I.Purpose

This communication provides guidance on paid and unpaid work experience for the youth program under Title I of the Workforce Investment Act (WIA). WIA administrative entities should convey this guidance to subrecipients and other entities that provide WIA activities and services.

II.Effective Date

Immediately

III.Background

Under the Workforce Investment Act of 1998, paid and unpaid work experience is an allowable activity and one of the ten (10) youth program elements required to be competitively procured when selecting a youth service provider for this activity.

The U. S. Department of Labor granted Ohio a waiver to allow a Local Workforce Investment Board (WIB) to decide whether to competitively procure paid and unpaid work experience or assign the administrative entity the responsibility for internally implementing this youth program element. Refer to WIAPL No. 09-06.2 regarding this waiver.

IV.Requirements

Work experience is one of the ten (10) required program elements that must be made available to all registered youth and should be offered throughout the program year. Work experience may be competitively procured or assigned to the administrative entity to perform the tasks for implementing this youth program element.

Work experience is a planned, structured learning activity that takes place in a workplace setting for a limited period of time. Youth are able to gain exposure to the world of work and its requirements. Work experience may be paid or unpaid. Work experience must be clearly distinguishable from public service employment.

The primary intent of the work experience element is to provide youth participants with opportunities for career exploration and skill development to gain work readiness skills in preparation for employment. Youth should acquire personal attributes, knowledge, and skills needed to obtain a job and advance in employment. Although a business, public agency or non-profit (hereafter collectively referred to as " work experience provider") may alsoreceive 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.

The use of work experience situations must be based on the assessment and service strategy identified in the Individual Service Strategy (ISS).

Work experience may include, but is not limited to:

• Instruction in employability skills or generic workplace skills such as those identified by the Secretary's Commission on Achieving Necessary Skills (SCANS);
• Exposure to various aspects of an industry;
• Mastering progressively more complex tasks;
• Internship and job shadowing;
• The integration of basic academic skills into work activities;
• Supported work, work adjustment, and other transition activities;
• Entrepreneurship;
• Service learning;
• Paid and unpaid community service; and
• Other elements designed to achieve the goals of work experience.

Work experience may be conducted in the private-for profit, private non-profit and public sectors.

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.

Job shadowing may be provided to participants as a work experience activity. Job shadowing is a short-term unpaid activity, which introduces a participant to the workplace and provides exposure to occupational areas of interest. 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 youth to observe only.

A.Trainee vs. 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.

WIA participants are subject to the requirements of the FLSA to the extent that the activities performed in the work experience constitute employment. A local grant recipient shall ensure that the administrative entity makes a determination regarding whether work experience is a training situation or an employment situation. The administrative entity should establish a process for making determinations.

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. The WIA participant is not an employee of the work experience provider if:

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 closelysupervised/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.

If all of the factors listed above are met, then the participant is a "trainee," an employment relationship does not exist under the FLSA, and the FLSA's minimum wage and overtime provisions do not apply to the participant. 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. On the other hand, if the youth 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 youth 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. Conversely, if the employer is providing job shadowing opportunities where the participant learns certain functions under the close and constant supervision of regular employees, but performs no or minimal work, this type of activity is more likely to be a bona fide training program. However, if the participant receives the same level of supervision as employees, this would suggest an employment, rather than training, relationship.

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.

The WIA administrative entity or youth service provider has the option of being the employer of record for the youth participant. The administrative entity or service provider as 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 administrative entity or service provider 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.

B.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 above must be met. The use of unpaid work experience should be limited.

For unpaid work experience, WIA funds may be used for incentives and/or a stipend for youth. Incentives and stipends encouraging successful completion are beneficial to youth.

Unpaid work experience participants may receive remuneration in cash or non-cash incentives. An incentive is remuneration to participants for successful participation and achievement of expected outcomes as defined in the Individual Service Strategy (ISS). The incentive should equate to an achievement, and should be tied to training and education, a work readiness skill attainment and/or an occupation skill attainment goal identified in the Individual Service Strategy.

Incentives for youth may include plaques, a certificate, gift certificates, recognition ceremonies for participants, caps and gowns, class pictures, class rings, school supplies and/or calculators, or a check.

WIA, Title l is silent on using the term "stipend."A stipend is a fixed and regular small payment such as an allowance. Reasonable stipends are allowable expenditures for unpaid work experience for youth when the provision of stipend is included in the participant's Individual Service Strategy. A youth may receive a stipend for an entire day if at least 51 percent of the youth's time is spent in unpaid work experience. For example, if a youth spends five hours per day in unpaid work experience and three hours in GED, the participant may receive a stipend for the day.

The incentives or stipends are determined by the WIB and funded by the WIA administrative entity. Stipends should be reasonable and allocable and issued through a uniform payment system. Such incentives or stipends are not considered income for WIA eligibility purposes,are not required to meet minimum wage requirements, are not to be dispersed as payroll, and income tax is not to be withheld.

C.Summer Employment Opportunities (SEO)

The Summer Employment Opportunities component is one of the ten (10) required program elements that must be made available to all youth. A summer employment opportunities activity is not intended to be a stand-alone program and must be tied to an objective in the individual service strategy.

Summer youth employment involves work experience as the primary strategy and must provide direct linkages to academic and occupational learning. Summer employment may provide other activities and strategies as appropriate to meet the needs and goals of the youth. Twelve months of follow-up services must be provided to youth in the summer employment opportunities activity.

D.Local Workforce Investment Board Policy

The WIB is responsible for creating and directing policy and a service delivery strategy to the administrative entity for administering both paid and unpaid work experience. We recommend that work experience be paid. In developing policy, the needs, circumstances and characteristics of the youth population should be taken into consideration. At a minimum, the WIB's policy should cover 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.
• Incentives / stipends - Incentives and stipends should be appropriate and in support of the activity. The policy should define appropriate incentives and stipends along with a minimum and maximum limitation on the type and/or dollar amount.
• Monitoring - The policy must describe the frequency of monitoring and staff responsible for monitoring, and include a monitoring guide, form or checklist.

The WIB must ensure that the administrative entity and or provider have a written agreement to ensure compliance with WIA and applicable regulations. The agreement, including a minor wage 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 administrative entity and or provider.

The written agreement, which may be called a worksite agreement, job site agreement, or host site agreement should 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 administrative entity and or provider should all be given a copy of the agreement. The agreement must be available for audit and monitoring purposes.

E.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 WIA.

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.

F.Child Labor Laws

An administrative entity must ensure compliance with child labor laws. The employer must comply with all applicable federal laws and with state child labor laws if the participant is less than 18 years of age. The Fair Labor Standards Act (FLSA); Ohio Revised Code (O.R.C.) Chapter 4109 Employment of Minors, and Chapter 3331 Age and Schooling Certificates; and Ohio Administrative Code (O.A.C.) 4101:9-2Employment of Minors in Occupations Hazardous or Detrimental to Health and Well-Being, are primary legislation which governs the employment of minors at the federal and state levels.

Proof of age and parental consent must be given for both paid and unpaid work experience. Minors participating in a work experience during the months that school is in session also require a work permit.Minors who are under 16 also must have an Age and Schooling Certificate (work permit).

G.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 objective assessment and Individual Service Strategy (ISS) indicating a need for work experience;
• Justification for incentive/stipend, and description of type of payment method and amount, if applicable;
• 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 incentives, stipends and 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.

H.Appropriate Employers

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

A selection criteria may be established to ensure that one employer is not favored at the expense of another employer. Although not required, the employer selection criteria could include using a request for proposal or a modified bid process which would also make the community at large aware of opportunities.

The WIB may encounter employers reluctant to assume responsibility for youth as employees. If an employer/employee relationship does exist, the local WIA administrative entity or youth provider may deem it advisable to be the employer of record and refer youth participants to host sites so they may receive experience.

I.Monitoring

The WIB is responsible for ensuring oversight of the program. The administrative entity 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 WIA law and regulations.

V. Technical Assistance

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

VI.References

Workforce Investment Act of 1998, Pub. L. No. 105-220, §§ 129(c), 188(3).

WIA Final Rules, 20 C.F.R. §§ 664.405, 664.410, 664.460, 667.266, 667.270, 667.274 (2000).

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

Recissions

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