I.Purpose

To provide guidance and additional clarification on the waiver authority to use up to 10% of local area adult and 10% dislocated worker formula funds to train incumbent workers for layoff aversion purposes.

II.Effective Date

July 1, 2010 - June 30, 2011

III.Background

Waiver authority has allowed local WIBs to use up to 10% of local adult and 10% dislocated worker formula funds to provide IWT. The United States Department of Labor (USDOL) is requiring that all IWT conducted under this waiver must be for layoff aversion. Due to the success of local incumbent worker training programs in the past, the state is continuing to utilize the waiver authority. The 10% of local adult funds designated for IWT are restricted to serving low-income adults.

IV.Requirements

Business closings, downsizings, and mass layoffs can occur for a variety of reasons in periods of both economic expansion and economic decline. Training incumbent workers to upgrade their skills can prevent worker dislocation and avoid a layoff. In conjunction with rapid response services provided by the state, layoff aversion can involve a range of strategies that may be used to prevent dislocations and business downsizing or closures.

Layoff aversion strategies for workers may include:

• providing workers with training services to assist them with retaining their present jobs, or placement into new jobs, or
• retraining workers with new technologies within the same company, when the company is at risk of closure or downsizing.

Appropriate data that includes a comprehensive business retention/layoff aversion plan must be available to verify the need for layoff aversion services for monitoring documentation purposes.

A.IWT-General Guidelines

IWT is a business service designed to develop a highly skilled workforce which will result in increased business financial viability, stability, competitiveness, and productivity. To avert the risk of closing, IWT can be developed with a business or business association to maintain their competitive status, incorporate new technology, or prevent downsizing.

Local WIBs shall establish criteria for identifying employers and any targeted industries and economic sectors, using resources such as Business Services Representatives (BSR), Chambers of Commerce or the local media. Further, local WIBs are required to develop IWT program policies and procedures in a manner that coordinates with the array of business services available through the Ohio Department of Development (ODOD) and other state and local stakeholders. WIBs are not mandated to use this waiver.

Workers participating in IWT will benefit by enhancing existing skills, learning new skills, earning employer or industry recognized credentials, in addition to retaining employment, maintaining their careers, and/or increasing their earnings potential. IWT will also allow the opportunity for backfilling vacated positions resulting from the promotion of newly trained workers.

Ohio employers, as well as employers in bordering states whose employees are Ohio residents, are eligible to participate in IWT programs under the waiver authority defined in this policy. A joint strategy should be developed between the WIBs, bordering states, and other stakeholders to explore the possibility of a jointly funded training package among appropriate state and local entities.

Even though IWT under this policy is considered to be a statewide activity, all 10% adult funds must be restricted to serve low-income adults. Local areas are required to follow the statutory definition of low-income as described in WIA Section 101. All IWT participants must be authorized to work in the United States. If applicable, male applicants must be registered for the Selective Service. Documentation may be satisfied by an employer statement that ensures all trainees meet this requirement and documentation must be made available to the WIB upon request.

Local WIBs are encouraged to develop innovative program design strategies to meet the needs of its local area workforce. If a WIB chooses to offer incumbent worker services, the WIB must set criteria to select employers and/or incumbent workers and define its local program requirements and application process.

Local WIBs have several options when determining how best to serve eligible employers. A WIB can arrange training using the traditional array of intensive and training services, customized training, skill upgrade training, occupational skills training (through the issuance of ITAs), or a combination of these training approaches. WIBs may also implement innovative training strategies that best meet the needs of the business community.

Ohio Department of Job and Family Services reserves the right to approve variances to this guidance on a case by case basis.

Allowable Costs for Incumbent Worker Training Program

Allowable costs may include:

• instructor / trainer salaries
• curriculum development, textbooks, manuals, training software, materials and non-consumables
• other necessary and reasonable costs directly related to training

Unallowable Costs for Incumbent Worker Training Program

Unallowable costs include but are not limited to:

• foreign travel,
• purchase or lease of capital equipment,
• encouragement or inducement of a business or part of a business to relocate from any location in the United States,
• use of IWT funds to pay for a worker's training wages
• use of IWT funds to train management employees in management skills such as Six Sigma and LEAN.

B.Definitions

For the purpose of this waiver, the following definitions apply:

Incumbent Worker

An incumbent worker is an employed worker who is in need of additional skills in order to avoid layoff. Incumbent worker training would support further job retention and career development for improved economic self-sufficiency for employed workers, especially those most vulnerable to job loss, and increase the capability of the employing firm(s) to access and retain skilled workers.

The employers have determined that their workforce requires training in order to help:

• workers maintain employment,
• upgrade workers' skills, and
• maintain wages earned by employees

Eligible Incumbent Workers

Local areas are required to use the 10% adult funds to serve low-income adults. However, local areas are required to follow the statutory definition of low-income as described in WIA Section 101.

Local areas utilizing up to 10% of their dislocated workers funds for IWT are not subject to the low-income requirement.

Layoff Aversion

Layoff aversion involves a continuum of strategies targeted to specific employers or industries that are experiencing a decline and have the potential to undergo layoffs, or are experiencing a serious skills gap that impacts their ability to compete and retain workers. A layoff is considered to be averted when:

1.a worker's job is saved at an existing employer facing a risk of downsizing or closing; or

2.a worker at risk of dislocation faces a brief gap of unemployment when transitioning to a different job with the same employer or is hired at a new job with a different employer.

Types of Incumbent Worker Training

All training delivered under this waiver is restricted to skill attainment activities. The training should benefit workers by making them more qualified in their line of business and/or by providing them with skills for new products or processes. It is desired that the training results in credentials or industry recognizable skills that promote the worker's career and increases the overall employability.

Allowable types of training for incumbent workers:

• Skills upgrade training: short-term training that enhances occupation-specific skills or basic skills that lead to a credential/certificate. See TEGL 17-05.
• Customized training: see WIAPL 09-07 for details; minimum employer match of 10% required depending on number of employees. Reimbursements of trainee wages are disallowed.
• Occupational skill training (ITAs): training that leads to a credential or a certificate as defined in TEGL 17-05 (subject to local policy established by local area boards).

C.Eligibility for Participating Businesses

Local IWT is one of many business services offered through local WIBs, ODOD, and other stakeholders. Based upon a thorough assessment, it may be determined that a business could be better served through a program not funded under this activity. Therefore, it is important to gather sufficient information to determine the appropriate mix of services to meet the business' needs.

There are also businesses that should not participate in this initiative due to past or current violations of local, state, or federal law; unfair labor practices; and other conditions identified during the course of conducting initial employer assessments and reviewing contract requirements, assurances, and certifications with the local WIB designee. Businesses that fail to meet any of the following six qualifying criteria are not eligible to receive funds for incumbent worker training:

1.Businesses must not be presently debarred, suspended, proposed for disbarment, declared ineligible, or voluntarily excluded from participation in transactions by USDOL or the State of Ohio.

2.Businesses shall not have any outstanding tax liability to the State of Ohio.*

3.Businesses must ensure that they are not on the most recent list established by the Ohio Secretary of State that would identify them as having more than one (1) unfair labor practice contempt of court finding.

4.Ohio businesses must have all of the approvals, licenses, or other qualifications needed to conduct business in the state and all must be current. Should this status change during the course of the local IWT program activities and the business is disqualified from conducting business in Ohio, all training under the IWT program must cease.

5.Governmental entities, including the city, county and state, may not participate in the local IWT program. Health care providers that are operating as not-for-profit entities are the only allowable exceptions to this prohibition.

6.Businesses that have relocated to Ohio and have laid-off workers at their former location in the United States may not be considered for this program until they have been in operation at the new location for 120 days.

7.Businesses must not have any outstanding civil, criminal or administrative fines or penalties owed to or pending in the state of Ohio.

*WIBs will require the businesses to disclose any known outstanding tax liabilities with other states prior to entering into contract. The local WIB may consider existing out-of-state violations when determining eligibility to receive incumbent worker training funds.

D.Procurement of Training

WIBs have several options to determine how best to provide the training needed by a business as described below:

1.Local WIBs may enter into contracts with training providers registered in Ohio's Eligible Training Provider Online (ETPO) system without any additional procurement requirements. Utilization of the ETP list is for universally applicable off-the-shelf employer training and is not intended to include unique, specialized, or employer-specific training.

2.A business may be considered a "beneficiary" of this federal program and receive incumbent worker training assistance on a reimbursement basis. WIA subrecipients and vendors are not considered to be beneficiaries. In order for a business to utilize the beneficiary option, the following guidelines must be followed:

a.Business beneficiaries may receive reimbursement for their actual training costs incurred under this program, on a reimbursement basis, subject to the limitations of section IV.A. of this policy.

b.Local WIB approval of a training plan is required before reimbursement may be provided to a beneficiary. The development of training plans is the joint responsibility of the local WIB designee and the business.

c.The training plan must identify the provider(s) of training, type of training, planned start/end dates, number of individuals to be trained, the projected cost of training, and any other information required by the WIB. All training costs must be allowable as defined under section IV.A. of this policy and follow the guidelines of this issuance. Training plans must be approved by the local WIB or a WIB designee prior to the start date of training. Beneficiaries must agree to provide all documentation required by the WIB in order to be reimbursed for the training.

d.Training providers are not required to be enrolled in the ETPO system for the purpose of providing training under this policy. WIBs may assist business beneficiaries in identifying potential providers of training; selection of a training provider is not subject to state or federal procurement requirements.

3.For businesses not following the guidelines in section D.2 and that have training needs that cannot be provided by Ohio's eligible training providers, local WIBs will need to follow proper procurement procedures as identified in the Ohio Administrative Code: Rule 5101:9-4-01 (Acquisition Standards Definitions) and Rule 5101:9-4-07 (Procurement Requirements), or local procurement policies if more restrictive.

E.Training Provider Considerations

The University System of Ohio (USO), community colleges, vocational schools, technical schools, licensed private institutions, and training providers on Ohio's statewide WIA Eligible Training Provider (ETP) list should be used whenever possible. However, WIBs may enter into a contract for services, rather than using an ITA, if there are an insufficient number of eligible training providers on the ETP list to conduct the proposed training.

Training providers without satisfactory past performance, accreditation, curricula that lead to credentials, relevant training experience, accredited instructors, high job placement rates, and or high training completion rates, should be avoided.

The training facility should provide an environment that supports learning and be within reasonable proximity to the trainees so the cost and time required for travel is minimized.

F.Program Authority and Fund Request Process

Local adult and dislocated worker formula funds appropriated annually for the program year may be used to fund an incumbent worker training program.

A WIB may request the incumbent worker waiver at any time during the program year (July 1st - June 30th).

The last page of this guidance letter is a sample letter showing a request to use adult and dislocated worker funds for a local incumbent worker training program.

G.Process to Request Permission to Utilize Funds

The fiscal agent's authorized representative must sign and submit a letter via email to WIAQNA@JFS.OHIO.GOV with "Incumbent Worker Training" in the subject line.

The letter must include:

• allocation for the funding stream
• dollar amount for incumbent worker services assignable by funding stream (adult and/or dislocated worker) and year of appropriation (such as program year and fiscal year)
• a statement that the WIB approved the request
• e-mail address of fiscal agent authorized representative

Within 15 business days, the Office of Workforce Development will notify the fiscal agent and/or administrative entity of the approval by email.

H.Fiscal Reporting

Funds contracted to a subrecipient or vendor for an incumbent worker training program are reported as program costs.

The fiscal agent must track funds used for incumbent worker training by funding stream and by the year of appropriation.

The administrative cost limit remains in effect. No separate amount may be set-aside for administration of the incumbent worker training program.

Fiscal agents will report incumbent worker expenditures using the incumbent worker code established by the Office of Fiscal and Monitoring Services. Coding exists for both the adult and dislocated worker programs. The accrued expenditures charged to the incumbent worker code for the adult and dislocated worker programs must not exceed the amount authorized for the incumbent worker training program. ODJFS will monitor costs reported against the incumbent worker training program.

Funds that are not used for the incumbent worker training program may be expended respectively on the adult and dislocated worker programs for program activities authorized by WIA.

I.Data Elements, Documentation and Program Reporting

Local WIBs are required to report IWT activities via the mini-incumbent worker registration in the Sharing Career Opportunities and Training Information (SCOTI). The reporting of outcomes is also required.

Each project must be categorized as Layoff Aversion when recorded in SCOTI. The type of training provided is also a required data element. Definitions for each training type are found in Section IV.B. of this issuance. They are as follows:

Customized Training

Occupation Skills Training (ITAs)

Skill Upgrade Training

The following additional data elements are required for reporting:

Worker outcomes must be reported and selected from the following list (multiple selections may be made):

The state has streamlined the reporting requirements to a minimal level that should not overburden employers but still allow for an assessment of the effectiveness of Ohio's IWT programs. Local WIBs may choose to collect more information if necessary to conduct successful IWT programs. Local WIBs choosing to collect and document data elements over and beyond the requirements must ensure that every IWT program is compliant with reporting requirements. Local policies should include local requirements in regards to data elements, documentation and reporting.

IWT programs will be reported in Sharing Career Opportunities and Information (SCOTI) with a minimal amount of data required. If local WIBs wish to co-enroll an IWT participant in the local adult or dislocated worker program, a full registration is required in SCOTI which includes all of the data elements needed for WIA participants for performance. Co-enrolled participants must meet all eligibility requirements for Adult, Youth and/or Dislocated Worker programs.

Incumbent worker trainees participating in a program under this waiver are not subject to the local WIA Common Measures unless they are co-enrolled in a WIA Adult, Dislocated Worker, or Youth program. Under this waiver, co-enrollment is permissible and is a local decision.

V.Technical Assistance

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

VI.Reference

DOL waiver approval letter, June 30, 2010

DOL Training and Employment Guidance Letter (TEGL) 26-09, May 12, 2010

DOL Training and Employment Guidance Letter (TEGL) 30-09, June 08, 2010

DOL waiver approval letter, November 12, 2009

Office of Workforce Development, Waiver Request Plan, July 24, 2009

DOL Training and Employment Guidance Letter (TEGL) 14-00, Change 3, August 24, 2009

DOL Training and Employment Guidance Letter (TEGL) 18-05, March 6, 2006.

Federal Register 20 Code of Federal Regulations, Final Rules, August 11, 2000, Sections 661.400, 661.420(c) and (e), 663.245, 663.145, 665.220, 667.220, 667.262, 663.715, and 667.264

Workforce Investment Act (WIA) of 1998, Public Law 105-220, August 7, 1998, Sections 129(b), 134, 181(e) and 189 (i)(4)(B)

DOL Training and Employment Guidance Letter (TEGL) 13-07, December 11, 2007

Office of Workforce Development Memo, June 2, 2008, John B. Weber

Rescissions:

WIATL 22B: Waiver Authority to Use 20% of the Adult and Dislocated Worker Formula Allocation for Incumbent Worker Training Program

WIATL 22C: Waiver Authority to Use 20% of the Adult and Dislocated Worker Formula Allocation for Incumbent Worker Training Program

WIAPL No. 09-09: Incumbent Worker Training (IWT) with Local Formula Funds under Waiver Authority

Attachment A - Sample Request Letter