I.Purpose

This communication provides guidance on the waiver authority to vary the statutory employer match of 50% for customized training with the option of a sliding scale reimbursement method, to a minimum of 10%; as well as general requirements for customized training.

II.Effective Date

July 1, 2011 - June 30, 2012

III.Background

In June 2010, Ohio received approval from the United States Department of Labor (USDOL) to replace the statutory employer match requirement of 50% for customized training, to a minimum of 10% with the variance based upon State and local policy. An extension of this waiver has been granted through June 30, 2012.

WIA Section 101(8) and the accompanying regulations in 20 CFR Subpart G 663.715, 663.720, and 663.730 establish that local WIBs and the State may offer customized training through an agreement with either a vendor or employer with a mandatory employer match requirement of 50% of the cost of training.

IV.Requirements

Overall, customized training is training designed to meet the needs of a specific employer, or group of employers (employer consortiums). It can be provided for the introduction of new technologies, or to new production or service procedures, upgrading existing skills, workplace literacy, or other appropriate purposes identified by the local WIB. The employer must commit to employ, or continue to employ, the worker(s) upon successful completion of any form of customized training.

Customized training agreements may be written for unemployed as well as employed workers. Employed workers may include full-time, part-time, and/or workers placed through private placement agencies.

The private placement agency and the placement employer should be included in the contract when offering customized training to employers that want to include workers placed through private placement agencies. This is to ensure that all parties agree that successful completion of the customized training will include the placement of the trainees into permanent employment.

Unless the trainee is unemployed, in order to participate in customized training, an "employer-employee" relationship must exist between the trainee and the business that is seeking local WIB approval to perform customized training. Individual workers who are independent contractors are not eligible to participate in customized training. Independent contractors fall under the category of self-employment. Trainees must meet the definition of employment found in the Ohio Administrative Code (OAC) 4141-3-05.

Customized training is one of several types of allowable training identified in Section 134(d)(4) of WIA. This training may be offered to individuals under local area formula-funded programs or as a type of incumbent worker training, conducted at the local level under waiver authority. As a type of training offered in local formula-funded programs, participants must meet all eligibility requirements, and receive both a core and an intensive service prior to the start of customized training. Local WIBs/employers need not adhere to the regulatory eligibility requirements, when serving incumbent workers through programs operated under waiver authority, as they are considered statewide activities and not subject to the same eligibility and sequence of service rules as regular formula-funded program participant services.

Regardless of the target group for services (incumbent workers or formula-funded participants), all other requirements of customized training apply, as described in this issuance. This includes the sliding scale, which allows an employer to pay less than 50% of the cost of training, depending on the total number of employees.

Training providers for customized training either need to be included in the ETP Online System in SCOTI, or must be competitively procured. For training providers not in the ETP Online System, local WIBs will need to follow proper procurement procedures as identified in Fiscal Administrative Procedure Manual Transmittal Letter (FAPMTL) No. 14, Acquisition Standards Definitions and Procurement Requirements, or local procurement policies if they are more restrictive.

ODJFS reserves the right to review and approve proposed exceptions to the requirements identified in this issuance, on a case-by-case basis. Recommendations for exceptions may be submitted via e-mail to: WIAQNA@JFS.OHIO.GOV.

A.Utilizing the Employer Reimbursement Waiver

1.Sliding Scale

This waiver is available immediately. Local WIBs may choose to implement this waiver of a reduction of the 50% match. If so, the employer match will be based upon the following sliding scale.

a)1-50 employees Employer match of no less than 10%

b)51-100 employees Employer match of no less than 25%

c)100+ employees Employer match of 50% - as per current

statutory requirements continue to apply

Head count: The following guidelines should be applied while determining head count at a local operation:

• Include all full time and part time workers and temporary and permanent workers at the work site including all managers and front line workers,
• Include any individuals employed by a staffing agency who are subject to the day to day control of the host employer,
• Do not use "FTE's." Every worker counts as "1,"
• Include individuals employed within the same local operation,
• Do not include individuals employed by and subject to the day to day control of other employers or independent contractors,
• Use the best, good faith estimate given by the employer on the day when the customized training screening form is completed.

Local areas should use reasonable judgment in determining head count, along with being consistent and documenting their methodologies. The determination for head count is applied while completing the employer information form and need not be updated unless the employer so requests or until the customized training agreement expires. Thus, if a small employer becomes a large employer in the midst of the customized training agreement period, the employer reimbursement rate will remain unchanged until the agreement expires.

For the purposes of determining head count, local operation is the employer size where the customized training placements will be made. For instance, a hotel chain that employs thousands nationwide, but only 40 at its company in the targeted region, may be eligible for reimbursement up to 90%, when reimbursement is determined based on size.

The number of workers to be counted in determining the customized training sliding scale shall include the workers at all worksites within an employer's local operation. In determining the geographic boundaries that define the employer's local operation, local areas should use their best judgment based on analysis of each employer's size and structure.

2.Selection Criteria and Local Policy

Local WIBs must establish policies if they choose to implement this waiver. Local policies should include any selection criteria for awarding customized training contracts, such as industry type, cost, demand occupation, increase in earnings, career advancement, portable skills, retention, etc. WIBs without a policy that includes the criteria above will be assumed to require a 50% employer match for all customized training activities.

IN NO INSTANCE MAY THE EMPLOYER PROVIDE A MATCH OF LESS THAN 10% OF THE COST OF TRAINING

B.Customized Training

1.Customized training means training:

a)That is designed to meet the special requirements of an employer (including a group of employers);

b)That is a participant/trainee service and a business service;

c)That is conducted with a commitment by the employer to employ or continue to employ an individual upon successful completion of the training;

d)That enable trainees to obtain industry or employer-recognized skills identified by the employer (or group of employers);

e)For which the employer pays for not less than 50% of the cost of the training, except as set forth in Section IV. B. 1. (f) below;

f)That requires a 50% employer match, unless a lesser percent match is warranted and approved by the local WIB. (Please refer to Section IV. A, above); and

g)For which an agreement has been negotiated and signed. The agreement must identify the occupation(s) of trainees, the skills and competencies to be learned, and the length of time the training will be provided. The agreement must specify what the employer will pay for the employer match portion for the cost of the training and according to what payment percent and method.

2.The Local WIBs Must:

a)Develop a local policy if they choose to implement the sliding scale and include any additional selection criteria;

b)Obtain commitments from participating employers to include, at a minimum:

i.That successful completion of the customized training will result in portable skills, and retention and placement of the trainee into permanent employment that offers good pay and benefits, with opportunities for career advancement;

ii.That continued training will be provided for trainees who need help with remedial skills or other skills in order to retain their jobs; after completion of customized training; and

iii.That training will be aligned with industry or employer recognized skill standards, as defined by the WIB and/or the employer.

3.Agreement Provisions for Customized Training

a)Good and effective agreements should include:

i.The occupation for which training will be provided; the skills and competencies to be achieved and the length of time for the training;

ii.The number of employees to be trained;

iii.The employer's assurance that customized training is needed, based upon the individual skill sets of trainees;

iv.The method and maximum amount of reimbursement (employer match);

v.Job description(s) of the trainees and a training outline;

vi.The cost and documented description of any ancillary items or supportive services that may be needed; and

vii.Other appropriate training outcomes related to the training (i.e. increases in earnings).

b)Customized training agreements are to contain appropriate assurances and certifications as specified in this issuance.

c)Written endorsement from a union official is required when the workplace is covered by a collective bargaining agreement.

d)When working with a group of employers (employer consortiums), the local WIB may decide with whom to contract and the details set forth therein. If the consortium is a legal entity and the participating employers are in agreement on their match requirements, the local WIB may contract with the consortium directly and accordingly, the match requirement would be paid by the consortium. It is also allowable to enter into individual contracts with each participating employer. Regardless of what entity the contract is with, all requirements, expected outcomes, and assurances described in this issuance must be met.

4.Business Considerations for Customized Training

a)A WIB must not enter into a customized training agreement with an employer who has exhibited a pattern of failing to retain individuals after successful completion of the customized training.

b)Businesses should be current on their local, state and federal tax obligations and compliant with all environmental requirements. Only businesses that are not presently debarred, suspended, or proposed for disbarment by any State or federal department or agency should be considered for training. Several websites that may be helpful in checking tax, environmental compliance, and debarment status are located at the end of this issuance, in Section VI.

c)A customized training contract that would prevent a layoff or avert a business closure should be given priority consideration. Businesses that provide additional sources of funding to support the training make strong candidates.

d)Businesses that have employees in a lay-off status should not be considered for customized training unless the training would avert additional layoffs.

e)Businesses that have relocated to Ohio and laid-off workers at their original location in the United States may not be considered for customized training, until they have been in operation at the new location for 120 days.

To verify that a business is not relocating employment from another area, a pre-award review must be undertaken and documented by the local WIB. The Review must include the names under which the establishment conducts business, including predecessors and successors in interest; the name, title, and address of the company official certifying the information, and whether WIA assistance is being sought in connection with past or impending job losses at other facilities of their company. The pre-award review should also include a review of whether appropriate notices have been filed, as required by the Worker Adjustment Retraining Notification (WARN) Act. The review may also include consultations with labor organizations and others in the affected local area(s).

5.Training Considerations for Customized Training:

a)Training for customized training will address:

i.Occupations in industries that have documented skill shortages. High wages, high costs for recruitment, and/or positions that remain unfilled for long periods of time may indicate a shortage of skills within the workforce; and

ii.Developing the skills of the workforce so as to lead to enhanced career pathways for individual employees.

b)Training providers should have satisfactory past performance, accreditation, curricula that lead to credentials, relevant training experience and programs, accredited instructors, high job placement rates, and/or high training completion rates. Training providers should also meet acceptable minimum retention rates for trainees in their field or occupation of training.

c)The training facility should provide an environment that supports learning and be within reasonable proximity to the participant. The training may take place in the business owned facility, a training provider's facility, or combination of sites.

6.Employer Match Requirements

Should a local WIB choose to lower the 50% match requirement, the local WIB must utilize the sliding scale described in Section IV. A. to determine the appropriate match. Local WIBs may add other selection criteria to the sliding scale if they so choose. Also, local WIBs decide if the employer match is cash or in-kind. In-kind match must benefit the training and must be documented. Also, the employer match cannot include federal, state, or other grant funds.

Step 1 is to identify the individual training items and establish the total training budget. These items may include, but are not limited to, items in Section IV.7. This budget may include traineewages while attending training and the wages can count for the employer match. But, the WIA costs cannot include trainee wages.

Step two calculates the employer match and the WIA cost. This calculation varies based upon allowable and unallowable WIA costs. Typically, the variable is the trainee wages.

If trainee wages are less than or equal to (</=) the employer match, an adjustment is not necessary. Just multiply the total budget by the selected percentage (%) to establish the Employer and WIA expense. See Scenario 1.

If trainee wages are greater (>) than the employer match, an adjustment is necessary to prevent unallowable WIA costs. When calculating the employer match and the WIA costs, subtract the excess wages over selected percentage. See Scenario 2.

Note: In both scenarios, the selected percentage is 50%.

Click here to view scenarios

7.Allowable Costs for Customized Training

Allowable costs may include only costs directly related to training. Examples of allowable costs include, but are not limited to the following:

a)Instructor's / trainer's training-related wages;

b)Curriculum development; and

c)Textbooks, instructional equipment, manuals, materials and supplies.

8.Unallowable Costs for Customized Training

Unallowable costs include but are not limited to:

a)Trainees' benefits/fringes;

b)Wages of trainees while attending customized training;

c)Costs that are not directly related to customized training for eligible individuals under Title I;

d)Foreign travel; and/or

e)Purchase of capital equipment.

V.Technical Assistance

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

VI.References

DOL waiver approval letter, June 7, 2011

DOL waiver approval letter, June 30, 2010

DOL waiver approval letter, November 12, 2009

Workforce Investment Act (WIA) of 1998, Public Law 105-220, August 7, 1998, Section 202 (3)

20 Code of Federal Regulations (CFR) Part 652 et al. Workforce Investment Act; Final Rules, August 11, 2000, Sections: 20 CFR Part 663 Subpart G 663.715, 663.720, and 663.730

WIAPL 09-09.3: Incumbent Worker Training (IWT) with Local Formula Funds under Waiver Authority

U.S. Department of Labor, Waiver Approval Letter, November 5, 2007

Federal Debarment Site: http://www.epls.gov

State Tax Status Site:

http://www2.sos.state.oh.us/pls/portal/PORTAL_BS.BS_QRY_BUS_INFORMATION1.SHOW_PARMS

Federal Environmental Compliance Site: http://www.epa-echo.gov/echo/index.html

Independent Contractor - Definition of Employment in OAC CH. 4141-3-05

Rescissions

WIATL No. 40

WIAPL 09-07

WIAPL 09-07.1

WIAPL 09-07.2

WIAPL 09-07.3 - Attachment A