[Federal Register Volume 60, Number 20 (Tuesday, January 31, 1995)]
[Rules and Regulations]
[Pages 5848-5860]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2229]



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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Parts 2 and 21

RIN 2900-AG56


Veterans Training Under the Service Members Occupational 
Conversion and Training Program

AGENCY: Department of Veterans Affairs.

ACTION: Interim final rule with request for public comment.

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SUMMARY: The Service Members Occupational Conversion and Training Act 
of 1992 established a job training program for recently discharged 
[[Page 5849]] veterans. That act authorizes the Secretary of Defense to 
delegate some of the responsibility for implementing it to either the 
Secretary of Veterans Affairs, the Secretary of Labor or both. The 
Secretary of Defense has delegated responsibilities to both officials. 
These regulations will acquaint the public with the way in which 
Department of Veterans Affairs (VA) will implement the responsibilities 
which have been delegated to the Secretary of Veterans Affairs.

DATES: Effective date January 31, 1995. Comments must be received on or 
before April 3, 1995.

ADDRESSES: Mail written comments concerning these proposed regulations 
to: Director, Office of Regulations Management (02D), Department of 
Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 20420; or hand 
deliver written comments to: Office of Regulations Management, Room 
1176, 810 Eye Street NW., Washington, DC 20001. Comments should 
indicate that they are submitted in response to ``RIN 2900-AG56.'' All 
written comments will be available for public inspection in the Office 
of Regulations Management, Room 1176, 801 Eye Street NW., Washington, 
DC 20001 between the hours of 8:00 a.m. and 4:30 p.m., Monday through 
Friday (except holidays).

FOR FURTHER INFORMATION CONTACT: June C. Schaeffer, Assistant Director 
for Policy and Program Administration, Education Service, Veterans 
Benefits Administration, 202-273-7187.

SUPPLEMENTARY INFORMATION: The Service Members Occupational Conversion 
and Training Act (Pub. L. 101-484, Subtitle G) establishes a program to 
reimburse employers for part of the cost of training recently 
discharged veterans in a training program leading to permanent, stable 
employment. The Service Members Occupational Conversion and Training 
Act authorizes the Secretary of Defense to enter into an agreement with 
the Secretary of Veterans Affairs and the Secretary of Labor to 
implement that program.
    On March 11, 1993, the Department of Defense entered into such an 
agreement with VA and the Department of Labor to implement this 
program. The Memorandum of Agreement, among other things, places upon 
VA the responsibility for making payments under the Service Members 
Occupational Conversion and Training Act and gives VA the authority to 
issue implementing regulations in order to do so. These regulations are 
adopted pursuant to that memorandum.
    The Service Members Occupational Conversion and Training Act gives 
the implementing official considerable latitude in implementing certain 
portions of that Act. The areas in which VA adopted policies which are 
permitted by law but are not specifically stated in the law are 
discussed below. Section numbers included in the discussion refer to 
the section numbers found in Pub. L. 102-484.
    While no money was appropriated for the Service Members 
Occupational Conversion and Training Act for Fiscal Year (FY) 1995, 
Public Law 103-335, enacted on September 30, 1994, permits unobligated 
funds designated for the Service Members Occupational Conversion and 
Training Act that were remaining on September 30, 1994, to be obligated 
during FY 1995. VA estimates that all of these funds will be obligated 
by late in the first quarter or early in the second quarter of the 
fiscal year.
    VA notes that money obligated during FY95 and earlier fiscal years 
will continue to be sent to the veterans' employers as the veterans are 
trained. Since these programs may be up to 18 months long and the final 
payment is made to the employer four months after the training program 
is completed, some of the money obligated early in the second quarter 
of FY95 will be sent to the employer during the first quarter of FY97.
    The Service Members Occupational Conversion and Training Act uses 
certain terms that are not defined by the Act and are open to a variety 
of different meanings. Thus, Sec. 21,4802 defines the terms for 
purposes of the Service Members Occupational Conversion and Training 
Act in a manner deemed by the Secretary to be consistent with the 
purpose and intent of the job training program provided by the Act.
    The Act requires that, to establish program eligibility based on 
unemployment, a veteran must have been unemployed for at least 8 of the 
15 weeks preceding application (sec. 4485(a)(1)(A)). However, it 
further states that ``part-time or temporary employment'' as defined by 
the Secretary will be disregarded in determining the individual's 
employment for this purpose (sec. 4485(a)(3)).
    Accordingly, Sec. 21.4802(k) defines ``part-time'' employment as 
employment when a work schedule requires a lesser number of hours of 
work than that which is customary in the community for full-time 
employment in a given position. VA considered a definition applicable 
to all employers based upon a fixed number of hours of work per week 
that would be necessary to reach the full-time rather than part-time 
employment level. However, since the standard or normal workweek is not 
consistent among communities, especially where determined by collective 
bargaining with unions, such a rule could be arbitrary in its 
application. Further, the definition adopted will maximize the number 
of veterans who may qualify for training and thus, further the goals of 
the program.
    As noted, ``temporary employment,'' also, is excludable for 
purposes of determining whether the veteran was employed during the 15-
week period preceding application. The Secretary has determined that 
for this purpose ``temporary employment'' shall be any employment which 
is not ``permanent.'' (See Sec. 21.4802(r).) The latter term is 
defined, in turn, as employment which is clearly continuous in nature 
and which would not terminate upon the completion by the employer of a 
particular product, task, obligation, contract or assignment. Thus, a 
veteran, who was ``employed'' on a full-time basis during each of the 
15 weeks preceding application, but on a job scheduled to end upon 
completion of the task being performed, e.g., completion of 
construction of a particular building, will be found to have been 
``unemployed'' for purposes of determining his or her eligibility to 
participate under the Act. VA could have adopted a more narrow 
definition of the term ``temporary employment'', but believes to do so 
would thwart the intent of the statute to provide veterans the 
opportunity for stable, long-term employment in a career field through 
training under the Act. This conclusion is based upon the determination 
that a person employed on a task-limited job has little likelihood of 
being able to sustain that type of employment for the long term beyond 
the project at hand.
    In addition to these terms, required to be defined for eligibility 
purposes, the Act uses other terms in discussing the type and duration 
of employment for which the participating veteran is to be trained by 
the employer. Section 4487(b) limits approvable job training programs 
to those not leading to jobs which are ``seasonal,'' ``intermittent,'' 
or ``temporary.'' The Secretary is adopting, for the purpose of 
approval of a job training program, the definitions of these terms 
found in Sec. 21.4802(n), (i) and (s), respectively. A ``temporary 
job'' is defined as time-limited employment which is known or expected, 
at the time training begins, to be only of short duration (e.g., 1 year 
or less). VA has determined that while it would be unreasonable to 
expect the prospective [[Page 5850]] employer to assure that the 
employer will be able to provide lifetime employment to the veteran who 
successfully completes the job training program, the employer should be 
able to assure that a reasonable likelihood exists of ongoing 
employment for the veteran in the position for which trained. It would 
be wasteful and absurd to subsidize an employer for 18 months of 
training a veteran for a job known or expected to last only 1 year or 
less after training is completed. VA notes that section of the statute 
provides for withholding a portion of the payment due the employer 
until the veteran has been employed for 4 months after training is 
completed as an incentive to the employer to retain the veteran in 
employment. However, a mere guarantee of a job for 4 months clearly 
would not be sufficient to indicate that the training will result in 
long-term, stable employment. VA could have circumscribed the duration 
of employment deemed temporary at any greater number of months or years 
but settled on a range up to 1 year, consistent with the temporary 
employment concept generally used in Federal hiring, as reasonably 
reflecting jobs considered to be of short duration.
    The definition of the term ``intermittent job'' recognizes that in 
most jobs the employee works on a regular schedule. If the nature of 
the job is such that the employer cannot provide the employee with a 
regular job schedule, VA has determined that the sporadic nature of the 
veteran's employment would be intermittent at best and the definition 
provides accordingly.
    The amount of work provided in ``seasonal jobs ``varies from place 
to place within the United States. For example, in some states along 
the northern tier outdoor construction is unavailable for half of the 
work year, while in other states such as Florida and Hawaii this type 
of work is available year-round. Rather than define ``seasonal job'' by 
listing specific jobs which are seasonal in at least part of the 
country, VA has chosen to define this in terms of the number of 
consecutive days for which no employment is provided. VA chose 90 days 
because this is approximately one-quarter of the year. A job which 
provides no work for at least this length of time would truly be 
seasonal.
    Finally, the term ``related employment'' is defined, as more fully 
explained below, to indicate that the job training to be provided may 
actually result in long-term employment in a different but ``related 
job'' or one at a higher level in the same field.
    The Service Members Occupational Conversion and Training Act 
provides a list of items an employer must certify in order to obtain 
payments for training a veteran. The last item in this list states that 
the certification may include other criteria which are essential for 
the effective implementation of the program (sec. 4486(d)(13)). 
Consequently, the list of items to be certified contains some which are 
not specifically enumerated in the statute.
    Section 21.4822(a)(3)(xiii) requires the employer to consider any 
prior training the veteran may have had in the field for which he or 
she is to be trained and to shorten the training program appropriately. 
The Act requires that the employer not place in a training program 
anyone who is fully qualified for the job which is the goal of the 
program. Shortening the training program for those who are partially 
qualified, VA believes, is in accord with the intent of this 
restriction and will preserve the limited monetary resources in this 
program so that the number of veterans to be trained will be maximized.
    Section 21.4822(a)(3)(xv) requires the employer to state the number 
of employees in the firm if the employer wishes to be paid monthly. The 
Service Members Occupational Conversion and Training Act states that 
employers may be paid monthly if being paid quarterly would be unduly 
burdensome for the employer. VA's experience in administering the 
Veterans' Job Training Act, a similar program with a similar provision, 
has shown that the burden on the employer is related to the number of 
employees, because of the need of employers with few employees to 
maintain their cash flow. Section 21.4832(a)(2) discussed below limits 
the number of employees an employer may have and still be paid monthly. 
Hence, the need for this information.
    Section 21.4822(a)(3)(xii) provides that the employer will certify 
that the trainee will have the opportunity to participate in a personal 
interview with a case manager if one is assigned to him or her. The 
Service Members Occupational Conversion and Training Act (sec. 4493) 
provides that the implementing official will provide case managers to 
be assigned under certain circumstances to veterans in training. The 
Act further provides that the trainee will have an in-person interview 
with the case manager within 60 days of entering into training. Under 
the provisions of the Memorandum of Agreement the Secretary of Labor 
will provide these case managers. It is reasonable, given the 
requirements of the law for an in-person interview, that the employer 
certify that the interview may take place during normal working hours.
    The Service Members Occupational Conversion and Training Act 
provides that the implementing official may prohibit payments to an 
employer on behalf of new trainees when the completion rate for a 
training program is disproportionately low due to deficiencies in the 
quality of the program. The law is specific as to the evidence the 
official must consider when determining when there are deficiencies in 
the quality of the program, but the law does not state what a 
disproportionately low percentage is. Section 21.4823(c) specifies the 
minimum completion rate needed to qualify for payment.
    That paragraph provides that unless the program has had at least 
five trainees only very strong evidence that deficiencies exist will 
cause VA to consider whether the completion rate is disproportionately 
low. Four or fewer trainees do not provide sufficient data for a 
percentage determination to be meaningful.
    If there have been five or more trainees, the regulation provides 
that, in effect, VA will compare the percentage of trainees who have 
successfully completed the particular training program during the three 
years which immediately precede the calculation with the percentage of 
all trainees who have ever successfully completed all training 
programs. If the percentage of successful completers of a program is 
less than half the percentage of successful completers of all programs, 
the percentage is low and will be considered as disproportionately low 
if the program fails to meet the other qualifications in the 
regulation. While the legislative history of the Act fails to define or 
indicate what constitutes a disproportionately low successful 
completion rate, VA believes that requiring a successful completion 
rate of at least half the national average will not place too great a 
burden on employers. Requiring no greater than half the national 
average adequately takes into account the fact that with less than 10 
or 12 trainees the one unsuccessful trainee may have a large effect on 
the successful completion rate.
    Section 21.4824 provides for withdrawal of approval if VA discovers 
that the program ceases to meet approval requirements, or the required 
employer's certifications were false in any material respect, or the 
employer refuses to make available the progress records for the 
trainees in a training program. While the Service Members Occupational 
Conversion and Training [[Page 5851]] Act does not specifically provide 
for a withdrawal of program approval, withdrawal of approval is 
implicit in the law. Since program approval is predicated upon the 
employer's meeting certain approval requirements, it clearly follows 
that such approval cannot be maintained if the approval requirements 
for the employer's program were not or are not met.
    Continued compliance with approval requirements is required. For 
example, one requirement is that there be enough space available to 
train the trainees. It is conceivable that, after having obtained 
approval, the employer may move to a new place of business where space 
is inadequate, thus bringing the employer into noncompliance.
    Similarly, VA may discover that an employer's certification was 
false. For example, an employer may falsely certify that there are 
sufficient instructor personnel available to train the trainees. 
Compliance monitoring may reveal that this is not the case. In that 
event approval should be withdrawn. To continue approval would make 
meaningless the compliance monitoring provided for in the law.
    The Service Members Occupational Conversion and Training Act (sec. 
4487(a)(2)) and Sec. 21.4822(a)(3)(xv) provide that employers may be 
paid monthly if being paid quarterly would be burdensome. Section 
21.4832(a) provides for monthly payments if the employer has less than 
75 employees and wants to be paid monthly.
    As noted above, VA has had experience administering a similar Act, 
the Veterans' Job Training Act, which had a similar provision, and the 
department found that the burden was related to the number of employees 
the employer had, because of the need of these employers to maintain 
their cash flow. VA believes from its administrative experience that 
employers with fewer than 75 employees may well find it burdensome to 
be paid quarterly.
    The Service Members Occupational Conversion and Training Act 
provides that no periodic payment may be made to an employer until the 
veteran certifies that he or she was employed full time in the training 
program during the period to be certified, and the employer confirms 
the certification and states the number of hours the employee worked. 
However, Sec. 21.4832(a)(3) provides for an exception for the 
employee's certification if the employee quit or died during the 
payment period or is similarly unavailable to make the certification. 
VA does not believe it equitable to withhold a payment which would 
otherwise be due an employer if circumstances beyond the employer's 
control make it difficult or impossible for the employer to obtain the 
certification, particularly if the employee refuses to cooperate.
    Similarly, the Service Members Occupational Conversion and Training 
Act forbids reimbursement of an employer for expenses for tools and 
other work-related materials until the employer and the employee 
certify the need for the tools and work-related materials, that the 
veteran bought them, and that the employer reimbursed the veteran for 
them. Section 21.4832(c) contains two provisions not made explicit in 
the Act. First, it provides for payment in certain circumstances if the 
employee is unavailable to make the certification. Again VA does not 
believe it is equitable to withhold payment to which an employer 
otherwise would be entitled, if the employee is unavailable to make the 
certification.
    Second, the regulation requires the employer and veteran to submit 
a copy of the receipt or other proof of purchase and cost which the 
employer used to determine the amount for which the veteran was 
reimbursed. Although not expressly required by the Service Members 
Occupational Conversion and Training Act, VA believes that its 
successful monitoring of this program requires documentation for this 
certification.
    Section 21.4832(d)(2) provides that if the employer reduces a 
trainee's pay below that of his or her starting wage, reimbursement 
will be made to the employer on the basis of the new lower wage rather 
than on the basis of the starting wage. This is not stated specifically 
in the Service Members Occupational Conversion and Training Act but it 
is implicit in the law.
    Occasionally, a trainee begins job training at a project where the 
Davis-Bacon Act applies. The Davis-Bacon Act provides a two-tier system 
of wages, a journeyman wage and a training wage, both of which may be 
higher than the starting wage which the employer usually pays 
employees. When the project is completed, the trainee may revert to the 
usual starting wage. Section 21.4802(j) defines normal starting wage in 
such a way that reimbursement to the employer in this situation would 
be based on the Davis-Bacon training wage while such a wage was being 
paid to the eligible person and would be based on the usual starting 
wage when the eligible person's training wage was not governed by that 
Act.
    VA believes paying the employer at the Davis-Bacon training wage 
rate even though the employer may be paying the journeyman rate is 
implicit in the law. The Service Members Occupational Conversion and 
Training Act provides that job training programs approved under 38 
U.S.C. chapter 36 will be considered to meet the approval requirements 
of the Act. These programs require a graduated wage scale. VA has 
always considered that someone who has reached the journeyman wage rate 
may not be considered to be a trainee entitled to educational 
assistance for training.
    The Service Members Occupational Conversion and Training Act 
requires that employers keep records adequate to show the progress of 
the veteran and make these records available to authorized 
representatives of the government. However, that Act does not state the 
length of time the records must be kept. Section 21.4850(b) would 
require the employer to keep those records for 3 years following the 
last month or quarter for which the employer received payment on behalf 
of the veteran.
    Another record retention period could be adopted. However, VA 
believes that given the limited resources for program oversight, a 
period of less than 3 years will make it difficult to monitor 
compliance effectively. On the other hand, the department realizes that 
retention of records for an indefinite time may well be unduly costly 
for the employer. Accordingly, the interim rule requires a 3-year 
retention as a compromise between VA's need to properly monitor 
compliance and the need to minimize expenses for the employer.
    Section 21.4832(b) would allow VA to pay an employer a lump-sum 
incentive payment after the trainee had worked full-time for 4 months 
in the job for which the training program was designed to provide 
training or in a related job. A related job is defined in 
Sec. 21.4820(m) as one which is found in the Dictionary of Occupational 
Titles as being in the same occupational work group.
    In permitting payment for employment in a related job, VA is 
reacting to concerns that in some instances a trainee may be promoted 
before the four months have expired or changing business conditions may 
force an employer to place the eligible person in a related job. VA 
believes that this is tantamount to placing the eligible person in the 
job for which the training program is designed to provide training. The 
employer should not be placed in a position of losing the payment for 
essentially carrying out the purpose of the Service Members 
Occupational Conversion and Training Act. Neither should the eligible 
person be placed in [[Page 5852]] a position where she or he would have 
to forgo a promotion.

Administrative Procedure Act

    A substantial portion of the changes made by this interim final 
rule merely consists of restatements of statutory material and, as 
such, is not subject to rule making requirements. The rule making 
changes consist of interpretative rules, general statements of policy, 
and rules of agency organization, procedure, and practice. As such, 
they are exempt from the notice and comment provisions of 5 U.S.C. 553.
    The changes subject to rule making requirements are also made 
effective immediately without a 30 day delay since, insofar as they 
consist of substantive rules, they are interpretative rules and 
statements of policy.

Regulatory Flexibility Act

    Because no notice of proposed rule making was required in 
connection with the adoption of this interim rule, no regulatory 
flexibility analysis is required under the Regulatory Flexibility Act 
(5 U.S.C. 601, et seq.).

    No Catalog of Federal Domestic Assistance number has been 
assigned to the program affected by these regulations.

List of Subjects

38 CFR Part 2

    Authority delegation (Government agencies), Veterans Affairs 
Department.

38 CFR Part 21

    Civil rights, Claims, Education, Grant programs-education, Loan 
programs-education, Reporting and recordkeeping requirements, Schools, 
Veterans, Vocational education, Vocational rehabilitation.

    Approved: November 29, 1994.
Jesse Brown,
Secretary of Veterans Affairs.

    For the reasons set out in the preamble, 38 CFR Parts 2 and 21 are 
amended as set forth below.

PART 2--DELEGATIONS OF AUTHORITY

    1. The authority citation for Part 2 continues to read as follows:

    Authority: 72 Stat. 1114; 38 U.S.C. 501, unless otherwise noted.

    2. Sections 2.100 and 21.101 are added to read as follows:


Sec. 2.100  Delegation of authority to the Under Secretary for Benefits 
or his or her designee to enter into Memoranda of Agreement with 
authorized representatives of Department of Defense or Department of 
Labor or both to implement programs authorized by Secs. 21.4800 through 
21.4856.

    This delegation is described in Sec. 21.4854 of this chapter.

(Authority: 38 U.S.C. 512)


Sec. 2.101  Delegation of authority to the Under Secretary for 
Benefits, and to supervisory or adjudicative personnel within the 
jurisdiction of the Veterans Benefits Administration designated by him 
or her, to make findings and decisions of the Department of Veterans 
Affairs under the Service Members Occupational Conversion and Training 
Act, and the applicable regulations, precedents and instructions, 
relating to programs authorized by Secs. 21.4800 through 21.4854.

    This delegation is described in Sec. 21.4856 of this chapter.

(Authority: 38 U.S.C. 512)

PART 21--VOCATIONAL REHABILITATION AND EDUCATION

    3. The authority citation for part 21 continues to read as follows:

    Authority: 38 U.S.C. 501.

    4. Subpart F-3 is added to read as follows:
Subpart F-3--Service Members Occupational Conversion and Training 
Program
Sec.

General

21.4800  Service Members Occupational Conversion and Training 
Program.
21.4801  [Reserved]
21.4802  Definitions.
21.4803-21.4809  [Reserved]

Eligibility

21.4810  Eligibility requirements for participation.
21.4811  [Reserved]
21.4812  Application and certification.
21.4813-21.4819  [Reserved]

Approval of Employer Programs

21.4820  Job training program approval.
12.4821  [Reserved]
21.4822  Employer applications for approval.
21.4823  Disapproval of entry into programs having unsatisfactory 
completion rates.
21.4824  Withdrawal of approval.
21.4825-21.4829  [Reserved]

Payments

21.4830  Entrance into training.
21.4831  [Reserved]
21.4832  Payments to employers.
21.4833  [Reserved]
21.4834  Overpayments and forfeits.
21.4835--21.4839  [Reserved]

Counseling

21.4840  Employment counseling services.
21.4841-21.4843  [Reserved]
21.4844  Failure to cooperate.
21.4845-21.4849  [Reserved]

Administrative

21.4850  Inspection of records.
21.4851  [Reserved]
21.4852  Monitoring and investigations.
21.4853  [Reserved]
21.4854  Delegation of authority to the Under Secretary for 
Benefits.
21.4855  [Reserved]
21.4856  Delegation of authority to the Veterans Benefits 
Administration.

Subpart F-3--Service Members Occupational Conversion and Training 
Program

    Authority: Subtitle G , Pub. L. 102-484, 106 Stat. 2757-2769

General


Sec. 21.4800  Service Members Occupational Conversion and Training 
Program.

    Sections 21.4800 through 21.4856 regulate a Service Members 
Occupational Conversion and Training Program. The purpose of this 
program is to assist members of the Armed Forces who are forced or 
induced to leave military service by reason of the drawdown of the 
Armed Forces and to provide the Secretary of Defense with another tool 
to manage that drawdown. The program assists eligible persons in 
entering the civilian workforce through training for employment in a 
stable and permanent position that involves significant training, VA 
makes payments to employers who employ and train eligible veterans in 
these jobs. The payments assist employers in defraying the costs of 
necessary training.

(Authority: Subtitle G, Pub. L. 102-484, 106 Stat. 2757-2769,10 
U.S.C. 1143 note)


Sec. 21.4801  [Reserved]


Sec. 21.4802  Definitions.

    For the purpose of the Service Members Occupational Conversion and 
Training Program described in Secs. 21.4800 through 21.4856 the 
following definitions apply.
    (a) Active duty. The term active duty means:
    (1) Full-time duty in the Armed Forces, other than active duty for 
training,
    (2) Full-time duty (other than for training purposes) as a 
commissioned officer of the Regular or Reserve Corps of the Public 
Health Service;
    (3) Full-time duty as a commissioned officer of the National 
Oceanic and Atmospheric Administration;
    (4) Service as a cadet at the United States Military, Air Force or 
Coast Guard Academy, or as a midshipman at the United States Naval 
Academy, and [[Page 5853]] 
    (5) Authorized travel to or from such service.

(Authority: 106 Stat. 2757, Pub. L. 102-484, sec. 4483(2), 10 U.S.C. 
1143, note)

    (b) Active duty for training. (1) The term active duty for training 
means:
    (i) Full-time duty in the Armed Forces performed by Reserves for 
training purposes,
    (ii) Full-time duty for training purposes performed as a 
commissioned officer of the Reserve Corps of the Public Health Service,
    (iii) In the case of members of the Army National Guard or the Air 
National Guard of any State, full-time duty under section 316, 592, 
593, 594 or 505 of title 32, U.S. Code,
    (iv) Duty performed by a member of a Senior Reserve Officers' 
Training Corps program when ordered to such duty for the purpose of 
training or a practice cruise under chapter 103 of title 10, U.S. Code 
for a period of not less than four weeks and which must be completed by 
the member before the member is commissioned, and
    (v) Authorized travel to or from such duty.
    (2) The term does not include duty performed as a temporary member 
of the Coast Guard Reserve.

(Authority: 106 Stat. 2757, Pub. L. 102-484, sec. 4483(2), 10 U.S.C. 
1143, note)

    (c) Active military, naval or air service. The term active 
military, naval or air service includes active duty, any period of 
active duty for training during which the individual concerned was 
disabled from a disease or injury incurred or aggravated in line of 
duty, and any period of inactive duty training during which the 
individual concerned was disabled from an injury incurred or aggravated 
in line of duty.

(Authority: 106 Stat. 2757, Pub. L. 102-484, sec. 4483(2), 10 U.S.C. 
1143, note)

    (d) Compensation. The term compensation means a monthly payment 
made by the Department of Veterans Affairs to a veteran because of a 
service-connected disability.

(Authority: 106 Stat. 2757, Pub. L. 102-484, sec. 4483(2), 10 U.S.C. 
1143, note)

    (e) Eligible person. The term eligible person means a veteran who--
    (1) Was discharged after August 1, 1990, and
    (2) Either--
    (i) Served in the active military, naval or air service for a 
period of more than 90 days, or
    (ii) Was discharged or released from active duty because of a 
service-connected disability.

(Authority: 106 Stat. 2758, Pub. L. 102-464, sec. 4485(a)(2), 10 
U.S.C. 1143, note)

    (f) Employer. The term employer means a person or business or other 
entity which--
    (1) Hires the veteran,
    (2) Provides work, wages, and supervision,
    (3) Either provides or arranges for training for the veteran, and
    (4) Can make the certification required by Sec. 21.4822(a).

(Authority: 106 Stat. 2762, Pub. L. 102-484, sec. 4487, 10 U.S.C. 
1143, note)

    (g) Full-time employment. The term full-time employment means 
employment which requires the employee to work a regular schedule of 
hours per day and days per week established as the standard full-time 
workweek at the employee's training establishment.

(Authority: 106 Stat. 2758, Pub. L. 102-484, sec. 4485(a)(3), 10 
U.S.C. 1143, note)

    (h) Inactive duty training. (1) The term inactive duty training 
means:
    (i) Duty (other than full-time duty) prescribed for Reserves 
(including commissioned officers of the Reserve Corps of the Public 
Health Service) by the Secretary concerned under section 206 of title 
37 or any other provision of law;
    (ii) Special additional duties authorized for Reserves (including 
commissioned officers of the Reserve Corps of the Public Health 
Service) by an authority designated by the Secretary concerned and 
performed by them on a voluntary basis in connection with the 
prescribed training or maintenance activities of the units to which 
they are assigned,
    (iii) Training (other than active duty for training) by a member 
of, or applicant for membership (as defined in section 8140(g) of title 
5, U. S. Code), in the Senior Reserve Officers' Training Corps 
prescribed under chapter 103, of title 10, U. S. Code, and
    (iv) In the case of a member of the Army National Guard or Air 
National Guard of any State, such term means duty (other than full-time 
duty) under sections 316, 502, 503, 504 or 505 of title 32, U. S. Code.
    (2) The term does not include:
    (i) Work or study performed in connection with a correspondence 
course,
    (ii) Attendance at an educational institution in an inactive 
status, or
    (iii) Duty performed as a temporary member of the Coast Guard 
Reserve.

(Authority: 106 Stat. 2757, Pub. L. 102-484, sec. 4483(2), 10 U.S.C. 
1143, note)

    (i) Intermittent job. The term intermittent job means a less than 
full-time job in which the employee is given no advance regular work 
schedule due to the unpredictable and sporadic nature of the work 
needed for the job.

(Authority: 106 Stat. 2760, Pub. L. 102-484, sec. 4486(b)(1), 10 
U.S.C. 1143 note)

    (j) Normal starting hourly wage. (1) The term normal starting 
hourly wage means, except as provided in paragraph (j)(2) of this 
section, the wage paid per hour (exclusive of overtime, premium pay or 
fringe benefits) on the first day of the job training program to an 
eligible person whose training program has not been shortened as a 
result of the employer's evaluation of an eligible person's prior 
training. This definition applies as to the eligible person whose job 
training program actually has been shortened, and who, therefore, 
begins training at a higher hourly wage.
    (2) For any eligible person to whom the Davis-Bacon Act applies the 
term normal starting hourly wage means:
    (i) The training wage payable under the Davis-Bacon Act (exclusive 
of overtime, premium pay or fringe benefits) to the eligible person on 
days during the job training program when the Davis-Bacon Act applies, 
and
    (ii) On days when the Davis-Bacon Act does not govern the wages 
paid to the eligible person, the wage as determined by paragraph (j)(1) 
of this section.

(Authority: 106 Stat. 2762, Pub. L. 102-484, sec. 4487, 10 U.S.C. 
1143 note)

    (k) Part-time employment. The term part-time employment means 
permanent employment in a position in which the employee works a 
regularly scheduled number of hours each workweek that is less than the 
number of hours customarily required for full-time employment in that 
position.

(Authority: 106 Stat. 2758, Pub. L. 102-484, sec. 4485(a)(3), 10 
U.S.C. 1143 note)

    (l) Permanent employment. The term permanent employment means 
employment which is clearly continuous in nature. Thus, the term does 
not include employment which is seasonal, time-limited, or expected to 
terminate upon completion of a particular product, task, obligation, 
contract, or assignment.

(Authority: 106 Stat. 2758, Pub. L. 102-484, sec. 4485(a)(3), 10 
U.S.C. 1143 note)

    (m) Related job. The term related job means a job which has the 
following characteristics when compared to another job.
    (1) The Dictionary of Occupational Titles, 4th edition, revised 
1991, shows that--
    (i) Both jobs are in the same occupational group, 
and [[Page 5854]] 
    (ii) The second job requires the same or higher specific vocational 
preparation level as the job to which it is being compared, and
    (2) The salary being paid to employees with comparable experience 
and training in the second job is the same or greater than the salary 
paid in the job to which it is being compared.

(Authority: 106 Stat. 2762, Pub. L. 101-484, sec. 4487(b)(3), 10 
U.S.C. 1143, note)

    (n) Seasonal job. The term seasonal job means a job which is 
subject to a seasonal need or availability resulting in no work for the 
employed person for 90 or more consecutive calendar days.

(Authority: 106 Stat. 2760, Pub. L. 102-484, sec. 4486(b)(1), 10 
U.S.C. 1143 note)

    (o) Secretary. The term Secretary means the Secretary of Veterans 
Affairs unless otherwise indicated by the text of the sentence in which 
the term appears.

(Authority: 106 Stat. 2760, Pub. L. 102-484, sec. 4486(b)(1), 10 
U.S.C. 1143 note)

    (p) Service-connected. The term service-connected means, with 
respect to disability, that the disability was incurred or aggravated 
in line of duty in the active military, naval or air service.

(Authority: 106 Stat. 2758, Pub. L. 102-484, sec. 4483(2), 10 U.S.C. 
1143, note)

    (q) State. The term State means each of the several States, 
Territories, and possessions of the United States, the District of 
Columbia and the Commonwealth of Puerto Rico.

(Authority: 106 Stat. 2758, Pub. L. 102-484, sec. 4483(2), 10 U.S.C. 
1143, note)

    (r) Temporary employment. The term temporary employment means 
employment other than permanent employment.

(Authority: 106 Stat. 2759, Pub. L. 102-484, sec. 4485(a)(3), 10 
U.S.C. 1143 note)

    (s) Temporary job. The term temporary job means a time-limited job, 
particularly one of known, expected, or intended short duration 
(generally, not to exceed one year and, frequently, shorter).

(Authority: Pub. L. 102-484, sec. 4486(b)(1), 10 U.S.C. 1143 note)

    (t) Unemployed. The term unemployed means that a person is without 
full-time, permanent employment and wants and is available for full-
time, permanent employment.

(Authority: 106 Stat. 2760, Pub. L. 102-484, sec. 4485(a)(3): 10 
U.S.C. 1143 note)

    (u) Veteran. The term veteran means a person who--
    (1) Served in the active military, naval or air service, as defined 
in paragraph (c) of this section, and
    (2) Was discharged or released therefrom under conditions other 
than dishonorable.

(Authority: 106 Stat. 2757, Pub. L. 102-484, sec. 4483(2), 10 U.S.C. 
1143 note, 38 U.S.C. 101(2))


Secs. 21.4803--21.4809  [Reserved]

Eligibility


Sec. 21.4810  Eligibility requirements for participation.

    To establish eligibility for participation in the Service Members 
Occupational Conversion and Training program, an eligible person, on 
the date of application, must--
    (a) (1) Be unemployed, and
    (2) Have been unemployed for at least 8 of the 15 weeks immediately 
preceding the date of his or her application for participation in a job 
training program under this subpart, or
    (b) Be separated from the active military, naval or air service and 
must have had a primary or secondary occupational specialty in the 
Armed Forces which (as determined under regulations prescribed by the 
Secretary of Defense and in effect before the date of the eligible 
person's separation) is not readily transferable to the civilian 
workforce; or
    (c) Be entitled to compensation (or but for the receipt of military 
retired pay would be entitled to compensation) under laws administered 
by VA for a service-connected disability rated at 30 percent or more.

(Authority: 106 Stat. 2758, Pub. L. 102-484, sec. 4485(a)(1)(B) and 
(C) 10 U.S.C. 1143 note)


Sec. 21.4811  [Reserved]


Sec. 21.4812  Application and certification.

    (a) Application. An individual must apply to a facility of the 
Veterans Benefits Administration for participation in a job training 
program using the form prescribed by VA.

(Authority: 106 Stat. 2759, Pub. L. 102-484, sec. 4485(b)(1), 10 
U.S.C. 1143 note)

    (b) Approval. VA will approve an application to participate in a 
job training program if:
    (1) The applicant is an eligible person who meets the participation 
requirements of Sec. 21.4810, and
    (2) Funds are available to pay employers under this subpart.

(Authority: 106 Stat. 2759, Pub. L. 102-484, sec. 4485(b)(2); 10 
U.S.C. 1143 note)

    (c) Certificates. (1) Upon approving an eligible person's 
application, VA will furnish the eligible person with a certificate for 
presentation to an employer with an existing approved job training 
program or an employer who is willing to develop and seek approval for 
a job training program. The certificate will state:
    (i) The individual's eligibility to participate;
    (ii) The date of the certificate's issuance to the eligible person 
and the period of its validity, and
    (iii) Approval of entrance into a job training program is subject 
to the availability of funds.
    (2) A certificate expires 180 days from the date on which it is 
furnished to the eligible person. However, VA may renew a certificate 
for an eligible person when the provisions of Sec. 21.4812(b) are met. 
A renewed certificate expires 180 days from the date on which it is 
furnished to the eligible person, and may itself be renewed.

(Authority: 106 Stat. 2759, Pub. L. 102-484, sec. 4485(b)(3), 10 
U.S.C. 1143 note)

    (d) Disapproval. If an individual's application is disapproved, VA 
will give the individual written notice of the decision, including the 
reasons therefor, a summary of the evidence considered and an 
opportunity for a hearing. The individual may appeal VA's denial of his 
or her application under the same process as is provided in Part 19, 
Subpart B of this chapter.

(Authority: 106 Stat. 2759, Pub. L. 102-484, sec. 4485(b)(3), 10 
U.S.C. 1143 note)


Secs. 21.4813--21.4819  [Reserved]

Approval of Employer Programs


Sec. 21.4820  Job training program approval.

    (a) Eligible persons. An employer may be paid assistance on behalf 
of a participating eligible person only for providing a program of job 
training approved by VA as meeting the requirements of this section and 
Sec. 21.4822.
    (1) The training provided under an employer's job training program 
must be in a field of employment providing a reasonable probability of 
stable, long-term employment and, except as provided in paragraph 
(a)(3)(ii) of this section, such training must be provided for a period 
of not less than 6 nor more than 18 months.
    (2) An employer may provide all or part of a job training program 
under an agreement with an educational institution offering the 
training through a course or courses which have been approved under 
Sec. 21.4253 or Sec. 21.4254 for the enrollment of veterans.
    (3) Notwithstanding the provision of paragraph (a)(1) that 
prohibits a training program from being more than 18 months long-- 
[[Page 5855]] 
    (i) An apprenticeship or other on-job training program approved 
under 38 U.S.C. 3687 will, upon the employer's submission of an 
application in accordance with Sec. 21.4822 containing the 
certification required by Sec. 21.4822(a)(3)(iii), be considered to 
have met all requirements for approval under this subpart, and will be 
approved unless found ineligible under paragraph (b) of this section, 
and
    (ii) If a job training program described in paragraph (a)(3)(i) of 
this section requires more than 18 months of training to complete, the 
period of training approvable for purposes of this subpart will be 
limited to the first 18 months of training under the program, or a 
period of training not to exceed 18 months from the point at which the 
eligible person enters the program in the case where the employer 
grants credit for prior training. (See Sec. 21.4832(a)(3)).

(Authority: 106 Stat. 2762, Pub. L. 102-484, sec. 4486(h); 10 U.S.C. 
1143 note)

    (b) Ineligible programs. VA will not approve a job training program 
for employment--
    (1) Which consists of seasonal, intermittent or temporary jobs,
    (2) Under which commissions are the primary source of income,
    (3) Which involves political or religious activities,
    (4) With any department, agency, instrumentality or branch of the 
Federal Government (including the United States Postal Service and the 
Postal Rate Commission); or
    (5) Which will not be performed in a State.

(Authority: 106 Stat. 2760, Pub. L. 102-484, sec. 4486(b); 10 U.S.C. 
1143 note)


Sec. 21.4821  [Reserved]


Sec. 21.4822  Employer applications for approval.

    (a) Applications for approval of job training programs. (1) The 
employer must apply for approval of a job training program to the 
Director of the VA facility having jurisdiction over the place where 
the eligible person will be trained.
    (2) The employer's application for approval of a job training 
program under this subpart must be in the form prescribed by the 
Secretary of Veterans Affairs and, except for a program of 
apprenticeship or other on-job training approved under 38 U.S.C. 3687, 
must include the employer's certification of the matters set forth in 
paragraphs (a)(3) and (a)(4) of this section.
    (3) The employer must make and submit the following general 
certifications with the application.
    (i) The employer plans that--
    (A) Upon the eligible person's completion of the job training 
program, the employer will employ the eligible person in the position 
for which he or she has been trained, and
    (B) This position will be a full-time, permanent employment 
position available to the eligible person at the end of the training 
period.
    (ii) The wages and benefits to be paid to an eligible person 
participating in the job training program--
    (A) Will be the same as the wages and benefits normally paid to 
other employees participating in the same or a comparable job training 
program, and
    (B) If there are no nonveterans training in the program, will be 
comparable to wages paid in similar programs in the community in which 
the employee will be trained.
    (iii) Employment of the eligible person under the program--
    (A) Will not result in the displacement of currently employed 
workers (including partial displacement such as a reduction in the 
hours of nonovertime work, wages, or employment benefits), and
    (B) Will not be in a job while another person is laid off from the 
same or substantially equivalent job, or will not be in a job the 
opening for which was created as a result of the employer having 
terminated the employment of any regular employee or otherwise having 
reduced its workforce with the intention of hiring an eligible person 
in the job.
    (iv) The employer will not employ in the job training program an 
eligible person already qualified by training and experience for the 
job for which the training is to be provided.
    (v) The job which is the objective of the job training program 
involves significant training.
    (vi) The training content of the job training program is adequate 
to accomplish the training objective of the program considering--
    (A) The nature of the occupation for which training is to be 
provided, and
    (B) The content of comparable, available training programs which 
lead to the same occupation.
    (vii) Each participating eligible person will be employed full-time 
while in the job training program.
    (viii) The training period of the program will not be longer than 
the training periods that other employers in the community customarily 
require new employees to complete in order to become competent in the 
occupation or job for which the training is provided.
    (ix) The training establishment or place of employment will have 
available, as needed to accomplish the training objective of the 
program, the following:
    (A) Sufficient space,
    (B) Equipment,
    (C) Instructional material, and
    (D) Instructor personnel.
    (x) The employer will keep adequate records.
    (A) To show the progress made by each eligible person participating 
in the program, and
    (B) To demonstrate compliance by the employer and eligible person 
with all requirements of law governing the Service Members Occupational 
Conversion and Training Act.
    (xi) The employer, before the eligible person's entry into 
training, will--
    (A) Furnish the eligible person with a copy of the certification 
described in this paragraph, and
    (B) Obtain and retain the eligible person's signed acknowledgment 
of having received the certification.
    (xii) The employer will provide to each participating eligible 
person for whom a case manager has been assigned by the Department of 
Labor full opportunity to participate in one personal interview with 
the case manager during the eligible person's normal work day.
    (xiii) The employer will evaluate the eligible person's prior 
training in the field for which he or she is being trained and will 
shorten his or her training program appropriately.
    (xiv) Whether tools or other work-related materials, or both, are 
necessary for the eligible person's participation in the program of job 
training, and if so, a list of those tools and work-related materials 
which the eligible person and all other trainees in the program, both 
eligible persons and others, will be required to purchase and for which 
the employer will reimburse the eligible person.
    (xv) The program meets such other criteria which are essential for 
effective implementation of the Service Members Occupational Conversion 
and Training Act and as to which VA, after having given notice to the 
employer, requires the employer's certification.
    (4) The employer must submit with the application on a form 
prescribed by the VA, information concerning:
    (i) The total number of hours of participation in the job training 
program to be offered the eligible person,
    (ii) The length of the job training program,
    (iii) The starting hourly rate of wages to be paid to a participant 
in the program,
    (iv) The training content of the program, including the name and 
address of the educational institution, if [[Page 5856]] any, with 
which the employer has an agreement to provide all or part of the job 
training program (supported by a copy of that agreement included with 
the application);
    (v) If all or part of a job training program is provided by an 
educational institution, a statement that VA will have access to the 
training records,
    (vi) The objective of the program,
    (vii) The address of the location where the records described in 
paragraph (a)(3)(x) of this section will be kept, and
    (viii) If the employer desires to be paid monthly, the number of 
the training establishment's employees.
    (5) The certifications required in paragraphs (a)(3)(i) through 
(xi) shall be considered to be a requirement established under subtitle 
G of the Service Members Occupational Conversion and Training Act, and 
for purposes of Sec. 21.4832(c) regarding payment for tools and other 
work-related materials and paragraphs (a)(3)(i) through (x) shall be 
considered to be a requirement established under subtitle G of the 
Service Members Occupational Conversion and Training Act.

(Authority: 106 Stat. 2760, Pub. L. 102-484, secs. 4486(e), 4487(b); 
10 U.S.C. 1143 note)

    (b) VA action upon receipt of the application. (1) Upon receipt of 
the application, the Director of the VA facility of jurisdiction will 
approve the job training program if:
    (i) The application contains all requisite information and 
certifications needed to enable the Director to determine whether the 
proposed job training program meets the approval requirements of the 
Service Members Occupational Conversion and Training Act.
    (ii) The Director finds no basis for conducting an investigation 
under Sec. 21.4852 that would warrant withholding approval of the 
employer's proposed program of job training pending the outcome of that 
investigation.
    (2) In determining whether the certifications required in 
paragraphs (a)(3) and (a)(4) of this section are complete and accurate, 
the Director of the VA facility of jurisdiction--
    (i) Will consider that the provisions have been met and that the 
certification is accurate if the job training program for which the 
employer is seeking approval has already been approved for training 
under Sec. 21.4261 or Sec. 21.4262, or the entire job training program 
consists of a course or courses offered at an educational institution 
and approved under Sec. 21.4253 or Sec. 21.4254;
    (ii) Will consider any information the Department of Labor or the 
State Employment Security Agency may have concerning the employer and 
the job training program;
    (iii) Will consider any other evidence which may show whether or 
not the certification is accurate and whether or not the provisions of 
Sec. 21.4820(a) are met; and
    (iv) May withhold approval pending an investigation.
    (3) The Director of the VA facility will notify the employer in 
writing of the approval or disapproval of the employer's program. If 
the program is disapproved, the notice will state the reasons therefor 
and the employer's right to seek review of the decision as provided in 
paragraph (c) of this section. If no review is sought, the decision of 
the Director of the VA facility of jurisdiction will be final.
    (c) Review of a decision not to approve a program. (1) If an 
employer disagrees with a decision of a Director of a VA facility not 
to approve the program, the employer, within 60 days after receipt of 
notice of the decision, may ask that the decision be reviewed by the 
Director, Education Service.
    (2) A review by the Director, Education Service, of a disapproval 
decision of the Director of the VA field facility will be based upon 
the evidence of record when the original decision not to approve a 
program was made. It will not be de novo in nature and no hearing will 
be held. The Director, Education Service, has the authority to affirm, 
reverse, or remand the original decision. The reviewing official's 
action, other than a remand, shall be the final Department decision on 
the issue presented.

(Authority: 38 U.S.C. 512(a))


Sec. 21.4823  Disapproval of entry into programs having unsatisfactory 
completion rates.

    (a) Disapproval of payments on behalf of new participants. The 
Director of a VA field facility may disapprove entry into an employer's 
approved job training program under this subpart when the Director 
finds that the rate of veterans' successful completion of the job 
training program is disproportionately low as a result of deficiencies 
in the quality of the job training program.

(Authority: 106 Stat. 2765, Pub. L. 102-484, sec. 4491(a), 10 U.S.C. 
1143 note)

    (b) Notice: effective date of disapproval. An eligible person who 
has not begun a job training program to which a disapproval under 
paragraph (a) of this section applies, will be barred from entering 
that program effective on the date the employer receives the 
notification provided pursuant to paragraph (e) of this section.

(Authority: 106 Stat. 2764; Pub. L. 101-484, sec. 4490(b); 10 U.S.C. 
1143 note)

    (c) Successful completion rate for job training programs. VA will 
determine whether the successful completion rate for a job training 
program is disproportionately low as follows.
    (1) If fewer than five eligible persons either successfully 
completed the particular job training program or terminated that 
program (voluntarily or involuntarily) during the three-year period 
immediately preceding the calculation, VA will consider that the 
completion rate of the job training program is not disproportionately 
low unless there is strong evidence to the contrary.
    (2) If five or more eligible persons either successfully completed 
the particular job training program or terminated that program, or if 
the number is less than five and there is compelling evidence of 
deficiencies in the quality of the program that may have adversely 
affected the completion rate, VA will--
    (i) Calculate a percentage by dividing the number of eligible 
persons who have successfully completed the job training program during 
the three-year period immediately preceding the calculation by the 
number of eligible persons who have either successfully completed or 
otherwise terminated that program during the three-year period 
immediately preceding the calculation;
    (ii) Calculate a second percentage by dividing the number of 
eligible persons who have ever successfully completed any job training 
program approved for veterans' training under the Service Members 
Occupational Conversion and Training Act by the number of eligible 
persons who have ever either successfully completed or otherwise 
terminated such a job training program, and
    (iii) Compare the two percentages. If the percentage determined in 
paragraph (c)(2)(i) of this section is less than one-half the 
percentage determined in paragraph (c)(2)(ii) of this section, the 
successful completion rate of the job training program is 
disproportionately low, and shall be considered with the data described 
in paragraphs (b) through (d) of this section and the results of any 
investigation VA or the Department of Labor may conduct in determining 
whether the disproportionately low completion rate is a result of 
deficiencies in the quality of the program.

(Authority: 106 Stat. 2764, Pub. L. 102-484, sec. 4490(b), 10 U.S.C. 
1143 note)

    [[Page 5857]] (d) Deficiencies in the quality of the job training 
program. In determining whether any disproportionately low completion 
rate of a job training program is the result of deficiencies in the 
quality of the program, VA will take into account appropriate data, 
including:
    (1) Quarterly data provided by the Secretary of Labor with respect 
to the number of veterans who:
    (i) Receive counseling in connection with training under the 
Service Members Occupational Conversion and Training Act.''
    (ii) Are referred to employers under the Service Members 
Occupational Conversion and Training Act,
    (iii) Participate in job training under the Service Members 
Occupational Conversion and Training Act, and
    (iv) Complete that training or do not complete that training, and 
the reasons for the noncompletion, and
    (2) Data from the compliance surveys of the employer which indicate 
the number of eligible persons who have undertaken a job training 
program, the number of such persons who failed to complete it, and the 
reasons for the noncompletion.

(Authority: 106 Stat. 2764, Pub. L. 102-484, sec. 4490(b); 10 U.S.C. 
1143 note)

    (e) Notification. If, after considering the data described in 
paragraphs (c) and (d) of this section, the Director of the VA field 
facility of jurisdiction determines that the completion rate for a job 
training program is disproportionately low due to deficiencies in the 
quality of the program, the Director will disapprove further initial 
entry by eligible persons into the program and shall notify the 
employer of that disapproval. The notice shall be by certified mail or 
registered letter, return receipt requested, and shall include:
    (1) A statement of the reasons for disapproval, including a summary 
of the evidence considered,
    (2) Notice of the opportunity to submit documentary evidence and to 
have a hearing before the Director of the VA field facility of 
jurisdiction or his or her designee, and
    (3) Notice of the employer's right to request, within 60 days after 
receipt of the notice, a review by the Director, Education Service, of 
the disapproval decision by the Director of the VA field facility of 
jurisdiction.
    (4) A review by the Director, Education Service, of a disapproval 
decision of the Director of the VA field facility will be based upon 
the evidence of record when the original decision to disapprove new 
program entrants was made. It will not be de novo in nature and no 
hearing will be held. The Director, Education Service, has the 
authority to affirm, reverse, or remand the original decision. The 
reviewing official's action, other than a remand, shall be the final 
Department decision on the issue presented.

(Authority: 106 Stat. 2765, Pub. L. 102-484, sec. 4491(b), 10 U.S.C. 
1143 note)

    (f) Period of disapproval. (1) A disapproval of further program 
entry as described in paragraph (a) of this section shall remain in 
effect until the Director of the VA field facility of jurisdiction 
determines that the employer has remedied the program deficiencies 
which resulted in the disapproval.
    (2) Upon reinstatement of approval of program entry, payments will 
be made on behalf of new participating eligible persons only for 
training received after the date remedial action was taken, as 
determined by the Director of the VA field facility.

(Authority: 106 Stat. 2765, Pub. L. 102-484, sec. 4491(b)(3), 10 
U.S.C. 1143 note)


Sec. 21.4824  Withdrawal of approval.

    (a) Approval may be withdrawn. The Director of a VA field activity 
may immediately disapprove the further participation by all eligible 
persons in a job training program which previously has been approved 
when:
    (1) The program ceases to meet any of the requirements of 
Sec. 21.4820 or Sec. 21.4822.
    (2) The Director finds that the employer's certification provided 
pursuant to Sec. 21.4822(a) was false; or
    (3) The employer, or an educational institution with which the 
employer has contracted to provide all or part of the training, refuses 
to make available to an authorized representative of the Federal 
Government those records which the employer (and the educational 
institution) is required to keep under Sec. 21.4850.
    (b) Notification. The Director of the VA field facility of 
jurisdiction shall notify the employer and all eligible persons 
participating in the program that approval is being withdrawn. The 
notices shall be by certified mail return receipt requested, and shall 
include:
    (1) A statement of the reasons for the withdrawal of approval, 
including a summary of the evidence considered;
    (2) Notice of the right of the employer or eligible person to 
submit documentary evidence and have a hearing before the Director of 
the VA field facility of jurisdiction or his or her designee concerning 
the withdrawal of program approval;
    (3) In the case of an employer notice of the employer's right to 
request a review by the Director, Education Service, of the disapproval 
decision by the Director of the VA field facility of jurisdiction. To 
exercise that right, the employer must request within 60 days either 
after the date of notice of the initial decision of the Director of the 
VA field facility of jurisdiction or the date of notice of any 
confirming decision by that Director following a timely requested 
hearing or timely submission of new evidence, or both, and
    (4) In the case of a notice sent to eligible persons, notice of the 
right of the eligible person to appeal the decision to the Board of 
Veterans Appeals and to have a hearing under the same process as is 
provided in Part 19, Subpart B of this title.

(Authority: 106 Stat. 2761-2763, Pub. L. 102-484, sec. 4486, 4487, 
38 U.S.C. 501(a); 10 U.S.C. 1143 note)

    (c) Review of a decision to withdraw approval of a program. A 
review by the Director, Education Service, of a disapproval decision of 
the Director of the VA field facility will be based upon the evidence 
of record when the original decision to disapprove new program entrants 
was made. It will not be de novo in nature and no hearing on review 
will be held. The Director, Education Service, has the authority to 
affirm, reverse, or remand the original decision. The reviewing 
official's action, other than a remand, shall be the final Department 
decision on the issue presented, unless an adversely affected eligible 
person prevails in an appeal of the decision to the Board of Veterans 
Appeals.

(Authority: 38 U.S.C. 512(a))


Secs. 21.4825-21.4829  [Reserved]

Payments


Sec. 21.4830  Entrance into training.

    (a) Notice of intent to hire before employee's entrance into 
training. Before an eligible person enters an approved job training 
program, the employer shall submit to the VA at the address on the form 
prescribed by the VA information concerning whether the employer 
intends to hire the eligible person.

(Authority: 106 Stat. 2764, Pub. L. 102-484, sec. 4488(a); 10 U.S.C. 
1143 note)

    (b) Lack of funds may prevent training. (1) If VA determines that 
funds are not available to make payments to the employer on behalf of 
the eligible person, VA may withhold or deny approval of the eligible 
person's entry into a job training program.
    (2) The eligible person may enter the job training program two 
weeks after the [[Page 5858]] date of the notice of intent to hire 
described in paragraph (a)(1) of this section, unless VA notifies the 
employer, within that two-week period, by certified mail that approval 
of the eligible person's entry into the job training program must be 
withheld or denied due to lack of funds. The two-week period shall 
begin on the date the employer's notice to VA is postmarked.

(Authority: 106 Stat. 2764, Pub. L. 102-484, sec. 4488(a); 10 U.S.C. 
1143 note)


Sec. 21.4831  [Reserved]


Sec. 21.4832  Payments to employers.

    Payments made to employers for training eligible persons and 
employing them in the respective positions for which they trained shall 
be made in accordance with the provisions of this section.
    (a) Periodic wage reimbursement payments for training provided the 
eligible person. Subject to the certification requirements of paragraph 
(a)(3) of this section and the limitations and restrictions stated in 
paragraphs (d) and (e) of this section, VA will make quarterly wage-
reimbursement payments to the employer based upon training provided to 
an eligible person. An employer with fewer than 75 employees when the 
eligible person enters training may, upon request, receive such 
payments on a monthly basis.
    (1) Amount of periodic payment. VA will determine the amount of 
periodic payment to the employer by multiplying 50 percent of the 
normal starting hourly wage paid by the employer to the eligible person 
(without regard to overtime, premium pay or fringe benefits), by the 
number of hours the veteran worked during the period for which payment 
is due, withholding 25 percent of this amount to be paid to the 
employer as an incentive payment as provided in paragraph (b) of this 
section.
    (2) Periods for which payments may be made. Payments may be made 
for an eligible person's training through the last date of training 
received in the training program but not after completion of the 
eighteenth month of the training program.
    (3) Certification of training. VA will issue no payments to an 
employer for any period of training of an eligible person unless the 
following certification requirements are met.
    (i) Unless VA waives certification, the eligible person must 
submit, and VA must receive, a certification that such person was 
employed full-time by the employer in an approved job training program 
during the applicable training period. VA will waive this certification 
upon receipt of evidence that the eligible person is deceased, has 
terminated employment and moved without a forwarding address, or 
otherwise cannot or will not comply through no fault of the employer.
    (ii) VA must receive from the employer on a form prescribed by the 
VA a certification concerning the following:
    (A) Employment of the eligible person during the period in an 
approved job training program,
    (B) Performance and progress of the eligible person during the 
period were satisfactory,
    (C) The number of hours the eligible person worked during the 
period for which the certification is made, and
    (D) For employer's first certification, the normal starting hourly 
rate of wages paid to the veteran, without regard to overtime or 
premium pay.

(Authority: 106 Stat. 2763, Pub. L. 102-484, sec. 4487, 10 U.S.C. 
1143 note)

    (b) Lump sum deferred incentive payment to employers. VA will make 
a lump-sum incentive payment to the employer of the total amount 
withheld from periodic payments made to the employer pursuant to 
paragraph (a)(1) of this section provided the following conditions are 
met.
    (1) The incentive payment may be made only when VA determines, and 
both the employer and (except as provided in paragraph (b)(2) of this 
section) eligible person certify, that the eligible person was employed 
full-time by that employer in the job for which the training program 
was designed to provide training or in a related job, and that such 
employment was for at least four continuous months beginning on the 
date the eligible person completed training for which periodic payments 
were made under this subpart.
    (2) VA may waive the requirement that the eligible person certify 
as provided in paragraph (b)(1) of this section if VA finds that the 
requisite employment occurred and either the eligible person is 
deceased or otherwise cannot or will not comply through no fault of the 
employer.

(Authority: 106 Stat. 2782, Pub. L. 101-484, sec. 4487(b)(3); 10 
U.S.C. 1143, note)

    (1) A certification signed by the employer and the eligible veteran 
stating that:
    (i) The identified tools and other work-related materials are 
necessary for the eligible person's participation in the job training 
program;
    (ii) The eligible person bought the tools and other work-related 
materials, and
    (iii) The employer reimbursed the eligible person for the cost of 
the tools and other work-related materials, and
    (2) A copy of the receipt or other proof of purchase which the 
employer used to calculate the amount for which the veteran was 
reimbursed.

(Authority: 106 Stat. 2762, Pub. L. 102-484, sec. 4487(c), 10 U.S.C. 
1143 note)

    (d) Limitations on amount of payments. (1) In no case will the sum 
of the periodic payments and the lump-sum incentive payment made to an 
employer on behalf of an eligible veteran exceed:
    (i) $12,000 for a person with a service-connected disability rated 
as 30 percent or more disabling, or
    (ii) $10,000 for all other eligible veterans.
    (2) If an employer reduces the wages paid to a trainee for a 
portion of the training period so that the trainee is paid at a rate 
less than the certified, normal starting wage rate, VA shall not make 
periodic payments in excess of 50 percent of the wages (exclusive of 
overtime and premium pay) paid to the trainee for that portion of the 
training period less the 25 percent that must be withheld under 
Sec. 21.4832(a).

(Authority: 106 Stat. 2762, Pub. L. 102-484, sec. 4487(a)(1)(B): 10 
U.S.C. 1143 note)

    (e) Restrictions on payments. (1) VA will not pay an employer:
    (i) On behalf of any veteran who initially applies for a job 
training program after September 30, 1995,
    (ii) For any job training program which begins after March 31, 
1996,
    (iii) For any training given to the veteran before VA certifies the 
individual is eligible to participate,
    (iv) During any period of time for which the veteran receives 
educational assistance under 38 U.S.C. chs. 30, 31, 32, 35 or 36 or 10 
U.S.C. ch. 106;
    (v) For any period during which the employer received any 
assistance on account of the veteran's training or employment, 
including:
    (A) Assistance under the Job Training Partnership Act (29 U.S.C. 
1501 et seq.),
    (B) A credit under section 51 of the Internal Revenue Code of 1986, 
or
    (C) Employer's incentive payments under Sec. 21.256 of this part,
    (vi) For any hours of training the veteran completes in excess of 
the hours approved by VA for his or her job training program.
    (2) VA will withhold payment to an employer who fails or refuses to 
maintain records or fails to make them available to authorized 
representatives of the Federal Government as required by Sec. 21.4850. 
The withholding will [[Page 5859]] continue until VA determines that 
the employer has fully complied with recordkeeping and disclosure 
requirements.

(Authority: 106 Stat. 2757, Pub. L. 102-484, Subtitle G, 10 U.S.C. 
1143 note)


Sec. 21.4833  [Reserved]


Sec. 21.4834  Overpayments and forfeits.

    (a) False certification by employer. Whenever VA finds that an 
overpayment has been made to an employer on behalf of a veteran as a 
result of a certification or information contained in the employer's 
application to VA which was false in any material respect--
    (1) The amount of the overpayment shall constitute a liability of 
the employer to the United States, and
    (2) The employer shall forfeit any unpaid amounts withheld from 
those payments for the purpose of making a lump-sum incentive payment 
under Sec. 21.4832(b).

(Authority: 106 Stat. 2763, Pub. L. 102-484, sec. 4487(d)(1)(A), 10 
U.S.C. 1143 note)

    (b) Noncompliance by employer. Whenever VA finds that an employer 
has failed in any substantial respect to comply for a period of time 
with a requirement of Sec. 21.4820 or Sec. 21.4822 or both (unless the 
employer's failure is the result of false or incomplete information 
provided by the eligible person), each amount paid to the employer on 
behalf of an eligible person for that period shall be considered an 
overpayment.
    (1) The amount of the overpayment shall constitute a liability of 
the employer to the United States.
    (2) The employer shall forfeit any unpaid amounts withheld from 
those payments for the purpose of making a lump-sum incentive payment 
under Sec. 21.4832(b).

(Authority: 106 Stat. 2763, Pub. L. 102-484, sec. 4487(d)(1)(B); 10 
U.S.C. 1143 note)

    (c) False certification by an individual. Whenever VA finds that an 
overpayment has been made to an employer on behalf of an individual as 
a result of certification by the individual, or as a result of 
information provided to an employer or contained in an application 
submitted by the individual to VA which was willfully or negligently 
false in any material respect--
    (1) The amount of the overpayment shall constitute a liability of 
the individual to the United States, and
    (2) The employer shall forfeit any unpaid amounts withheld from 
those payments for the purpose of making a lump-sum incentive payment 
under Sec. 21.4832(b).

(Authority: 106 Stat. 2763, Pub. L. 102-484, sec. 4487(d)(2); 10 
U.S.C. 1143 note)

    (d) Payment contrary to limitation or restriction. Whenever VA 
finds that payment has been made to an employer on behalf of an 
individual in an amount which exceeds or is otherwise contrary to the 
limitations set forth in Sec. 21.4832 (d) or (e)--
    (1) Such amount shall constitute an overpayment for which the 
employer shall be liable to the United States,
    (2) The employer shall forfeit any unpaid amounts withheld from 
that overpayment for the purpose of making a lump-sum incentive payment 
under Sec. 21.4832(b).

(Authority: 106 Stat. 2757, Pub. L. 102-484, Subtitle G, 10 U.S.C. 
1143 note)

    (e) Waivers of overpayments. VA may waive any overpayment 
established under this section, in whole or in part, as provided by 
Secs. 1.955 through 1.970 of this chapter. Any amount withheld for the 
purpose of making a lump-sum incentive payment forfeited under this 
section is not subject to waiver.

(Authority: 106 Stat. 2763, Pub. L. 102-484, sec. 4487(d)(4), 10 
U.S.C. 1143 note)

    (f) Recovery of overpayments. (1) Any overpayments referred to in 
paragraph (a), (b), (c) or (d) of this section may be recovered in the 
same manner as any other debt due the United States.
    (2) To the extent that an individual and employer are found liable 
to the United States under this section for the same overpayment, they 
will be held jointly and severally liable.

(Authority: 106 Stat. 2762, Pub. L. 102-484, sec. 4487, 10 U.S.C. 
1143 note)

    (g) Disagreements concerning overpayments. (1) If an employer 
disagrees with a decision of a Director of a VA facility to hold the 
employer liable for all or part of an overpayment, the employer, within 
60 days after receipt of notice of the decision, may ask that the 
decision be reviewed by the Director, Education Service.
    (2) A review by the Director, Education Service, of an overpayment 
liability decision of the Director of the VA field facility will be 
based upon evidence of record when the original decision not to approve 
a program was made. It will not be de novo in nature and no hearing 
will be held. The Director, Education Service, has the authority to 
affirm, reverse, or remand the original decision. The reviewing 
official's action, other than a remand, shall be the final Department 
decision on the issue presented.
    (3) If the eligible person is held liable for all or part of an 
overpayment, he or she has the right of appeal to the Board of Veterans 
Appeals and to have a hearing under the same process as is provided in 
Part 19, Subpart B of this title.

(Authority: 38 U.S.C. 511(a))


Secs. 21.4835--21.4839  [Reserved]

Counseling


Sec. 21.4840  Employment counseling services.

    (a) Eligibility. An eligible person who meets the requirements of 
Sec. 21.4810 to participate in the Service Members Occupational 
Conversion and Training Act program may ask VA to provide employment 
counseling services to assist him or her in selecting a suitable job 
training program under this subpart.

(Authority: 106 Stat. 2763, Pub. L. 102-484, sec. 4487(d)(4), 10 
U.S.C. 1143 note, 38 U.S.C. 3697A)

    (b) Purpose. The purpose of this counseling is to assist the 
eligible person to select an employment objective likely to provide 
satisfactory employment opportunities in light of his or her personal 
circumstances,

(Authority: 106 Stat. 2763, Pub. L. 102-484, sec. 4487(d)(4), 10 
U.S.C. 1143 note, 38 U.S.C. 3697A)

    (c) Additional counseling services. To the extent feasible, VA and 
the Department of Labor may provide an additional program of counseling 
or other services designed to resolve difficulties that may be 
encountered by eligible persons during training under this subpart. If 
provided, the counseling or other services will be similar in nature 
to:
    (1) Outreach and assistance (38 U.S.C. 7723, 7724), readjustment 
counseling (38 U.S.C. 1712A), and educational and vocational counseling 
(38 U.S.C. 3696A) offered by VA, and
    (2) Disabled veterans' outreach (38 U.S.C. 4103A), employment 
assistance (38 U.S.C. 4104), and employment counseling, job training 
counseling, and other transitional assistance (10 U.S.C. 1144) services 
offered by the Department of Labor.

(Authority: 106 Stat. 2763, Pub. L. 102-484, sec. 4487(d)(4), 10 
U.S.C. 1143 note, 38 U.S.C. 1712A, 3797A, 7723, 7724)


Secs. 21.4841--21.4843  [Reserved]


Sec. 21.4844  Failure to cooperate.

    VA will take no further action on an eligible person's application 
for assistance when he or she:
    (a) Fails to report for his or her counseling appointment, 
[[Page 5860]] 
    (b) Fails to cooperate in the counseling process,
    (c) Does not complete counseling to the extent required under 
paragraph Sec. 21.4840(c).

(Authority: 106 Stat. 2763, Pub. L. 102-16, Pub. L. 102-484)


Secs. 21.4845--21.4849  [Reserved]

Administrative


Sec. 21.4850  Inspection of records.

    (a) Availability of records. The records and accounts of employers 
pertaining to eligible persons on behalf of whom assistance shall be 
paid, as well as other records that VA determines to be necessary to 
ascertain compliance with the requirements established in Secs. 21.4820 
through 21.4832 shall be available at reasonable times for examination 
by authorized representatives of the Federal Government. If the records 
are maintained by an educational institution training the employee on 
behalf of the employer, the latter shall be responsible for insuring 
their availability.

(Authority: 106 Stat. 2765, Pub. L. 102-484, sec. 4491(a), 10 U.S.C. 
1143 note)

    (b) Retention of records. (1) Except as provided in paragraph 
(b)(2) of this section, an employer must keep the records mentioned in 
paragraph (a) of this section intact and in good condition for at least 
three years following:
    (i) The last month or quarter for which the employer received a 
periodic payment on behalf of the eligible person as described in 
Sec. 21.4832(a), or
    (ii) The date on which VA paid the employer a lump-sum incentive 
payment provided that the employer received such a payment on behalf of 
the eligible person.
    (2) Retention of records for a period longer than that described in 
paragraph (b)(1) of this section is not required unless the employer 
receives a written request from the General Accounting Office or VA not 
later than 30 days before the end of the 3-year period.

(Authority: 106 Stat. 2765, Pub. L. 102-484, sec. 4491(a), 10 U.S.C. 
1143 note)


Sec. 21.4851  [Reserved]


Sec. 21.4852  Monitoring and investigations.

    (a) Monitoring and investigations. VA with the assistance of the 
Department of Labor may determine compliance with the provisions of 
Secs. 21.4820 through 21.4832 by:
    (1) Monitoring employers and eligible persons participating in job 
training programs,
    (2) Investigating any matter necessary to determine compliance, and
    (3) Requiring the submission of information deemed necessary by the 
Secretary of Veterans Affairs or by the Secretary of Labor before, 
during or after training.

(Authority: 106 Stat. 2765, Pub. L. 102-484. sec. 4491(b), (c) and 
(d), 10 U.S.C. 1143 note)

    (b) Scope of investigations. VA, with the assistance of the 
Department of Labor will carry out the monitoring and investigative 
functions contained in paragraph (a) of this section by:
    (1) Examining records (including making certified copies of 
records),
    (2) Questioning employees, and
    (3) Entering into any premises or onto any site where:
    (i) Any part of the job training program is conducted, or
    (ii) Any of the employer's records are kept.

(Authority: 106 Stat. 2765, Pub. L. 102-484, sec. 4491(b), (c) and 
(d), 10 U.S.C. 1143 note)


Sec. 21.4853  [Reserved]


Sec. 21.4854  Delegation of authority to the Under Secretary for 
Benefits.

    Authority is delegated by the Secretary to the Under Secretary for 
Benefits of VA or his or her designee to enter into such agreements 
with the Departments of Defense and Labor or either of those, as may be 
necessary to implement the Service Members Occupational Conversion and 
Training Act.

(Authority: 38 U.S.C. 512)


Sec. 21.4855  [Reserved]


Sec. 21.4856  Delegation of authority to the Veterans Benefits 
Administration.

    In a Memorandum of Agreement among the Departments of Defense, 
Veterans Affairs, and Labor, the Secretary was designated as the 
implementing official for the Service Members Occupational Conversion 
and Training Act. In Sec. 2.101 of this title the Secretary has 
delegated authority given to the Secretary in the Memorandum to the 
Under Secretary for Benefits and to supervisory or adjudicative 
personnel within the jurisdiction of the Veterans Benefits 
Administration designated by him or her, to make findings and decisions 
under the Service Members Occupational Conversion and Training Act and 
the applicable regulation, precedents and instructions relating to 
programs authorized by Secs. 21.4800 through 21.4852 of this part.

(Authority: 38 U.S.C. 512)
[FR Doc. 95-2229 Filed 1-30-95; 8:45 am]
BILLING CODE 8320-01-P