I.Purpose

This communication provides guidance on paid and unpaid work experience for the adult and dislocated worker programs under Title I of the Workforce Innovation and Opportunity Act (WIOA).

II.Effective Date

July 1, 2015

III.Background

Under the Workforce Innovation and Opportunity Act, work experience is a career service that is provided in order for an individual to obtain or retain employment and is linked to a potential career choice.

IV.Definitions

Internship: a system of gaining on-the-job experience by placement in a work environment for a period of time with the goal to build technical and job awareness skills. Internships may be paid or unpaid.

Job shadowing: a short-term unpaid activity which introduces a participant to the workplace and provides exposure to occupational areas of interest to increase career awareness.

Public service employment: work normally provided by governments, and includes, but is not limited to work in fields of: human betterment and community improvement, child care, health care, education, crime prevention, public transportation, streets and parks, solid waste removal, housing and neighborhood improvement, rural development, etc.

Work experience: a planned, structured learning activity that takes place in a workplace setting for a limited period of time.

V.Requirements

Work experience is a planned, structured learning activity that takes place in a workplace setting for a limited period of time. Work experience is paid or unpaid and may include, but is not limited to internship and job shadowing.

Work experience functions as a workplace-values activity for acquiring of behavioral competencies and specific occupation or job skills. The primary intent of work experience is to provide participants with opportunities for career exploration and skill development to gain work readiness skills in preparation for employment. Work experiences should enable adults and dislocated workers to gain exposure to the working world and its requirements. It is a strategy for participants who have little or no work experience in situations where an employer can offer a meaningful experience.

Work experience must be based on identified needs of the adult and dislocated worker. Use of work experience situation must be based on an assessment and identified on the participant's individual employment plan (IEP). A likely candidate for work experience is a participant who is appropriate for long term employment in a particular industry or occupation, but does not have all of the skills or the experience to qualify for entry-level employment in the field.

Work experience may be conducted in the private-for profit, private non-profit and public sectors. It must be clearly distinguishable from public service employment. Public service employment is a prohibited activity under the WIOA. Although a business, public agency or non-profit (hereafter collectively referred to as " work experience provider") may also receive some benefit from work experience in the form of work being done or recruiting a potential new employee, the primary goal of work experience is to benefit the participant.

Work experience may be combined with classroom instruction relating to a particular position, occupation, industry or basic skills and abilities to successfully compete in the local labor market. Work experience is an intermediate employment step toward the long-term goal of moving along a career path.

A.Appropriate Employers

The WDB should seek employers that are committed to helping participants receive the experience and training that is required for employment beyond the work experience period. Employers should be willing to work closely with program staff and be flexible in working with participants who have barriers to employment.

Attention must be given to ensure that work experience arrangements do not unfavorably impact current employees and do not impair existing contracts for services or collective bargaining agreements. Work experience, including internships, in the private for-profit sector must be structured so as not to appear to be subsidizing private for-profit operations. The work of the participant should not materially impact the profit margin of a private-for-profit company.

B.Determining "Trainee" versus "Employee"

Work experience may be paid or unpaid. It is expected that work experience will be paid in most cases and the federal Fair Labor Standards Act (FLSA) will apply in any situation where an employer/employee relationship exists. WIOA participants are subject to the requirements of the FLSA to the extent that the activities performed in the work experience constitute employment.

A local area shall ensure that staff providing career services make a determination regarding whether work experience is a "training" situation or an "employment" situation. The local WDB should establish a process for making these determinations.

Trainee

Because the FLSA's definition of "employee" is broad, the excluded category of "trainee" is necessarily quite narrow. In general, the more a training program is centered around a classroom or academy as opposed to the work experience provider's actual operations, the more likely the activity is training. The more the training is providing the participants with skills that can be used in multiple employment settings, as opposed to skills particular to one work experience provider's operations, the more likely the participant is a trainee.

According to the Wage and Hour Division of the U.S. Department of Labor, Employment Standards Administration, if all of the following six (6) items exist, the work experience can be considered a "training" situation and an employment relationship does not exist under FLSA:

1.The training, even though it includes actual operation of the facilities of the work experience provider is essentially a training experience similar to a vocational school;

2.The participant is primarily the beneficiary of the experience;

3.Regular employees are not displaced and the experience is closely supervised/observed;

4.The work experience provider that hosts the experience derives no immediate or significant advantage (and may even be adversely impacted);

5.The participant is not guaranteed a job at the conclusion of the experience; and,

6.There is mutual understanding between the participant and the host agency that the participant is not entitled to wages for this time because the activity is essentially a training experience.

As the participant is a "trainee" and an employment relationship does not exist under the FLSA, the FLSA's minimum wage and overtime provisions do not apply to the participant.

Employee

On the other hand, if the adult or dislocated worker participants are engaged in the primary operations of the work experience provider and are performing productive work (for example, filing, performing other clerical work, or assisting customers), then receiving some benefits in the form of a new skill or improved work habits is unlikely to make the participant a trainee, given the benefits received by the work experience provider.

If the worksite uses the adult or dislocated worker participants as substitutes for regular full time or part time employees, it is more likely that the participants are employees as opposed to trainees. Also, if the work experience provider would have needed to hire additional employees or require overtime had the participants not performed the work, then the participants are likely employees.

Employer of Record

1.Employer - If the work experience provider is relying on the participant to perform real work, i.e., to be productive, then the situation should be recognized as an employer-employee relationship. In this situation, the site employer is the employer of record. Participants must receive no less than the applicable state or federal minimum wages, related benefits are required and payroll taxes should be deducted. The employer of record will be responsible for paying all taxes and providing similar benefits as are available to other employees.

2.Provider of Career Services- The OhioMeansJobs center operator or the contracted provider of career services, whichever situation applies, has the option of being the employer of record for the adult or dislocated worker participant. The employer of record is responsible for paying the participant and negotiating with the host site the activities that will be performed by the participant. The work experience may occur at the provider of career services, service provider, or employer location or the participant may be referred to a host site to receive the work experience. The host site is the location where work experience tasks will occur.

C.Health and Safety Standards

The local areas must apply the same health and safety standards otherwise applicable to working conditions of employees to working conditions of participants in programs and activities under Title I of the WIOA.

The state workers' compensation law may or may not apply to a participant in work experience depending on the work experience arrangements and employer's benefits. If the state workers' compensation law does not apply to a participant in work experience, the administrative entity must secure insurance coverage for injuries suffered by the participant in work experience.

D.Unpaid Work Experience

Unpaid work experience is an activity exposing participants to the working environment, and an individual does not expect payment for tasks performed. An employer and employee relationship must not exist, which means that all six conditions listed in Section V.B. of this policy letter must be met. The use of unpaid work experience should be limited.

Unpaid work experience may include job shadowing. A participant experiences the work environment to increase career awareness, observe models of behavior on the job through examples, and receives help in making career decisions. Job shadowing can reinforce the link between classroom learning and work requirements. Job shadowing is limited and allows participants to observe only.

WIOA adult and dislocated worker participants who are in school and required to complete an unpaid internship as part of a training program may receive needs-related payments in accordance with the WIOA requirements governing needs-related payment (refer to WIOAPL No. 15-14, Needs-Related Payments (NRP) - WIOA Adult and Dislocated Worker Formula Funds).

E.Worksite/Job Site/Host Site Agreement

The local WDB must ensure that the provider of career services has a written agreement to ensure compliance with the WIOA and applicable regulations. The agreement is a written document that details terms and conditions of paid and unpaid work experience and the expectations of the parties to the agreement. The written agreement is between the participant, the site employer or host site, and the provider of career services.

The written agreement, which may be called a worksite agreement, job site agreement, or host site agreement must include at a minimum: the duration, remuneration, tasks, duties, supervision, health and safety standards and other conditions of work experience such as consequences of not adhering to the agreement and a termination clause. The worksite or host site entity, the participant and the provider of career services should all be given a copy of the agreement. The agreement must be available for audit and monitoring purposes.

F.Local Workforce Development Board Policy

The WDB is responsible for creating and directing policy and a service delivery strategy for administering both paid and unpaid work experience. When developing this policy, the needs, circumstances and characteristics of the adult and dislocated worker populations should be taken into consideration. At a minimum, the WDB's policy should include all of the following:

• The goal of the work experience - Work experience designed to aid participants in a structured environment, learning good work habits with the focus on career exploration.
• Duration of work experience - The duration of paid and unpaid work experience should be stated in the policy. A minimum and a maximum limitation must be set on the number of hours that may be assigned for any single work experience.
• Monitoring - The policy must describe the frequency of monitoring and staff responsible for monitoring, and include a monitoring guide, form or checklist.

VI.Documentation to be Maintained

Documentation of the work experience must be maintained in the participant's file. Local policy and procedures should specify what documentation will be kept in the participant's file, which should include, at a minimum, the following items:

• An assessment and IEP indicating a need for work experience;
• A copy of the agreement between the participant, the worksite or host site and the local workforce investment board, including any attachments to the agreement, such as a training plan;
• Time sheets, attendance sheets and performance records, as appropriate; and
• Documentation of receipt of supportive services received by the participant.

To ensure effective and efficient record keeping practices, local procedures should specify where certain documents will be placed in the file.

VII.Monitoring

The WDB is responsible for ensuring oversight of the program. The local area must periodically monitor the participant and the worksite or a host site to ensure that goals are being met and adherence to this guidance and WIOA law and regulations.

Through the state's monitoring system, program monitors will review the local area's use of work experience in the WIOA adult and dislocated worker programs, including a participant file review, during the annual onsite monitoring review for compliance with federal and state laws and regulations. Any issues will be handled through the state's monitoring resolution process.

VIII.Technical Assistance

For additional information, you may send your questions to the Office of Workforce Development: OWDPOLICY@jfs.ohio.gov.

For additional information, you may send your questions to ODJFS, Office of Workforce Development: WIAQNA@JFS.OHIO.GOV.

IX.References

Workforce Innovation and Opportunity Act, Pub. L. 113-128

20 CFR Parts 603 et al.

29 U.S.C. 3101 et seq

Fair Labor Standards Act of 1938, 52 Stat. 1060, 29 U.S.C. 201 et seq.

USDOL, Training and Employment Guidance Letter No. 12-09, Joint Guidance for States Seeking to Implement Subsidized Work-Based Training Programs for Unemployed Workers, (January 29, 2012).

USDOL, U.S. Secretary's Commission on Achieving Necessary Skills, A SCANS Report for America 2000, (June 1991).

I.R.S. Revenue Ruling 75-246, 1975-1 C.B. 24, Scenarios distinguish between amounts paid in connection with training-excludable under general welfare exception-and amounts paid in connection with services.

O.A.C. § 4101:9-2 (2004).

O.R.C. § 3331 (2002).

O.R.C. § 4109

ODJFS, Workforce Innovation and Opportunity Act Policy Letter No. 15-14, Needs-Related Payments (NRP) - WIOA Adult and Dislocated Worker Formula Funds, (July 1, 2015).

Rescission

ODJFS, Workforce Investment Act Transmittal Letter No. 17, Work Experience for Adults and Dislocated Workers, (October 26, 2005).