be tailored to include an evaluation of women's “interest and aptitude for higher-wage, nontraditional careers.”

Departments' Response: The Departments have decided not to change the regulatory text in response to this comment. The Departments recognize the importance of placing women in higher-wage, nontraditional careers, but note that local areas have discretion to undertake such an evaluation as part of Start Printed Page 55886the initial assessment of skill levels required in § 678.430(a)(3).

Comments: A commenter recommended rewording paragraph (b)(1) of § 678.430 to state, “Comprehensive and specialized assessments of the skill levels, interests, values, aptitudes, and service needs of adults and dislocated workers . . .”

Departments' Response: The Departments have decided not to change the regulatory text in response to this comment. The assessment of