[Federal Register / Vol. 59, No. 170 / Friday, September 2, 1994 / 45815]
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DEPARTMENT OF LABOR
Employment and Training Administration
20 CFR Parts 626, 627, 628, 629, 630, 631, and 637
Job Training Partnership Act
RIN 1205-AA95
AGENCY: Employment and Training Administration, Labor.
ACTION: Final rule.
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SUMMARY: The Employment and Training Administration (ETA) of the
Department of Labor (DOL) is amending the Job Training Partnership Act
(JTPA) regulations to implement the Job Training Reform Amendments of
1992 and related statutes. Through these final regulations, the
Department intends to direct the focus of JTPA training and employment
programs on improving the targeting of JTPA services to those facing
serious barriers to employment, enhancing the quality of services
provided and program outcomes, strengthening fiscal and program
accountability and the linkage between the services provided and local
labor market needs, and fostering a comprehensive and coherent system
of human resource services.
EFFECTIVE DATE: June 30, 1995, except that the provisions of
Sec. 627.201 shall be effective October 3, 1994.
FOR FURTHER INFORMATION CONTACT: Mr. James M. Aaron, Office of
Employment and Training Programs. Telephone: (202) 219-6825 (this is
not a toll-free number). Copies of this final rule are available in the
following formats: electronic file on computer disk and audio tape.
They may be obtained at the above office.
SUPPLEMENTARY INFORMATION: On October 13, 1982, the President signed
into law the Job Training Partnership Act, Public Law 97-300. The
stated purposes of the Act were "to establish programs to prepare
youth and unskilled adults for entry into the labor force, and to
afford job training to those economically disadvantaged individuals and
others facing serious barriers to employment who are in special need of
such training to obtain productive employment."
Title I of the Act sets forth general requirements for programs, as
well as some requirements for State and local operation of programs.
Title II provides requirements for State and local operation of adult
and youth programs for the economically disadvantaged. Title III of the
Act provides for operation of State and substate programs of employment
and training assistance for dislocated workers. Title IV provides
requirements for special programs for targeted groups, such as Native
Americans, migrant and seasonal farmworkers, and veterans, as well as
for the Job Corps and other specialized programs. Title V provides
incentives to States to reduce welfare dependency and increase self-
sufficiency for absent parents of children receiving aid to families of
dependent children and blind or disabled individuals receiving
supplemental security income under title XVI of the Social Security
Act.
The final rule, among other things, implements statutory
requirements under the Job Training Reform Amendments of 1992 (JTPA
Amendments), Public Law 102-367; the Nontraditional Employment for
Women Act (NEW), Public Law 102-235; the Department of Defense
Authorization Act for Fiscal Year 1993 (Defense Authorization Act),
Public Law 102-484; the Older Americans Act, as amended by Public Law
103-171; the Clean Air Act, Public Law 101-549; the North American Free
Trade Agreement (NAFTA) Worker Security Act, title V of Public Law 103-
182 and the Goals 2000: Educate America Act, Public Law 103-227. While
the programs are modified pursuant to statutory amendments and
requirements, the delivery system for the JTPA programs under the final
rule remains essentially the same as in pre-Amendment regulations. It
does not have the financial or other impact to make it a major rule
and, therefore, the preparation of a regulatory impact analysis is not
necessary. See Executive Order 12866, 58 FR 51735, October 4, 1993.
The Department of Labor ("DOL" or "the Department") has
certified to the Chief Counsel for Advocacy, Small Business
Administration, that pursuant to the Regulatory Flexibility Act at 5
U.S.C. 605(b), the final rule would not have a significant economic
impact on a substantial number of small entities. No significant
economic impact would be imposed on such entities by the final rule.
Paperwork Reduction Act
Pursuant to the Paperwork Reduction Act, information collection
requirements which would be imposed as a result of the final rule are
being submitted separately to the Office of Management and Budget.
Prior Actions
The Department has conducted this rulemaking in an open and public
manner. Since the enactment of the Amendments, Department officials
have responded to numerous invitations to discuss the Amendments with
organizations interested in the Amendments and proposed regulatory
action. Additionally, a group of technical experts has offered
suggestions to the Department on the proposed areas for regulatory
action.
On September 10, 1992, the Department published an Advance Notice
of Proposed Rulemaking in the Federal Register and invited comments
from interested parties regarding proposed or recommended regulatory
actions to be taken by the Department. 57 FR 41447.
On December 29, 1992, the Department published an interim final
rule in the Federal Register, providing the opportunity for comment. 57
FR 62004. Amendments to the rule were published on June 3, 1993. 58 FR
31471.
Over 400 sets of comments were received in response to the interim
final rule. Sources of comments by the close of the comment period were
as follows: Private industry councils (99); service delivery areas
(72); service providers (41); States (39); community-based
organizations (33); public interest groups (31); State JTPA offices
(28); private contractors (14); State education agencies (10); Federal
agencies (8); unions (7); private citizens (7); State job training
coordinating councils (6); members of Congress (2); and other sources
(4).
In addition, on March 24, 1992, the Department published proposed
rules in the Federal Register for the Clean Air Employment Transition
Assistance program under JTPA title III, providing the opportunity to
comment. 57 FR 10232. Thirteen sets of comments were received from
State, substate entities and other organizations.
The Department fully considered these comments and other comments
received in time to consider in the development of this final
regulation and addresses the issues they raised in the following
discussion.
Finally, during the period of May through July, 1994, when this
final rule was in development, the Department initiated a Dialogue with
the employment and training community and others interested in the JTPA
title II program for the disadvantaged. This Dialogue was initiated by
a Federal Register notice published on May 18, 1994, and consisted
principally of a series of fifteen small group and town hall meetings
and a review of research on employment and training programs with a
view to developing an action plan to improve title II programs.
Approach to Rulemaking
These regulations continue to provide substantial responsibility
and discretion to States and local areas in developing policy and in
implementing procedures for JTPA programs. Thus, in many instances in
these final regulations, responsibility for certain decisions is vested
in the State and in the service delivery areas (SDA's) and substate
grantees (SSG's).
The Department has attempted in these final regulations to foster
improved customer services by eliminating or reducing unnecessary
programmatic requirements wherever possible so that decisions on how to
best serve JTPA customers will be made, to the maximum extent possible,
at the level of customer service and based upon customer need. For
example, some of the restrictions on the duration of certain
activities, such as work experience and entry employment experience
where not specifically provided for in the Act, have been eliminated.
Rather than Federal regulation, the needs of the customer as determined
in the assessment process and the intervention's likelihood of success
in enhancing skills and achieving long term employment will dictate how
the program intervention will be designed.
This was also a theme from the title II Dialogue. Some of the
principal themes suggested by the title II Dialogue were the following:
(1) Greater program flexibility with accountability, (2) Greater
support for longer-term training interventions, including approaches
more customized to customer needs and better connections between
training and jobs, (3) Improved coordination at all levels but with
special attention to coordination among federal agencies, (4) Increased
supportive services, (5) More streamlining of eligibility, and (6)
Better access for community-based organizations to JTPA planning and
service delivery. To the extent permitted by the rulemaking process,
the Department considered the major themes from the Dialogue in this
final rule. In several instances, there are changes in this final rule
that are consistent with the themes of the Dialogue. For example, as
noted above, certain prior restrictions have been eliminated; initial
efforts to achieve greater coordination with the Departments of
Education, Health and Human Services and Housing and Urban Development
are reflected in this final rule; the Department has attempted to
streamline the requirements for providing participants with financial
assistance; and these final regulations clarify that, as appropriate,
the new eligibility provisions for youth are applied in the program
under section 123 and title II-B. In addition, the Department will
reexamine the Eligibility Documentation Technical Assistance Guide.
Consistent with Executive Order 12866 (58 FR 51735, October 4,
1993), these regulations are limited to those areas which are
specifically required by statute, identified by the Department or the
public as necessary to provide guidance and clarification, or essential
to further the purposes of the Act. Additionally, the Department fully
intends to provide strong oversight and monitoring of JTPA programs in
conjunction with strengthened State and local oversight and monitoring.
It is through the monitoring of the implementation of the Amendments
and these regulations, rather than through promulgation of prescriptive
regulations, that the Department, working with the States and service
delivery and substate areas, will ensure effective program operations.
Of all the consultations and comments the Department has received,
about half expressed interest in having the Department be more detailed
in the regulations, and the other half indicated that the Department
was being overly prescriptive in the interim final rule and preferred
that the Department provide minimal guidance. The Department reminds
readers of these regulations that the JTPA Amendments create more
restrictive operational and programmatic requirements in order to
address a series of issues that had been identified in connection with
JTPA. The Department has sought to strike a balance in these final
regulations in terms of guidance and prescriptiveness. In some
regulatory areas, such as some of the administrative requirements, the
Department has carefully specified requirements to set a strong
foundation for program integrity so that in other regulatory areas,
such as program design, there can be more flexibility and emphasis on
outcomes. Finally, the Department has sought to make these regulations
sufficiently clear, so that all parties with an interest in JTPA
understand both the requirements and the areas of flexibility in the
program.
This final rule is not a stand-alone document; the companion
document is the JTPA, as amended. In several instances, however,
portions of the Act are repeated to make the final rule user-friendly
and to facilitate its use as a reference tool.
In addition to the 1992 JTPA Amendments, the Clean Air Act, section
4467 of the Defense Authorization Act and the NAFTA Worker Security Act
impacted on title III of JTPA. The final regulations in 20 CFR part 631
provide for limited revisions to existing title III regulations as
required by these statutes.
There were a number of comments on specific areas of performance
standards and related reporting requirements. On July 11, 1994, the
Department published separately in the Federal Register the final
performance standards for PY 1994 and PY 1995. The Department
appreciates the issues raised by commenters on the interim final
regulations in the area of performance standards and has taken these
comments into account in developing the performance standards. In
addition, on June 23, 1994 the Department issued Training and
Employment Information Notice 5-93, Change 1 with the revised reporting
instructions.
The Department also plans to issue separately revisions to the
regulations for title IV, part A, the Employment and Training Programs
for Native Americans and Migrant and Seasonal Farmworkers. When it
does, the contents of the regulations as reflected herein may change.
The Department has issued revised regulations for title IV, part B, the
Job Corps. (58 FR 69098 (December 29, 1993)).
Format of These Final Regulations
The structure, organization, and enumeration of the JTPA
regulations have been revised to accommodate the Amendments. Throughout
this document, unless otherwise stated, "JTPA" or "the Act" refers
to the Job Training Partnership Act, as amended (29 U.S.C. 1501, et
seq.); "Department" or "DOL" refers to the U.S. Department of
Labor; and "Secretary" refers to the Secretary of the U.S. Department
of Labor or the Secretary's designated representative(s). As used in
these final regulations, the term "title" refers to a title of the
Job Training Partnership Act, unless the text specifically refers to
another statute. The terms "section", "part", and "subpart" refer
to a section, part, and subpart, respectively, of these final
regulations, unless the text specifically refers to another document.
As specified at PART 626--Introduction To The Regulations Under The
Job Training Partnership Act, part 627 applies to all programs under
titles I, II, and III of the Act, except where noted, and part 628
generally applies to title II programs. Parts 629 and 630 are reserved
for future use. Part 631 continues to apply to title III programs and
part 637 has been revised for the title V Jobs for Employable Dependent
Individuals (JEDI) program. Therefore, various sections that previously
appeared in parts 627, 628, 629, and 630 have been redesignated to
parts 627 and 628.
Definitions
The interim final rule at Sec. 626.5 added a significant number of
definitions of terms used throughout the JTPA and regulations.
Definitions of the terms "commercially available off-the-shelf
training package", "family", "family income", "obligations",
"stand-in costs", and "vendor" received the most comments.
Commercially available off-the-shelf training package.
At the outset, the wording of the term being defined is changed. In
the interim final rule the term was "commercially available or off-
the-shelf training packages;" in the final rule, the word "or" is
dropped so that the term being defined reads "commercially available
off-the-shelf training packages". The reason for this change is that
both the Act and the definition require that a training package be both
commercially available and available at off-the-shelf prices.
Practically, availability at off-the-shelf prices is subsumed within
the broader concept of commercial availability.
Several commenters submitted comments on the definition of
"commercially available off-the-shelf training package", contained in
Sec. 626.5. The basis of this definition is the definition of a
commercial product found in part 15 of the Federal Acquisition
Regulation (FAR). First of all, the Department acknowledges that there
is a degree of uncertainty regarding which training packages and their
providers fall within the meaning of commercially available off-the-
shelf. The term, as defined within Sec. 626.5, relies generally upon
whether the package is provided in a commercial market in which it is
available to the public. This was the origin of the language "sold to
the public" and that related to "catalogue or market prices". These
business concepts are indicators of the training package's availability
to the public, e.g., a catalogue available to the public or a public,
advertised price shows that the entity is seeking to engage in
commerce. The Department believes that most parties understand the
basic meaning of whether any package is "commercially available."
Some related areas of the definition are discussed further below.
A second area of inquiry pertains to the contents of the package.
The training will consist of classroom and related practical
instruction, which may include hands-on experience. It may consist of
the development of occupational or education-related skills. For
example, a package may provide occupational training to a participant
as a nurse practitioner, as a maintenance mechanic, or in computer
design, in heating, ventilation and air conditioning, or may provide
basic skills in reading and computation. The package may consist of a
necessary assessment of interests, aptitudes, and abilities, as well as
counseling and guidance related to participant progress and employment
prospects. Such a training package will not normally consist of the
kind of assistance typically provided within the meaning of a JTPA
supportive service, but may include fees, books and other materials
needed for participation and completion of the package. In other words,
if an organization offers training to the general public which consists
solely of a practical training course in a particular occupation, it is
that course, without any other placement or assessment services, which
may be purchased as a commercially available training package. On the
other hand, if the organization offers assessment or placement services
to the public as part of its training course, those services will be a
part of the commercially available package. A key indicator, however,
is whether the contents of the package are generally available and
generally the same for all participants, not just JTPA participants.
Finally, commenters raised questions about the type of entity that
might provide the commercially available package. A variety of entities
may be the source of a commercially available package; however, the
characteristics of the package, that is, whether they meet the tests of
commercial availability at off-the-shelf prices, are more of an
indicator than the entity that provides it. Such entities may include
those that provide computer-based instruction in a variety of
occupational and educational topical areas, or they may be public and
private schools, academies or other entities that offer training that
is commercially available, as discussed above.
A few commenters requested that the phrase "performance criteria"
be defined, and the definition now includes language that addresses the
reference to "performance criteria". "Performance criteria" may
generally fall into two or more areas that reflect the necessary
components and features of the package that is to be delivered, such as
(1) grade requirements, knowledge, skills, and competencies which may
be expected to be attained by students, and (2) where appropriate,
participant attainment as manifested by job placement. This latter
component is contingent upon whether the service is regularly offered
and may be reasonably included in the package.
A few commenters were concerned with the requirement that the
packages be unmodified. They indicated that, in many instances, a
commercially available training package may be modified to some degree
to reflect the special needs of the JTPA population, without changing
its basic content. A strict reading of the regulation would prohibit
contracting for commercially available packages which are modified in
any way, regardless of whether the package remains substantially the
same. In addition, this strict reading would prohibit the JTPA program
from taking advantage of a discounted price that might be offered in
connection with multiple purchases of the package. The Department does
not intend that a local program be prohibited from purchasing a
commercially available package at a discounted price.
In order to respond to this comment, the Department further
conforms the definition to the concepts in the FAR, and the word
"unmodified" is removed. This change recognizes that some
modifications may be made to a package to meet special JTPA
requirements, just as a commercial entity would offer to other
customers, while the package remains substantially similar to that
regularly offered. A test for whether the package remains substantially
the same as that regularly offered is whether the modification does not
involve an increase in the catalogue price. An increase in catalogue
price would indicate that the package is not substantially the same.
However, a price decrease due to such things as volume discounts or
good negotiating is not, in itself, indicative of a modified package.
Another test is whether the same training components continue to be
offered in the package. A difference in the training components would
indicate that the package may not be substantially the same. All of
these tests should be considered in determining whether a training
package meets the definition. Further, JTPA funds should not be used to
make any modification to a training package. Should training packages
be modified in order to conform to JTPA requirements, they may be
considered commercially available off-the-shelf only if they comply
with the remaining requirements listed in the definition. Thus, while
some modification is possible, the definition is not intended to
include "customized training," training designed solely to meet the
special needs of an individual or group of JTPA participants.
A few commenters asked for a definition of "substantial" in
regard to the quantities sold. In response, the phrase "in substantial
quantities" is removed from the definition because the Department
believes that the concept is embodied in the idea of "being sold to
the general public" which follows in the definition. For further
guidance, the FAR indicates, with respect to being sold in
"substantial quantities", that "[N]ominal quantities, such as
models, samples, prototypes, or experimental units, do not meet this
requirement." Further, there were suggestions that an amount such as
25 to 30 percent non JTPA sales may be useful to States and SDA's when
setting policy in this area. The definition that is provided conforms
to the FAR definition; therefore, it is not being changed.
A few commenters wondered if community-based organizations (CBO's)
and non-profit organizations were included within this definition. Such
organizations may be among the types of organizations that provide a
"commercially available off-the-shelf" training package if the
training packages they provide meet the definition.
Several comments reflected confusion about the relationship of
"commercially available off-the-shelf training packages" to
"vendors" and "subrecipients". It is important to recognize that
the definitions of "vendor" and "subrecipient" and the definition
of "commercially available off-the-shelf training package" exist for
different purposes and should not be viewed as related. An agreement to
acquire a commercially available off-the-shelf training package may
create either a vendor or a subrecipient relationship, depending on the
content of the package. If the package contains elements that meet some
of the distinguishing characteristics of a subrecipient (see
definition), then a subrecipient relationship is created.
Regardless of whether a vendor or subrecipient relationship is
created, the costs of the commercially available off-the-shelf training
package may be charged entirely to the direct training category.
However, other JTPA requirements such as record retention, audit, etc.
do apply to a subrecipient.
The intent of the definition of "commercially available off-the-
shelf training packages" is to provide states and SDA's broad
flexibility to utilize generally available training services and to be
able to charge those services entirely to the training cost category.
It will, for example, permit states and SDA's to purchase training from
a variety of educational institutions at off-the-shelf or catalogue
prices. It must be recognized, however, that there are limits to the
flexibility that the definition affords. One important limitation is
that the definition only applies to the provision of actual training
services to eligible JTPA participants. It does not apply to
intermediate administrative entities or entities that pass funds
through to training providers. Another limitation is that the services
must actually be available to and provided to significant numbers of
persons or to entities that procure training for such persons under
other state or federal programs outside the JTPA system. It will not be
sufficient for a training provider merely to claim that its services
are available to the general public or to other training programs (like
the JOBS program). The state or SDA must be able to show that the
services actually are available to the public or to other programs and
that the services are utilized by them. If a training provider has a
history of providing training only to the JTPA program or to JTPA
participants, it will not be considered a provider of "commercially
available off-the-shelf training packages".
Although not a part of the definition, section 141(d)(3)(A) of the
Act also requires that "commercially available off the shelf training
packages" be purchased competitively. The requirements for competitive
procurement are covered in the procurement provisions of the
regulations at Sec. 627.420.
Family
Several comments were received on the definition of the term
"family" at Sec. 626.5 of the interim final regulations. In general,
the nature of these comments was that: (1) The definition is too
restrictive and limits the Governor's flexibility in defining the term;
(2) the definition does not recognize alternative living arrangements
that do not fit neatly into the "traditional" concept of a family;
and (3) the regulations do not address how to handle other family
members, including dependent adults, living in the same residence. A
few of the commenters noted that an apparent conflict exists in how
"family" is defined in the interim final regulations and how it is
treated in the Standardized Program Information Report (SPIR)
instructions.
The term "family" was statutorily defined in the 1992 Amendments
for the purposes of income eligibility determination for receipt of
JTPA services. The interim final regulations provide the Governor with
flexibility to interpret the term "family" concerning how "dependent
children" are defined for JTPA programs. The interim final rule also
defines the phrase "living in a single residence". The statute
established a standard definition to apply consistently for JTPA
programs, which, within the three categories, covers the vast majority
of family configurations and living relationships in the country. The
definition is not intended to address every possible permutation of
alternative living arrangements.
Although the Department believes that the regulations provide the
Governor with some latitude in defining the term "family", the
comments raised an issue regarding the adverse effect of excluding
"dependent adults" from the definition, which warrants further
consideration. While the Department recognizes that excluding dependent
adults may impact on the eligibility of some family members, the
Department does not believe that this circumstance is included in the
statutory definition. The Department does not believe that it has the
authority to expand upon the definition of "family" beyond the
categories specifically found at section 4 of the Act. No change is
made in the final regulations. Other individuals living in the same
residence, who are not dependent children, would be viewed as
individuals in applying for and being determined eligible to receive
JTPA services.
A few of the commenters accurately noted the difference between the
definition of "family" in the interim final regulations and the SPIR
instructions regarding the treatment of an individual with a disability
for the purposes of eligibility determinations. The SPIR reflects the
definition of "family" in the regulations in effect prior to the
publication of the December 29, 1992, interim final rule. The
definition contained in the interim final regulations indicate that an
individual with a disability "may", for the purpose of income
eligibility, be considered to be an unrelated individual who is a
family unit of one. This change was an administrative error and should
not have been included in the interim final rule. Accordingly, the
definition of "family" is amended to revise the word "may" to
"shall" in the final regulations. This amendment is consistent with
the provisions at section 4(8) of the Act defining the term
"economically disadvantaged".
Family Income
A few comments were received on the change in the definition of
"family income" and the method for calculating such income for the
purposes of determining eligibility for JTPA services. In general, the
nature of the comments were that: (1) The use of the Department of
Health and Human Services' (HHS) poverty guidelines appears to conflict
with the definition of "economically disadvantaged" at section 4(8)
of the Act; (2) the definition does not include certain payments that
have previously been excluded from family income; and (3) the old
definition of "family income" should be retained, with the Governor
defining the term for the purposes of income eligibility
determinations, as has been the case since the inception of JTPA.
A few commenters accurately noted that certain payments that have
always been considered to be "public assistance" were omitted from
the interim final rule. This was an inadvertent oversight in developing
the regulations. The definition of "family income" is amended in the
final rule to reflect that "public assistance" still includes Aid to
Families with Dependent Children (AFDC), Supplemental Security Income,
Emergency Assistance money payments, and non-Federal funded General
Assistance or General Relief money payments, which are exclusions from
income for the purposes of income eligibility determinations. In
addition, certain other Federal statutes exclude additional types of
payments from JTPA income eligibility determinations. For example, Pell
grants are specifically excluded by title IV of the Higher Education
Act, as is income earned while on active military duty and certain
other veterans' benefits, identified at 38 U.S.C. 4213. These
exclusions are incorporated into the final rule. There also has been
concern expressed regarding the inclusion of Social Security benefit
payments as income in determining eligibility for older individuals. It
has been noted that many older individuals fall just above the income
threshold for JTPA because of the inclusion of Social Security benefits
and, therefore, are being denied needed JTPA services. The Department
recognizes that older individuals have special needs which warrant
consideration for their participation and inclusion in programs under
JTPA. In the interest of responding to such needs, the Department is
amending the regulations in the final rule to permit the Governor to
exclude 25 percent of regular Social Security benefits from family
income. The Department believes that this change will address the
concerns of the commenters.
A few commenters raised the issue that the HHS guidelines include
scholarships as income. They expressed concern that individuals who may
receive scholarship assistance based on need, but who are otherwise
economically disadvantaged, would not be eligible for services if such
assistance is counted as family income. In addition, they pointed out
that the inclusion of such needs-based assistance would also impact the
eligibility of another family member who would otherwise be eligible
for services, regardless of whether the individual receiving such
assistance applies for JTPA services. The Department finds merit in the
comments and is amending the definition of "family income" to add
"needs-based scholarship assistance" to the exclusions from family
income. To the extent that existing guidance has been interpreted to
require the inclusion of needs-based scholarship assistance as family
income, these regulations supersede any such guidance.
A few of the commenters noted that the interim final rule appeared
to indicate that only use of the poverty level applied in determining
eligibility. This conflicts with section 4(8) of the Act, which
indicates the use of the higher of the poverty level or 70 percent of
the Lower Living Standard Income Level in determining economically
disadvantaged status. The Department acknowledges that the preamble
language could be misinterpreted. The reference to the use of the HHS
poverty guidelines as the standard for determining economic
disadvantage pertained to the use of the HHS guidelines to define
family income, and not to indicate requirements different from those
found at section 4(8) of the Act. The HHS guidelines, with the
exceptions noted in the definition of family income, would be used to
determine income, and that income figure would apply for the purposes
of income eligibility determinations under section 4(8) of the Act.
Of the several comments received on the term "obligations", most
commenters were satisfied with the definition and asked that it not be
changed. A few commenters wanted it changed as they believed that, as
defined, very little, if any, funds would be reallotted or reallocated.
No change is made to the definition, but the issue of reallotment is
further treated in the discussion of Sec. 627.410.
One commenter pointed out that the term "service provider" was
defined by statute in section 301(b)(3) of the Act. The definition in
these regulations is amended to conform to the statutory definition.
The definition of "stand-in costs" is revised, along with the
regulation at Sec. 627.480(f) (which had been paragraph (g) in the
interim final regulation), so that both provide the same criteria as to
the time when such costs were incurred and the cost category to which
they are chargeable.
Several other comments were received on the definition of
"vendor", most of which generally fell into two groups. One group
encouraged referencing the definition of this term contained in the
Office of Management and Budget (OMB) Circulars A-128 and A-133. The
other group requested more clarification or examples. A few commenters
raised questions of whether vendor goods or services could be
customized, or the extent to which they could be altered, and still
meet the vendor definition.
The Department is applying the standard Federal Government-wide
description of the term "vendor", as it already exists in the audit
requirements and related literature of OMB Circulars A-128 and A-133.
However, A-128 does not contain a definition of the term "vendor" and
the A-133 definition appears to limit the term to providers of
administrative goods and services. For those reasons, and, as explained
in the preamble to the interim final rule, the Department draws upon
the Questions and Answers developed by the President's Council on
Integrity and Efficiency (PCIE) and OMB for its definition. The PCIE
document carries the vendor definition beyond administrative goods and
services and provides examples.
With regard to the question on whether vendor goods or services
could be customized or modified, the Department believes that the
package may be modified to meet JTPA requirements if the vendor
modifies its goods or services for other customers and if it remains
substantially the same as those goods or services regularly offered. An
indication of whether vendor goods or services are substantially the
same as those regularly offered is whether the price does not increase
when it is modified. No change is made to the definition in the final
rule.
The Major Changes in Part 627--General Provisions Governing Programs
Under Titles I, II, and III of the Act are as follows
Subpart B--Program Requirements
Governor/Secretary Agreement
Section 627.200 was amended in the interim final rule to require
that guidelines, interpretations, and definitions adopted by the
Governor be published. A few commenters raised the question of what
constituted "published".
The word "published" is removed in the final rule and the word
"issued" is substituted. Also, language is added to indicate that
such guidelines, interpretations, and definitions adopted by the
Governor are to be those that actually have been imposed or utilized,
consistent with section 124 of the Act. The word "issued" is used to
better reflect the purpose of the requirement that the guidelines,
interpretations and definitions on which the Governor relies are to be
made public prior to their effective date and to assure that they are
actually being used in the administration of the JTPA programs. How the
Governor chooses to inform the public may vary and may depend upon the
nature of the action. It may include means such as issuance of written
directives or letters, inclusion in an electronic network or bulletin
board, publishing in a newspaper, or other public announcement in which
the effective date is indicated.
Waivers
In the interim final rule, the Department requested comments on the
feasibility of authorizing waivers to the JTPA regulatory requirements.
Recently, it has been suggested that some of the administrative burden
or unintended effect of regulatory requirements may be reduced through
the granting of waivers--specifically waivers of regulatory
requirements. This was recommended in the recent report of the National
Performance Review, "Creating a Government That Works Better and Costs
Less." The Department believes that there is merit in this concept and
incorporates a waiver provision in these regulations. Therefore, a new
Sec. 627.201 is added which permits the Governor to request, and the
Secretary to approve, waivers of the regulations for up to four years.
The request from the Governor must be consistent with the provisions of
the Act and demonstrate how the waiver will meet one of the criteria
listed in the regulation.
Absent specific statutory authorization, the Secretary has no
authority to waive statutory requirements. The Secretary may, however,
waive provisions of the regulations which expand upon, interpret or
explicate statutory requirements. The new regulation is intended to
permit waivers of any regulatory provision as long as the waiver does
not affect the basic statutory requirements and if it is shown that the
waiver will improve services, increase skill or educational attainment,
promote coordination or substantially improve the job placement
outcomes of the JTPA program. For example, a State may seek a waiver of
the 25% disregard for social security income for older workers since
that rule is not mandated by the Act. To obtain such a waiver, a state
would have to demonstrate that it would not reduce services to those
most in need. On the other hand, a state could not obtain a waiver of
the regulatory prohibition on using JTPA funds to support employment
generating activities since that regulation simply repeats a clear
statutory requirement. In a more complicated situation, a state could
request a waiver of some of the detailed requirements of the
procurement regulation (Sec. 617.420) if those requirements conflicted
with its own procurement system. In order to obtain such a waiver,
however, the state would have to show that its system adequately
addresses all of the minimum requirements listed in section 164(a)(3)
of the Act and that it would promote coordination with other programs
or would result in either better quality services or better employment
outcomes if the same procurement system were used by those programs.
The Department assumes that the States and SDA's/SSG's are more
aware than is DOL of what waivers they may need. Thus, the Department
does not intend to provide immediate general guidance on what waivers
may or may not be requested. As the Department determines which waiver
requests it will grant and which waivers lead to greater coordination
or better program results, guidance will be issued to enable the JTPA
system to better understand the waiver process and to learn about what
practices work.
Public Service Employment Prohibition
No comments were received on this section. Section 627.205 remains
unchanged, except for extending the public service employment
prohibition to include title II-C funds.
Nondiscrimination and Equal Opportunity
The JTPA Amendments amended section 167 of the Act to require that
the Secretary issue final regulations which would clarify the
application of the nondiscrimination and equal opportunity provisions
of the JTPA and provide uniform procedures for implementing these
provisions. On January 15, 1993, the Directorate of Civil Rights (the
DOL agency responsible for enforcing the various Federal
nondiscrimination and equal opportunity statutes applicable to
federally assisted programs) promulgated a final rule to implement the
nondiscrimination and equal opportunity requirements of the JTPA (29
CFR part 34; 58 FR 4742). Throughout these final regulations, all of
the Department's nondiscrimination and equal opportunity regulations
(29 CFR parts 31, 32, and 34) are cited since they are all applicable
to JTPA federally assisted programs. In order to eliminate the burden
of complying with overlapping regulatory requirements, 29 CFR part 34
provides that compliance by JTPA recipients with part 34 constitutes
compliance with the Department's Civil Rights Act of 1964, title VI
regulations (29 CFR part 31) and with specified portions of the
Department's Rehabilitation Act section 504 federally assisted program
regulations. 29 CFR part 32, subparts A, C, and E.
A few commenters, in connection with Sec. 627.210(a)(3), questioned
the cost category to which expenses for "accessibility" and
"reasonable accommodation" should be charged. This matter is treated
in the discussion of Sec. 627.440, Cost classification. In addition, a
commenter noted that this provision of the regulations should not be
construed to otherwise relieve a recipient or subrecipient from their
responsibility under the law to provide for "accessibility and
"reasonable accommodation". The Department agrees and the final rule
is modified to indicate that the provision applies only with regard to
needs for the JTPA program.
Relocation
Section 141(c) of the Act was revised substantially to prohibit the
use, or proposal for use, of JTPA funds to induce or to encourage the
relocation of a company when such relocation results in the loss of
employment of any employee of the company at the original site. That
section also prohibits certain assistance to any relocating company for
the first 120 days after the company commences operations at the new or
expanded location, if the relocation results in an employee's job loss
at the original site. If the Secretary finds that the State, SDA, or
substate grantee (SSG) has violated either provision, fines are levied
equal to twice the amount of funds expended. If the State, SDA, or SSG
demonstrates that it neither knew nor reasonably could have known
(after an inquiry undertaken with due diligence) that the funds it
provided were expended in violation of these provisions, then only the
amount expended is repaid.
Some commenters questioned whether these provisions prevent SDA's/
SSG's from placing participants in certain job openings for a set
period of time. The Department believes that they do under
circumstances in which there are job losses in other geographic areas
or in which workers are laid off or experience periods of unemployment.
By clarifying and standardizing terms, as well as setting the
prohibition on assistance at 120 days, the Act systematizes the
administration of this prohibition on relocation. Most of the comments
on the interim final rule pertaining to these provisions focused on the
need for clarification of terms such as "labor market area", "loss
of employment", "commercial operations", "pre-award review",
"induce" or "encourage", and on the extent of an SDA's due
diligence and local liability.
Section 627.215(c) defines a "relocating establishment" as a
business entity moving operations "from a facility in one labor market
area within the United States and its territories to a new or expanding
facility in another labor market area." Commenters pointed out that
some rural labor market areas may encompass vast areas and several
counties. Section 4(13) of the Act provides a definition of "labor
market area" as "an economically integrated geographic area within
which individuals can reside and find employment within a reasonable
distance or can readily change employment without changing their place
of residence. Such areas shall be identified in accordance with
criteria used by the Bureau of Labor Statistics of the Department of
Labor in defining such areas or similar criteria established by a
Governor." The key to the Act's definition is that the labor market
area be "an economically integrated geographic area" where an
individual can change his or her employment without changing his or her
place of residence. Thus, for purposes of this relocation provision, a
large rural SDA could contain more than one labor market area.
Several commenters asked for a clarification of "loss of
employment". One stated that when employees at the original location
do not accept relocation job offers and then are laid off, "loss of
employment" has not occurred. The Department believes that, in such a
situation, loss of employment is presumed when a person no longer has a
job with the company at the original location or with any other entity
because of the relocation and the loss of employment at that location
would not otherwise have occurred. This does not include those who
would have retired or quit regardless of the relocation, or those who
were fired for cause.
Several commenters requested further guidance on commencement (or
expansion) of commercial operations. The Department added the term
"commercial" to the regulations to be consistent with the statutory
intent that a viable prohibition on JTPA assistance in the day-to-day
production of goods and services be observed. The term "commercial"
operations is intended to further distinguish between the construction
and operation stage of a business, as well as to demarcate the stage
when products are being produced for commercial distribution.
Similarly, a number of commenters asked whether ongoing JTPA
contracts with a company must be stopped or interrupted when the
company relocates work from another facility. The Department believes
any such contracts with the business within the SDA to which the
company has relocated must be ended for the duration of the time work
is being relocated, since ongoing JTPA assistance was not meant to
accommodate business needs which are the result of work relocation from
another facility.
Additional clarification was also requested on the treatment of
relocation scenarios where large retail store chains close down some
sites sequentially and then open others in widely dispersed locations.
The Department believes that the Act only applies to such cases where a
company closes a retail store in one location in order to move that
retail store's business to another location.
Section 627.215(d) requires a pre-award review to be completed to
document compliance with section 141(c) of the Act. Several commenters
asked for clarification, and one recommended that the States be
responsible for developing the standardized pre-award format. Others
voiced concern about whether SDA's should be held liable if relocation
occurred despite pre-award assurances to the contrary; several stated
that a properly completed pre-award review should prove due diligence
on the part of the SDA and that sanctions otherwise are unduly harsh.
The Department believes that these reviews are for the protection of
the State and the SDA/SSG. Section 627.215(d) is revised to provide
additional guidance for States and SDA's in developing standardized
pre-award review procedures and to indicate items which should be
included in a review. Information should include the names under which
the facility does business, including successors-in-interest, the name,
title, and address of the employer supplying the information; the name
and address of the facility in the other geographic area which is being
closed or from which business is being transferred; the nature of the
products or business being transferred to the new location; the date
the facility will commence or expand operations; and a statement from
the employer about job losses at the old location. The SDA also should
check with the former location to verify the employer's statements
about job loss. The Department believes that a review based upon the
suggestions in the regulations is evidence of due diligence, but does
not hold the SDA harmless when it is subsequently shown that the
statute was violated because the Act provides that the Secretary shall
require repayment.
It is important to note that assistance to relocating businesses is
not an entitlement. Once the State complies with the minimum
requirements set out in these regulations, it may be more restrictive
in its assessment of the company's situation or its determination of
policy regarding relocating employers.
One commenter stressed the importance of monitoring to ensure the
use of consistent pre-award reviews and also recommended that the SDA/
SSG consult with all affected parties, including union representatives
at the original and relocated site if relocation is indicated and JTPA
assistance is sought. Although not required by the regulations, the
State should consider incorporating such procedures in its guidelines
for the pre-award review. Before engaging in negotiations with any
company interested in moving to the area which seeks future JTPA
assistance, the SDA/SSG should initiate a pre-award review.
Finally, a few commenters asked what constituted "inducement" or
"encouragement" to a company to relocate. The Act provides that
"[N]o funds provided under this Act shall be used or proposed for use
to encourage or induce the relocation, of an establishment or a part
thereof, that results in a loss of employment for any employee of such
establishment at the original location." Thus, JTPA funds cannot be
used in any manner for this purpose. Similarly, JTPA funds cannot be
used under the prohibitions concerning employment generating activities
(Section 141(q)). One commenter asked whether written material
containing a general description of JTPA programs could be distributed
to the local Chamber of Commerce. The Department does not believe that
providing material to a Chamber of Commerce which provides a general
description of JTPA programs would fall within the prohibition of the
Act unless the purpose of the material were to induce or encourage
relocation. This regulation is not intended to affect what the Chamber
of Commerce does, as long as JTPA funds are not used.
Guidance on the Issue of Duplicate and Overlapping Payments Among
Federal, State, and Local Programs, Including Pell Grants
Section 627.220 clarifies the interpretation of sections 107(b) and
141(b) of the Act. This section also highlights the importance of
coordination with programs under title IV of the Higher Education Act
of 1965, as amended (HEA), in view of the new coordination provisions
at sections 205 and 265 of the Act, which require SDA's to enhance the
provision of services through coordination with other programs.
The purpose of coordination requirements is to preclude duplicate
or overlapping payments among Federal, State, and local programs to
participants and training institutions and to ensure that the best mix
of programs and funds is available to the JTPA participant.
Accordingly, Sec. 627.220 assigns responsibility to the SDA's to
coordinate the sharing of information that affects JTPA-funded programs
with the school's financial aid officer, provides for contractual
safeguards to prevent duplication or overlap of services and funding
among programs, and emphasizes the requirement for assessing the JTPA
participant's financial needs and available resources as part of the
individual service strategy (ISS). These matters will also be addressed
through technical assistance and guidance jointly developed between DOL
and U.S. Department of Education officials in order to guide both
systems in the development of constructive working relationships.
Comments were submitted on a number of issues addressed in this
section. The issue of whether JTPA funds should pay for tuition or
supportive services in coordination with other payment programs was
raised by some who recommended that clearer instructions be provided.
The exact mix of funds should be determined according to the
availability of each funding source for either training costs or
supportive services, with the goal of making the program affordable and
enabling the participant to successfully complete it.
In addition, commenters were concerned about the complexity of
procedures needed to ensure compliance with sections 107(b) and 141(b)
of the Act. The Department agrees with the need to streamline
procedures. Accordingly, Sec. 627.220 is revised to reflect the
following changes: Sec. 627.220(b)(2) is deleted, and
Sec. 627.220(b)(1) now directs the SDA to assist the participant early
in the objective assessment, as appropriate, to establish eligibility
for HEA, title IV financial assistance programs. In addition,
Sec. 627.220(b)(4) now emphasizes that participants may, but are not
required to, apply for or access student loans or incur personal debt
as a condition of JTPA participation. While the use of student loans to
finance training or education is not prohibited and may be explored in
the assessment process, loans should only be used if the participant
agrees and is made fully aware of the responsibilities that the loan
entails. Participation in a JTPA program may not be conditioned on
applying for or using a loan. Finally, Sec. 627.220(b)(4) clarifies the
need for information sharing which must take place for any financial
aid awarded after the participant enrolls in an agreed-upon program.
The discussion of HEA student assistance programs in this provision
raised a concern that title II participants may be required to access
loans. The Department wishes to stress that this is not the case.
Section 627.220(b)(4) emphasizes the importance of matching the
participant with an affordable program. As a general consideration,
individuals should not be required to incur debts as a condition of
participating in JTPA programs. Indeed, better identification and
coordination of funding sources and improved evaluation of the
participant's ability to complete a program successfully as part of the
ISS should address the need for personal indebtedness to finance JTPA
participation. Thus, Sec. 627.220(a) should not be construed to mean
that loans must be considered resources for the purposes of this
regulation.
The reason for including HEA, title IV student loans in the
information-sharing requirements is that in the past, some JTPA
participants have been required or encouraged to take out loans to pay
for their training without the knowledge of the SDA's. However, the new
requirements for objective assessments and developing ISS's for
participants mean that SDA's must take responsibility for evaluating
and documenting the participant's financial needs and coordinated
ability to pay for an agreed-upon training program before he/she
enrolls in the program.
In fact, several commenters stressed the importance of evaluating
all potential HEA funding sources as part of the development of the ISS
and that these funding sources be identified and applied for while the
ISS is being developed. See Sec. 627.220(b)(2).
Since federal Pell Grant eligibility can be established before a
student enrolls and a Pell Grant can be used at any participating
institution that an eligible student attends, SDA's and SSG's should
expedite the application process by providing application forms to
individuals and providing assistance, as necessary, in filling out and
submitting these forms. Although a few commenters were concerned that
undue delays in the provision of services might result, it is important
to note that Pell Grant eligibility guidelines are readily available,
as is the application form for establishing eligibility, and the
financial information required to complete the application is already
required to ascertain eligibility for JTPA programs. Furthermore, the
Department of Education makes funds available to participating schools
before the start of the school year to pay eligible students. These
funds can be accessed as soon as eligibility is documented, the cost of
attendance (COA) is calculated, and enrollment occurs. Although a few
commenters suggested that establishing Pell Grant eligibility might
represent an administrative burden, the sequence described herein in
fact streamlines the funding decision process for the JTPA delivery
system and permits coordination of funding sources in the context of
the ISS.
A number of comments questioned a perceived inconsistency between
Department of Education and Department of Labor guidance on whether HEA
title IV or JTPA funds must be used first. The Department does not
think there is any conflict with Department of Education regulations
with regard to coordinating with JTPA funding decisions for tuition
payments because of the flexibility in the use of the Pell Grant for
tuition or other education related expenses. These JTPA regulations
only require that, when a Pell Grant is awarded to a JTPA participant,
JTPA funds cannot be expended on costs that already have been paid by
federal Pell Grant funds.
One commenter questioned the need for including the participant's
agreement to the disposition of the Pell Grant in the contract with the
school, since it is understood that the participant will sign off on
the ISS, which includes information to be shared. Another commenter
raised the issue of the Privacy Act as a reason why schools may not
share information regarding JTPA participants with SDA's. To clarify
the issue of participant agreement, the final rule includes the
participant's agreement to the information-sharing process in
Sec. 627.220(c).
Strengthening monitoring provisions was the concern of a few
commenters, who stated that requiring the school's financial aid
officer to share financial information on JTPA participants with the
SDA is key to following up on the participant's ISS and to coordinating
JTPA funds with other sources of funding. The Department carefully
considered comments which called for reduced coordination requirements
but believes that information sharing agreements are necessary to
ensure compliance with this section; however, the separate sharing of
students' names may not be necessary since JTPA agreements with
training institutions will include the names of participants for whom
payments to the school are being made. Therefore, this requirement is
removed from the final rule.
Several commenters reported that schools are holding JTPA
participants personally liable for payments withheld in accordance with
the terms of performance-based contracts. Performance-based contracts
(or any other agreements with service providers) must prohibit schools
from holding the student liable for outstanding charges. Otherwise, the
performance-based contract would be undercut because the incentive for
the school to perform would be removed. This practice is prohibited by
the U.S. Department of Education as described in the Federal Student
Financial Aid Handbook, Pell Grant Section. Therefore, JTPA program
operators should be aware that the use of certain contracting methods,
particularly contracts for classroom-sized projects and fixed unit
price, performance-based contracts, affects how educational
institutions are permitted to calculate the COA, which determines the
amount of the participant's Pell Grant. An institution can include a
tuition and fee charge for calculating the federal Pell Grant COA only
when contracts or agreements specify the tuition and fees (i.e.,
individual referrals), when there is a charge recorded to the student
(when JTPA or another source pays the tuition and fee charge and the
student would be required to pay these charges if they were not paid by
JTPA or another source). Two types of JTPA agreements do not allow
schools to include tuition and fees in the Pell COA or to make a charge
to the student for these costs: (1) Blanket agreements that do not
specify an individual amount to be paid by the SDA for tuition and fees
but may include a number of students to be trained and an amount of
compensation to be paid to the school; and (2) performance-based
contracts (to the extent they are still used).
Employment Generating, Economic Development, and Other Activities
Section 141(q) of the Act prohibits employment generating
activities (EGA) with JTPA funds. Included in the prohibition are
economic development activities, revolving loan funds, capitalization
of businesses, contract bidding resource centers, and similar
activities.
Section 627.225(b) encourages SDA staff to work with economic
development agencies and to participate on economic development boards
and commissions to provide information about JTPA. Such participation
may assist SDA staff in making informed decisions about community job
training needs and the future direction of local JTPA training. In
addition, the prohibition of EGA should not be taken to prohibit
ordinary employer outreach and job development activities.
Section 141(q) of the Act also includes a prohibition on foreign
travel. A number of comments were received requesting that the
prohibition in the interim final regulations on using title I, II, or
III funds for foreign travel be narrowed. While the Department agrees
that allowing foreign travel would be beneficial with the
implementation of NAFTA, it was clearly the intent of the Act to
restrict the use of funds for economic development and related
activities. However, other foreign travel necessary to the conduct of
JTPA program may be allowable; therefore, Sec. 627.225(a) is revised to
clarify that the prohibition on foreign travel applies to economic
development and related activities prohibited by the Act.
A commenter was concerned that a prohibition on foreign travel
would prohibit staff from Territorial or Freely Associated States
recipients, such as American Samoa and Micronesia, from traveling to a
State. While the narrower interpretation of prohibited foreign travel
described above should resolve this, the Department wants to clarify
that, under section 4(22), such recipients are considered States for
JTPA purposes and as such, inter-recipient travel would not be
considered foreign travel.
Several commenters requested clarification about what cost
categories the remaining allowable EGA should be charged. To clarify,
there are no allowable employment generating activities available under
JTPA. The allowable activities discussed in this section are otherwise
authorized activities and should be charged to the category of benefit
determined with guidance provided by the Governor.
Displacement
The provisions in the regulations have not been substantially
changed from the prior Sec. 629.4 and closely reflect the provisions of
section 143(b) of the Act. No comments were made on this section and no
changes are made.
General Program Requirements
Section 627.235 of the interim final rule sets forth some general
program requirements for the JTPA program, including specific reference
to the provisions of sections 141, 142, and 143 of the Act, reference
to the selective service requirements of the Act, continuation of the
requirement for timely enrollment, and the new requirements of section
124 of the Act regarding the imposition of State and SDA requirements.
A few commenters suggested setting forth extensive procedures
regarding the appropriate consultation and concurrence of organized
labor. The Department believes that the provisions of the Act, though
somewhat revised, are clear and that in most instances SDA's and others
have developed procedures for ensuring that labor is consulted, as
appropriate, in the development of training programs, and that the
affected labor organization concurs in writing with training agreements
when there is a collective bargaining agreement, even if it is not
impaired. In the years since the inception of JTPA, this has not
systematically emerged as an issue. Accordingly, the final rule is not
changed.
One commenter suggested that the only aliens who should be eligible
for JTPA participation are permanent resident aliens. The commenter's
reasoning is that to serve other aliens in the United States on a
temporary basis would waste scarce JTPA resources. The
nondiscrimination provisions of section 167 of the Act set forth the
requirements for the participation of individuals who may not be
citizens of the United States, including those who are not permanent
resident aliens. The final rule is not changed.
A commenter suggested that this section be revised to indicate that
JTPA is not an entitlement program. The Department believes that the
provisions of sections 204(c)(5), 264(d)(6) of the Act and Sec. 628.525
of the interim final rule adequately address this subject by making it
clear that neither eligibility nor participation in a JTPA program
creates an entitlement to services. The final rule is not changed.
Several commenters requested clarification of when the "45-day
clock" in paragraph (c) begins for purposes of enrollment into JTPA,
particularly in light of the new program requirements for targeting and
assessment. The Department agrees that such guidance would be helpful
and the final rule is changed to indicate that the clock begins with
the date of eligibility determination.
In connection with the requirements of paragraph (e), some
commenters questioned the method for determining whether a requirement
which is a rule, regulation, policy, or performance standard is imposed
by a State or an SDA. This question is raised particularly when the Act
or these regulations may require the Governor or SDA to develop such a
requirement. In general, any requirement that is issued beyond the
actual text of the Act or these regulations should be identified to the
source (State or SDA) that issues it. This guidance applies only to
requirements that are not specifically called for (i.e., "the Governor
shall" or "the SDA shall") by the Act or these regulations. Note
that, for these purposes, the term SDA as used here includes any entity
empowered to act for the SDA including the grant recipient,
administrative entity or the private industry council. See also the
discussion of Sec. 627.200 above. The final rule is changed to indicate
that it applies to State and SDA requirements that are in addition to
those of the Act and regulations.
On-the-Job Training (OJT)
Section 627.240 of the interim final regulations sets out
requirements pertaining to the on-the-job training (OJT) activity
authorized at sections 204(b), 253(a), 314(d) and in title IV of the
Act. The interim final regulations dealt with a few broad areas related
to OJT, such as the duration of OJT, OJT payments, contracts for OJT,
employer and participant eligibility, as well as a definition of OJT.
any of the commenters observed that the requirements for OJT have
become so burdensome as to make OJT no longer a viable JTPA training
option. The 1992 Amendments made a number of changes in the
requirements for OJT programs which are implemented in these
regulations. These changes were aimed at eliminating perceived abuses
in OJT programs. While it is true that these new requirements do limit
some flexibility in operating OJT programs, the Department does not
agree that the new requirements in any way make OJT a less desirable or
feasible training option. Indeed, the Department believes that OJT is
an important training vehicle for the JTPA program. As demonstrated by
The National JTPA Study (December 1994) , OJT provided "the most
consistent positive program impacts on the earnings of adults * * *.
Both women and men in this subgroup enjoyed large positive earnings
gains that were statistically significant and sustained throughout the
30-month follow-up period." The Department believes that entities
which deliver OJT will find that these final regulations set forth only
those requirements which are necessary to preserve the integrity of the
OJT activity and to ensure that it remains an effective training tool.
With regard to the definition of OJT in paragraph (a), it is
essential to recognize that by using OJT, the JTPA system is purchasing
occupational training needed by a participant--often training not
elsewhere available, which is provided through employment that will
usually continue with the employer after the training is completed.
(Note the provisions of paragraph (a)(2) of the final rule regarding
placement of OJT participants with other employers). The objective of
OJT is not, as suggested by some commenters, to subsidize wages or to
reduce an employer's wage costs, but to purchase training and to
provide an opportunity for JTPA participants that they might not
otherwise have. The contents of paragraph (a) are reorganized into
three subordinate paragraphs for better clarity. Language is added in a
new paragraph (a)(1) to clarify the definition of OJT by: (1) Making
reference to the ISS as part of the process for determining whether an
individual should be offered OJT, (2) making specific reference to the
OJT agreement, and (3) making specific reference to the principle that
the purpose of the OJT arrangement is to purchase training in exchange
for reimbursement of the employer's extraordinary costs.
By far the most prevalent comment on the interim final rule was
that the Department needed to clarify the provisions relating to the
limitations on the duration of OJT which were contained in paragraph
(b) of the interim final rule. The final rule clarifies the durational
rules for OJT. The basic rule is that OJT is to be for the length of
time normally needed for training to acquire the skills needed to
perform the occupation up to a 6-month length of training. OJT may not
exceed that 6 month maximum training period except in cases in which
the training is less than full time and the training period will exceed
6 calendar months. In that case, OJT may not exceed 500 hours. To more
clearly convey these rules, paragraph (b)(1) is broken into four
subordinate paragraphs. Paragraph (b) is also reordered for greater
clarity. Six months of training is defined as the amount of time an
employee would work on a regular or full-time basis in the occupation
for which the OJT contract is written in a 6 month period. If the
training period is shorter, the training time is still considered to be
the amount of time an employee would work on a regular or full-time
basis for that period.
Commenters observed that OJT contracts were usually written in
terms of hours and wondered how this related to the 6-month limitation.
The Department wishes to promote local discretion in developing OJT
contracts; therefore, the regulations do not prescribe a particular
time category by which SDA's designate the 6-month period, so long as
the designation is consistent with the purpose of the statutory
limitation. For example, the 6-month training period may be expressed
in the number of hours (usually not more than 1,040 working hours),
days (180 days), or weeks (26 weeks in 6 months) that an individual
would work full-time in a 6-month period. Contracts for OJT which are
expressed in any of these ways will be acceptable. In simplest terms,
an OJT employee who enters employment on May 1 and works continuously
on a full-time basis on the OJT occupation would complete 6 months of
training on October 31. Whatever time category the SDA chooses to use
to designate the duration of the OJT contract, it should treat any
adjustments (such as those provided for in the discussion below) in the
same terms, so if there is an adjustment for illness to a contract
written in working hours, the adjustment will be made in working hours,
not weeks or days.
If the OJT period is interrupted for a full day or more by events
beyond the OJT trainee's or the employer's control, such as holidays,
illness, plant downtime, or strike, such time may be added to the
original period. Thus, using the time period of the above example, if
an OJT participant is in OJT to learn a machine operation but is ill
for 10 working days (approximately 80 working hours, two working weeks,
or one-half of a working month) the OJT period may end approximately
November 11 through November 15 (instead of October 31) depending on
how duration is designated in the contract. (The employer would not be
reimbursed for the period in which the participant is not in the OJT
occupation.) The objective of this rule is to assure that the
participant receives the full period of training (up to 6 months) in
the occupation for which the OJT contract is written. This rule, of
course, applies only to time that a participant was scheduled to spend
in the actual OJT activity. It does not apply to any of the
participant's other activities, either in training or outside of their
OJT employment.
Several commenters expressed the concern that the regulations were
too prescriptive in requiring OJT in higher skilled occupations. The
language of Sec. 627.240(b)(2) of the interim final rule was merely
intended to encourage the use of OJT in higher skilled occupations.
Language is added to the redesignated Sec. 627.240(b)(5) to make this
clear. Other commenters were concerned that the 6-month limitation was
inconsistent with providing training in very high skilled occupations.
The Department agrees that there are some higher skilled occupations
for which OJT training may not be available because of the 6-month
limitation. Nevertheless, that limitation is statutory and cannot be
ignored. The Department believes that there are still a number of
higher skilled occupations for which OJT is appropriate and that it is
consistent with both the nature of OJT and with the intent of the Act
that States and SDA's seek to use OJT to provide training in those
kinds of occupations. Therefore, the language encouraging OJT in higher
skilled occupations remains in the final regulation. The Department
wishes to acknowledge several comments by noting that, while it
encourages OJT in high-skilled occupations, this is not a strict
requirement. Also, while OJT contracts may recognize training times
that are longer than 6 months, JTPA reimbursement to the employer is
limited to 6 training months.
A number of commenters wanted to know how the 500 hour exception to
the 6-month limitation works. First of all, it should be repeated that
the overall limitation on the duration of OJT is 6 months, not 500
hours. This exception will apply in only a limited number of
situations, such as in the cases of individuals who are disabled, who
have limited employment availability due to child-care or other needs,
or who must work a limited or part-time schedule. The final rule makes
it clear that individuals who have not received 500 hours of OJT within
6 months may receive 499 hours of OJT, even if this results in OJT in
excess of the 6-month duration. The 499 hour figure is used because it
reflects the "less than 500 hours" language contained in the Act. For
example, if an individual works for 15 hours a week and 6 months later
has only been in training for about 360 hours (roughly 60 hours a month
for 6 months), the participant could be continued in OJT for up to
another 139 hours. The objective is to assure that participants who
must work limited or part-time schedules receive up to 499 hours of
OJT, in situations when up to 499 hours of training is appropriate.
In response to a comment that the interim final rule unnecessarily
requires that the regular training duration provided for in a standard
reference be reflected in the participant's ISS, the final rule
provides that the training time for OJT must be reflected in the ISS
only when the training time varies from the average training time for
the occupation, using the methodology adopted for computing training
time. Thus, when greater or lesser OJT periods than those provided in
standard reference works are necessary, the variation must be reflected
in the participant's ISS.
Several commenters noted that the language in paragraph (c)(1) of
the interim final rule regarding employer payments is more restrictive
than the provisions in the Act. In response to these comments, the
final rule is revised to use the language of the Act, which provides
that payments shall not average more than 50 percent of the wages paid
by the employer to such participants. This change provides the SDA with
some flexibility in structuring OJT contracts with an individual
employer for multiple participants. Compliance with the statutory
requirement is based upon the total allowable wage base (i.e., regular
wages and scheduled increases reflected in the contract) for all JTPA
participants. Additionally, in response to comments which questioned
the wage basis for OJT reimbursement, the final rule clarifies in
paragraph (c)(2)(ii), that OJT reimbursement may be based upon regular
pay and scheduled increases, and not, as provided in paragraph
(c)(2)(iii), on overtime, shift differential or other premium pay. The
Department believes that regular pay and regular scheduled pay
increases reflect the wages specified in the Act and that overtime and
shift differential do not imply a greater level of training cost to the
employer. Finally, to clarify a longstanding issue in regard to OJT,
paragraph (c)(2)(iv) indicates that payments are not to be based on
time when the participant is not in training such as on holidays. Such
time may also be excluded from the calculation of the duration of OJT.
Section 141(g)(1) of the Act provides that payments to employers
"are deemed to be" in compensation for the extraordinary costs
associated with training JTPA participants. Section 141(g)(3)(A) of the
Act provides that each contract "specify the types and duration of on-
the-job training and other services to be provided in sufficient detail
to allow for a fair analysis of the reasonableness of proposed costs *
* *." This latter requirement was reflected in the interim final rule.
Some commenters raised a question about the apparent conflict between
these provisions, and the Department wishes to clarify this area. The
final rule prohibits the imposition of a requirement on employers to
document extraordinary costs. The Department believes that payments to
employers should not produce a recordkeeping burden on employers by
requiring the documentation of extraordinary costs that would
unnecessarily make OJT a less desirable training option.
The purpose of Sec. 627.240(d)(1) of the interim final rule was to
reflect the requirements of section 141(g)(3) of the Act. It was not
intended to require specific documentation of an employer's
extraordinary costs. The Department views the final rule as requiring
no more recordkeeping of an employer than is already required of the
employer for other purposes, (e.g., an employer would have to maintain
payroll records to demonstrate that a participant worked the number of
hours that were billed, but payroll records are already required to be
kept for a variety of other federal and state purposes). Rather, the
Department believes that the intent of this requirement is that the
contract accurately reflect the basis for the contract costs, including
the number of participants, occupations, wage rates, training content
and the duration of training, provisions for adjustment (such as
scheduled wage increases), and the basis for any other payments (such
as separately scheduled classroom training as described in paragraph
(d)(4) of this section).
The final rule is revised to clarify this requirement by removing
the confusing language regarding the analysis of the reasonableness of
costs and by reflecting the minimum criteria that will be necessary to
make the reasonableness analysis.
Several commenters thought that the requirements in paragraph
(d)(2) that the OJT agreement provide information on the training by
skill area or task was too prescriptive. These requirements have been
removed in the final rule.
In addition, in response to a comment seeking clarification of the
meaning of "types" of OJT, this language is removed in the final rule
to eliminate confusion. The idea behind this language was simply to
capture other kinds of training, such as classroom training, that will
be provided in the course of the OJT training period. The more specific
language in the final rule will capture the same information. Finally,
this discussion does not affect the requirements for broker contracts
in which there is to be an adequate reflection of the work performed by
the broker.
Section 627.240(f) of the final rule provides that JTPA
participants must be assessed and that OJT must be determined in the
ISS to be a suitable training vehicle. This provision is also
applicable if the participant is referred to JTPA by an employer. If
the participant is determined not to be suitable for OJT or for the OJT
slot available from the specific employer, the participant is not
eligible for OJT with that employer.
A commenter sought clarification of Sec. 627.240(f)(3) regarding
OJT with a participant's previous employer, particularly in connection
with "upgrading". This paragraph is intended to address a perceived
abuse of the OJT activity in which the JTPA program provides OJT
assistance to an employer to "train" a previous employee who had been
laid off or separated when the proposed participant already has the
skills required for the job. The training is in the same occupation for
virtually or nearly the same work. In view of the limited availability
of JTPA funds and services, individuals previously employed by or
recently hired by the employer prior to referral to JTPA should not
normally be enrolled in JTPA-funded OJT. In order to conduct skill
"upgrading", which is allowable under section 204(b)(1)(L) of the
Act, and retraining, conditions for eligibility and participation must
be met and there must be a demonstrable difference between the job and
skill requirements of the upgraded job into which the participant is
being trained and those of the current or prior job. The prohibition
against using OJT for "upgrading" with the participant's employer is
maintained in the final rule because the Department believes that the
JTPA program should not unnecessarily subsidize an employer's normal
workforce training expenses. Paragraph (f)(3) is revised to eliminate
confusion about whether the rule was intended to address the
participant's previous employer or the participant's current employer.
The final rule makes it clear that the prohibition applies to both and
that it applies only to OJT.
Many commenters questioned the specific provisions of
Sec. 627.240(g)(1) of the interim final regulations which require that
an OJT "employer who had two or more previous OJT contracts" and
exhibited a pattern of failing to provide long term employment would be
ineligible for other OJT contracts. They pointed out that it is not
possible to establish a "pattern" with two cases. In response to
these comments, the final rule is revised to reflect Congress' intent
that employers who fail to offer continued employment, unless there is
an acceptable reason, should not receive additional OJT contracts and
that the State must issue procedures to implement this requirement. The
JTPA program should not be used to underwrite an employer's labor
turnover. The Department points out that the provision in the interim
final rule specified two contracts because, by definition, to have a
pattern there must be more than one. The Department accepts that there
may be instances in which a policy may use as few as two contracts, or
more than two, to establish a pattern and will accept reasonable
interpretations of what constitutes a pattern. The Department chooses
not to specify what constitutes a pattern and leaves that decision to
the State. In the final rule, Sec. 627.240(g) is redesignated
Sec. 627.240(h).
A number of commenters objected to the provisions in the interim
final rule that required on-site monitoring of each OJT contract and
on-site monitoring by an OJT brokering contractor before making
payments. The Department acknowledges these concerns and revises these
monitoring requirements. The final rule removes the prescriptive
requirements for monitoring each contract and specifies that recipients
and subrecipients are required to conduct periodic on-site monitoring
of OJT employers. The requirements pertaining to the areas to be
verified through monitoring remain the same. In addition, the
monitoring requirements for brokering OJT contractors remain the same
since they are requirements of the Act.
In response to several comments which argued in favor of providing
OJT through employment agencies, the final rule also provides a
clarification of the conditions under which employment agencies and
employee leasing agencies may be eligible for OJT agreements. The
purpose of OJT is to provide training through an employer, not to
subsidize wages or reduce agency costs. Thus, the final rule indicates
that OJT agreements with employment and employee leasing agencies are
to specify the employer that provides the training and the entity to be
reimbursed the costs of training. Note that the word "temporary" is
deleted from the rule since the term "employment agency" includes
agencies that may arrange employment on less than a full-time basis.
Work Experience
The provisions of Sec. 627.245 of the interim final rule set forth
requirements pertaining to work experience. The work experience
activity is related to other activities in which there is work-based
training, such as entry employment experience and limited internships,
but the activities may differ due to the circumstances of the work
experience assignment. Such circumstances could include whether the
participant is an adult or a youth, whether the host employer is
public, private non-profit, or private for-profit, whether an employer-
employee relationship is established, and whether there is an
expectation of continued employment, or whether the activity is a
short-term training opportunity. For example, entry employment
experience and limited internship in the private sector are not
allowable activities for adults. "Work experience" is available only
in the public or private non-profit sector. The Department acknowledges
the relationship among these activities but chooses not to provide
specific definitions beyond that for work experience so as not to
arbitrarily limit development of types of work-based training
activities. The Department wishes to encourage a variety of approaches
to these activities. For that reason, Sec. 627.245(a) is revised by
deleting the reference to limited internships and entry employment
experience.
The definition of work experience clarifies that work experience is
primarily a training, not an employment, assignment. The words
"employing agency" are removed from the interim final rule to address
the concern that work experience automatically establishes an
employment relationship.
A few commenters noted that the provisions of paragraph (b) of the
interim final rule that dealt with the types of individuals for which
work experience would be "suitable" did not adequately reflect the
circumstances under which it would be appropriate to use work
experience. The final rule is revised to delete this characterization
of the individuals for whom work experience is appropriate. The
paragraph now only states how work experience is to be designed.
In response to comments criticizing the limitations on the duration
of work experience, entry employment experience, and limited
internships, the Department has decided to remove the limitations. The
Department believes that this change will permit the development of
activities that may better meet the individual needs of participants
and the final rule indicates that this should be reflected in the ISS.
The Department expects that discrete periods of work experience
participation will be limited in duration; although, in response to
comments and in recognition of successful program models, the
Department acknowledges that an individual may benefit from
participation in multiple work experience opportunities.
Many commenters asked for removal or revision of the provision that
work experience is suitable for individuals who have been "out of the
labor force for an extended period of time * * *." They pointed out
that this is difficult to interpret, may vary depending on the previous
experience and other characteristics of the participant, and is the
kind of provision that could unnecessarily lead to varying
interpretations and audit exceptions. The final regulations provide
only that work experience should promote the development of good work
habits and basic work skills. In addition, it is the Department's
belief that the work experience activity provides an excellent
opportunity to provide non-traditional employment opportunities, in a
variety of settings, for women and youth.
Several commenters suggested that the prohibition of work
experience in title III be removed or revised. Since title III
dislocated workers generally have, by definition, previous employment
under which work habits and basic work skills are developed, the
provision in the interim final rule is not revised.
Finally, a few commenters asked for clarification of the
requirement that work experience be combined with basic or occupational
skills training--particularly in light of one of the examples provided
in Sec. 628.535. This is addressed in the discussion of Sec. 628.535,
but by way of general guidance, the prohibition may not be addressed by
combining work experience with any of the other proscribed stand-alone
activities such as job search or job club.
Subpart C--Payments, Supportive Services, Benefits, and Working
Conditions
A number of comments were received on Subpart C of the interim
final rule, Payments, Benefits and Working Conditions. The Department
has rethought its positions in response to these comments and the final
rule contains a considerable number of changes. Subpart C is revised,
retitled, and renumbered. The following discussion is intended to
clarify the Department's position on payments and supportive services
and identifies the changes from the interim final to the final
regulations. In keeping with the Amendments' emphasis on targeting
services to the hardest-to-serve and the need for longer-term
interventions, these regulations clarify the widened array of payments,
supportive services, benefits and working conditions available or
required under the Amendments.
The Amendments provide for comprehensive supportive services and
for their allocation to the training-related and supportive service
cost category. The regulations implement these provisions and also
provide for clarification of the various types of payments for title II
programs. Some payments can be allocated to the training-related and
supportive services cost category while others can be allocated to the
training cost category. The treatment of specific expenditures is
provided for at Sec. 627.440 of these regulations.
Service Strategy Overview
A number of commenters expressed confusion regarding appropriate
documentation procedures and requested clarification on the
requirements and the mechanisms for providing payments and supportive
services to participants. Several commenters suggested that while the
legislation clearly intended to increase supportive services and
payments, the requirements in the interim final regulations would
probably limit their usage. In response, the final rule is revised to
minimize the amount of documentation necessary to establish an
individual's need for supportive services and payments while
maintaining the necessary safeguards to prevent misuse of program
funds.
The final rule is revised to permit a simplified service strategy.
For example, under title II, it is intended that a participant, based
upon the needs identified in the objective assessment and recorded in
the ISS, will be provided or the program will arrange for the necessary
payments and supportive services to enable the participant to meet the
goals set out in the ISS. The necessary payments and supportive
services may be provided or paid for in different ways. For example,
participants may receive a payment from a training activity, such as an
employer-paid wage for OJT, or work-based training payment for work
experience which may be counted toward meeting their needs in addition
to other supportive services like child care. Participants may also
receive supportive services, such as financial assistance under title
II that will provide for the participant's general welfare. If the
participant has additional specific needs not met by the supportive
services, including a need for financial assistance, title II further
provides for an individually determined needs-based payment may be made
to the participant.
The final regulation provides for significantly different
documentation requirements than did the interim final rule. An
individual determination of need, over and above what normally occurs
in the objective assessment and ISS, is not required to justify the
provision of any supportive service. When a participant is given money
rather than a voucher for a supportive service, SDA's and SSG's need
not ensure that the payment is exactly equal to the participant's
expenditure. The policy of the SDA or SSG may allow for a fixed
reimbursement or a schedule of different reimbursement amounts for a
type of service, however, the policy must provide the rationale for
such amounts. Under title II, if the objective assessment and the ISS
indicate that a needs-based payment is also necessary, then that
determination will be sufficient to make the payment. A payment may
then be made in accordance with a locally developed policy and recorded
in the ISS along with the other services provided. Changes to reflect
this strategy are made throughout Secs. 627.305 and 627.310 of the
final rule.
Shifting to more specific recommendations, in response to comments
that the supportive services section be separated from the benefits and
working conditions section, the supportive services regulations are now
found under Sec. 627.310, while benefits and working conditions are now
addressed under a new Sec. 627.315. Section 627.300 and the title of
subpart C are also amended to clarify these changes.
A comment was received regarding the ability to ensure that
services were provided equitably. This concern is heightened with the
reduction in documentation required when providing supportive services
and payments. Therefore, a new provision is added at
Secs. 627.305(a)(3) and 627.310(d) requiring that SDA's ensure, to the
extent possible, that similarly situated participants receive similar
payments or supportive services, as appropriate.
Payments
A few commenters requested clarification on when payments shall
count towards the determination of income for other programs that serve
JTPA participants. To clarify, language from section 142(b) of the Act
is now included in Sec. 627.305(a)(4). Any payment under JTPA, broadly
defined for this section as any JTPA funds received by a participant
except OJT wages (since OJT wages are paid by an employer), shall not
be counted for purposes of determining income for other Federal or
federally assisted programs, except as provided under the Social
Security Act. For example, the Department of Housing and Urban
Development has issued a policy notice (PIH 92-48, October 16, 1992)
which states, "[A]ll payments received under programs funded in whole
or part under the Job Training Partnership Act are excluded from Annual
Income" for purposes of Public and Indian Housing. The major exception
to disregarding JTPA income is under title IV-A of the Social Security
Act which governs Aid to Families with Dependent Children (AFDC). The
AFDC regulations do allow States flexibility in allowing a dependent
child's JTPA income to be disregarded as income for AFDC purposes (45
CFR 233.20(a)(11)), but generally, any JTPA payment to an adult AFDC
recipient, except to cover the cost of child care, transportation,
work-related expenses or work-related services, is counted as earned
income. States are encouraged to work with their welfare departments in
developing State policies specifically for JTPA. SDA's also are
encouraged to coordinate with their local AFDC agency to determine
local policies on income disregards and to consider co-enrollment with
JOBS, where appropriate, so that the participant may be aware of all
available services.
Section 627.305(a) is revised to include a new paragraph (a)(6)
which authorizes SDA's to set fixed levels for payments. Section
627.305(b) is amended by replacing the words "formula or procedure"
with the word "policy". These changes permit SDA's to make needs-
related payments based on a payment schedule without any other
documentation than that used to develop or support the schedule. Only
in cases in which a participant's needs exceed the payments available
under the payment schedule is any other documentation or justification
necessary. The change in the wording of Sec. 627.305(b) also is
intended to make it clear that there are no extraordinary documentation
requirements to support the SDA's system for payments above its payment
schedule. All that is needed is a reasonable policy based on the
circumstances of the local community.
Needs-based payments. Needs-based payments may be made in
circumstances where fixed or scheduled supportive services fail to meet
the needs of an individual to participate. For example, if a standard
transportation reimbursement is $2 a day for participants, but a
particular participant must spend $10 a day to commute to a training
program, this need would be identified in the objective assessment and
recorded in the ISS. Then a needs-based payment of $8 could be made to
meet that participant's transportation needs. No additional
documentation other than the transportation need identified in the
objective assessment and recorded in the ISS is required for the
initial $2. However, a specific notation of the additional need would
be identified in the objective assessment and recorded in the ISS for
the $8 needs-based payment. While this payment should be the amount
"necessary for participation," it also may be a scheduled or fixed
amount (see the discussion of supportive services, below, for an
additional discussion on "scheduled" or "fixed amount"), as
provided for in the SDA policy.
Incentive and bonus payments. A number of comments were received
requesting that the ability to use incentive and bonus payments not be
limited to title II-C. Several commenters indicated they would prefer
to use incentive and bonus payments rather than a wage or training
payment to encourage participant performance. Since it is important to
have tools to reward participant accomplishment, and incentive and
bonus payments are not prohibited in those titles, the final rule is
amended to clarify that incentive and bonus payments also may be made
to participants under titles II-A and II-B.
Approximately equal numbers of comments were received requesting
that Sec. 627.305(c) require that incentive and bonus payments be based
upon attendance and performance as there were comments requesting
attendance or performance. Several commenters thought that teaching
life skills, such as good attendance, is an appropriate function of
JTPA and should be rewardable. Because section 264(c)(2)(D) of the Act
uses the word "and", the final regulation is revised to reflect the
statutory language. Payments are to be reasonable and commensurate with
the behavior being rewarded. The policy for such a payment is to be
included in the SDA job training plan, which is approved by the
Governor. The provisions of paragraph (c) are amended in the final rule
by removing paragraphs (c) (2) through (4), to reflect the
simplification of this topic.
Training payments. To permit longer term participation,
Sec. 627.305(d) provides for training payments to be paid for certain
title II activities, such as work experience and limited internships.
Section 627.305(e) provides for training payments for participation in
other activities, such as classroom training, if the concurrent work-
related activity is for more than 50 percent of the training time.
Several commenters indicated that the work-based training
requirement for adults in classroom training combined with work
experience at interim final Sec. 627.305(e)(2) may not always be
appropriate and was redundant with regard to the requirements of
section 204(c)(1) of the Act on workplace context and integration.
Therefore, the Department encourages SDA's to link classroom training
to the work-based training activity, but the condition for making such
payments to adults that the classroom training have a workplace context
is removed.
The term "wage" is replaced with "training payment" or
"training payment for combined activity" to reflect the rare
circumstances when a participant may not be in an employee-employer
relationship as defined by the Internal Revenue Service, and also to
make clear that the SDA may not be required to make a payment equal to
the minimum wage. The minimum wage requirement still exists where
participants are receiving wages as outlined in section 142 of the Act.
The Department believes that payments in most work-based training
activities should be equal to or exceed the minimum wage to better
approximate a work setting. With the exclusion of on-the-job training
and disaster relief employment, this change from "wage" to
"payment" runs through the entire payments section.
Supportive Services. Supportive services are often critical in
serving those most in need. The use of supportive services is
encouraged to enable the hard-to-serve population to participate in
longer term interventions. The objective assessment and, under title
II, the ISS, is the basis for determination of need for a particular
supportive service. The major change in Sec. 627.310 is that further
documentation of need is not required. Supportive services may be
provided in-kind, through cash assistance, or by arrangement with
another human service agency when necessary to enable an individual
eligible for JTPA training, but who cannot afford to pay for such
services, to participate in JTPA-assisted programs. Several commenters
indicated that the administrative determination and documentation of
participants' actual cost, for example, of lunch or transportation, was
unduly burdensome. Given the generally narrow variance in cost for
those services, most stated that a single dollar amount, or a schedule
of dollar amounts, would be equally prudent. The Department agrees that
such a method is acceptable and should be outlined in the supportive
services policy of the SDA or SSG. To reduce its administrative burden,
an SDA or SSG may set fixed levels of benefit for particular supportive
services; e.g., an SDA or SSG may reimburse participants who incurred
transportation expenses with identical payments, regardless of actual
cost to an individual participant, even though some participants may
receive a payment above their actual cost and others may be underpaid.
Section 627.310(a) sets forth the parameters for the provision of
supportive services. The preamble to the interim final rule noted that
"limited supportive services" were permitted for applicants. A few
commenters requested that this be stated in the regulations. This
provision can now be found at Sec. 627.310(b). A comment was also
received requesting that the "limited" in limited supportive services
be defined. The Department declines to define "limited"; rather, the
final rule is revised to indicate that such payments may be made to
provide the applicant with an opportunity to complete the application
process. The Department expects the restriction on the training-related
supportive services cost category to act as a natural control on SDA's
and SSG's while still permitting flexibility for local level decisions.
Section 627.310(g)(1) provides that supportive services may include
financial assistance under title II. In order to ensure a comprehensive
system of supportive services and payments, there have been changes to
the definition and allowable usage of financial assistance. Financial
assistance is intended for the purpose of general support typical of
stipends and allowances. A number of commenters indicated that
requiring additional documentation in order to receive any type of
financial support was redundant, particularly with JTPA's hard-to-serve
population. The Department agrees that participants pass through
significant income eligibility tests upon entering the program and that
additional eligibility checks are unnecessary, inefficient, and
discourage the provision of necessary services. Therefore, the final
regulations state, at Sec. 627.310(g)(2), that financial assistance may
be deemed to be necessary for eligible participants and, as a
supportive service, may be a fixed payment or based upon a schedule of
payments. The SDA shall include financial assistance in its policy on
supportive services.
Section 627.305(g) of the interim final rule dealing with needs-
related payments is redesignated Sec. 627.310(h) to reflect the
similarity of needs-related payments under title III with financial
assistance under title II. However, needs-related payments are the only
form of general "cash" assistance (excluding cash provided as a
reimbursement for transportation expenses, etc.) allowable under title
III.
A few commenters disagreed with the statement in the preamble to
the interim final rule that supportive services could not be based on a
group characteristic, such as welfare. In light of the other changes
made in the final rule, this statement is no longer applicable. In
developing the policy called for in the final rule, an SDA may use a
group characteristic as a basis for determining supportive service
needs. For example, under title II, a financial assistance payment to a
participant may be fixed, based upon an income schedule or group
characteristic (such as welfare recipient) identified in the objective
assessment and reported in the ISS, or may be determined in accordance
with another method determined by the SDA.
The regulations reflect the Department's intent that financial
assistance be treated as a supportive service for the general welfare
of the participant. This assistance is to be based upon the financial
needs of an eligible individual to permit the individual to participate
in training. With this basic premise, the Department intends that
financial assistance payments, in addition to not being considered as
income in accordance with section 142(b) of the Act, should not be
subject to income and employment taxes. However, all such decisions
need to be made on a case-by-case basis.
Benefits and Working Conditions. The provision of Sec. 627.310(b)-
(d) of the interim final rule are redesignated and revised as a new
Sec. 627.315. One commenter suggested that the regulations should not
require participants to work for employers that are violating labor
laws. In response, Sec. 627.315(a) is amended to reflect this concern
for compliance with applicable labor laws.
In addressing a number of other comments, redesignated
Sec. 627.315(b) (Sec. 627.310(b) of the interim final rule) is amended
to clarify that if a State workers' compensation law is not applicable,
recipients and subrecipients shall secure insurance coverage for
injuries suffered by participants in all JTPA work-related activities.
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