[Federal Register Volume 81, Number 161 (Friday, August 19, 2016)]
[Rules and Regulations]
[Pages 56072-56469]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15975]



[[Page 56071]]

Vol. 81

Friday,

No. 161

August 19, 2016

Part VI





 Department of Labor





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Employment and Training Administration





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20 CFR Parts 603, 651, 652, et al.





Workforce Innovation and Opportunity Act; Final Rule

  Federal Register / Vol. 81 , No. 161 / Friday, August 19, 2016 / 
Rules and Regulations  

[[Page 56072]]


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DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Parts 603, 651, 652, 653, 654, 658, 675, 679, 680, 681, 682, 
683, 684, 685, 686, 687, and 688

[Docket No. ETA-2015-0001]
RIN 1205-AB73


Workforce Innovation and Opportunity Act

AGENCY: Employment and Training Administration (ETA), Labor.

ACTION: Final rule.

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SUMMARY: The Department of Labor (DOL or the Department) issues this 
Final Rule to implement titles I and III of the Workforce Innovation 
and Opportunity Act (WIOA). Through these regulations, the Department 
reforms and modernizes our nation's workforce development system. This 
rule provides the framework for changes for statewide and local 
workforce development systems to increase the employment, retention, 
earnings, and occupational skill attainment of U.S. workers, 
particularly those individuals with barriers to employment, so they can 
move into good jobs and careers and provide businesses with the skilled 
workforce needed to make the United States more competitive in the 21st 
Century global economy.

DATES: This Final Rule is effective October 18, 2016.

FOR FURTHER INFORMATION CONTACT: Adele Gagliardi, Administrator, Office 
of Policy Development and Research (OPDR), U.S. Department of Labor, 
Employment and Training Administration, 200 Constitution Avenue NW., 
Room N-5641, Washington, DC 20210, Telephone: (202) 693-3700 (voice) 
(this is not a toll-free number). If you use a telecommunications 
device for the deaf (TDD), call 1-800-326-2577.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary
    A. Purpose of the Regulatory Action
    B. Summary of Major Provisions
    C. Costs and Benefits
II. Acronyms and Abbreviations
III. Rulemaking Authority and Background
    A. Workforce Innovation and Opportunity Act Principles
    B. Major Changes From the Workforce Investment Act of 1998
    C. Workforce Innovation and Opportunity Act Rulemaking Process
    D. Legal Basis
IV. Public Comments Received on the Notice of Proposed Rulemaking
V. Section-by-Section Discussion of the Public Comments and Final 
Regulations
    A. Part 603--Federal-State Unemployment Compensation Program
    B. Part 675--Introduction to the Regulations for the Workforce 
Development Systems Under Title I of the Workforce Innovation and 
Act
    C. Part 679--Statewide and Local Governance of the Workforce 
Development System Under Title I of the Workforce Innovation and 
Opportunity Act
    D. Part 680--Adult and Dislocated Worker Activities Under Title 
I of the Workforce Innovation and Opportunity Act
    E. Part 681--Youth Activities Under Title I of the Workforce 
Innovation and Opportunity Act
    F. Part 682--Statewide Activities Under Title I of the Workforce 
Innovation and Opportunity Act
    G. Part 683--Administrative Provisions Under Title I of the 
Workforce Innovation and Opportunity Act
    H. Part 684--Indian and Native American Programs Under Title I 
of the Workforce Innovation and Opportunity Act
    I. Part 685--National Farmworker Jobs Program Under Title I of 
the Workforce Innovation and Opportunity Act
    J. Part 686--The Job Corps Under Title I of the Workforce 
Innovation and Opportunity Act
    K. Part 687--National Dislocated Worker Grants
    L. Part 688--Provisions Governing the YouthBuild Program
    M. Part 651--General Provisions Governing the Wagner-Peyser Act 
Employment Service
    N. Part 652--Establishment and Functioning of State Employment 
Service
    O. Part 653--Services of the Wagner-Peyser Act Employment 
Service
    P. Part 654--Special Responsibilities of the Employment Service
    Q. Part 658--Administrative Provisions Governing the Wagner-
Peyser Act Employment Service
VI. Rulemaking Analyses and Notices
    A. Executive Orders 12866 and 13563: Regulatory Planning and 
Review
    B. Regulatory Flexibility Act
    C. Small Business Regulatory Enforcement Fairness Act of 1996
    D. Paperwork Reduction Act
    E. Executive Order 13132 (Federalism)
    F. Unfunded Mandates Reform Act of 1995
    G. Plain Language
    H. Assessment of Federal Regulations and Policies on Families
    I. Executive Order 13175 (Indian Tribal Governments)
    J. Executive Order 12630 (Government Actions and Interference 
With Constitutionally Protected Property Rights)
    K. Executive Order 12988 (Civil Justice Reform)
    L. Executive Order 13211 (Energy Supply)

I. Executive Summary

A. Purpose of the Regulatory Action

    On July 22, 2014, President Obama signed the Workforce Innovation 
and Opportunity Act (WIOA) (Pub. L. 113-128), comprehensive legislation 
that reforms and modernizes the public workforce system. WIOA reaffirms 
the role of the public workforce system, and brings together and 
enhances several key employment, education, and training programs. This 
new law provides resources, services, and leadership tools for the 
public workforce system to help individuals find good jobs and stay 
employed and improves employer prospects for success in the global 
marketplace. It ensures that the public workforce system operates as a 
comprehensive, integrated, and streamlined system to provide pathways 
to prosperity for those it serves and continuously improves the quality 
and performance of its services.
    The Department is publishing this Final Rule to implement those 
provisions of WIOA that affect the core programs under title I, the 
Wagner-Peyser Act Employment Service (ES) program, as amended by WIOA 
title III (ES program), and the Job Corps and national programs 
authorized under title I which will be administered by the Department. 
In addition to this DOL WIOA Final Rule, the Departments of Education 
(ED) and Labor jointly are publishing a Final Rule to implement those 
provisions of WIOA that affect all of the WIOA core programs (titles I 
through IV) and which will have to be overseen and administered jointly 
by both Departments. Readers should note that in this DOL WIOA Final 
Rule there are a number of cross-references to the Joint WIOA Final 
Rule published by ED and DOL, including those provisions in the Joint 
WIOA Final Rule regarding performance reporting. In addition to the 
Joint WIOA Final Rule, ED and DOL are issuing separate final rules to 
implement program-specific requirements of WIOA that fall under each 
Department's purview. DOL is issuing this Final Rule governing program-
specific requirements under WIOA title I and for the ES program, as 
amended by WIOA title III. ED is issuing three final rules: One 
implementing program-specific requirements of the Adult Education and 
Family Literacy Act (AEFLA), as reauthorized by title II of WIOA; and 
two final rules implementing all program-specific requirements for 
programs authorized under the Rehabilitation Act of 1973, as amended by 
title IV of WIOA. The Joint WIOA Final Rule and other Department-
specific final rules are published

[[Page 56073]]

elsewhere in this issue of the Federal Register.
    WIOA seeks to deliver a broad array of integrated services to 
customers of the public workforce system, which include both 
individuals seeking jobs and skills training and employers seeking 
skilled workers. The law improves the public workforce system by more 
closely aligning it with regional economies and strengthening the 
network of about 2,500 one-stop centers. Customers must have access to 
a seamless system of high-quality services through coordination of 
programs, services, and governance structures. The Act builds closer 
ties among key workforce partners--business leaders, State and Local 
Workforce Development Boards (WDBs), labor unions, community colleges, 
non-profit organizations, youth-serving organizations, and State and 
local officials--in striving for a more job-driven approach to training 
and skills development.
    WIOA will help job seekers and workers access employment, 
education, training, and support services to succeed in the labor 
market and match employers with the skilled workers they need to 
compete in the global economy. The purposes of WIOA described in the 
statute include:
     Increasing access to and opportunities for the employment, 
education, training, and support services that individuals need, 
particularly those with barriers to employment.
     Supporting the alignment of workforce investment, 
education, and economic development systems, in support of a 
comprehensive, accessible, and high-quality workforce development 
system.
     Improving the quality and labor market relevance of 
workforce investment, education, and economic development efforts.
     Promoting improvement in the structure and delivery of 
services.
     Increasing the prosperity of workers and employers.
     Providing workforce development activities that increase 
employment, retention, and earnings of participants and that increase 
postsecondary credential attainment and as a result, improve the 
quality of the workforce, reduce welfare dependency, increase economic 
self-sufficiency, meet skill requirements of employers, and enhance 
productivity, and the competitiveness of our nation.
    WIOA's passage and implementation builds upon the groundwork 
already laid by an Administration-wide review of employment, education, 
and training programs to ensure Federal agencies do everything possible 
to prepare ready-to-work-Americans with ready-to-be-filled jobs. That 
review identified several priorities for Federally supported training 
programs, including employer engagement; promoting work-based learning 
strategies, such as on-the job training and registered apprenticeships, 
career pathways, and regional collaboration; increasing access to 
training by breaking down barriers; and data-driven program management 
and evaluation.
    As WIOA implementation progresses, success in accomplishing the 
purposes of WIOA at the State, local, and regional levels, will be 
determined by whether:
     One-stop centers are recognized as a valuable community 
resource and are known for high quality, comprehensive services for 
customers.
     The core programs and one-stop partners provide seamless, 
integrated customer service.
     Program performance, labor market, and related data drive 
policy and strategic decisions and inform customer choice.
     Youth programs reconnect out-of-school youth (OSY) to 
education and jobs.
     Job seekers access quality career services either online 
or in a one-stop center through a ``common front door'' that connects 
them to the right services.
     One-stop centers facilitate access to high quality, 
innovative education and training.
     Services to businesses are robust and effective, meeting 
businesses' workforce needs across the business lifecycle.
    As noted throughout this Final Rule, the Department will be issuing 
guidance to help our regulated communities understand their rights and 
responsibilities under WIOA and these regulations. Consistent with the 
Administrative Procedure Act's exemption from its notice and comment 
requirement for general statements of policy, interpretations, and 
procedural instructions, this guidance will provide interpretations of 
many of the terms and provisions of these regulations and more detailed 
procedural instructions that would not be appropriate to set out in 
regulations. The Department also will be issuing guidance to provide 
information on current priorities and initiatives, suggested best 
practices, and in response to stakeholder questions.

B. Summary of Major Provisions

    To implement WIOA title I, the Department has added several new CFR 
parts to title 20, chapter V (ETA's regulations). In particular, 
because the WIA regulations will continue to be referenced in existing 
and historic documents for some time after the WIOA transition, the 
Department is creating entirely new programmatic regulations to reflect 
the requirements of WIOA, rather than amending the WIA title I 
regulations found at 20 CFR parts 660 through 672. Table 1 below 
presents a crosswalk for these new CFR parts to illustrate how they 
relate to the existing WIA regulations.
    In addition, the Department is revising in this DOL WIOA Final Rule 
certain other CFR parts in accordance with WIOA, rather than creating 
entirely new parts, where it was not necessary to retain the WIA 
version of the regulation. For example, the Department retains the 
Wagner-Peyser Act implementing regulations in 20 CFR parts 651 through 
658 and is revising in this Final Rule only those parts that are 
affected by WIOA, i.e., parts 651 through 654 and 658. Further, the 
Department is amending portions of part 603 (Federal-State Unemployment 
Compensation (UC) Program; Confidentiality and Disclosure of State UC 
Information) in accordance with WIOA. These CFR parts that are amended 
but not new in this DOL WIOA Final Rule are indicated in Table 1 by 
showing that they do not change location in the CFR from WIA to WIOA. 
The remainder of this section I.B briefly summarizes each CFR part in 
this Final Rule and any significant differences between the notice of 
proposed rulemaking (NPRM) and Final Rule.

                                 Table 1--Crosswalk of WIA and WIOA Regulations
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          Subject matter                        WIA CFR part                           WIOA CFR part
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Federal-State UC Program.........  20 CFR part 603.......................  20 CFR part 603.
Definitions/Introduction to        20 CFR part 660.......................  20 CFR part 675.
 Regulations.
State and Local WDBs, Local and    20 CFR part 661.......................  20 CFR part 679.
 Regional Plans, Waivers.
Adult and Dislocated Workers.....  20 CFR part 663.......................  20 CFR part 680.

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Youth Activities.................  20 CFR part 664.......................  20 CFR part 681.
Statewide Activities.............  20 CFR part 665.......................  20 CFR part 682.
Administrative Provisions........  20 CFR part 667.......................  20 CFR part 683.
Indian and Native American         20 CFR part 668.......................  20 CFR part 684.
 Programs.
National Farmworker Jobs Program.  20 CFR part 669.......................  20 CFR part 685.
Job Corps........................  20 CFR part 670.......................  20 CFR part 686.
National Dislocated Worker Grants  20 CFR part 671.......................  20 CFR part 687.
YouthBuild.......................  20 CFR part 662.......................  20 CFR part 688.
Wagner-Peyser Act Employment       20 CFR part 651.......................  20 CFR part 651.
 Service--Definitions.
Wagner-Peyser Act Employment       20 CFR part 652.......................  20 CFR part 652.
 Service--Establishment and
 Functioning.
Wagner-Peyser Act Employment       20 CFR part 653.......................  20 CFR part 653.
 Service--Services.
Wagner-Peyser Act Employment       20 CFR part 654.......................  20 CFR part 654.
 Service--Special
 Responsibilities.
Wagner-Peyser Act Employment       20 CFR part 658.......................  20 CFR part 658.
 Service--Administrative
 Provisions.
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1. Part 603--Federal-State Unemployment Compensation Program
    The Department is amending its regulations at 20 CFR part 603 to 
help States comply with WIOA. WIOA requires that States use ``quarterly 
wage records'' in assessing the performance of certain Federally funded 
employment and training programs. In particular, this Final Rule amends 
part 603 to clarify and expand, in a limited fashion, those public 
officials with whom the State may share certain confidential 
information to carry out requirements under WIOA, including the use of 
wage records to meet performance reporting requirements and cooperation 
with certain DOL and ED evaluations. The Department is amending part 
603 as proposed in the NPRM.
2. Part 675--Introduction to the Regulations for the Workforce 
Development System Under Title I of the Workforce Innovation and 
Opportunity Act
    Part 675 discusses the purpose of title I of the WIOA, explains the 
format of the regulations governing title I, and provides additional 
definitions for terms used in the law.
    The most notable changes to this part from the regulatory text 
proposed in the NPRM include the addition of a definition of ``family'' 
and strengthening the definition of ``consultation.'' The DOL WIOA 
Final Rule defines ``family'' in the same way as the WIA definition of 
``family,'' except that instead of using the gender-specific 
``husband'' and ``wife'' terms that were in WIA, it substitutes ``a 
married couple.'' This is intended to bring the definition into 
conformance with the recent Supreme Court decisions about marriage 
equality.
    Regarding the revised definition of ``consultation,'' in response 
to public comments expressing concern that the proposed definition was 
not specific enough, the Final Rule definition better focuses on the 
public workforce system and is necessary to clarify that consultation 
constitutes a coming together of stakeholders, robust conversation, and 
opportunity for all parties to express thoughts and opinions.
    The Department also changed the terms ``workforce innovation and 
opportunity system,'' and ``workforce investment system'' to 
``workforce development system'' throughout this rule. This was done to 
enhance consistency across parts and avoid confusion, and to be 
emphasize the role of workforce development boards in this system.
3. Part 679--Statewide and Local Governance of the Workforce 
Development System Under Title I of the Workforce Innovation and 
Opportunity Act
    Part 679 addresses the statewide and local governance provisions of 
the workforce development system under WIOA title I. This part includes 
provisions that govern the conditions under which the Governor must 
establish the State WDB (subpart A); the requirements for designation 
of regions and local areas under WIOA (subpart B); the role of Local 
WDBs, Local WDB membership, and the role of chief elected officials 
(CEOs) (subpart C); the requirements relating to regional and local 
plans (subpart D); the statutory and regulatory waiver authority 
provided by WIOA sec. 189(i), including the requirements for submitting 
a workforce flexibility plan under WIOA sec. 190 (subpart E).
    As for notable changes to this part from the NPRM regulatory text, 
to address concerns about representation of core programs on the State 
WDB was raised by many commenters, the Department has revised the final 
regulations to clarify that, for the WIOA title I and ES programs, a 
single lead State official with primary responsibility for those 
programs may represent more than one of those programs. However, WIOA 
title II programs must have a single, unique representative, and the 
Vocational Rehabilitation (VR) program administered by ED and 
authorized under title I of the Rehabilitation Act of 1973, as amended 
by WIOA title IV (VR program), must have a single, unique 
representative. See Sec.  679.110(b)(3)(iii)(A)(1)(i) through (iii).
    Further, the Department clarified the regulatory text by providing 
details on the duration of initial local area designation and the 
timing of the first available opportunity for local area subsequent 
designation to occur. The Department revised the proposed requirement 
to clarify that initial designation is applicable only to Program Year 
(PY) 2016 and PY 2017. Noting the commenters' concerns regarding 
availability of WIOA performance data, which is required for the 
determination of designation, the Department added Sec.  679.250(c) to 
clarify that no determination of subsequent designation may be made 
before the conclusion of PY 2017. The section-by-section discussion of 
part 679 below details other changes to the part 679 regulatory text, 
as well as Department responses to all substantive public comments.
4. Part 680--Adult and Dislocated Worker Activities Under Title I of 
the Workforce Innovation and Opportunity Act
    In this part of the Final Rule, the Department describes 
requirements relating to the services that are available for adults and 
dislocated workers under WIOA title I. Under WIOA, adults and 
dislocated workers may access career services and training services. 
Training is provided through a robust eligible training provider and 
program list (ETPL), comprised of entities with a demonstrated 
capability of training

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individuals to enter quality employment. WIOA also provides enhanced 
access and flexibility for work-based training options, such as on-the-
job training (OJT), customized training, and incumbent worker training. 
In this part, the Department also discusses supportive services and 
needs-related payments that can be provided, based on customer needs, 
to enable them to participate in WIOA career and training services.
    Some of the notable changes to this part from the NPRM regulatory 
text include that the Final Rule clarifies that the priority of service 
in the adult program for individuals who are public assistance 
recipients, other low-income individuals and for individuals who are 
basic skills deficient exists at all times, not just when funds are 
limited.
    Regarding the role of registered apprenticeship programs, the Final 
Rule emphasizes the key role WIOA envisions for registered 
apprenticeship programs by highlighting these programs as a training 
service for both Individual Training Accounts (ITAs) and as OJT. The 
Final Rule allows apprenticeship programs that are not registered to go 
through the eligible training provider (ETP) process if they want to be 
on the ETP list; the rule does not provide apprenticeship programs that 
are not registered special access to the ETPL. The Department also 
clarifies in this Final Rule that registered apprenticeship programs 
are automatically eligible for the ETPL and the State is required to 
notify them of their automatic eligibility and allow the registered 
apprenticeship program an opportunity to consent to be on the State 
ETPL (see Sec.  680.470). This mechanism must be minimal burden to 
registered apprenticeship programs and must comply with Federal 
guidance. The Department further clarifies in this Final Rule that 
local areas, which have the authority to set more stringent standards 
than the State for eligibility of training providers, may not do so for 
registered apprenticeship programs that are on the State ETPL. Finally, 
the Department clarifies in this Final Rule that registered 
apprenticeship programs may be removed from the State ETPL for 
enforcement reasons other than performance, such as a clear violation 
of WIOA (see Sec.  680.470). Although registered apprenticeship 
programs are not required to report in the same way as other ETPs, they 
are required to be a part of the State annual ETP performance report 
under WIOA sec. 116(d)(2).
5. Part 681--Youth Activities Under Title I of the Workforce Innovation 
and Opportunity Act
    Part 681 describes requirements relating to the services that are 
available to youth under WIOA title I, subtitle B, as part 664 did for 
youth activities funded under WIA. The most significant change to the 
youth formula program under WIOA is the shift to focus resources 
primarily on OSY. WIOA increases the minimum percentage of program 
funds required to be spent on OSY from 30 to 75 percent. The Department 
plans to release subsequent guidance and technical assistance on how 
States and local areas can incorporate strategies for recruiting and 
serving more OSY.
    In addition, WIOA includes a major focus on providing youth with 
work experience opportunities with a requirement that local areas must 
spend a minimum of 20 percent of local area funds on work experience. 
And although work experience becomes the most important of the program 
elements, WIOA also introduces 5 new program elements: Financial 
literacy; entrepreneurial skills training; services that provide labor 
market and employment information about in-demand industry sectors or 
occupations available in the local areas; activities that help youth 
prepare for and transition to postsecondary education and training; and 
education offered concurrently with and in the same context as 
workforce preparation activities and training for a specific occupation 
or occupational cluster.
    The most significant change between the NPRM and the Final Rule 
occurs in Sec.  681.400. This section clarifies that youth activities 
may be conducted by the local grant recipient and that when the Local 
WDB chooses to award grants or contracts to youth service providers, 
such awards must be made using a competitive procurement process in 
accordance with WIOA sec. 123. The section-by-section discussion of 
part 681 below details other changes to the part 681 regulatory text, 
as well as Department responses to all substantive public comments.
6. Part 682--Statewide Activities Under Title I of the Workforce 
Innovation and Opportunity Act
    WIOA provides a reservation of funds for statewide employment and 
training activities. These activities are undertaken by the States, 
rather than by Local WDBs; both the required and allowable activities 
are addressed by part 682. WIOA designates the percentage of funds that 
may be devoted to these activities from annual allotments to the 
States--up to 15 percent must be reserved from youth, adult, and 
dislocated worker funding streams, and up to an additional 25 percent 
of dislocated worker funds must be reserved for statewide rapid 
response activities.
    Some of the notable changes to this part from the NPRM regulatory 
text include the specification that layoff aversion is a required rapid 
response activity, as applicable. Layoff aversion activities may 
include employer-focused activities such as providing assistance to 
employers in managing reductions in force, funding feasibility studies 
to determine if the employer's operation may be sustained through a 
buy-out, etc. Further, the DOL WIOA Final Rule specifies that a 
successful rapid response system includes comprehensive business 
engagement. Finally, the DOL WIOA Final Rule specifies that rapid 
response funds may be used to pay for incumbent worker training as long 
as it is part of a broader layoff aversion strategy. Incumbent worker 
training is also a valuable layoff aversion tool and, under WIA, many 
States requested a waiver to allow such training with rapid response 
funds. This Final Rule change recognizes the value of incumbent worker 
training for this purpose and includes it as allowable under rapid 
response within the context of layoff aversion activities.
7. Part 683--Administrative Provisions Under Title I of the Workforce 
Innovation and Opportunity Act
    Part 683 establishes the administrative provisions for the programs 
authorized under title I of WIOA. Some of the provisions are also 
applicable to grants provided under the Wagner-Peyser Act, as indicated 
in specific sections of the part. The remaining Wagner-Peyser Act 
administrative regulations are located in part 658. Additionally, 
please note that administrative provisions for Job Corps (subtitle C of 
title I of WIOA) contracts are addressed separately in part 686.
    This DOL WIOA Final Rule adds a requirement that the Governor 
establish criteria or factors for approving Local WDB transfers of 
funds between the adult and dislocated worker programs and that these 
criteria must be in a written policy, such as the State Plan or other 
written policy.
    Regarding Pay-for-Performance contract strategies, the final 
regulations made a change from the NPRM in that the Department has 
added a new section that maintained the requirement for a feasibility 
study prior to implementing a Pay-for-Performance contract strategy

[[Page 56076]]

but removed it from the 10 percent limitation of funds.
8. Part 684--Indian and Native American Programs Under Title I of the 
Workforce Innovation and Opportunity Act
    Part 684 governs the Indian and Native American (INA) program 
authorized under WIOA sec. 166. WIOA and part 684 streamline the 
competitive process for awarding the INA program grants. Section 166 of 
WIOA requires both that grants be awarded through a competitive process 
and that grantees submit a 4-year plan (WIOA secs. 166(c) and 166(e)). 
These WIOA regulations streamline the grant award process to ease the 
administrative burdens. The Department will no longer designate 
grantees or require a notice of intent. Moreover, the part 684 WIOA 
regulations have incorporated the 4-year plan into the competitive 
grant award process. Because these changes will help streamline the 
process for awarding grants, these WIOA regulations should result in 
less of an administrative burden on both applicants and the Department.
    Other than a few technical, non-substantive edits, the Department 
has made no changes to the regulatory text in part 684.
9. Part 685--National Farmworker Jobs Program Under Title I of the 
Workforce Innovation and Opportunity Act
    The purpose of part 685 is to implement WIOA sec. 167, which 
authorizes migrant and seasonal farmworker (MSFW) programs. In drafting 
these regulations, the Department consulted with States and MSFW groups 
during stakeholder consultation sessions conducted in August and 
September 2014, as required by WIOA sec. 167(f). MSFW programs include 
career services and training, housing assistance, youth services, and 
related assistance to eligible MSFWs.
    The regulations in part 685 support strategic alignment across 
workforce development programs by: Aligning the definition of 
``farmwork'' found in this part with that used in the ES program; 
adjusting the upper and lower age ranges of eligible MSFW youth to 
conform to those established in WIOA sec. 129 for OSY and ISY; and 
requiring that grantees coordinate services, particularly outreach to 
MSFWs, with the State Workforce Agency (SWA) in their service area and 
the State Monitor Advocate. These changes are intended to support 
coordination between MSFW programs and other workforce programs such as 
the ES program, and facilitate MSFW youth co-enrollments with other 
WIOA title I programs.
    Part 685 includes language regarding training services that 
reinforces that training must be directly linked to an in-demand 
industry or occupation that leads to economic self-sufficiency and 
encourages the attainment of recognized postsecondary credentials when 
appropriate (see Sec.  685.350).
    Part 685 also establishes that grantees funded under WIOA sec. 167 
can serve eligible MSFW youth participants (see Sec. Sec.  685.320 and 
685.510). These regulations also require that a percentage of the total 
funds appropriated each year for WIOA sec. 167 activities must be used 
for housing grants, and described specific housing assistance 
activities to better articulate the types of services that can be 
delivered to eligible MSFWs (see Sec.  685.360).
    Based on the public comments received in response to the NPRM, the 
Department made the following significant changes to part 685 as 
proposed:
     The Final Rule permits a National Farmworker Jobs Program 
(NFJP) grantee some flexibility to increase the OJT reimbursement rate 
up to 75 percent of the wage rate of a participant, provided that such 
reimbursement rates are consistent with the rates set by the Governor 
in the State or Local WDB(s) in the local area(s) in which the grantee 
operates in accordance with WIOA sec. 134(c)(3)(H)(i);
     The Final Rule revises Sec.  685.360(d) to clarify that 
NFJP-funded permanent housing development activities that benefit 
eligible MSFWs do not require individual eligibility determinations;
     The Final Rule clarifies in Sec.  685.360 that development 
of on-farm housing located on property owned and operated by an 
agricultural employer is an allowable activity; and
     In response to commenters' concerns regarding the negative 
impact that would result on performance indicator calculations by 
including individuals who receive only certain minimal ``related 
assistance'' services, which do not require a significant investment of 
staff time and resources, the Department has added language to Sec.  
685.400 that puts the NFJP program in alignment with other WIOA 
authorized programs regarding performance accountability calculations.
10. Part 686--The Job Corps Under Title I of the Workforce Innovation 
and Opportunity Act
    This part establishes regulations for the Job Corps program, 
authorized in title I, subtitle C of WIOA. The regulations address the 
scope and purpose of the Job Corps program and provide requirements 
relating to site selection, protection, and maintenance of Job Corps 
facilities; funding and selection of center operators and service 
providers; recruitment, eligibility, screening, selection and 
assignment, and enrollment of Job Corps students; Job Corps program 
activities and center operations; student support; career transition 
services and graduate services; community connections; and 
administrative and management requirements. The regulations carry out 
Congressional direction on contracting and competition for centers and 
incorporate the requirements of title I, subtitle C of WIOA. 
Specifically, the regulations describe how the Job Corps program is 
operated in order to deliver relevant academic and career technical 
training (CTT) that leads to meaningful employment or postsecondary 
education and explain the requirements necessitated by the unique 
residential environment of a Job Corps center.
    Although the Department received some public comments that opposed 
the proposed provision stating that the Secretary of Labor, in 
consultation with the Secretary of Agriculture, may select an entity to 
operate a Civilian Conservation Center (CCC) or close low performing 
CCCs if the Secretary of Labor deems appropriate (Sec.  686.350(e) 
through (f)), the DOL WIOA Final Rule retains these paragraphs as 
proposed because the regulatory text mirrors the statutory requirements 
at WIOA sec. 159(f)(2). In addition, regarding concerns expressed by 
commenters that the proposed high-performing center criteria were too 
difficult to achieve, the Department is retaining Sec.  686.320 as 
proposed because the language in the regulation mirrors that of WIOA 
and the Department does not have the discretion to loosen the criteria.
11. Part 687--National Dislocated Worker Grants
    National Dislocated Worker Grants (DWGs) are discretionary awards 
that temporarily expand service capacity at the State and local levels 
through time-limited funding assistance in response to significant 
dislocation events. These grants are governed by sec. 170 of WIOA. The 
part 687 regulations set forth the key elements and requirements for 
DWGs. Additional guidance on DWGs and the application requirements for 
these grants was published separately by the Department in Training and 
Employment Guidance Letter (TEGL) No. 01-15, ``Operational Guidance for 
National Dislocated Worker Grants, pursuant to the

[[Page 56077]]

Workforce Innovation and Opportunity Act (WIOA or Opportunity Act).''
    The part 687 regulations establish a framework that will enable 
eligible applicants to apply quickly for grants to relieve the impact 
of layoffs, emergencies, and disasters on employment in the impacted 
area and to meet the training and reemployment needs of affected 
workers and to enable them to obtain new jobs as quickly as possible. 
These regulations call for early assessment of the needs and interests 
of the affected workers, through either rapid response activities or 
other means, as well as an indication of the other resources available 
to meet these needs, to aid in the creation of a customer-centered 
service proposal. The early collection of information about affected 
workers will allow applicants to have an understanding of the needs and 
interests of the impacted workers to enable a prompt application for 
the appropriate level of DWG funds. Early collection of information 
also will facilitate the receipt of DWG funds when the Secretary 
determines that there are insufficient State and local formula funds 
available. Early intervention to assist workers being dislocated is 
critical to enable them to access work-based learning opportunities and 
other types of training that lead to industry-recognized credentials, 
as appropriate, to help them find new employment in in-demand 
industries and occupations as soon as possible after their dislocation 
occurs.
    The Department has made several global changes and technical edits 
to the part 687 regulations proposed in the NPRM for clarity and 
technical accuracy. For example, ``National Dislocated Worker Grants'' 
will be referred to by the acronym ``DWGs'' in this part for 
simplicity. In addition, the Department has determined it is necessary 
to alter the labels of what the NPRM called ``Regular'' and 
``Disaster'' DWGs to describe more accurately their purpose and 
intended use. ``Regular'' DWGs have been renamed ``Employment 
Recovery'' DWGs, and ``Disaster'' DWGs have been renamed ``Disaster 
Recovery'' DWGs. Further, the terms ``career services'' and 
``employment-related assistance'' have been changed to ``employment and 
training assistance'' to clarify that the use of DWG funds is not 
limited to only career services. Training and supportive services also 
may be provided as appropriate and in accordance with the requirements 
of part 687. Finally, the term ``temporary employment'' has been 
replaced with the term ``disaster relief employment'' to better align 
the text of this part 687 with that of WIOA sec. 170. In addition, this 
DOL WIOA Final Rule clarifies that individuals who relocate to another 
State, tribal, or outlying area after a disaster may receive services 
in either the disaster area or the area to which they relocate. 
However, the Final Rule also includes a provision for the Secretary to 
allow, in certain circumstances, individuals to receive services in 
both the disaster and the relocation area. Other non-substantive 
changes and technical edits are described in detail in the section-by-
section discussion of part 687 below.
12. Part 688--Provisions Governing the YouthBuild Program
    The YouthBuild program authorizes grants for job training and 
educational activities for at-risk youth who, as part of their 
training, help construct or rehabilitate housing for homeless 
individuals and families and low-income families in their respective 
communities. Participants receive a combination of classroom training, 
job skills development, and on-site training in the construction 
trades. The Department wants to emphasize the connections across all of 
our youth-serving programs under WIOA, including the WIOA youth formula 
program and associated boards and youth committees, connections to pre-
apprenticeship and registered apprenticeship programs, and Job Corps 
centers across the country. WIOA is an opportunity to align and 
coordinate service strategies for these ETA youth training programs, as 
well as to align with our Federal partners that serve these same 
customers. WIOA also ensures that these programs are using common 
performance indicators and standard definitions, which includes 
aligning the definitions for homeless youth, basic skills deficient, 
occupational skills training, and supportive services. Additionally, 
the YouthBuild regulation adopts the six new performance indicators 
that were codified across WIOA youth-serving programs and aligns 
YouthBuild with the WIOA youth formula program performance outcomes.
    WIOA affirms the Department's commitment to providing high-quality 
education, training, and employment services for youth and young adults 
through YouthBuild grants by expanding the occupational skills training 
offered at local YouthBuild programs. YouthBuild programs can offer 
occupational skills training in in-demand occupations, such as health 
care, advanced manufacturing, and IT, as approved by the Secretary and 
based on the maturity of the program and local labor market 
information.
    Other changes include revisions to the duration of the restrictive 
covenant clause, clarifying eligibility criteria for participation, and 
describing qualifying work sites and minimum criteria for successful 
exit from the YouthBuild program. Beyond these regulations, the 
Department will continue to develop guidance and technical assistance 
to help grantees and the workforce development community operate highly 
effective YouthBuild programs.
13. Part 651--General Provisions Governing the Wagner-Peyser Act 
Employment Service
    The Wagner-Peyser Act of 1933 established the ES program, which is 
a nationwide system of public employment offices that provide public 
labor exchange services. The ES program seeks to improve the 
functioning of the nation's labor markets by bringing together 
individuals seeking employment with employers seeking workers. In 1998, 
the ES program was amended to make it part of the one-stop delivery 
system established under WIA. The ES program has now been amended again 
under title III of WIOA.
    WIOA expands upon the previous workforce reforms in the WIA and, 
among other provisions, identifies the ES as a core program in the one-
stop delivery system, embeds ES State planning requirements into a 
unified planning approach, and requires the colocation of ES offices 
into the one-stop centers. The regulations in parts 651, 652, 653, 654, 
and 658 update the language and content of the regulations to implement 
amendments made by title III of WIOA to the Wagner-Peyser Act. In some 
areas, these regulations establish entirely new responsibilities and 
procedures. In other areas, the regulations clarify and update 
requirements already established. The regulations make important 
changes to the following components of the ES program: definitions, 
data submission, and increased collaboration requirements, among 
others.
    Part 651 sets forth definitions for 20 CFR parts 652, 653, 654, and 
658. The Department received several comments regarding these 
definitions and has eliminated, revised, and added definitions, as 
needed. Some commenters suggested new terms they would like to see 
defined in part 651, and other commenters expressed concerns or 
suggestions relating to specific proposed definitions. Additionally, 
the Department has made technical and clarifying changes to some of the 
definitions.

[[Page 56078]]

14. Part 652--Establishment and Functioning of State Employment Service
    The regulations at 20 CFR part 652 set forth standards and 
procedures regarding the establishment and functioning of State ES 
operations. These regulations align part 652 with the WIOA amendments 
to the ES program, and with the WIOA reforms to the public workforce 
system that affect the ES program. The WIOA-amended Wagner-Peyser Act 
furthers longstanding goals of closer collaboration with other 
employment and training programs by mandating colocation of ES offices 
with one-stop centers; aligning service delivery in the one-stop 
delivery system; and ensuring alignment of State planning and 
performance indicators in the one-stop delivery system. Other new 
Wagner-Peyser Act provisions are consistent with long-term Departmental 
policies, including increased emphasis on reemployment services for UI 
claimants (sec. 7(a)); promoting robust Workforce Labor Market 
Information (WLMI); the development of national electronic tools for 
job seekers and businesses (sec. 3(e)); dissemination of information on 
best practices (sec. 3(c)(2)); and professional development for ES 
staff (secs. 3(c)(4) and 7(b)(3)).
    Several public comments received in response to the NPRM prompted 
the Department to make minor changes to parts of the regulations in 
this section. For example, the Department agreed with comments 
regarding ensuring comprehensive front-line staff training; and direct 
language has been added to Sec.  652.204 from sec. 3(c)(4) of the 
Wagner-Peyser Act (as amended by WIOA sec. 303(b)(4)) to indicate that 
professional development and career advancement can be supported by the 
Governor's Reserve. The Department agreed with the commenter-suggested 
benefits of aligning definitions across the core programs, and as a 
result, the terms ``reportable individual'' and ``participant'' have 
been revised to align with the performance accountability of the other 
core programs. The Department also agreed with commenters who suggested 
that career services under WIOA are not a substitute for Wagner-Peyser 
Act sec. 7(a) services; Sec.  652.3(f) has been amended to reference 
sec. 7(a) of the Wagner-Peyser Act. The Department continues to seek 
alignment of service delivery with WIOA core programs.
    The Department received several varying comments regarding 
colocation. This part clarifies the intent of colocation; how ES-only 
affiliate sites do not meet the intent of WIOA; the Department's 
decision to broaden language in 20 CFR 678.315(b) to allow multiple 
programs to meet the more than 50 percent threshold by combining the 
time their staff members are physically present (see Joint WIOA Final 
Rule); and the expectation that colocation should be completed as 
expeditiously as possible, and that the Department will issue future 
guidance on this topic. Many commenters also raised questions and 
provided comments regarding the allowable uses of Wagner-Peyser Act 
funds. The Department clarified that there are no changes in the 
activities that may be funded by Wagner-Peyser Act funds. Specifically, 
training services may not be provided with sec. 7(a) of the Wagner-
Peyser Act funding; however, appropriate career services and labor 
exchange services may be provided to individuals in training and there 
is no restriction on funding training services with sec. 7(b) funds 
under the Wagner-Peyser Act.
    In regard to WLMI, some of the clarifications identified in this 
part include: There is a need to provide extensive education and 
technical assistance with regard to accessing wage record data; the 
Workforce Information Advisory Council (WIAC) will advise on WLMI and 
may consider what kind of information is needed for planning, but it 
will not be involved in developing State Plans; and the Departments of 
Labor and Education will issue joint guidance with regard to use of 
wage data for performance in the context of the confidentiality 
requirements for the use of UI wage record data and education data 
under the Family Educational Rights and Privacy Act (FERPA). The 
Department also made other clarifying changes to part 652, as discussed 
elsewhere in this Final Rule.
15. Part 653--Services of the Wagner-Peyser Act Employment Service
    Part 653 sets forth standards and procedures for providing services 
to MSFWs and provides regulations governing the Agricultural 
Recruitment System (ARS), a system for interstate and intrastate 
agricultural job recruitment. In subparts B and F of part 653, the 
Department is implementing the WIOA title III amendments to the Wagner-
Peyser Act, as well as streamlining and updating certain sections to 
eliminate duplicative and obsolete provisions. Despite these changes, 
part 653 remains consistent with the ``Richey Order.'' NAACP v. 
Brennan, 1974 WL 229, at *7 (D.D.C. Aug. 13, 1974).
    Upon the consideration of comments suggesting that the Department 
require outreach workers to be trained on not only how to identify and 
refer possible incidents of sexual harassment, but also on similar 
issues such as sexual coercion, assault, and human trafficking, the 
Department has added such language to the regulatory text at Sec.  
653.107(b)(7). Training outreach workers in this way is key in helping 
to connect victims with appropriate resources and support networks.
16. Part 654--Special Responsibilities of the Employment Service System
    In 1980, the Department published amended regulations at 20 CFR 
part 654, subpart E, providing agricultural housing standards for 
MSFWs. In the NPRM, the Department proposed to revise these 
agricultural housing regulations (hereinafter ``ETA standards'') by 
updating outdated terminology and by establishing an expiration date 
for the ETA standards. This proposed expiration date was intended to 
transition housing currently governed by the ETA standards to the 
Occupational Safety and Health Administration (OSHA) regulations 
governing temporary labor camps for agricultural workers as set forth 
at 29 CFR 1910.142. After considering the public comments received on 
this aspect of the proposal, the Department is rescinding its proposal 
to establish an expiration date for the ETA standards in order to 
transition housing currently governed by the ETA standards to the OSHA 
standards, as explained in further detail in this Final Rule.
17. Part 658--Administrative Provisions Governing the Wagner-Peyser Act 
Employment Service
    Part 658 sets forth systems and procedures for complaints, 
monitoring for compliance assessment, enforcement, and sanctions for 
violations of the ES regulations and employment-related laws, including 
discontinuation of services to employers and decertification of SWAs. 
The Department's proposed changes to part 658 updated terminology and 
responsibilities and reorganized various regulations to increase the 
clarity and efficiency of the provisions involved. Additionally, 
headings were revised, when necessary, to reflect changes to the 
regulations, and language was added to permit, where relevant, the use 
of electronic mail and electronic signatures.
    Overall, the Department received several comments seeking 
clarification on processing complaints and apparent violations, 
attempting informal

[[Page 56079]]

resolution, and the role of MSFW complainant's representatives, among 
many others. The Department has addressed these requests for 
clarification in the responses to public comments contained in the part 
658 section-by-section discussion below (see section V.Q). 
Additionally, the Department will issue guidance on the Complaint 
System, informal resolution, referring complaints and apparent 
violations, and on part 658, subpart F (Discontinuation of Services to 
Employers by the Employment Service System).

C. Costs and Benefits

    This Final Rule has been designated an ``economically significant 
rule'' under sec. 3(f)(4) of Executive Order (E.O.) 12866. Therefore, 
the Office of Management and Budget (OMB) has reviewed the Final Rule, 
and the Department has conducted a regulatory impact analysis to 
estimate the costs, benefits, and transfers associated with the Final 
Rule, which is detailed in full in section V.A of the Final Rule below. 
In total, the Department estimates that this Final Rule will have an 
average annual net benefit of $14,806,210 and a total 10-year net 
benefit of $95,836,706 (with 7-percent discounting).
    The Department estimates that this Final Rule will have an average 
annual cost of $35,037,540 and a total 10-year cost of $278,750,652 
(with 7-percent discounting). The largest contributor to the cost is 
the requirement related to the development and continuous improvement 
of the workforce development system, followed by the career pathways 
development and the colocation of ES services.
    The Department quantified the expected incremental benefits 
associated with this Final Rule relative to the baseline of the current 
practice under the Workforce Investment Act of 1998 (WIA), where 
possible. Specifically, the Department quantified the benefits expected 
to result from required competition for all one-stop operators. 
Competition for all one-stop operators will result in cost reductions 
for Local WDBs due to increases in efficiency, which are estimated to 
amount to approximately $49,843,750 per year and $374,587,357 over the 
10-year period (with 7-percent discounting). This quantified benefit 
resulting from increased competition for all one-stop operators, 
however, does not account for several other important benefits to 
society that the Department was unable to quantify due to data 
limitations or lack of existing data or evaluation findings. Based on a 
review of empirical studies (primarily studies published in peer-
reviewed academic publications and studies sponsored by the 
Department), however, the Department identified a variety of societal 
benefits: (1) Training services increase job placement rates; (2) 
participants in occupational training experience higher reemployment 
rates; (3) training is associated with higher earnings; and (4) State 
performance accountability measures, in combination with the board 
membership provision requiring employer/business representation, can be 
expected to improve the quality of the training and, ultimately, the 
number and caliber of job placements. The Department identified several 
channels through which these benefits might be achieved: (1) Better 
information about training providers will enable workers to make better 
informed choices about programs to pursue; (2) sanctions to under-
performing States will serve as an incentive for both States and local 
entities to monitor performance more effectively and to intervene 
early; and (3) enhanced services for dislocated workers, self-employed 
individuals, and workers with disabilities will lead to the benefits 
discussed above.
    In addition, the Final Rule will result in transfer payments, i.e., 
a shift in costs or benefits from one group to another that does not 
affect total resources available to society. The Department estimates 
that this Final Rule will result in annual average transfer payments of 
$12,887,628 and a total 10-year transfer payment of $96,853,514 (with 
7-percent discounting). These transfers result from increased funding 
for targeting OSY.
    The Department has determined that the Final Rule will have no cost 
impact on small entities and will not impose an unfunded mandate on 
Federal, State, local, or tribal governments as defined by the Unfunded 
Mandates Reform Act of 1995.

II. Acronyms and Abbreviations

AEFLA Adult Education and Family Literacy Act
ALJ Administrative Law Judge
ACS American Community Survey
ADA Americans with Disabilities Act
ANRC Alaska Native Regional Corporation
ANVSA Alaska Native Village Service Area
AOP Agricultural Outreach Plan
ARC Analyst Resource Center
ARS Agricultural Recruitment System
ATAP Assistive Technology Act Program
AWPA Migrant and Seasonal Agricultural Worker Protection Act
AWOL Absent Without Official Leave
BCL Business and Community Liaison
BLS Bureau of Labor Statistics
CBO Community-based organization
CCC Civilian Conservation Center
CDBG Community Development Block Grant
CEO Chief elected official
CEP Concentrated Employment Program
CFR Code of Federal Regulations
Complaint System Employment Service and Employment-Related Law 
Complaint System
COO Chief operating officer
COSO Committee of Sponsoring Organizations of the Treadway 
Commission
CPARS Contract Performance Assessment Reports
CPP Career Preparation Period
CRIS Common Reporting Information System
CTS Career Transition Services
CTT Career Technical Training
DACA Deferred Action for Childhood Arrivals
DINAP Division of Indian and Native American Programs
DOL Department of Labor
DVOP Disabled Veterans Outreach Program
DWG Dislocated Worker Grant
EBSS Enterprise Business Support System
ED Department of Education
EEOC Equal Employment Opportunity Commission
E.O. Executive Order
EO Equal opportunity
ES Employment Service
ESA Employment Standards Administration
ESARS Employment Security Automated Reporting System
ETA Employment and Training Administration
ETP Eligible training provider
ETPL Eligible training provider list
FAR Federal Acquisition Regulations
FECA Federal Employees Compensation Act
FEIN Federal employer identification number
FEMA Federal Emergency Management Agency
FERPA Family Educational Rights and Privacy Act
FLSA Fair Labor Standards Act
FOA Funding Opportunity Announcement
FPO Federal Project Officer
FR Federal Register
FTE Full Time Equivalent
GED General Educational Development
GIS Geographic information system
GPRA Government Performance and Results Act
HEARTH Homeless Emergency Assistance and Rapid Transition to Housing 
Act of 2009
HHS Department of Health and Human Services
HOME HOME Investment Partnerships
HSD High School Diploma
HSE High School Equivalent
HUD U.S. Department of Housing and Urban Development
IC Information collection
ICR Information Collection Request
IEP Individual Employment Plan
IEVS Income and Eligibility Verification System
INA Indian and Native American
IRFA Initial Regulatory Flexibility Analysis
IRS Internal Revenue Service
ISDEAA Indian Self-Determination and Education Assistance Act

[[Page 56080]]

ISS Individual Service Strategy
ISY In-school youth
IT Information technology
ITA Individual Training Account
JIS Job Information Service
JS Job Service
JTPA Job Training Partnership Act
JVSG Jobs for Veterans State Grants
LEARS Labor Exchange Agricultural Reporting System
LEHD Longitudinal Employer-Household Dynamics
LEP Limited English proficiency
LEWIS Local Employment and Wage Information System
LLC Limited Liability Corporation
LLSIL Lower Living Standard Income Level
LMI Labor Market Information
Local WDB Local Workforce Development Board
MOU Memorandum of Understanding
MPO Management Performance Outcome
MSFW Migrant and Seasonal Farmworker
MSWR Medical Separation with Reinstatement Rights
NAA National Apprenticeship Act
NAACP National Association for the Advancement of Colored People
NAETC Native American Employment and Training Council
NAFTA North American Free Trade Agreement
NAICS North American Industry Classification System
NDWG National Dislocated Worker Grant
NEG National Emergency Grant
NFJP National Farmworker Jobs Program
NICRA Negotiated Indirect Cost Rate Agreement
NIEM National Information Exchange Model
NLX National Labor Exchange
NPRM Notice of Proposed Rulemaking
OA Outreach and Admissions
OALJ Office of Administrative Law Judges
OBS On-board strength
ODEP Office of Disability and Employment Policy
OFLC Office of Foreign Labor Certification
OIG Office of the Inspector General
OJT On-the-job training
OMB Office of Management and Budget
OMS Outcome Measurement System
OPDR Office of Policy Development and Research
OSHA Occupational Safety and Health Administration
OSY Out-of-school youth
OTSA Oklahoma Tribal Service Area
OWI Office of Workforce Investment
PART Program Assessment and Rating Tool
PBP Program Budget Plan
PEDCS Post Enrollment Data Collection System
PIA Privacy Impact Assessment
PII Personally identifiable information
PIP Performance improvement plan
PIRL Participant Individual Record Layout
PMP Projections Managing Partnership
PPACA Patient Protection and Affordable Care Act
PRA Paperwork Reduction Act of 1995
PREP Profiling Reemployment Program
PRH Policy and Requirements Handbook
Pub. L. Public Law
PY Program year
REA Reemployment and Eligibility Assessment
RESEA Reemployment Services and Eligibility
RFA Regulatory Flexibility Act
RFP Requests for proposals
RHY Runaway or Homeless Youth
Richey Order Judge Richey Court Order
RIN Regulatory Information Number
RMA Regional Monitor Advocate
RSA Rehabilitation Services Administration
SBA Small Business Administration
SBREFA Small Business Regulatory Enforcement Fairness Act of 1996
SDA Service delivery area
sec. Section of a Public Law or the United States Code
SESA State Employee Security Act
S-FTP Secure File Transfer Protocol
SMA State Monitor Advocate
SOC Standard Occupational Classification
SNAP Supplemental Nutrition Assistance Program
SSA Social Security Act
SSDI Social Security Disability Insurance
SSN Social Security Number
State WDB State Workforce Development Board
STAWRS Simplified Tax and Wage Reporting System
SWA State Workforce Agency
SWCAP Statewide Cost Allocation Plans
TAA Trade Adjustment Assistance
TANF Temporary Assistance for Needy Families
TAPR Trade Act Participant Report
TAT Technical Assistance and Training
TDD Telephone device for the deaf
TEAP Trainee Employee Assistance Program
TEGL Training and Employment Guidance Letter
TEN Training and Employment Notice
UC Unemployment Compensation
UCX Unemployment Compensation for Ex-service members
UI Unemployment insurance
U.S.C. United States Code
VA Department of Veterans Affairs
VETS Veterans' Employments and Training Service
VR Vocational rehabilitation
Wagner-Peyser Act Wagner-Peyser Act of 1933
WARN Worker Adjustment and Retraining Notification
WDB Workforce Development Board
WHD Wage and Hour Division
WIA Workforce Investment Act of 1998
WIAC Workforce Information Advisory Council
WIASRD Workforce Investment Act Standardized Record Data
WIB Workforce investment boards
WIC Workforce Information Council
WIOA Workforce Innovation and Opportunity Act
WLMI Workforce and Labor Market Information
WLMIS Workforce and Labor Market Information System
WPRS Worker Profiling and Reemployment Services
WRIS Wage Record Interchange System
YB-TAP YouthBuild Trainee Apprenticeship Program
ZT Zero Tolerance

III. Rulemaking Authority and Background

A. Workforce Innovation and Opportunity Act Principles

    On July 22, 2014, President Obama signed WIOA, the first 
legislative reform of the public workforce system in more than 15 
years, which passed Congress by a wide bipartisan majority. WIOA 
supersedes WIA and amends the Adult Education and Family Literacy Act 
(AEFLA), the Wagner-Peyser Act, and the Rehabilitation Act of 1973. 
WIOA presents an extraordinary opportunity for the public workforce 
system to accelerate its transformational efforts and demonstrate its 
ability to improve job and career options for our citizens through an 
integrated, job-driven public workforce system that links diverse 
talent to our nation's businesses. It supports the development of 
strong, vibrant regional economies where businesses thrive and people 
want to live and work.
    WIOA reaffirms the role of the customer-focused one-stop delivery 
system, a cornerstone of the public workforce development system, and 
enhances and increases coordination among several key employment, 
education, and training programs. Most provisions in WIOA took effect 
on July 1, 2015, the first full program year after enactment, although 
the new statutory State Plans and performance accountability system 
requirements take effect July 1, 2016. Title IV of WIOA, however, took 
effect upon enactment.
    WIOA is designed to help job seekers access employment, education, 
training, and support services to succeed in the labor market and to 
match employers with the skilled workers they need to compete in the 
global economy. WIOA has six main purposes: (1) Increasing access to 
and opportunities for the employment, education, training, and support 
services for individuals, particularly those with barriers to 
employment; (2) supporting the alignment of workforce investment, 
education, and economic development systems in support of a 
comprehensive, accessible, and high-quality workforce development 
system; (3) improving the quality and labor market relevance of 
workforce investment, education, and economic development efforts; (4) 
promoting improvement in the structure and delivery of services; (5) 
increasing the prosperity of workers and employers; and (6) providing 
workforce development activities that increase employment, retention, 
and earnings of participants and that increase

[[Page 56081]]

postsecondary credential attainment and as a result, improve the 
quality of the workforce, reduce welfare dependency, increase economic 
self-sufficiency, meet skill requirements of employers, and enhance 
productivity and competitiveness of the nation.
    Beyond achieving the requirements of the new law, WIOA offers an 
opportunity to continue to modernize the public workforce system, and 
achieve key hallmarks of a customer centered public workforce system, 
where the needs of business and workers drive workforce solutions, 
where one-stop centers and partners provide excellent customer service 
to job seekers and businesses, where the public workforce system 
pursues continuous improvement through evaluation and data-driven 
policy, and where the public workforce system supports strong regional 
economies.
    Regulations and guidance implementing WIOA titles I and III are 
issued by DOL, with the exception of the joint regulations issued by 
DOL and ED on the provisions in title I relating to unified and 
combined planning, performance, and the one-stop delivery system. 
Regulations and guidance on implementing titles II and IV of WIOA are 
issued by ED. The Joint WIOA Final Rule and the ED WIOA Final Rules are 
published elsewhere in this issue of the Federal Register.
    WIOA retains much of the structure of WIA, but with critical 
changes to advance greater coordination and alignment. Under title I, 
subtitle A, each State will be required to develop a single, unified 
strategic plan that is applicable to six core workforce development 
programs. The core programs consist of the adult, dislocated worker, 
and youth formula programs administered by the Department under WIOA 
title I; the Adult Education and Family Literacy program administered 
by ED under WIOA title II; the ES program administered by the 
Department and authorized by the Wagner-Peyser Act, as amended by WIOA 
title III; and the VR program administered by ED and authorized under 
title I of the Rehabilitation Act of 1973, as amended by WIOA title IV 
(VR program). In addition to core programs, WIOA provides States the 
opportunity to include other key one-stop partner programs such as the 
Supplemental Nutrition Assistance Program (SNAP), Unemployment 
Insurance (UI), Temporary Assistance for Needy Families (TANF), and 
Perkins Career Technical Education in a Combined State Plan. The law 
also includes a common performance accountability system applicable to 
all of the core programs.
    The remainder of WIOA title I authorizes the adult, dislocated 
worker, and youth formula programs; the State and local WDBs (formerly 
workforce investment boards or WIBs); the designation of regions and 
local areas; local plans; the one-stop delivery system; national 
programs, including Job Corps, YouthBuild, Indian and Native American 
(INA) programs, and Migrant and Seasonal Farmworker (MSFW) programs; 
technical assistance and evaluations; and general administrative 
provisions currently authorized under title I of WIA. Title II retains 
and amends the Adult Education and Family Literacy Program currently 
authorized under title II of WIA. Title III contains amendments to the 
Wagner-Peyser Act relating to the ES and Workforce and Labor Market 
Information System (WLMIS), and requires the Secretary to establish a 
WIAC. Title IV contains amendments to the Rehabilitation Act of 1973, 
which were also included under title IV of WIA; it also requires the 
Secretary of Labor to establish an Advisory Committee on Increasing 
Competitive Integrated Employment for Individuals with Disabilities. 
Finally, title V contains general provisions similar to the provisions 
applicable under title V of WIA as well as the effective dates and 
transition provisions.

B. Major Changes From the Workforce Investment Act of 1998

    This section contains a summary of the major changes from WIA. As 
indicated above, WIOA retains much of the structure of WIA. Major 
changes in WIOA are:
     Aligns Federal investments to support job seekers and 
employers. The Act provides for States to prepare a single Unified 
State Plan that identifies a 4-year strategy for achieving the 
strategic vision and goals of the State for preparing an educated and 
skilled workforce and for meeting the skilled workforce needs of 
employers. States govern the core programs as one system assessing 
strategic needs and aligning them with service strategies to ensure the 
public workforce system meets employment and skill needs of all workers 
and employers.
     Streamlines the governing bodies that establish State, 
regional and local workforce investment priorities. WIOA makes State 
and Local WDBs more agile and well positioned to meet local and 
regional employers' workforce needs by reducing the size of the WDBs 
and assigning them additional responsibilities to assist in the 
achievement of the State and local strategic workforce vision and 
goals. The State WDBs continue to have a majority of business 
representation and a business chair and work for all workers and job 
seekers, including low-skilled adults, youth, and individuals with 
disabilities, while they foster innovation, and ensure streamlined 
operations and service delivery excellence.
     Creates a common performance accountability system and 
information for job seekers and the public. WIOA ensures that Federal 
investments in employment, education, and training programs are 
evidence-based and data-driven, and accountable to participants and the 
public. It establishes a performance accountability system that applies 
across the core programs, by generally applying six primary indicators 
of performance: Entry into unsubsidized employment at two points in 
time, median earnings, attainment of postsecondary credentials, 
measurable skill gains, and effectiveness in serving employers.
     Fosters regional collaboration to meet the needs of 
regional economies. WIOA promotes alignment of workforce development 
programs with regional economic development strategies to meet the 
needs of local and regional employers.
     Enhances access to high quality services through the 
network of one-stop delivery system. WIOA helps job seekers and 
employers acquire the services they need in centers and online, 
clarifies the roles and responsibilities of the one-stop partner 
programs, adds the TANF program as a required one-stop partner unless 
the Governor objects, requires competitive selection of one-stop 
operators, and requires the use by the one-stop delivery system of a 
common one-stop delivery identifier or brand developed by the Secretary 
of Labor (``American Job Center,'' see Joint WIOA Final Rule).
     Improves services to individuals with disabilities. WIOA 
stresses physical and programmatic accessibility, including the use of 
accessible technology to increase individuals with disabilities' access 
to high quality workforce services.
     Makes key investments for disconnected youth. WIOA 
emphasizes services to disconnected youth to prepare them for 
successful employment by requiring that a minimum of 75 percent of 
youth formula program funds be used to help OSY, in contrast to the 30 
percent required under WIA. WIOA increases OSYs' access to WIOA 
services, including pre-apprenticeship

[[Page 56082]]

opportunities that result in registered apprenticeship. It adds a 
requirement that at least 20 percent of formula funds at the local 
level be used on work-based training activities such as summer jobs, 
OJT, and apprenticeship.
     Helps employers find workers with the necessary skills. 
WIOA contributes to economic growth and business expansion by ensuring 
the public workforce system is job-driven--matching employers with 
skilled individuals. WIOA requires Local WDBs to promote the use of 
industry and sector partnerships that include key stakeholders in an 
industry cluster or sector that work with public entities to identify 
and address the workforce needs of multiple employers.
    Additionally, successful implementation of many of the approaches 
called for within WIOA, such as career pathways and sector strategies, 
require robust relationships across programs and with businesses, 
economic development, education and training institutions, including 
community colleges and career and technical education, local entities, 
and supportive services agencies.

C. Workforce Innovation and Opportunity Act Rulemaking Process

    Since the enactment of WIOA, the Department has used a variety of 
means to coordinate with other Federal agencies that have roles and 
responsibilities under the Act. The Department works closely with staff 
at ED and the Department of Health and Human Services (HHS) on all 
shared policy and implementation matters. Key areas of collaboration 
include the Unified State Plan, performance reporting, one-stop service 
delivery, and services to disconnected youth and to individuals with 
disabilities. WIOA created an opportunity to enhance coordination and 
collaboration across other Federal programs through the Combined State 
Plan and the Department meets with the other Federal agencies regarding 
those plans.
    Before publishing the WIOA NPRM (80 FR 20690, Apr. 16, 2015), the 
Department solicited broad input through a variety of mechanisms 
including:
     Issued Training and Employment Notice (TEN) No. 05-14 to 
notify the public workforce system that WIOA was enacted, accompanied 
by a statutory implementation timeline, a fact sheet that identified 
key reforms to the public workforce system, and a list of frequently 
asked questions.
     Issued TEN No. 06-14 to announce a series of webinars to 
engage WIOA stakeholders in implementation of WIOA.
     Issued TEN No. 12-14 to provide guidance to States and 
other recipients of funds under title I of WIA on the use and reporting 
of PY 2014 funds for planning and implementation activities associated 
with the transition to WIOA.
     Established a WIOA Resource Page (www.doleta.gov/WIOA) to 
provide updated information related to WIOA implementation to the 
public workforce system and stakeholders;
     Established a dedicated email address for the public 
workforce system and stakeholders to ask questions and offer ideas 
related to WIOA ([email protected]);
     Conducted, in conjunction with ED and HHS, outreach calls, 
webinars, and stakeholder and in-person town halls in each ETA region. 
The Department and its Federal partners hosted 10 town halls across the 
country, reaching over 2,000 system leaders and staff representing core 
programs and one-stop partners, employers, and performance staff. This 
included a town hall with INA leaders and membership organizations 
serving Indians and Native Americans, Hawaiians, and Alaskan Natives as 
well as a formal consultation with members of the Native American 
Employment and Training Advisory Council to the Secretary of Labor.
     Conducted readiness assessments to implement WIOA in all 
States and 70 local workforce areas to inform technical assistance.
    Since the DOL WIOA NPRM was published, the Department has issued 
additional WIOA guidance using various mechanisms including the 
following:
     Issued numerous pieces of official guidance to the public 
workforce system on policies related to WIOA implementation (some 
jointly with ED), including ``Vision for the One-Stop Delivery System 
under WIOA'' (Aug. 13, 2015) and TEGL No. 14-15, ``Workforce Innovation 
and Opportunity Act (WIOA) Requirements for Unified and Combined State 
Plans.'' See http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm.
     Provided on-going technical assistance to the public 
workforce system in the form of Frequently Asked Questions. See https://www.doleta.gov/wioa/FAQs.cfm.
     Developed a network of peer learners titled the Innovation 
and Opportunity Network (ION) that is designed to help all levels of 
workforce development professionals, stakeholders, and partners connect 
with others throughout the public workforce system who are working to 
implement WIOA. ION's in-person collaboration is provided through the 
Department's regional Federal Project Officers, and regional meetings 
with State and local stakeholders. Regarding online collaboration, the 
ION Web site provides webinars, quick start action planners, podcasts 
from voices in the field describing their experiences in 
implementation, and other online resources.
     Conducted, in conjunction with ED and HHS, webinars for 
stakeholders on a variety of topics, including: Credentials that Count 
for Youth (Apr. 29, 2015); ION (May 13 and June 3, 2015); Firing Up 
Youth Standing Committees (May 27, 2015); Making the Shift--
Successfully Leveraging In-School Youth (ISY) and OSY Resources and 
Services (June 24, 2015); WIOA Act Now Series: Partnerships in Action 
(July 1, 2015); Webinar Series Act Now: Governance, Leadership, and 
Building a Strategic Board (July 15, 2015); Collaborative Partnerships 
Serving Youth wish Disabilities (July 29, 2015); Customer-Centered 
Design Implementation WIOA (July 29, 2015); WIOA Eligible Training 
Provider Provisions: The First Year (Aug. 5, 2015); WIOA Performance 
Accountability Reporting Requirements--Overview of Layout and Templates 
(Aug. 12 and 13, 2015); Career Pathways for Youth (Aug. 26, 2015); 
Proposed Information Collection: Required Elements for Submission of 
the Unified or Combined State Plan and Plan Modifications Under WIOA 
(Aug. 27, 2015); Implementing WIOA in Rural Areas (Sept. 30, 2015); DEI 
Lessons Learned for WIA/WIOA: How Integrated Resource Teams Achieved 
WIA Outcomes for Populations that Experience Multiple Challenges to 
Employment and Implications for WIOA (Oct. 22, 2015); ApprenticeshipUSA 
Online Toolkit: A New Tool to Advance Apprenticeship Under WIOA (Oct. 
26, 2015); Partnership Between WIOA and TANF to Serve Youth (Oct. 28, 
2015).
Workforce Innovation and Opportunity Act Information Collection 
Requests
    There are two new Information Collection Requests (ICRs) and six 
existing OMB-approved information collections that are being revised as 
part of this DOL WIOA Final Rule. Section V.B of the NPRM (Paperwork 
Reduction Act) included descriptions of the new ICRs and how the 
proposal would change each of the existing information collections. 
Section VI.D of this Final Rule (Paperwork Reduction Act) provides 
summary information about the public comments received on these

[[Page 56083]]

ICRs and details the final burden estimates for the revised information 
collections.
    Soon after publication of the DOL WIOA NPRM and the Joint WIOA 
NPRM, DOL and ED published a notice in the Federal Register announcing 
the joint ICR for the WIOA Performance Management, Information, and 
Reporting System (80 FR 43474, July 22, 2015) and requested comments on 
this ICR during a 60-day public comment period (hereinafter ``WIOA 
Joint Performance ICR'') (see https://www.regulations.gov/#!docketDetail;D=ETA-2015-0007). On September 1, 2015, DOL solicited 
comments on its own WIOA performance accountability ICR to require the 
following programs to report on a standardized set of data elements 
through the WIOA Workforce Performance Accountability, Information, and 
Reporting System: WIOA adult, dislocated worker, and youth, ES, 
National Farmworker Jobs, Trade Adjustment Assistance, YouthBuild, INA, 
and the Jobs for Veterans' State Grants (80 FR 52798) (hereinafter 
``DOL Performance ICR'') (see https://www.regulations.gov/#!docketDetail;D=ETA-2015-0008). On April 16, 2015, ED solicited 
comments on its ICR related to the VR program Case Service Report (RSA-
911) to require VR agencies to report data required under sec. 
101(a)(10) of the Rehabilitation Act of 1973, as amended by WIOA, as 
well as performance accountability data under title I of WIOA 
(hereinafter ``RSA-911''). DOL and ED received 112 public comment 
submissions in response to the WIOA Joint Performance ICR, DOL received 
public comments on the DOL Performance ICR, and ED received public 
comments on the RSA-911, respectively. The Departments address those 
comments in the final WIOA Joint Performance and DOL WIOA ICRs.
    On August 6, 2015, the U.S. Departments of Labor, Education, Health 
and Human Services, Agriculture, and Housing and Urban Development 
proposed a new information collection regarding required elements for 
submission of the Unified or Combined State Plan and Plan modifications 
under WIOA (hereinafter ``WIOA State Plan ICR'') (80 FR 47003) (see 
https://www.regulations.gov/#!docketDetail;D=ETA-2015-0006). The WIOA 
State Plan ICR received a total of 16 public comments. These public 
comment submissions informed the development of the final WIOA State 
Plan ICR, which OMB approved on February 19, 2016. See http://www.reginfo.gov/public/do/PRASearch (ICR Reference No. 201601-1205-
001).

D. Legal Basis

    On July 22, 2014, the President signed WIOA (Pub. L. 113-128) into 
law. WIOA repeals WIA (29 U.S.C. 2801 et seq.). As a result, the WIA 
regulations no longer reflect current law. Section 503(f) of WIOA 
required that the Department issue an NPRM and then a Final Rule that 
implements the changes WIOA makes to the public workforce system in 
regulations. Therefore, the Department has developed and issued this 
Final Rule that implements WIOA. The Department has issued regulations 
regarding the WIOA sec. 188 nondiscrimination and equal opportunity 
provisions through separate rulemaking. See 80 FR 43872 (July 23, 2015) 
(establishing WIOA sec. 188 implementing regulations at 29 CFR part 
38); 81 FR 4494 (Jan. 26, 2016) (proposing updates to 29 CFR part 38 
consistent with current equal opportunity law).

IV. Public Comments Received on the Notice of Proposed Rulemaking

    The Department's NPRM to implement titles I and III of WIOA was 
published on April 16, 2015 (80 FR 20690). During the 60-day public 
comment period, the Department received a total of 767 public comments 
on the WIOA NPRM. In addition to these submissions, the Department also 
considered portions of 84 public comment submissions from the Joint 
WIOA NPRM docket that the Department determined related to the DOL WIOA 
NPRM. The Joint WIOA NPRM, which proposed regulations to implement 
jointly administered activities authorized under WIOA title I, was also 
published on April 16, 2015 (80 FR 20574).
General Comments
    Comments: Several commenters expressed general support for the 
proposed regulation, commenting that the regulations would increase 
employment, make the United States more competitive, lead to higher 
wages, and produce other benefits. Some of these commenters expressed 
confidence that that the Department can deliver on this proposal, and 
that the associated expense is necessary. Several comments made general 
positive remarks about WIOA, and specifically cited an emphasis on one 
or more specific aspects of the law, such as adult education, college 
and career readiness, strengthening connections among programs and 
recognizing the role of distance learning and technology in reaching 
broader audiences. The commenters suggested that WIOA provides adequate 
flexibility to accommodate differences among States (e.g., size, 
population density and population diversity. Some commenters discussed 
workforce development-related services currently provided or cited 
statistics that they asserted illustrate the current or historical use 
of the public workforce system in terms of services and participant 
demographics. For example, one organization cited statistics regarding 
which aspects of titles I and II are being used by LEP individuals.
    Department Response: Since these comments require no response, they 
are not addressed in this DOL WIOA Final Rule. No submissions expressed 
general opposition to the proposal. Instead, many commenters discussed 
their disagreement with specific aspects of the proposal. These 
comments are addressed in the associated and appropriate sections of 
the section-by-section discussion of the Final Rule (see section V 
below).
Requests To Extend the Comment Period
    Comments: A few commenters requested a 60-day extension of the 
comment period. The commenters cited the size and complexity of the 
five proposed NPRMs implementing WIOA.
    Department Response: While the Department recognizes that the 
issues addressed in the DOL WIOA NPRM are complex and important, the 
Department concluded that the 60-day comment period was sufficient to 
provide the public a meaningful opportunity to comment, and this 
conclusion is supported by the hundreds of complex and thoughtful 
comments received. Additionally, the NPRM was available to the public 
for a preliminary review on the Federal Register Web site upon 
submission of the NPRMs to the Federal Register, which was several 
weeks prior to publication, thereby providing stakeholders additional 
time prior to the publication date.
Coordination and the WIOA Rulemaking Process
    Comments: A commenter urged the Departments of Labor and Education 
to increase collaboration, including more coordinated implementation 
guidance, providing incentives for programs within the two Departments 
to participate in a Combined Plan, and affording flexibility in use of 
funding streams and on performance accountability. Two commenters said 
that aspects of the proposed regulations suggest lesser coordination of 
WIOA

[[Page 56084]]

guidance and oversight across Departments than envisioned by WIOA. 
Further, these commenters expressed concern that the lack of 
specificity in areas of the proposed regulations could result in the 
issuance of Federal guidance on levels that should be in regulation to 
ensure that States and local areas have an opportunity to comment.
    Department Response: The Departments of Labor and Education have 
taken great care to coordinate the issuance of collaborative guidance 
regarding WIOA implementation, including TEGL No. 14-15, ``Workforce 
Innovation and Opportunity Act (WIOA) Requirements for Unified and 
Combined State Plans''; TEGL No. 04-15, ``Vision for the One-Stop 
Delivery System under the Workforce Innovation and Opportunity Act 
(WIOA).'' The Departments will continue to issue guidance 
collaboratively. As appropriate, the Department will reach out and 
consult other stakeholders as it develops guidance and technical 
assistance. As the Department implements WIOA, it anticipates lots of 
stakeholder outreach, building on our long established relationships. 
The Department will continue this robust outreach throughout 
implementation.

V. Section-by-Section Discussion of Public Comments and Final 
Regulations

    The analysis in this section provides the Department's response to 
public comments received on the DOL WIOA NPRM. If a proposed CFR 
section is not addressed in the discussion below, it is because the 
public comments submitted in response to the NPRM did not substantively 
address that specific section and no changes have been made to the 
regulatory text. Further, the Department received a number of comments 
on the NPRM that were outside the scope of the proposed regulation and 
the Department offers no response to such comments. Lastly, the 
Department has made a number of non-substantive changes to correct 
grammatical and typographical errors to improve the readability and 
conform the document stylistically that are not discussed in the 
analysis below.

A. Part 603--Federal-State Unemployment Compensation Program

Relationship Between 20 CFR part 603 and WIOA
    The disclosure of wage record data is governed by 20 CFR part 603, 
which establishes requirements for maintaining the confidentiality of 
unemployment compensation (UC) information along with standards for 
mandatory and permissive disclosure of such information. Part 603 
permits State agencies to disclose confidential unemployment 
compensation information--including ``wage information'' (referred to 
in Sec.  603.2(k))--to ``public officials'' (defined at Sec.  603.2(d)) 
under limited circumstances (under Sec.  603.5), and authorizes such 
public officials in turn to use the information to meet certain Federal 
requirements in the performance of their official duties.
    The Department has decided to amend 20 CFR part 603 as proposed in 
the NPRM. These Final Rules amend current regulations to clarify and 
expand, in a limited fashion, those public officials with whom the 
State may share certain confidential information to carry out 
requirements under WIOA. The regulations enumerate certain additional 
public officials who may access confidential State wage records for the 
State's performance reporting. Ensuring such access to these State 
records will allow State agencies to manage better the information for 
the purpose of making Federally required reports on certain program 
outcomes, and to cooperate more effectively and be more informative 
with respect to Federal program evaluations.
    WIOA sec. 116(i)(2) and 20 CFR 677.175(a) (see Joint WIOA Final 
Rule) require State workforce, training, and education programs to use 
quarterly wage records to measure the progress of the State on State 
and local performance accountability measures. The Department 
interpreted at 20 CFR 677.175(b) the reference to ``quarterly wage 
records'' in WIOA sec. 116(i)(2) to require States to use the 
confidential UC information in the employer-provided wage reports 
collected under sec. 1137 of the Social Security Act (SSA), 42 U.S.C. 
1320b-7. These are the reports that the State UC agency obtains from 
employers for determining UC tax liability, monetary eligibility, or 
for cross-matching against State UC agencies' files to determine if 
improper payments have been made.
    The regulation at 20 CFR 677.175(b) (see Joint WIOA Final Rule) 
defines ``quarterly wage record information'' to include three data 
elements or categories of data elements: (1) A program participant's 
Social Security Number (SSN); (2) information about the wages that 
program participants earn after exiting from the program; and (3) the 
name, address, State, and (when known) Federal Employer Identification 
Number (FEIN) of the employer paying those wages. The ``wage 
information'' defined in Sec.  603.2(k)--which the regulations allow 
State agencies to disclose under limited circumstances--includes the 
three data categories or elements (wages, SSN(s), employer information) 
that States must use as their data source for State and local 
performance reporting under WIOA. These terms are different but refer 
to the same information: wage records.
    As explained in greater detail below, in the NPRM the Department 
proposed to change and expand Sec.  603.2 (definition of ``public 
official'') and change Sec.  603.5 (governing disclosures to public 
officials) to help States comply with WIOA's performance requirements, 
including the performance reports of the States, local areas, and 
Eligible Training Providers (ETPs). In addition, the Department amended 
Sec.  603.6 to add a provision requiring disclosure of confidential UC 
information to a Federal official (or an agent or contractor of a 
Federal official) requesting such information to meet the new statutory 
requirement on State cooperation with certain DOL and ED evaluations. 
These changes facilitate States' obligations to report on performance 
through the use of quarterly wage records, and to cooperate in DOL and 
ED evaluations.
    The amendments to 20 CFR part 603 only relate to State agency 
disclosures necessary to comply with certain provisions of WIOA. Much 
of part 603 was left intact and was not considered for amendment in the 
NPRM, the purpose of which was to implement WIOA, not to otherwise 
impact partner programs. The Department invited comments on the 
proposed amendments to part 603, but did not consider comments on other 
portions of part 603 or other UC matters that are outside the scope of 
the proposed rulemaking.
    The Department received 22 comments in response to the proposed 
changes to part 603. While normally the Department does not discuss 
comments that are outside the scope of the amendment, the Department 
notes that only the portions of part 603 that are being amended were 
part of the NPRM and open for comment. The existing data protections 
required under other portions of part 603 will continue and will be 
enforced. These required protections, laid out in Sec. Sec.  603.8, 
603.9, 603.10, and 603.12, ensure that confidential UC data are secure. 
These portions of part 603 were not considered for amendment and so 
were excluded from the NPRM.
    The analysis that follows provides the Department's response to 
public comments received on the proposed part 603 regulations. If a 
section is not addressed in the discussion below, it is because the 
public comments submitted

[[Page 56085]]

in response to the NPRM did not substantively address that specific 
section and no changes have been made to the regulatory text. Further, 
the Department received a number of comments on this part that were 
outside the scope of the regulation and the Department offers no 
response. Lastly, the Department has made a number of non-substantive 
changes to correct grammatical and typographical errors to improve the 
readability and conform the document stylistically that are not 
discussed in the analysis below.
Section 603.2 What definitions apply to this part?
    Definition of ``public official'': The changes to this section 
amend the definition of ``public official'' as used throughout part 
603. The changes to Sec.  603.2(d), to facilitate State compliance with 
WIOA's reporting requirements, clarify and expand the definition of who 
and what entities are considered ``public officials.'' The amendments 
to Sec.  603.2(d) clearly enumerate that ``public official'' includes 
officials from public postsecondary educational organizations; State 
performance accountability and customer information agencies; the chief 
elected officials of local areas (as that term is used in WIOA sec. 
106); and a public State educational authority, agency, or institution. 
Some of these officials already would meet the definition of ``public 
official'' under current Sec.  603.2(d); however, the amendments make 
this clear.
    Comments: The Department received some comments suggesting 
clarification of the definition and application of the phrase ``chief 
elected official.''
    Department Response: No changes were made to the regulatory text in 
response to these comments. Such clarification is best accomplished 
through guidance and technical assistance as needed.
    Disclosure to public postsecondary institutions: Section 
603.2(d)(2) permits disclosure to public postsecondary educational 
institutions, regardless of how those institutions are structured or 
organized under State law. Section 603.2(d)(2) clearly delineates the 
types of postsecondary educational institutions that are allowed access 
to confidential UC information:
    (1) Public postsecondary educational institutions that are part of 
a State's executive branch, i.e., that derive their authority either 
directly from the Governor or from an entity (State WDB, commission, 
etc.) somewhere in that line of authority (see Sec.  603.2.(d)(2)(i));
    (2) Public postsecondary educational institutions that are 
independent of the State's executive branch, which means those 
institutions whose directors derive their authority either directly 
from an elected official in the State other than the Governor or from 
an entity (again, a State WDB, commission, or other entity) in that 
line of authority. This covers any public postsecondary educational 
institution established and governed under State law, for example, a 
State Board of Regents (see Sec.  603.2(d)(2)(ii));
    (3) State technical colleges and community colleges, which may also 
be covered under (1) or (2) (see Sec.  603.2(d)(2)(iii)).
    Section 603.2(d)(5) permits disclosure to a public State 
educational authority, agency, or institution; the Department considers 
the heads of public institutions deriving their authority from a State 
educational authority or agency to be ``public officials'' for purposes 
of part 603.
    These changes are designed to help States comply with WIOA's 
requirement to use wage records to measure performance (WIOA sec. 
116(i)(2)) and to facilitate the performance reporting required for 
ETPs under secs. 116(d) and 122 of WIOA. As long as the recipients of 
the data adhere to all of the requirements in 20 CFR part 603, this 
section permits States to make these disclosures to comply with WIOA 
requirements for Federal, State, or local government reporting on 
program outcomes and for other specified purposes.
    Comments: The Department received several comments requesting that 
non-public educational institutions, community-based organizations, and 
for-profit educational institutions be added to the list of entities 
included in the term ``public official.''
    Department Response: As explained in the NPRM, non-public 
educational institutions, including non-profit or for-profit 
educational institutions, community-based organizations, and eligible 
training providers that are not subject to the authority of the 
executive branch of a State or other elected official, are not 
permitted to obtain confidential UC information, including wage 
information, under this authority. In first proposing the ``public 
official'' exception to the UC confidentiality requirement in 69 FR 
50,022, 50,027 (2004), the Department explained that ``there is less 
risk of unauthorized use or disclosure of UC information if 
responsibility for safeguarding confidentiality rests within the 
executive or legislative branches of government.'' Any disclosures of 
confidential UC information to those entities for purposes of complying 
with WIOA must be authorized under an exception contained in Sec.  
603.5 other than Sec.  603.5(e). The Department is issuing guidance to 
address how non-public entities that need wage record information to 
complete reports required under WIOA will be able to obtain access to 
aggregate wage record information for this purpose. No changes were 
made to the regulatory text in response to these comments.
Section 603.6(b)(8) What disclosures are required by this subpart?
    Section 603.6(b)(8) makes the disclosure of confidential UC 
information mandatory for certain Federal evaluations when the 
disclosure does not interfere with the efficient administration of 
State UC law. The addition of Sec.  603.6(b)(8) implements the 
requirement that States cooperate in conducting evaluations under the 
authority of either the Secretary of Labor or the Secretary of 
Education under WIOA sec. 116(e)(4). This cooperation, defined in WIOA, 
must include ``the provision of data (in accordance with appropriate 
privacy protections established by the Secretary of Labor)''; this 
includes 20 CFR part 603 and any other privacy protections the 
Secretary may establish. The final regulation requires disclosure of 
confidential UC information to Federal officials or their agents or 
contractors, requesting such information in the course of an evaluation 
covered by WIOA secs. 116(e)(4) and 116(e)(1) to the extent that such 
disclosure is ``practicable.''
    The Department interprets ``to the extent practicable'' to mean 
that the disclosure would not interfere with the efficient 
administration of State UC law. This interpretation is consistent with 
the application of regulations that apply to disclosures under Sec.  
603.5. The introductory language to Sec.  603.5 provides that, in 
situations where the disclosure of confidential UC information is 
permitted, the State may make the disclosure only if doing so would not 
interfere with the efficient administration of State UC law. In effect, 
Sec.  603.6(b)(8) requires that State UC agencies make disclosures to 
DOL and ED for the purposes of the Departments' conducting evaluations, 
when the disclosures do not interfere with the efficient administration 
of the State UC law. The Department expects this cooperation and 
related disclosures to include responding to surveys and allowing site 
visits, as well as disclosing confidential UC information needed for 
evaluations.
    Comments: The Department received two comments that raised concerns 
that the adoption of Sec.  603.6(b)(8) would

[[Page 56086]]

allow the creation of a national UC database and require a State's 
``entire UI file.''
    Department Response: The information required to be disclosed for a 
given evaluation is considerably less than what may be included in a 
State's UC file. Additionally, these disclosures are required only for 
research, evaluation, and investigation purposes found in WIOA, the 
Rehabilitation Act of 1973, and the Wagner-Peyser Act, as well as 
evaluations under other laws. The information disclosed may not be used 
for purposes other than that for which it was obtained. These 
disclosures are subject to the appropriate privacy and confidentiality 
protections found throughout 20 CFR part 603. Research projects, 
evaluations, and investigations have set time frames for which data are 
being reviewed and are generally limited in scope. In general, the 
Department would not be in possession of any of the information 
requested under the disclosure provisions at Sec.  603.6(b)(8). The 
researcher, evaluator, or investigator would be in possession of the 
information and use it for their stated purposes under proper authority 
or would be subject to sanctions for breach of the agreement under 
which the data were obtained. No changes were made to the regulatory 
text in response to these comments.

B. Part 675--Introduction to the Regulations for the Workforce 
Development Systems Under Title I of the Workforce Innovation and 
Opportunity Act

    Part 675 discusses the purpose of title I of the WIOA, explains the 
format of the regulations governing title I, and provides additional 
definitions which are not found and defined in WIOA.
    Section 675.100 describes the purposes of title I of WIOA.
    Section 675.200 outlines the structure of the WIOA regulations.
    Section 675.300 provides a list of definitions that are applicable 
across the WIOA regulations.
    Included in this list of definitions, the Department includes the 
following relevant definitions from the Office of Management and 
Budget's (OMB) ``Uniform Administrative Requirements, Cost Principles 
and Audit Requirements for Federal Awards'' found at 2 CFR part 200: 
Contract, Contractor, Cooperative Agreement, Federal Award, Federal 
Financial Assistance, Grant Agreement, Non-Federal Entity, Obligations, 
Pass-Through Entity, Recipient, Subaward, Subrecipient, Unliquidated 
Obligations, and Unobligated Balance. All other definitions at 2 CFR 
part 200 apply to these regulations where relevant, but have not been 
included in this section.
    Contract. The definition for ``contract'' incorporates the 
definition established by OMB at 2 CFR 200.22. Specifically, the term 
``contract'' refers to the legal document that a non-Federal entity 
uses to purchase property or services used to carry out its duties 
under a grant authorized under WIOA. If the Department determines that 
a particular transaction entered into by the entity is a Federal award 
or subaward it will not be considered a contract.
    Contractor. The definition of ``contractor'' incorporates the 
definition contained in OMB's Uniform Guidance at 2 CFR 200.23. The 
Uniform Guidance has replaced the term ``vendor'' with the term 
``contractor.'' As used in these regulations, the term ``contractor'' 
includes entities that WIOA refers to as ``vendors.'' Additionally, it 
is important to note that contractors are not subrecipients. Additional 
guidance on distinguishing between a contractor and a subrecipient can 
be found at 2 CFR 200.330.
    Cooperative Agreement. The definition of ``cooperative agreement'' 
incorporates the definition contained in the Uniform Guidance at 2 CFR 
200.24.
    Department or DOL. This term refers to the United States Department 
of Labor, its agencies, and organizational units.
    Employment and Training Activity. As used in these regulations, the 
term ``employment and training activity'' refers to any workforce 
investment activities carried out for an adult or dislocated worker 
under sec. 134 of WIOA and 20 CFR part 678 (see Joint WIOA Final Rule).
    Equal Opportunity (EO) Data. This term refers to the data required 
by the Department's regulations at 29 CFR part 37 implementing sec. 188 
of WIOA.
    ETA. This term refers to the Employment and Training 
Administration, which is an agency of DOL, or its successor 
organization.
    Federal Award. This definition incorporates the definition in the 
Uniform Guidance at 2 CFR 200.38.
    Federal Financial Assistance. The definition of ``Federal financial 
assistance'' incorporates the definition contained in the Uniform 
Guidance at 2 CFR 200.40.
    Grant or Grant Agreement. The definition of ``grant agreement'' 
incorporates the definition contained in the Uniform Guidance at 2 CFR 
200.51. Because both WIOA and these regulations use ``grant'' and 
``grant agreement'' interchangeably, the inclusion of both terms here 
clarifies that the terms are synonymous.
    Grantee. The definition of ``grantee'' refers to a recipient of 
funds under a grant or grant agreement. Grantees are also referred to 
as recipients in these regulations.
    Individual with a Disability. This definition uses the definition 
from sec. 3 of the Americans with Disabilities Act, as amended, and is 
further defined at 29 CFR 37.4.
    Labor Federation. This definition remains unchanged from the 
definition used in the regulations under WIA at 20 CFR 660.300.
    Literacy. The definition for ``literacy'' as used in these 
regulations is a measure of an individual's ability to participate and 
successfully function both in the workplace and in society.
    Local WDB. This definition clarifies that the term ``Local WDB'' as 
used in these regulations refers to the Local Workforce Development 
Boards (WDB) established under WIOA sec. 107, to set policy for the 
local workforce development system.
    Non-Federal Entity. The definition of ``non-Federal entity'' 
incorporates the definition contained in the Department's Exceptions to 
the Uniform Guidance at 2 CFR 2900.2.
    Obligations. The definition of ``obligations'' incorporates the 
definition contained in the Uniform Guidance at 2 CFR 200.71.
    Outlying Area. The term ``outlying area'' refers to those 
Territories of the United States which are not within the definition of 
``State,'' including the U.S. Virgin Islands, Guam, American Samoa, the 
Commonwealth of the Northern Mariana Islands, and, in certain 
circumstances, the Republic of Palau.
    Pass-through entity. The definition of pass-through entity 
incorporates the definition in the Uniform Guidance at 2 CFR 200.74.
    Recipient. The definition of ``recipient,'' which is different than 
the current definition of recipient under WIA at 20 CFR 660.300, 
incorporates the definition in the Uniform Guidance at 2 CFR 200.86.
    Register. The definition of ``register'' means the point at which 
an individual seeks more than minimal assistance from staff in taking 
the next step towards self-sufficient employment. This is also when 
information that is used in performance information begins to be 
collected. At a minimum, individuals must provide identifying 
information to be registered.
    Secretary. This term refers to the Secretary of the U.S. DOL, or 
their officially delegated designees.

[[Page 56087]]

    Secretaries. This term refers to the Secretaries of the U.S. DOL 
and the U.S. ED, or their officially designated designees.
    Self-Certification. The term ``self-certification'' refers to the 
certification made by an individual that they are eligible to receive 
services under title I of WIOA.
    State. The term ``State'' refers to each of the several States of 
the United States, the District of Columbia, and the Commonwealth of 
Puerto Rico.
    State WDB. This definition clarifies that the term ``State WDB'' as 
used in these regulations refers to the State Workforce Development 
Boards (WDB) established under WIOA sec. 101.
    Subgrant or Subaward. This term incorporates the definition of 
``subaward'' in the Uniform Guidance at 2 CFR 200.92. This term 
replaces the term ``subgrant'' found in WIA at 20 CFR 660.300. Because 
both WIOA and these regulations use ``subgrant'' and ``subaward'' 
interchangeably, the inclusion of both terms here clarifies that the 
terms are synonymous.
    Subrecipient. The definition of ``subrecipient'' incorporates the 
definition in the Uniform Guidance at 2 CFR 200.93. This term is 
synonymous with the term ``subgrantee.''
    Unliquidated Obligations. The definition of ``unliquidated 
obligations'' incorporates the definition contained in the Uniform 
Guidance at 2 CFR 200.97.
    Unobligated Balance. The definition of ``unobligated balance'' 
incorporates the definition in the Uniform Guidance at 2 CFR 200.98.
    Wagner-Peyser Act. As used in these regulations, the term ``Wagner-
Peyser Act'' refers to the Wagner-Peyser Act passed on June 6, 1933, 
and codified at 29 U.S.C. 49 et seq.
    WIA Regulations. The term ``WIA Regulations'' as used in this 
regulation or subsequently by the Department refers to the regulations 
20 CFR parts 660 through 672. This definition is necessary because, as 
described in the introduction to these regulations, the Department has 
chosen to retain the WIA regulations at parts 660 through 672 of title 
20 of the CFR.
    WIOA Regulations. This term, as used in this regulation or 
generally by the Department means those regulations in 20 CFR parts 675 
through 687, the Wagner-Peyser Act regulations in 20 CFR part 652, 
subpart C, and the regulations implementing WIOA sec. 188 in 29 CFR 
part 37.
    Workforce Investment Activities. The term ``workforce investment 
activities'' is a general term that describes the broad array of 
activities and services provided to eligible adults, dislocated 
workers, and youth under secs. 129 and 134 of title I of WIOA.
    Youth Workforce Investment Activity. The term ``youth workforce 
investment activity'' refers to those activities carried out for 
eligible youth that fall within the broad definition of ``workforce 
investment activity.''
Section 675.100 What are the purposes of title I of the Workforce 
Innovation and Opportunity Act?
    Comments: An advocacy organization urged the Department to include 
in Sec.  675.100 a reminder to States and employers of their existing 
obligations under the Americans with Disabilities Act (ADA), 
notwithstanding anything else reflected in the WIOA regulations.
    Department Response: The Department takes nondiscrimination 
seriously and addresses it in the regulation at 20 CFR part 38. No 
change to the regulatory text was made in response to this comment.
Section 675.200 What do the regulations for workforce development 
systems under title I of the Workforce Innovation and Opportunity Act 
cover?
    Comments: Some commenters provided feedback on technical 
corrections for this section, while others provided comments that 
addressed specific provisions found elsewhere in this regulation.
    Department Response: Technical corrections were made to this 
section. In addition, several comments that referenced this section 
were more appropriately addressed in other parts of the regulation, and 
have been so addressed.
Section 675.300 What definitions apply to these regulations?
    Comments: Some commenters suggested that the Department should 
provide additional detail on what is involved in a requirement to 
consult. These commenters generally emphasized the importance of 
meaningful consultation. For example, referring to the proposed 
definition of consultation, a Local WDB commented that ``exchanging 
viewpoints and ideas'' is only helpful when both parties feel equally 
empowered to influence the outcome of the discussion. Two commenters 
expressed concern that the requirement to consult could be interpreted 
to mean just share information or whatever else is in the best interest 
of the entity required to consult. Another commenter suggested that 
consultation should be defined as strongly as possible to stress 
advanced notice, robust conversation, and collaborative efforts with 
local areas prior to the State's decision-making process. Some 
commenters made specific suggestions for what the Department should or 
could include in a definition of consultation, including active 
engagement, good faith discussion and decision-making agreement and 
consent from local elected officials, the Local WDB, and the State WDB, 
provision of written notice of intended changes with a cost-benefit 
analysis and a specific timeframe for public comment, process to 
contest decisions through a formal grievance process, requiring 
consultation with the largest and smallest local areas in the State, 
and requiring State WDB members to visit and engage local areas.
    Department Response: The Department agrees with the need to 
emphasize meaningful consultation and revised the definition of 
consultation in this section to emphasize convening, robust 
conversation, and an opportunity for all stakeholders to share their 
thoughts and opinions. In addition, some of the specific suggestions 
not incorporated into this definition are addressed in other parts of 
this regulation and the Joint WIOA Final Rule. For example, 20 CFR part 
676 requires public comment on Unified and Combined State Plans (see 
Joint WIOA Final Rule), and part 679 of this regulation requires 
governors to appoint only persons who have been nominated by certain 
stakeholder organizations to certain positions on the State WDB.
    Comments: A commenter recommended clearly defining ``career 
pathways'' in this regulation in such a way to ensure flexibility in 
deviation from a pathway if education and employment requirements are 
met.
    Department Response: WIOA secs. 3(7)(A) through (G) define career 
pathways as a combination of rigorous high-quality education, training, 
and other services that meet specified guidelines. The Department 
agrees that additional guidance would help State and Local WDBs 
implement career pathways. With the Department of Education, the 
Department has published a Career Pathways Toolkit, which can be found 
at www.DOLETA.gov, and continues to provide guidance and technical 
assistance on the implementation of career pathways under WIOA.
    Comments: Asserting that neither WIOA sec. 3 nor the WIOA NPRMs 
include a definition of ``family,'' some commenters suggested that the 
Department provide clarification on this term.
    Department Response: The Department agrees that ``family'' is a 
term that should be defined in this

[[Page 56088]]

regulation and has added a definition of family that is based on the 
WIA definition and has been updated to reflect the Supreme Court 
decision in United States v. Windsor, 133 S. Ct. 2675 (2013). While 
this definition applies to all parts of this regulation, the Department 
notes that part 681 of this regulation adds a reference to dependents, 
per specifications of the Internal Revenue Service, when this 
definition is considered as part of a determination of eligibility to 
participate in the WIOA youth programs described in that part.
    Comments: Several commenters recommended adding to this part 
definitions of terms not addressed above or in the NPRM. Most of them 
were related to indicators of performance of WIOA title I programs, 
which are addressed in 20 CFR part 677 of the Joint WIOA Final Rule. 
Several other comments focused on defining or revising definitions of 
terms that are used in regulations applying solely to Department of 
Education programs. The Department worked with the Department of 
Education to ensure they were addressed where they most appropriately 
fit, which was often in the Joint WIOA Final Rule and sometimes in 
specific parts of this regulation.
    Department Response: The Department considered these comments and 
addressed them in other parts of this regulation, as appropriate, and 
worked with the Department of Education to address these comments in 
the most relevant part of the most appropriate regulation. For example, 
some commenters suggested definitions of terms related to performance 
under WIOA title I programs are addressed in 20 CFR part 677 (see Joint 
WIOA Final Rule) and comments related to serving youth under WIOA title 
I programs are addressed in part 681.
    In addition, the Department realized that the NPRM contained minor 
inconsistencies in how it defined ``individual with a disability'' 
across parts. The Department therefore edited such definitions using 
the statutory definition at WIOA sec. 3(25), which uses the definition 
from the Americans with Disabilities Act (ADA), to make them consistent 
with each other. The Department interprets all references to the ADA to 
include case law and interpretive guidance. The Department also changed 
the terms ``workforce innovation and opportunity system,'' and 
``workforce investment system'' to ``workforce development system'' 
throughout this rule. This was done to enhance consistency across parts 
and avoid confusion, and to be emphasize the role of workforce 
development boards in this system.

C. Part 679--Statewide and Local Governance of the Workforce 
Development System Under Title I of the Workforce Innovation and 
Opportunity Act

    20 CFR part 679 addresses the Statewide and Local Governance 
provisions of the Workforce Development System under title I of WIOA. 
This part includes provisions on the State WDB, the Workforce 
Innovation and Opportunity Act Local Governance (Workforce Development 
Areas), Local WDBs, Regional and Local Plans, and Waivers/Workforce 
Flexibility Plans.
    The analyses that follows provides the Department's response to 
public comments received on the proposed Statewide and Local Governance 
regulations. If a section is not addressed in the discussion below, it 
is because the public comments submitted in response to the NPRM did 
not substantively address that specific section and no changes have 
been made to the regulatory text. Further, the Department received a 
number of comments on this part that were outside the scope of the 
regulation and the Department offers no response. Lastly, the 
Department has made a number of non-substantive changes to correct 
grammatical and typographical errors to improve the readability and 
conform the document stylistically that are not discussed in the 
analysis below.
1. Subpart A--State Workforce Development Board
    Subpart A sets forth the conditions under which the Governor must 
establish the State WDB. 20 CFR 679.100(a) through (e) explain the 
purpose of the State WDB. The State WDB represents a wide variety of 
individuals, businesses, and organizations throughout the State. WIOA 
is designed to help job seekers and workers access employment, 
education, training, and support services needed to succeed in the 
labor market, and match employers with the skilled workers needed to 
compete in the global economy. The State WDB has the critical role of 
leading and guiding the State's implementation of WIOA, which requires 
aligning Federal investments in job training, integrating service 
delivery across programs, and ensuring that workforce investments are 
job-driven and match employers with skilled workers. The State WDB 
serves as a convener of State, regional, and local workforce system 
partners to enhance the capacity and performance of the workforce 
development system and align and improve employment, training, and 
education programs, and through these efforts, promote economic growth. 
The State WDB's role as a strategic convening place where key 
stakeholders and partnerships come together can be accomplished only if 
each State WDB member is an active participant in the business of the 
board. State WDB members must establish a platform in which all members 
actively participate and collaborate closely with the required partners 
of the workforce development system, and other stakeholders, including 
public and private organizations. This engagement is crucial in the 
State WDB's role to help integrate and align a more effective job-
driven workforce development system that invests in the connection 
between education and career preparation.
Overarching Comments on State WDBs
    Comments: Commenters expressed concern with the WIOA implementation 
timelines for establishing compliant State WDBs. They said that States 
should have more flexibility in the time allowable to become compliant 
with new requirements, including new membership requirements and the 
new State WDB role, which could require changes by the State 
legislature.
    Department Response: WIOA called for the implementation of most of 
WIOA, including the State WDB requirements, by July 1, 2015. State WDB 
requirements are outlined in WIOA sec. 101 and Sec.  679.100. The 
Department issued operating guidance in TEGL No. 27-14 on April 15, 
2015, titled ``Workforce Innovation and Opportunity Act Transition 
Authority for Immediate Implementation of Governance Provisions.'' This 
guidance can be found at http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm.
    Comments: One commenter was concerned with potential political 
influence the Governor holds over State and Local WDBs as well as 
procurement requirements.
    Department Response: WIOA vests certain authority with the 
Governor, including State WDB appointments, and the Department has no 
authority to change it.
    WIOA sec. 107(e) requires Boards to operate in a transparent 
manner; Sec. Sec.  679.140 and 679.390 set forth the parameters for 
State and Local WDBs to conduct business in an open and transparent 
manner. Transparency in operations also assures that all parties are 
held accountable to the public and can mitigate concerns of 
inappropriate influence. Transparency promotes

[[Page 56089]]

accountability and provides valuable information to citizens on the 
Federal, State, and local government's activities. The State WDB must 
make available to the public on a regular basis, through electronic 
means and open meetings, information about State WDB activities such as 
the State Plan, modifications to the State Plan, board membership, the 
board's by-laws, and the minutes of meetings. This information must be 
easily accessed by interested parties. Ensuring that this information 
is widely available promotes transparency and provides access to the 
public on how the State WDB works to align, integrate, and continuously 
improve the workforce development system. No change to the regulatory 
text was made in response to this comment.
    Comments: Another commenter recommended that developing an 
overarching vision for the workforce development system and monitoring 
of progress toward that vision should be a function of the State WDB.
    Department Response: These actions are a function of the State WDB. 
20 CFR 679.100 implements WIOA sec. 101(d) and outlines the vision and 
purpose of the State WDB. Among other responsibilities, the State WDB 
is required to assist the Governor in the ``development, 
implementation, and modification of the State Plan'' (WIOA sec. 
101(d)(1)) and to support the function of the public workforce system 
enumerated in WIOA sec. 101(d)(2) through (12). The State Plans must 
detail the State's strategic workforce approach and vision as outlined 
in 20 CFR 676.100(a) (see Joint WIOA Final Rule) and no change to the 
regulatory text was made in response to this comment.
Section 679.100 What is the purpose of the State Workforce Development 
Board?
    20 CFR 679.100 implements WIOA sec. 101 and outlines the purpose of 
the State WDB. A key goal of Federally-funded training programs is to 
get more U.S. workers jobs and marketable skills and support businesses 
to find workers with the skills that are needed. The State WDB is 
responsible for engaging employers, education providers, economic 
development, and other stakeholders to help the workforce development 
system achieve the purpose of WIOA and the State's strategic and 
operational vision and goals outlined in the State Plan.
    The Department encourages the State to take a broad and strategic 
view when considering representatives of the State WDB, and also in 
establishing processes which it will use to include necessary 
perspectives in carrying out State WDB functions. For example, 
alignment of required one-stop partner investments is essential to 
achieving strategic and programmatic alignment at the State, regional, 
and local level. Further, States are encouraged to examine factors like 
the natural bounds of regional economies, commuting patterns, and how 
economic sectors impact the State, which may benefit from inputs either 
from formal members of the board, or through other engagement. Broad 
geographic representation as well as a reflection of diversity of 
populations within the State is critical.
    Comments: A commenter emphasized the need for Boards to remain 
connected to local and regional programs, and another requested more 
information on how employer engagement would be measured and how a 
State WDB would know if their engagement was successful. This commenter 
suggested surveys of partners (both pre-WIOA and annually) to determine 
the level of engagement.
    Department Response: There is a primary indicator of performance in 
WIOA sec. 116(b)(2)(i)(vi) to gauge the system's effectiveness in 
serving business. WIOA does not provide parameters for measuring the 
Board's effectiveness in engaging employers. However, this engagement 
is crucial in the State WDB's role to help integrate and align a more 
effective job-driven workforce development system that invests in the 
connection between education and career preparation. The Department 
will continue to provide technical assistance and guidance to Boards to 
assist their efforts to fulfill this vision. The Department envisions 
that the State WDB will serve as a convener of State, regional, and 
local workforce system partners to enhance the capacity and performance 
of the workforce development system; align and improve employment, 
training, and education programs, and through these efforts, promote 
economic growth.
    Comments: A commenter suggested that more information regarding the 
State Plan and how States will satisfy the needs of individuals with 
disabilities, and the specific performance metrics that will be used 
for systemic improvement be included in Sec.  679.100.
    Department Response: State Plan requirements as a function of the 
State WDB are addressed in Sec.  679.130. WIOA sec. 102 describes the 
requirements for the State Plan; State Plan requirements are also 
addressed in 20 CFR part 676, including requirements to address the 
needs of the State's workforce and services to individuals with 
barriers to employment (see Joint WIOA Final Rule). No change to the 
regulatory text was made in response to this comment.
Section 679.110 What is the State Workforce Development Board?
Local Elected Officials
    Comments: Commenters citing the needs of large and diverse States 
that are concerned with adequate representation of local level 
interests recommended that Governors include the chief elected official 
from the smallest and largest workforce areas on the State WDB. 
Similarly, other commenters recommended that the local elected 
officials be increased from a minimum of two representatives to a 
percentage of the Board.
    Department Response: Both WIOA and the regulations offer the 
Governor the flexibility to ``include other appropriate representatives 
and officials designated by the Governor'' as detailed in Sec.  
679.110(b)(3)(iii)(B). The Governor has the flexibility to appoint more 
local elected officials to the State WDB as he/she sees fit and a 
Governor may seek to have such officials represent the range of local 
government entities. The Department encourages the Governor to use this 
authority, which may include increasing the representation of CEOs, to 
ensure accurate representation of the interests of job seekers and 
businesses in the State. No change to the regulatory text was made in 
response to these comments.
Representation of Core Programs
    Comments: Commenters opposed the Department's interpretation of 
WIOA allowing for representation of multiple core programs by a single 
person (as proposed in Sec.  679.110(b)(3)(iii)(A)) and indicated that 
this situation fails to adequately represent adult education. Some 
commenters called for specifically mandating the State director of 
adult education on the State WDB. Others were concerned that the 
Department's interpretation does not satisfy the requirement to have a 
representative of the lead State official with primary responsibility 
for each of the core programs.
    Department Response: The Governor is responsible for ensuring 
adequate representation of the core programs, which the Department 
interprets to mean that the core program's State WDB representative has 
not only primary responsibility for the program, but also the expertise 
to actively and meaningfully contribute to the State WDB's 
understanding of the program's role in the public workforce system, 
especially with regard to the strategic

[[Page 56090]]

planning for that system, and in the development and implementation of 
the State Plan. The Department has added Sec.  
679.110(b)(3)(iii)(A)(1)(i) through (iii) to clarify that, for title I 
and Wagner-Peyser Act programs, a single lead State official with 
primary responsibility for those programs may represent more than one 
of those programs. However, the WIOA title II and VR programs must have 
a single, unique representative. When appointing a board member to 
represent multiple core programs under Sec.  679.110(b)(3)(iii), 
Governors should take into account the requirement that the 
representative has the primary responsibility for the core program 
which includes direct responsibility for, and understanding of, policy 
issues involving the core program and the public workforce system. The 
Department encourages Governors to ensure an ongoing role for all core 
programs to inform the Boards' actions. Meeting these requirements may 
be achieved in a number of ways, such as directly appointing a State's 
director for those core programs to the Board, gathering direct input 
from program administrators via a subcommittee or staffing structure, 
or frequent efforts to gather input.
    These provisions are intended to ensure that all core programs have 
meaningful input on the State WDB, but neither WIOA nor the regulation 
requires that the adult education director be appointed to the State 
WDB. The regulation is not changed to require a specific title be named 
as representative; however, representatives must meet the requirement 
of primary responsibility.
    The Department will issue guidance to support the implementation 
and maintenance of compliant State WDBs.
Labor Union, Small Business, and Registered Apprenticeship 
Representation
    Comments: Comments on the membership requirements of 
representatives of labor organizations and registered apprenticeship 
included multiple suggestions for regulatory text changes. One 
commenter suggested changing ``exists'' in Sec.  679.110(b)(3)(ii)(B) 
to ``operating,'' because ``exists'' could cause confusion. Another 
commenter suggested that the term ``registered'' precede 
apprenticeship, out of concern that the NPRM language would allow low-
quality apprenticeship programs that are not registered be considered.
    Department Response: The Department disagrees that ``exists'' will 
cause confusion in reference to registered apprenticeship programs 
available in the State. The Department agrees that the reference to 
apprenticeship should be changed to ``registered apprenticeship'' 
because references throughout WIOA are generally references to 
registered apprenticeship.
    No change to the regulatory text was made in response to these 
comments, with the exception of revising Sec.  679.110(b)(3)(ii)(B) to 
refer to apprenticeship as ``registered apprenticeship.''
    Comments: Commenters requested clarification of the total number of 
labor representatives required on the State WDB, and suggested labor 
representatives include employee representatives for non-unionized 
employees.
    Department Response: WIOA requires at least two representatives of 
labor organizations nominated by State labor federations, and a 
representative of a registered apprenticeship program. Because State 
WDB members may not serve multiple roles for the categories included in 
WIOA sec. 101(b)(1)(C)(ii) (as outlined in WIOA sec. 101(b)(3)(B)), the 
Department's proposed language clarified that, at minimum, two labor 
representatives and one joint labor-management of a registered 
apprenticeship program are required. The State WDB must include not 
less than 20 percent representation of the workforce, including at a 
minimum these three representatives.
    In addition to these representatives, WIOA sec. 
101(b)(1)(C)(iii)(II) and Sec.  679.110(b)(3)(iii)(B), give the 
Governor the flexibility to appoint ``other representatives and 
officials as the Governor may designate.'' This would allow the 
Governor to designate non-union employee organizations as additional 
members of the State WDB. No change to the regulatory text was made in 
response to these comments.
Nominations
    Comments: Two union commenters urged the Department to clarify that 
the nominations for representatives of joint labor-management 
registered apprenticeship programs on State and Local WDBs should be 
made by State and local building and construction trades councils, 
except where none exist in the State, in which case the 
representative(s) should be nominated by the local Building Trades 
Councils within the State.
    Regarding the proposed Sec.  679.110(b)(3)(i)(C) requirement that 
the Governor must appoint required representatives of businesses or 
organizations based on nominations from business organizations and 
trade associations in the State, a commenter asked what would qualify 
these organizations to submit such nominations and requested that the 
Department clarify the definition of these organizations.
    Department Response: Paragraph (b)(3)(i)(C) of Sec.  679.110 
implements WIOA sec. 101(b)(1)(C)(i)(III), which requires State WDB 
members who represent businesses or organizations representing 
businesses to be appointed from a list of potential members nominated 
by State business organizations and business trade associations. WIOA 
does not further define trade associations; restricting the nominating 
entity would not comply with WIOA sec. 101(b)(1)(C)(i)(III), but 
Governors may accept nominations of representatives to the State WDB 
from Trade Councils. Furthermore, WIOA does not require that the 
representatives of joint labor-management registered apprenticeship 
programs (under WIOA sec. 101(b)(1)(C)(ii)(II) be nominated by any 
organization. The Department declines to add the requirement that 
trades councils must nominate these members. No change to the 
regulatory text was made in response to these comments.
Single-Area States
    Comments: Relating specifically to concerns for single-area States, 
one commenter suggested that the core programs can be improved by CEOs 
on the State WDB and that the Departments of Labor and Education must 
look critically at any Unified or Combined State Plan that is submitted 
from a single-area State that does not obviously and fully represent 
the local viewpoint from a diverse set of stakeholders, as is the 
intention of this section. Another commenter stated that because local 
control is primarily with the State WDB in single-area States, the 
local community advisory groups, who are more familiar with the 
specific community needs, do not have the influence that they should. 
Multiple commenters also requested that the Department clarify the 
meaning of the proposed Sec.  679.110(b)(3)(iii)(A)(2) requirement that 
the State WDB include two or more CEOs (collectively representing both 
cities and counties ``where appropriate'') and indicate whether this 
language would exempt single-area States from requiring CEOs to serve 
on the State WDB.
    Department Response: 20 CFR 679.270 implements WIOA sec. 107(c)(4), 
which describes the requirements of Local WDBs in single-area States. 
Section 679.270 requires that the State WDB, acting as the Local

[[Page 56091]]

WDB, carry out the functions of both Boards except that the State is 
not required to meet and report on a set of local performance 
accountability measures. Section 679.110(b) requires CEO representation 
on the State WDB. There is no exemption for membership categories on 
the State WDB in single-area States. No change to the regulatory text 
was made in response to these comments.
Community-Based Organizations
    Comments: A few commenters recommended that State WDBs should be 
required to have at least one representative from community-based 
organizations (CBOs) with experience and expertise in addressing 
individuals' training, employment, and educational needs. For example, 
one commenter suggested adding Sec.  679.110(b)(3)(ii)(E) that states 
``State Boards are strongly encouraged to include organization 
representatives in (C) and (D).''
    Department Response: Many comments from stakeholders with mandated 
representation on the Board under WIA requested that they again be 
mandated Board members or that they be referenced in regulation. WIOA 
reduced mandated Board membership in an effort to streamline State WDBs 
and provide Governors the flexibility to establish Boards that best 
reflect the diversity of the State's job seeker and employer 
communities. The Department recognizes that many important system 
partners with experience with specific job seeker populations, such as 
required one-stop partner programs, tribal organizations, other 
Department program grantees, and those serving the disadvantaged and 
disabled populations are no longer required members of the Board. 
However, Sec.  679.110(b)(3)(ii) permits representatives of community-
based organizations that have demonstrated experience and expertise in 
addressing the employment, training, or education needs of individuals 
with barriers to employment to contribute to the 20 percent workforce 
threshold. Paragraph (b)(3)(iii)(B) says the Governor has the 
flexibility to appoint ``other appropriate representatives and 
officials designated by the Governor'' which does not preclude any 
organization as the Governor deems appropriate for the State. The 
Department encourages the Governor to ensure that State WDB members 
represent the diversity of job seekers, and employers across the State, 
which includes ensuring adequate representation on the State WDB. The 
Department has made no changes to the regulatory text in response to 
these comments.
Chairperson Requirements
    Paragraph (c) of Sec.  679.110 implements WIOA sec. 101(c) 
requiring the Governor to select a chairperson of the Board from among 
the business representatives on the Board who are the owner or chief 
executive officer for the business or organization, or a person who is 
an executive with the business or organization with optimum policy-
making or hiring authority.
    Comments: One commenter requested amending the statutory language 
to allow outlying areas to appoint a representative from a non-
governmental organization, a community-based organization, or a small 
business rather than a business as chair of the State WDB, expressing 
concern about finding a chairperson who would be willing to dedicate 
the time and effort to the Board.
    Department Response: A small business owner would meet the 
qualifications outlined in the statue and would not require a change to 
the regulations. However, WIOA does not delineate specific Board 
membership exemptions for outlying areas. No change to the regulatory 
text was made in response to these comments.
Individuals With Disabilities and Other Barriers to Employment
    Comments: Many commenters from stakeholders with mandated 
representation on the Board under WIA and from other interest groups 
requested that they again be mandated Board members or that they be 
referenced in regulation. Various commenters suggested that Governors 
be required to appoint individuals with disabilities, disability 
service providers, and direct support professionals, lead State 
officials from agencies with primary responsibility for providing 
services to individuals with intellectual, developmental, and other 
significant disabilities as members of the State WDB. Another commenter 
recommended that because it is not required, the Department should 
strongly urge representation of populations with disabilities on State 
and Local WDBs.
    Department Response: WIOA reduced mandated Board membership in an 
effort to streamline State WDBs and provide Governors the flexibility 
to establish Boards that best reflect the diversity of the State's job 
seeker and employer communities. The Department recognizes that many 
important system partners with experience with specific job seeker 
populations, such as required one-stop partner programs, tribal 
organizations, other Department program grantees, and those serving the 
disadvantaged and individuals with disabilities are no longer mandated 
members of the Board. However, Sec.  679.110(b)(3)(ii) requires not 
less than 20 percent of the Board be comprised of workforce 
representatives which may include one or more individuals who have 
demonstrated experience and expertise in addressing the employment, 
training, or education needs of individuals with barriers to 
employment. Paragraph (b)(3)(iii)(B) says the Governor has the 
flexibility to appoint ``other appropriate representatives and 
officials designated by the Governor,'' which does not preclude 
representatives of any required partner program, community based 
organizations or other organizations as the Governor deems appropriate 
for the State. The Department encourages the Governor to ensure that 
State WDB members represent the diversity of job seekers, and employers 
across the State, which includes ensuring adequate representation on 
the State WDB. The Department has made no changes to the regulatory 
text in response to these comments.
Work-Relevant Training
    Comments: Relating to the WIOA provision that provides that State 
WDB business representatives may represent businesses that provide 
``employment opportunities that, at a minimum, include high-quality, 
work-relevant training and development in in-demand industry sectors,'' 
some commenters asked the Department to clarify the definition of 
``work-relevant training'' in proposed Sec.  679.110(b)(3)(i)(B). In 
particular, some of these commenters asked whether it pertains to for-
profit training providers. Another commenter stated while the 
definition of ``in-demand'' is located at WIOA sec. 3(23), there are no 
definitions for the terms ``high-quality'' and ``work-relevant.'' This 
commenter recommended that the Department allow definition of these 
terms at the State or local level.
    Department Response: Paragraph (b)(3)(i)(B) of Sec.  679.110 
implements WIOA sec. 101(b)(1)(C)(i)(II), which provides that State WDB 
business representatives must represent businesses that provide 
``employment opportunities that, at a minimum, include high-quality, 
work-relevant training and development in in-demand industry sectors.'' 
WIOA sec. 3 provides definitions used in the law, however the terms 
``work-relevant'' training and ``high quality'' are not defined in 
WIOA. The State WDB, in conjunction with the Governor, is responsible 
for crafting appropriate parameters to address

[[Page 56092]]

circumstances in the State; States are therefore responsible for 
defining ``work-relevant'' and ``high-quality'' in accordance with the 
particular circumstances faced by that State. The Department has made 
no changes to the regulatory text in response to these comments.
    Comments: Other commenters said that while they agree that 
customized training, registered apprenticeship, or OJT are all work-
relevant, the Department should clarify that these are just a few 
examples and not a comprehensive list because such limitation could 
deem ineligible representatives of the business community who may 
successfully offer alternative types of training such as a non-
registered apprenticeship. Similarly, another commenter recommended 
that Sec.  679.110(b)(3)(i)(B) should clarify that ``a representative 
of a business providing an alternative form of training can serve on 
the State Board.''
    Department Response: The Department acknowledges that the training 
options mentioned in this section are illustrative, and that other 
training strategies could reasonably satisfy this requirement. The 
Department has determined that no further definition is required and 
has made no changes to the regulatory text in response to these 
comments.
Voting Rights
    Comments: Expressing concern that allowing a Governor to 
selectively grant voting rights among non-required members could skew a 
Board or lead to the appearance of discrimination against some of the 
non-required member interests, a commenter recommended that Sec.  
679.110(g) state clearly that the Governor may grant voting privileges 
to either all or none of the non-required members of the State WDB. 
Another commenter said that allowing a CEO to give voting rights to 
non-required members could lead to political tension. Some commenters 
were concerned that a Governor's authority to convey voting privileges 
to non-required members, as stated in Sec.  679.110(g), would be used 
to circumvent the requirement of a business majority on the State WDB, 
or otherwise impact the functionality of the Board.
    Department Response: WIOA sec. 101(b)(1) mandates certain State WDB 
members in order to ensure a core set of interests are represented. 
Title 20 CFR 679.110(g) requires all mandated Board members to have 
voting rights. This section also permits the Governor to grant voting 
privileges to the non-required members of the board, and the Department 
encourages the Governor to do so, if doing so would further the mission 
and goals of the board. Additionally, as described below, the Governor 
may not award voting rights in such a way that would upset the balance 
of required membership categories. Under the regulations as proposed, 
Governors cannot circumvent membership requirements by granting voting 
rights to non-mandated State WDB members because the membership 
requirements explained in paragraph (b) will always cause the majority 
of members on the Board to be mandated members. No change to the 
regulatory text was made in response to these comments.
Indian and Native American Representation
    Comments: Paragraph (b) of Sec.  679.110 implements WIOA sec. 
101(b) describing the required State WDB membership. Many comments from 
stakeholders with mandated representation on the Board under WIA and 
other interest groups requested that they again be mandated Board 
members or that they be referenced in regulation. Several commenters 
suggested that Indian and Native American representatives be required 
as Board members. As part of a Council resolution submitted as a public 
comment, the Native American Employment and Training Council (NAETC) 
proposed that each State WDB should have a representative from a tribe 
or tribal organization.
    Department Response: WIOA reduced mandated Board membership in an 
effort to streamline the State WDBs and provide Governors the 
flexibility to establish Boards that best reflect the diversity of the 
State's job seeker and employer communities. Many important system 
partners with experience with specific job seeker populations, such as 
tribal organizations, other Department program grantees, and those 
serving the disadvantaged and disabled populations are no longer 
required members of the Board. However, Sec.  679.110(b)(3)(ii) 
requires not less than 20 percent of the Board be representatives of 
the workforce, which may include representatives of community-based 
organizations that have demonstrated experience and expertise in 
addressing the employment, training, or education needs of individuals 
with barriers to employment. It also says the Governor has the 
flexibility to appoint ``other appropriate representatives and 
officials designated by the Governor'' (Sec.  679.110(b)(3)(iii)(B)); 
the Department encourages the Governor to ensure that State WDB members 
represent the diversity of job seekers and employers across the State. 
No change to the regulatory text was made in response to these 
comments.
Section 679.120 What is meant by the terms ``optimum policy-making 
authority'' and ``demonstrated experience and expertise''?
    Paragraph (a) of Sec.  679.120 defines the term ``optimum policy-
making authority'' as an individual who can reasonably be expected to 
speak affirmatively on behalf of the entity he or she represents and to 
commit that entity to a chosen course of action. This section retains 
the same requirements that were included in the WIA regulations at 20 
CFR 661.203(a). Paragraph (b) of Sec.  679.120 defines the term 
``demonstrated experience and expertise'' as an individual who has 
documented leadership in developing or implementing workforce 
development, human resources, training and development, or a core 
program function.''
    Comments: The Department sought comment on the definition of 
optimum policy-making authority, and demonstrated experience and 
expertise. Commenters recommended adding education and training 
expertise to Sec.  679.120 by indicating that documented leadership in 
any of the areas in Sec.  679.110(b)(3)(ii)(C) and (D) also would be 
considered.
    Department Response: The Department agrees with these commenters 
and changed the regulatory language in Sec.  679.120 to reference Sec.  
679.110(b)(3)(ii)(C) and (D).
    Comments: Commenters also recommended in-depth criteria including: 
A successful track record, leveraging of funds, documented service 
track record, quality partnerships, culturally competent, and a 
physical location in the area. However, the majority of commenters 
supported leaving the definition open to State and local discretion. 
Some commenters expressed concern that the definition proposed in Sec.  
679.120 was too specific and may limit the types of representatives on 
the State WDB to those with experience in human resources.
    Department Response: With the clarification that demonstrated 
experience and expertise may include individuals with experience in 
education or training of job seekers with barriers to employment as 
described in Sec.  679.110(b)(3)(ii)(C) and (D), the Department has 
determined that the definition is sufficiently clear to provide 
parameters to State WDBs.

[[Page 56093]]

    Comments: Another commenter suggested removal of the term 
``documented,'' referencing experience in the areas described in Sec.  
679.120, to avoid added administrative burdens of processing 
documentation.
    Department Response: The use of the term ``documented'' assures 
that the selected representatives meet the criteria necessary to 
contribute meaningfully to the Board's actions for job seekers but does 
not require any specific administrative burden. Processes and 
procedures related to membership are the responsibility of the elected 
official. No change to the regulatory text was made in response to 
these comments.
Section 679.130 What are the functions of the State Workforce 
Development Board?
    20 CFR 679.130 implements sec. 101(d) of WIOA and describes the 
role and functions of the State WDB. Paragraphs (a), (d) through (e), 
and (g) through (k) of Sec.  679.130 reiterate the relevant statutory 
requirements at WIOA secs. 101(d)(1), (4) and (5), and (7) through 
(11). These functions are the primary functions of the State WDB.
    Comments: A few commenters suggested text changes such as requiring 
State WDBs to partner with public television stations due to those 
stations' experience creating instructional materials on employability 
skills for job agencies and one-stop centers, providing professional 
development tools like workshops, and hosting job fairs.
    Department Response: The Department encourages State WDBs to 
partner with a wide variety of organizations, however it declines to 
require entities not identified in statute. No change to the regulatory 
text was made in response to these comments.
    Comments: One commenter suggested that Sec.  679.130(a) and (b) 
should require State WDBs to create and implement an appeal process for 
all policies, monitoring, and negotiations that take place by the 
Governor, State WDB, or State pass-through entity and the Local WDBs.
    Department Response: Section 679.130 implements WIOA sec. 101(d), 
which does not include the requirement to establish such an appeals 
process. No change to the regulatory text was made in response to these 
comments.
Clarification of Role of the State WDB
    Comments: Commenters requested clarification of the roles of the 
State WDB such as how the State WDB is to assist in reviewing 
recommendations ``on actions that should be taken by the State to align 
workforce development programs to support a comprehensive and 
streamlined workforce development system'' and whose recommendations 
the Board is to review.
    Department Response: WIOA sec. 101(d) indicates that the role of 
the State WDB is to assist the Governor in the development, 
implementation, and modification of the State Plan. To that end the 
Board is to review policies, programs, and recommendations on actions 
that should be taken by the State to align workforce development 
programs in the State. The State WDB is not limited in the types of 
recommendations that can be reviewed. The Board may consider 
recommendations from any number of areas, not limited to those 
resulting from the public comment on the State Plan, from State WDB 
meetings, or standing committees. In its role in assisting the 
Governor, the State WDB should review relevant comments regarding State 
WDB actions, as well as provide its own recommendations of actions to 
the Governor. No change to the regulatory text was made in response to 
these comments.
    Comments: Commenters requested clarification of the role of the 
State WDB when other entities perform the same functions such the 
development and oversight of the State's labor market information (LMI) 
system, which involves the State WDB and State Unemployment Insurance 
(UI) Administrator.
    Department Response: State WDBs have several roles related to the 
use of LMI in the State. Paragraph (e)(3) of Sec.  679.130 implements 
WIOA sec. 101(d)(5)(C) and requires State WDBs to develop effective 
training programs that respond to real-time data analysis of the labor 
market. WIOA sec. 101(d)(11) and Sec.  679.130(k) require the 
development of the statewide workforce and labor market information 
system described in sec. 15(e) of the Wagner-Peyser Act which refers to 
the State's responsibilities. The responsibilities are complementary 
rather than duplicative of the roles of other State agencies in these 
areas. The State WDB should coordinate with all relevant parties to 
develop and implement a plan for ensuring activities are cohesively 
leveraged rather than duplicated. No change to the regulatory text was 
made in response to these comments.
    Comments: Two commenters urged the Department to incorporate into 
Sec.  679.130 an active review of State policies that encourage 
innovation or hinder innovative strategies that are developed at the 
local level and both cautioned against over-regulation by the State.
    Department Response: Under Sec.  679.130 State WDBs are already 
required to review policies, programs, and recommendations on actions 
that should be taken by the State to align workforce development 
programs in the State. No change to the regulatory text was made in 
response to these comments.
    Comments: A commenter asked whether, for the purpose of carrying 
out sec. 101(d), WIOA authorizes the Governor to ignore or otherwise 
disregard existing State laws with regard to agency rulemaking.
    Department Response: WIOA does not provide this authority to the 
Governor. However, States are required to comply with the Final Rule as 
a condition of the WIOA grant. The Governor should follow applicable 
State laws in a manner best designed to comply with these regulations 
when implementing the functions of the State WDB.
Single-Area States
    Comments: Single-area States, which operated as such under WIA, are 
permitted under WIOA. A commenter urged the Department to mandate use 
of Local WDBs and/or regional consortia in single-area States.
    Department Response: WIOA sec. 107(c)(4) requires that State WDBs 
operating as the Local WDB carry out the same functions, except as 
noted, required of the Local WDB as detailed in Sec.  679.270. 
Therefore, State WDBs in single-area States are already required by 
statute and regulation to meet all requirements of membership and 
functions of both State and Local WDBs. No change to the regulatory 
text was made in response to these comments.
Career Pathways (Sec.  679.130(c)(2))
    WIOA sec. 101(d)(3)(B) outlines ``the development of strategies to 
support the use of career pathways for the purpose of providing 
individuals, including low-skilled adults, youth, and individuals with 
barriers to employment (including individuals with disabilities), with 
workforce investment activities, education'' as a function of the State 
WDB and is described in Sec.  679.130(c)(2). WIOA sec. 107(d) and Sec.  
679.300 extends the requirement to Local WDBs. WIOA sec. 3(7)(A) 
through (G) defines career pathways as a combination of rigorous and 
high-quality education, training, and other services that meet 
specified guidelines.
    Comments: Commenters requested that the Department provide more 
comprehensive guidance on the implementation of career pathways.

[[Page 56094]]

Several commenters provided recommended changes to the regulatory text 
that included adding criteria, including a section specific to Local 
WDB implementation of career pathways, requiring the State and Local 
WDBs to define the roles and responsibilities of WIOA programs related 
to career pathways, listing required partners (such as Job Corps, and 
public television), and developing strategies to include job seekers 
with specific barriers.
    Department Response: The ideas and suggestions provided by the 
commenters support career pathways as a dynamic topic that involves 
input of multiple partners and stakeholders throughout the system. The 
statutory language provides general criteria for both State and Local 
WDBs to reference in developing career pathway strategies. The 
Department has concluded that more prescriptive regulatory language may 
limit State WDBs' innovation in developing career pathways to support 
individuals to retain and enter employment; however, the Department 
will issue further guidance and technical assistance to help States. No 
change to the regulatory text was made in response to these comments.
Industry or Sector Partnerships (Sec.  679.130(c)(4))
    Paragraph (c)(4) of Sec.  679.130 implements WIOA sec. 101(d)(3)(D) 
states that the roles and functions of the State WDB include the 
development and expansion of strategies to meet the needs of employers, 
workers, and job seekers particularly through industry or sector 
partnerships related to in-demand industry sectors and occupations.
    Comments: A commenter suggested that the Department should revise 
Sec.  679.130(c)(4)'s requirement for State WDBs to assist with 
strategies related to industry or sector partnerships to include the 
language ``with an emphasis on attainment of recognized post-secondary 
credentials.''
    Department Response: Title 20 CFR 679.130(c)(4) states that State 
WDBs have responsibility for the development and expansion of 
strategies to meet the needs of employers, including sector strategies. 
State WDB functions already include the requirement to develop and 
update comprehensive State performance and accountability measures to 
assess core program effectiveness under WIOA sec. 116, which includes a 
credential attainment measure. Therefore, attainment of credentials, 
including postsecondary credentials, should already be a State WDB 
priority, as should sector strategies. No change to the regulatory text 
was made in response to these comments.
Best Practices (Sec.  679.130(e))
    Paragraph (e) of Sec.  679.130 requires the Board to identify and 
disseminate best practices in a number of areas (paragraphs (e)(1) 
through (3)).
    Comments: Commenters had concerns about dissemination of best 
practices surrounding assessments. One commenter urged the Department 
to explain further how States would use assessments by including how to 
report this in title-specific data. This commenter expressed concerns 
that the value of requiring these assessments could be undercut through 
a perverse incentive for programs to avoid co-enrollment if the 
assessments' use in an accountability system is not clearly defined and 
recommended that States ensure that title II providers have processes 
for sharing assessment data with title I providers and vice versa.
    Department Response: The regulation does not require the reporting 
of the use of assessments in this section. The State WDB's purpose, as 
outlined in WIOA sec. 101 and Sec.  679.100, is to convene State, 
regional, and local workforce system, and partners to align and improve 
the outcomes and effectiveness of Federally-funded and other workforce 
programs and investments. Therefore, the Board' responsibility already 
includes aligning the strategies related to best practices in 
assessments. The State Plan should address the State's strategic and 
operational vision. No change to the regulatory text was made in 
response to these comments.
State WDB One-Stop Delivery System Guidance (Sec.  679.130(f))
    Paragraph (f) of Sec.  679.130 requires the State WDB to develop 
and review statewide policies affecting the coordinated provision of 
services through the State's one-stop delivery system which is to 
include developing objective criteria and procedures for the Local 
WDBs' use in assessing the physical and programmatic accessibility of 
one-stop centers.
    Comments: A commenter suggested that the language in Sec.  
679.130(f) should be strengthened to better reflect the importance of 
including programmatic and physical accessibility in the assessment of 
one-stop centers. This commenter recommended that accessibility of one-
stop centers must include the removal of barriers as defined in the 
Americans with Disabilities Act (ADA) and 28 CFR 36.304 and should 
extend to technological accessibility, citing sec. 508 of the 
Rehabilitation Act of 1973.
    Department Response: The Department agrees that accessibility is 
paramount for all job seekers, and it is the State WDB's function to 
develop the tools to assist local areas to ensure that one-stop centers 
are both physically and programmatically accessible to all job seekers. 
As noted by the commenter, physical accessibility is already required 
under existing statute and individual State laws as well as the 
regulation implementing WIOA sec. 188 at 29 CFR part 38. WIOA sec. 
102(2)(vii) and the WIOA State Plan ICR require that the State Plan 
address how the one-stop delivery system will comply with the Americans 
with Disabilities Act of 1990. No change to the regulatory text was 
made in response to these comments.
Strategies for Technological Improvements To Improve One-Stop Services 
(Sec.  679.130(g)) and Strategies for Aligning Technology and Data 
Systems Across One-Stop Partner Programs (Sec.  679.130(h))
    Comments: A State agency expressed concern that the requirement 
that State WDBs develop strategies to ensure technology is accessible 
to individuals with disabilities and individuals residing in remote 
areas (Sec.  679.130(g)(4)) could become costly and asked the 
Department for information on if each State would create its own plan 
and for the expectations for the scope of available technology. A 
commenter expressed concern that the requirement that State WDBs 
develop strategies to for aligning technology and data systems across 
one-stop partner programs in Sec.  679.130(h) could become costly, and 
asked the Department for an explanation of why this responsibility is 
necessary and what the plan development schedule would look like.
    Department Response: Paragraph (g)(4) of Sec.  679.130 and 
paragraph (h) of Sec.  679.130 address technology improvements, and 
data system alignment across one-stop partner programs. Neither 
paragraph (g) nor (h) require the development of a plan, or outline 
specific technology expectations; rather, the Board is responsible for 
developing strategies for technological improvements. Although the 
State WDB may choose to develop a technology plan to achieve those 
requirements, neither WIOA nor the regulations require the submission 
of a formal technology plan. No change to the regulatory text was made 
in response to these comments.

[[Page 56095]]

Development of Statewide Workforce and Labor Market Information System 
(Sec.  679.130(k))
    Comments: WIOA sec. 101(d)(11) and Sec.  679.130(k) require the 
development of the statewide workforce and labor market information 
system described in sec. 15(e) of the Wagner-Peyser Act which refers to 
the State's responsibilities. A commenter requested clarification of 
the role of the State WDB in the development and oversight of the 
State's labor market information (LMI) system. State WDBs have several 
roles related to the use of LMI in the State.
    Department Response: Paragraph (e)(3) of Sec.  679.130 implements 
WIOA sec. 101(d)(5)(C) and requires State WDBs to develop effective 
training programs that respond to real-time data analysis of the labor 
market. WIOA sec. 101(d)(11) and Sec.  679.130(k) require the 
development of the statewide workforce and labor market information 
system described in sec. 15(e) of the Wagner-Peyser Act which refers to 
the State's responsibilities. The responsibilities are complementary 
rather than duplicative of the roles of other State agencies in these 
areas. The State WDB should coordinate with all relevant parties to 
develop and implement a plan for ensuring activities are cohesively 
leveraged rather than duplicated.
Section 679.140 How does the State Workforce Development Board meet its 
requirement to conduct business in an open manner under ``sunshine 
provision'' of the Workforce Innovation and Opportunity Act?
    Title 20 CFR 679.140 implements WIOA sec. 101(g) requiring the 
State WDB to conduct business in an open manner.
    Comments: A commenter recommended the Department revise Sec.  
679.140(b)(3) to require State WDBs to make available the minutes of 
meetings and any public comments, feedback, or requests for service, 
and to provide a written response to such comments or requests.
    Department Response: The Department notes that paragraph (b)(3) 
already implements the WIOA sec. 101(g) requirement that meeting 
minutes be available to the public upon request. The Department 
encourages all State WDBs to operate with transparency; State WDBs are 
free to make additional information, such as public comments and other 
information it deems appropriate, available to the public. No change to 
the regulatory text was made in response to these comments.
Section 679.150 Under what circumstances may the Governor select an 
alternative entity in place of the State Workforce Development Board?
    Title 20 CFR 679.150 implements WIOA sec. 101(e), which authorizes 
the use of alternative entities to the State WDB under the following 
conditions: The alternative entity was in existence on the day before 
the date of enactment of the Workforce Investment Act of 1998; is 
substantially similar to the WIOA State WDB; and includes 
representatives of business and labor organizations in the State. As 
outlined in Sec.  679.150(c), if the alternative entity does not 
provide representatives for each of the categories required under WIOA 
sec. 101(b), the State Plan must explain the manner in which the State 
will ensure an ongoing role for any unrepresented membership group in 
the workforce development system. The State WDB must maintain an 
ongoing and meaningful role for an unrepresented membership group, 
including entities carrying out the core programs.
    Comments: Commenters disagreed with the interpretation at Sec.  
679.150(d) that required a new State WDB if the membership of the 
alternative entity had changed significantly after August 7, 1998 and 
paragraph (e) that defined the criteria for a significant change. 
Commenters interpreted the alternate entity provisions of WIOA to mean 
that an alternative entity may add or remove membership categories and 
maintain alternative entity status unless those changes make the State 
WDB ``substantially dissimilar'' to the State WDB. Commenters requested 
the Governor be given the authority to make a determination regarding 
the definition of ``substantially similar.''
    Department Response: The Department agrees and has deleted the 
proposed text at Sec.  679.150(d) and (e) from the Final Rule. The 
Department declines to further define ``substantially similar'' in 
Sec.  679.150 but considers substantially similar to be aligned with 
the composition of the WIOA compliant State WDB as outlined in WIOA 
sec. 101(a) through (c) and Sec.  679.110. The Department considers 
changes to the alternative entity membership or structure that are 
contrary to the requirements of WIOA sec. 101(a) through (c) and Sec.  
679.110 or those that make the alternative entity less aligned with 
WIOA State WDB compliance to result in an alternative entity that is 
not substantially similar to a compliant WIOA State WDB.
    Comments: Commenters requested that the Department require a 
business majority for alternative entities.
    Department Response: WIOA sec. 101(e) and Sec.  679.150(b)(3) 
require alternative entities to have representatives of businesses in 
the State, however lacks a requirement for a business majority. The 
Department strongly encourages alternative entities to seek a majority 
business participation in State WDB activities and decisions. No change 
to the regulatory text was made in response to these comments.
2. Subpart B--Workforce Innovation and Opportunity Act Local Governance 
(Workforce Development Areas)
    This subpart provides the requirements for identification of 
regions and designation of local areas under WIOA. WIOA envisions a 
workforce development system that is customer focused on both the job 
seeker and business, and is able to anticipate and respond to the needs 
of regional economies. It requires Workforce Development Boards and 
CEOs to design and govern the system regionally, aligning workforce 
policies and services with regional economies and supporting service 
delivery strategies tailored to these needs. To support this regional 
approach, this subpart requires States to identify intrastate or 
interstate regions. When the region contains more than one local area, 
the local areas are required to plan regionally. WIOA envisions a 
regional system where public workforce system leaders partner and 
provide leadership as part of a comprehensive, regional workforce and 
economic strategy. The majority of comments in this section pertained 
to the structure of regions, and initial and subsequent designation of 
workforce development areas.
Section 679.200 What is the purpose of requiring States to identify 
regions?
    Title 20 CFR 679.200 implements requirements found at both WIOA 
sec. 101(d)(3)(E), and WIOA sec. 106(a), which require the Governor to 
identify regions with consultation from the CEOs and Local WDBs in the 
affected region. The development of comprehensive regional partnerships 
facilitates alignment of workforce development activities with regional 
economic development activities, and better supports the execution and 
implementation of sector strategies and career pathways. Regional 
cooperation may also lower costs and increase the effectiveness of 
service delivery to businesses that span more than one local area 
within a region and to job seekers through coordination of shared

[[Page 56096]]

services, processes, and operations. The Department encourages States 
to ensure that local and regional planning areas are aligned to support 
improved service delivery, improved training and employment outcomes, 
better meet employer needs, and greater effectiveness and efficiency in 
achieving these outcomes.
    Comments: A commenter expressed concern that defining boundaries of 
a region at the State level could result in a lack of coordination 
among locals in different regions. A different commenter suggested that 
the Department require cooperation between core partners to align 
existing services into the appropriate regions and ``to reject plans 
where Governors have not effectively assigned local areas to regions.''
    Department Response: State WDBs are required to identify regions in 
consultation with local chief elected officials and Local WDBs. The 
State WDB is also tasked with ensuring the overall alignment of the 
public workforce system. The function of identifying regions should not 
limit coordination among Local WDBs outside of the identified region; 
in fact, the State WDB function is to ensure that the system becomes 
more, rather than less, cohesive. No change to the regulatory text was 
made in response to these comments.
    Comments: One commenter said that the market of a local area may 
lend itself to more than one region and in instances such as this they 
could exist as a singular local region and partner with the neighboring 
areas.
    Department Response: The Department agrees that the State WDB could 
reach such a conclusion. No change to the regulatory text was made in 
response to these comments.
Section 679.210 What are the requirements for identifying a region?
    Title 20 CFR 679.210 addresses the requirements for identifying a 
region and requires a process that includes consultation with Local 
WDBs and CEOs.
    Comments: Commenters suggested additional clarification regarding 
how consultation will take place including requiring memorandums of 
agreement, and a detailed policy of the process.
    Department Response: The term consultation is used in Sec.  679.210 
as a requirement for identifying a region; the Department added a 
definition of consultation to part 675. This clarifies that 
consultation constitutes a robust conversation in which all parties are 
given opportunity to share their thoughts and opinions. The Department 
declines to add additional requirements.
    Comments: The Department requested comment on additional data that 
may be considered other than that laid out in Sec.  679.210(c)(1) 
through (8). Commenters provided suggestions for new data points as 
well as adjustments to those in paragraphs (c)(1) through (8), such as 
including public transportation when considering commuting patterns, 
adding the workforce participation rate of people with barriers to 
employment, especially individuals with disabilities and out of school 
youth with disabilities, administrative efficiencies, and existing 
regional capacity and a history of local areas working together.
    Department Response: The data points in Sec.  679.210(c)(1) through 
(8) are for illustrative purposes and should not limit the State's 
decision-making when identifying regions. The Department will review 
the suggestions when determining and issuing guidance on any additional 
factors as outlined in Sec.  679.210(c)(8). No change to the regulatory 
text was made in response to these comments.
    Comments: WIOA sec. 102(b)(2)(D)(i)(II) and Sec.  679.210 require 
the Governor to develop a policy and processes for identifying regions. 
Commenters suggested that local areas designated under WIA be able to 
join one or more region or have the opportunity to remain a single 
region. Another commenter suggested that any current local areas that 
incorporate multiple jurisdictions should automatically be considered a 
region. A commenter requested clarification regarding the difference 
between the identification of regions and the designation of local 
areas.
    Department Response: Local area designation is addressed in 
Sec. Sec.  679.220 and 679.230; the purpose of a local area is to 
administer workforce development activities. The purpose of a region is 
addressed in Sec. Sec.  679.200 and 679.210; the purpose of a regional 
area is to align workforce development activities and resources with 
larger regional economic development areas and resources. The regional 
plan should describe the Governor's processes for ensuring the 
requirements outlined in WIOA sec. 102 for the identification of 
regions are met. Local areas designated under WIA are not exempt from 
the regional identification process. No change to the regulatory text 
was made in response to these comments.
    Comments: Those regions comprised of two or more contiguous local 
areas are planning regions as described in WIOA sec. 3(48). Commenters 
have suggested that a single area could participate in multiple 
planning regions by being a member, or through a memorandum of 
agreement.
    Department Response: In accordance with WIOA sec. 106(a)(2), a 
single local area may not be split across two planning regions. Local 
areas must be contiguous in order to be a planning region and 
effectively align economic and workforce development activities and 
resources. The Department encourages States confronted with this issue 
to reevaluate whether the local areas in question are consistent with 
labor market areas and with regional economic development areas in the 
State. If these criteria are not met, the State should consider how 
best to recast local areas for the purposes of subsequent designation 
and regional integration. Local areas only may be part of one region, 
however, local areas within planning regions are not prohibited from 
working or coordinating with other local areas, and regions may 
coordinate with other planning regions. Coordination may be especially 
vital across States; the Department anticipates providing additional 
guidance regarding the creation and management of interstate planning 
regions. No change to the regulatory text was made in response to these 
comments.
    Comments: A commenter requested that the Governor be provided 
flexibility to add more criteria to Sec.  679.210(c) for use when 
identifying a region.
    Department Response: The Department has determined that the 
Governor must use the criteria at Sec.  679.210 in determining a region 
in order to ensure consistency among States. However, the list of 
factors in paragraph (c) is illustrative and additional factors may be 
considered. The Department will review the criteria when determining 
and issuing guidance on any additional factors as outlined in Sec.  
679.210(c)(8), which states that the Secretary of Labor may provide 
additional considerations for the development of regions according to 
the policy priorities of the Department. No change has been made to the 
regulatory text in response to this comment.
Section 679.230 What are the general procedural requirements for 
designation of local areas?
    Title 20 CFR 679.230 describes a general public comment process and 
the general procedural requirements for designation of local areas, 
which include consultation with the State WDB, chief elected officials 
and affected Local WDBs. The Governor has the discretion to establish 
the process and procedures to solicit comments that it determines 
appropriate. However, a

[[Page 56097]]

wide-reaching, inclusive process allows sufficient time for 
stakeholders to provide substantive comments that will enable the 
Governor to receive meaningful feedback from all interested 
stakeholders, ensuring that the Governor is able to consider all 
relevant information, data, and opinions before making a decision to 
designate or redesignate a local area. WIOA sec. 102(b)(2)(D)(i)(II) 
requires the State Plan to describe the Governor's processes for 
designating local areas. In addition, the State Plan must detail how 
the State will ensure the requirements outlined in WIOA sec. 102 
regarding public comments and consultation are met.
    Comments: Commenters suggested that regulations require additional 
clarification regarding consultation.
    Department Response: The Department agrees with the comment and has 
added a definition of consultation to the regulatory definitions in 
part 675 of the Final Rule. The term ``consultation'' is used 
throughout WIOA to describe the process by which State and/or local 
stakeholders convene to discuss changes to the public workforce system. 
The Department has concluded that this definition is necessary to 
clarify that consultation constitutes a robust conversation in which 
all parties are given opportunity to share their thoughts and opinions. 
Written correspondence or other simple communication methods do not 
constitute consultation. This definition applies to all provisions that 
use the term unless otherwise specified. With the addition of the 
definition in part 675 of the Final Rule, the Department considers the 
requirements of Sec.  679.230 to be clear. No changes were made to the 
regulatory text in response to these comments.
    Comments: Many commenters expressed their agreement with the 
general procedural language in this section and commented that pursuant 
to WIA sec. 189(i)(2), Texas's workforce areas were designated before 
WIA took effect and therefore, they may continue to be used as local 
areas. One of the commenters agreed commenter, stating that for these 
reasons, ``Texas should continue to operate pursuant to the waiver 
authority afforded under WIOA.''
    Department Response: Throughout the sections pertaining to Local 
WDBs several similar comments referenced operations in Texas as 
approved under WIA. The Department's response to all comments 
pertaining to Texas's operation under special rule authority in WIA is 
that WIOA sec. 193 continues the provisions in effect in WIA and the 
Department will continue to administer them in the same manner under 
WIOA.
Section 679.240 What are the substantive requirements for designation 
of local areas that were not designated as local areas under the 
Workforce Investment Act of 1998?
    Title 20 CFR 679.240 implements WIOA sec. 101 and addresses the 
substantive requirements for designation of local areas that were not 
designated as local areas under the Workforce Investment Act of 1998 
and Sec.  679.250 addresses subsequent eligibility of local areas.
    Comments: One commenter supported this section as proposed. A few 
commenters, including a State WDB, suggested that the Department add 
language to the regulation that will provide Governors the flexibility 
to apply the factors outlined in Sec.  679.240(a) following subsequent 
designation regardless of whether the area was designated previously.
    Department Response: WIOA sec. 106(b)(3) outlines the requirements 
of subsequent eligibility: ``After the period for which a local area is 
initially designated under paragraph (2), the Governor shall approve a 
request for subsequent designation as a local area from such local 
area, if such area--(A) performed successfully; (B) sustained fiscal 
integrity; and (C) in the case of a local area in a planning region, 
met the requirements described in subsection (c)(1).'' WIOA does not 
require other criteria, and this provision permits existing areas to 
continue so long as they meet the statutory criteria. No change to the 
regulatory text was made in response to these comments.
Section 679.250 What are the requirements for initial and subsequent 
designation of workforce development areas that had been designated as 
local areas under the Workforce Investment Act of 1998?
    Comments: A couple commenters expressed their support for the 
language in Sec.  679.250(a) through (c). One commenter recommended 
that in this section and elsewhere in the regulations any language that 
``prohibits a rural concentrated employment program (CEP) from applying 
for designation as local workforce area'' should be deleted.
    Another commenter presented the same suggestion and recommended 
deleting language from the rule and preamble discussion that exclude 
rural CEPs from being eligible to apply as local workforce areas. 
Specifically, the commenter recommended deleting language from the 
regulatory text of Sec.  679.250(g), and deleting language discussing 
CEPs in the preamble discussion for Sec.  679.250(g), and the preamble 
discussion for Sec.  679.290(a), and the commenter provided detailed 
rationale to support the deletion of all anti-CEP language.
    Department Response: WIOA Technical Amendments Act, enacted on May 
22, 2015, amended WIOA sec. 106(b) to allow rural concentrated 
employment programs to apply for initial and subsequent designation as 
a local workforce area. The regulations have been revised to conform 
with the statutory direction and paragraph (g) now reads as follows: 
``The Governor may approve, under paragraph (c) of this section, a 
request for designation as a local area from areas served by rural 
concentrated employment programs as described in WIOA sec. 
107(c)(1)(C).''
    Comments: Many commenters requested clarification regarding the 
requirements of subsequent designation and the associated timelines in 
Sec.  679.250.
    Department Response: The Department clarified Sec.  679.250 to 
provide details on the duration of initial designation and the timing 
of the first available opportunity for local area subsequent 
designation to occur. The Department revised the proposed requirement 
to clarify that initial designation is only applicable to PY 2016 and 
PY 2017. Noting the commenters' concerns regarding availability of WIOA 
performance data, which is required for the determination of 
designation, the Department added Sec.  679.250(c) to clarify that no 
determination of subsequent designation may be made before the 
conclusion of PY 2017.
Section 679.260 What do the terms ``performed successfully'' and 
``sustained fiscal integrity'' mean for purposes of designating local 
areas?
    Title 20 CFR 679.260 implements the WIOA sec. 106(e)(1) definition 
of performed successfully.
    Comments: Many commenters asked for guidance in applying the WIOA 
sec. 106(e)(1) definition.
    Department Response: The Department agrees that additional detail 
is necessary to ensure that initial and subsequent designation 
requirements are applied consistently. The Department has adjusted the 
Final Rule at Sec.  679.260 to detail the performance indicators, and 
corresponding timelines, to be considered for initial and subsequent 
designation. For clarity and to reduce duplication the Department 
deleted Sec.  679.260(a)(1) and (2) pertaining to the negotiated levels 
of performance. The details in paragraphs

[[Page 56098]]

(a)(1) and (2) were unnecessarily duplicative to the requirements 
covered in the introductory text of paragraph (a), which already 
outline the relevant performance goals. The Department added detailed 
timeframe information for subsequent designation in Sec.  679.260(b)(1) 
and (2).
    Comments: Some commenters suggested that performance be measured in 
the aggregate based on the total outcomes for all performance 
indicators instead of individual performance indicators. Another 
commenter requested that success be based on achieving 80 percent of 
the negotiated goal.
    Department Response: Based on experiences under WIA, the Department 
determined that individual indicators of performance provide Governors 
more detailed information for making designation determinations. Title 
20 CFR 679.260 clarifies that local areas must not fail any individual 
measure for 2 consecutive years. Title 20 CFR 679.260(a) clarifies that 
the local area must meet or exceed the performance levels the Governor 
negotiated with Local WDB and CEO.
    Comments: A commenter asked for clarification regarding appeal 
rights if a local area is deemed not to have performed successfully if 
there was no negotiation between a local area and the State for the 
previous 1 to 2 years before enactment of WIOA.
    Department Response: WIA sec. 136(c) and Sec.  666.310(a) of the 
regulations implementing WIA required the negotiation of local area 
performance indicators under WIA. In accordance with WIOA sec. 
106(e)(1) and Sec.  679.260(a) and (b), the local performance must be 
judged in accordance with the definitions of ``meets'' and ``exceeds'' 
in place at the time the performance levels were negotiated. Appeals 
regarding local area designation must adhere to the requirements in 
Sec. Sec.  683.630(a), 683.640, and 679.290.
    Comments: Paragraph (c) of Sec.  679.260 implements WIOA sec. 
106(e)(2), which defines the term ``sustained fiscal integrity.'' 
Commenters requested clarification of fiscal integrity, and one 
commenter expressed concern that the three criteria used for 
determining ``sustained fiscal integrity'' would limit the Governor's 
ability to designate local areas and suggested that the Department 
clarify that only the first criterion requires a formal determination 
by the Secretary of Labor.
    Department Response: In WIOA sec. 106(e), ``sustained fiscal 
integrity'' means ``that the Secretary has not made a formal 
determination, during either of the last 2 consecutive years preceding 
the determination regarding such integrity, that either the grant 
recipient or the administrative entity of the area misexpended funds . 
. . due to willful disregard of the requirements of the provision 
involved, gross negligence, or failure to comply with accepted 
standards of administration.'' Section 679.260(c) implements the 
requirements outlined in WIOA sec. 106(e). No changes were made to the 
regulatory text in response to these comments. To the extent that 
additional clarification may be needed, the Department will issue 
separate guidance.
Section 679.270 What are the special designation provisions for single-
area States?
    Title 20 CFR 679.270 implements WIOA secs. 106(d) and 107(c)(4)(A), 
which allow for single-area States so designated under WIA to continue, 
and requires the State WDB to carry out the functions of the Local WDB 
in a single-area State.
    Comments: Commenters requested additional clarification on the 
roles of the State WDB in single-area States. Several commenters 
indicate that single-area States tend to be small or substantially 
rural areas and fulfilling the mandates of both the State and Local 
WDBs would be both unduly burdensome for single-area States as well as 
impractical. Others objected to single-area State WDBs taking on the 
role of the Local WDB and expressed concern that such situations are 
non-responsive to local needs and to local stakeholders. Commenters 
suggested varying solutions which include allowing waivers or 
exceptions for single-area States of certain Board functions; mandating 
local representation to a broader extent on the single-area State WDB; 
creating a specific section regulating exemptions for single-area State 
WDB functions; and offering non regulatory technical assistance and 
guidance.
    Department Response: WIOA sec. 107(c)(4)(A) requires that single-
area States' State WDB carry out the function of the Local WDB with an 
exemption only for meeting and reporting on local performance 
indicators, so the requirements of Sec.  679.270(c) cannot be reduced. 
However, the Department does not intend for single-area States to 
conduct the required Board functions in such a way as to be inefficient 
or duplicative. To that end, the Department has amended the regulatory 
text at Sec.  679.270 by adding paragraph (d), which clarifies that 
single-area States must conduct the functions of the Local WDB to 
achieve the incorporation of local interests but may do so in a manner 
that reduces unnecessary burden and duplication of processes. The 
Department will issue guidance regarding how single-area States must 
carry out the duties of State and Local WDBs.
    The Department encourages the Governor to ensure that State WDB 
members represent the diversity of job seekers and employers across the 
State, which includes ensuring adequate local elected official 
representation on the State WDB. Single-area States have the additional 
burden of representing local level interests and stakeholders.
3. Subpart C--Local Workforce Development Boards
    Title 20 CFR 679.300 explains the purpose of the Local WDB. The 
Local WDB represents a wide variety of individuals, businesses, and 
organizations throughout the local area. The Local WDB serves as a 
strategic convener to promote and broker effective relationships 
between the CEOs and economic, education, and workforce partners. The 
Local WDB must develop a strategy to continuously improve and 
strengthen the workforce development system through innovation in, and 
alignment and improvement of, employment, training, and education 
programs to promote economic growth. Local WDB members must establish a 
platform in which all members actively participate and collaborate 
closely with the required and other partners of the workforce 
development system, including public and private organizations. This is 
crucial to the Local WDB's role to integrate and align a more 
effective, job-driven workforce investment system. In this part the 
Department addresses comments on the roles of the Local WDBs, Local WDB 
memberships, and the role of local elected officials.
Section 679.300 What is the vision and purpose of the Local Workforce 
Development Board?
    Title 20 CFR 679.300 establishes the vision for and explains the 
purpose of the Local WDB.
    Comments: Commenters suggested the Department clarify that Local 
WDBs are responsible for organizing the key partners to develop a 
vision for the system collectively, implementing that system, and 
monitoring performance.
    Department Response: These responsibilities are already laid out in 
the regulations under Sec.  679.300(b)(1). One of the purposes of the 
Local WDB is to provide strategic and operational oversight in 
collaboration with required and other partners to help the workforce

[[Page 56099]]

development system achieve the purposes outlined in WIOA sec. 2, and 
assist in the achievement of the State's strategic and operational 
vision and goals outlined in the State Plan. Paragraphs (b)(2) and (3) 
of Sec.  679.300 require the Local WDB to assist in the achievement of 
the State's strategic and operational vision and goals as outlined in 
the Unified State Plan or Combined State Plan, and to maximize and 
continue to improve the quality of services, customer satisfaction, and 
effectiveness of the services provided. No change to the regulatory 
text was made in response to these comments.
Section 679.310 What is the Local Workforce Development Board?
    Title 20 CFR 679.310 implements WIOA sec. 107 by defining the Local 
WDB and its functions.
    Comments: Commenters suggested changes regarding the function of 
establishing by-laws covered in Sec.  679.310(g) including suggesting 
that the criteria that apply to the selection of Local WDB members also 
should apply to by-laws of the Board, and that Board members should not 
be required to actively participate in convening system stakeholders.
    Department Response: WIOA sec. 107(b)(1) and Sec.  679.320 describe 
the Local WDB membership requirements as enumerated in WIOA. The WIOA 
statute does not indicate that by-laws restrict membership. The 
Department declines to make the suggested regulatory change. No change 
to the regulatory text was made in response to these comments.
    Comments: Some commenters stated that Sec.  679.310(g)(7) should 
refer to membership on the Local WDB, rather than the State WDB. One 
commenter suggested that the authority should fall to Local WDBs and 
not CEOs and recommended that the Department reword Sec.  679.310(g)(7) 
as follows: ``A description of any other conditions governing 
appointment or membership on the Local Board as deemed appropriate by 
both the Local Board Chair and the CEO. The rest of these conditions 
should be under the authority of the [Local Board] and be included as 
requirements in the [Local Board] developed by-laws.''
    Department Response: The Department agrees and will make that 
technical change to Sec.  679.310(g)(7) to replace State WDB with Local 
WDB. The regulatory text has been revised with this change to Sec.  
679.310(g)(7).
    Comments: A commenter requested clarification regarding the 
financial liability for local areas with multiple chief elected 
officials.
    Department Response: Paragraph (e) of Sec.  679.310 says that if a 
local area includes more than one unit of general local government the 
chief elected officials may execute an agreement to describe their 
responsibilities for carrying out the roles and responsibilities. This 
agreement may include the assignment of liabilities among the units of 
local government. The chief elected officials should address financial 
roles in this agreement. In addition there is authority under WIOA sec. 
107(d)(12)(B)(i)(I) that the Governor may agree to take on the 
liability of the chief elected official.
    Comments: A commenter stated that the term ``elect'' in the 
nomination process should be changed to ``appoint.''
    Department Response: The Department agrees and has changed the term 
``elect'' in Sec.  679.310(g)(1) to ``select.''
    Comments: Regarding the nomination process, a commenter asked the 
Department to clarify whether the Board chair will be nominated by a 
vote of the Local WDB members and not by the chief elected official.
    Department Response: The Local WDB is required to elect the 
chairperson as outlined in Sec.  679.330 in accordance with WIOA sec. 
170(b)(3).
    Comments: The proposed regulations in Sec.  679.310(g) would 
require the CEO to establish by-laws for Local WDBs. A few commenters 
suggested that the Department revise the language in proposed paragraph 
(g) to require that CEOs, ``in consultation with the Local Board,'' 
must establish by-laws consistent with State policy for Local WDB 
membership.
    Department Response: Paragraph (g) of Sec.  679.310 requires the 
local elected official to establish by-laws that include the process to 
ensure Local WDB members actively participate in convening system 
stakeholders, brokering relationships with a diverse range of 
employers, and leveraging support for workforce development activities. 
The by-laws will outline the process and roles for Local WDB members. 
An effective Local WDB establishes clear roles, responsibilities, 
procedures, and expectations through its by-laws, and that these 
requirements will help Local WDBs to be more agile and proactive in 
reacting to board turnover, increase board participation when board 
members are not able to physically attend board meetings, improve board 
functionality, and help ensure that the public is informed about the 
operation of the board. No changes to the regulatory text have been 
made in response to these comments.
    Comments: A commenter requested that the Department revise the 
section so that the Local WDBs must draft by-laws ``after consultation 
with and approval by the chief elected official.''
    Department Response: WIOA sec. 107 delegates the establishment of 
by-laws to the chief elected official. The chief elected official must 
establish the by-laws in order to constitute a Local WDB. Paragraph (c) 
of Sec.  679.310 allows the Local WDB and the chief elected official(s) 
to enter into an agreement that describes the respective roles and 
responsibilities of the parties which does not prohibit the Local WDB's 
role in the development of future by-laws. The suggested change is not 
necessary and no change to the regulatory text was made in response to 
this comment.
Section 679.320 Who are the required members of the Local Workforce 
Development Board?
    Title 20 CFR 679.320 addresses the required members on the Local 
WDB in accordance with WIOA sec. 107.
    Comments: The Department received comments of support for this 
section but one commenter suggested that it may cause political tension 
to allow a Chief Elected Official to appoint Local WDB members.
    Department Response: WIOA clearly contemplates that Chief Elected 
Officials will use the State established criteria to appoint Local WDB 
membership that meets the requirements in WIOA sec. 107(b)(2). Section 
679.320(g) requires the Chief Elected Official establish a formal 
nomination and appointment process. No change has been made to the 
regulatory text in response to this comment.
Overarching Comments on the Required Members of Local WDBs
    Comments: Commenters requested guidance on documenting the 
inability to find a certain member type.
    Department Response: Local WDBs should follow State guidelines for 
documenting the lack of member types in the area.
Adult Education Representation
    Comments: The Department received several comments suggesting that 
a specific entity be named to represent adult education programs at the 
local level.
    Department Response: WIOA sec. 107(b)(1) and Sec.  679.320(a) 
require that the chief elected official use the criteria set by the 
Governor, in partnership with the State WDB, to appoint members of the 
Local WDBs. The Department concludes that the Governor, in

[[Page 56100]]

partnership with the State WDBs, has authority for creating a policy 
regarding the criteria for the membership of the Local WDB, which 
includes criteria for selecting the representative of a title II 
eligible provider of adult education and literacy activities. No change 
has been made to the regulatory text in response to this comment.
    Comments: Commenters also recommended that a process be implemented 
for selecting a Local WDB representative in the event there are 
multiple providers in the area.
    Department Response: In accordance with WIOA sec. 107(b)(2)(C)(i), 
Sec.  679.320(d)(1) requires that the Local WDB include at least one 
eligible provider administering adult education and literacy activities 
under title II. Nominations are solicited when multiple entities are in 
a local area as described in Sec.  679.320(g)(3) and WIOA sec. 
107(b)(6). No change to the regulatory text was made in response to 
these comments.
    Comments: One commenter asked for clarification between the terms 
``education and training activities'' and ``education and training 
services,'' stating that they seem to mean the same thing in many 
instances.
    Department Response: In order to avoid confusion, the Department 
eliminated the term ``education and training services'' from the 
regulatory text.
Dual Representation
    Title 20 CFR 679.320(h) allows an individual to be appointed as a 
representative on the Local WDB for more than one entity if the 
individual meets all of the criteria for representation.
    Comments: Several commenters expressed concern with this approach 
because it differs from State WDB requirements; commenters recommended 
allowing for all core programs to have separate representation on Local 
WDBs. One commenter supported the flexibility in permitting a Local WDB 
member to represent multiple entities. Another commenter recommended 
that the Department should strongly discourage a Local WDB member from 
representing two interests, reasoning that a Board member serving the 
interests of two separate functions would not be true to the intent of 
WIOA. This commenter also expressed concern that it would create a 
conflict of interest under the Sarbanes-Oxley Act and a Board member's 
heightened fiduciary responsibilities.
    Department Response: The Department recognizes that the structure 
of core programs may differ across the country and separate 
representation may not be possible or practical in all local areas. The 
Department offers Governors and Local Chief Elected Officials the 
flexibility for an individual to be appointed as a representative on 
the Local WDB for more than one entity if the individual meets all of 
the criteria for representation. However, there is no requirement that 
this be the case. In accordance with WIOA sec. 107(b)(1) and Sec.  
679.320(a) the CEO must follow the process established by the Governor, 
in partnership with the State WDB, for appointing members of the Local 
WDB. With regard to concerns about conflicts of interest under the 
Public Company Accounting Reform and Investor Protection Act (Sarbanes-
Oxley Act) or other applicable laws, neither WIOA nor these regulations 
exempt an official serving in a dual representation capacity from any 
applicable ethical rules. In fact, Sec.  683.200(c)(5) imposes specific 
conflict of interest requirements on WIOA recipients in addition to 
those applicable under the uniform administrative requirements. For 
these reasons, the Department has determined that the flexibility for 
Local WDB membership is appropriate and no change to the regulatory 
text was made in response to these comments.
Labor Union, Small Business, and Registered Apprenticeship 
Representation
    Paragraph (c) of Sec.  679.320 requires that at least 20 percent of 
Local WDB membership must be workforce representatives to include 
representatives of labor organizations, and a joint labor-management 
registered apprenticeship program, or (if no such program exists in the 
area) a representative of a registered apprenticeship program in the 
area if such program exists.
    Comments: Commenters requested clarification of the total number of 
labor representatives required on the Local WDB, and suggested labor 
representatives include employee representatives for non-unionized 
employees.
    Department Response: Paragraph (c) of Sec.  679.320 clarified that, 
at minimum, three labor representatives must be included in the Local 
WDB: Two or more representatives of labor organizations, where such 
organizations exist in the local area, and one joint labor-management 
representative of a registered apprenticeship program where such 
program exists in the local area. In the event that these organizations 
are not present in the local area, representatives must be selected 
from other employee representatives. For local areas with no union-
affiliated registered apprenticeship program, a representative of a 
non-union registered apprenticeship in the area must be appointed if 
one exists. The Local WDB may include other individuals or 
representatives as outlined in paragraph (e). The Department has 
determined that no change is required to the proposed language to allow 
for additional representation of the labor force as appropriate.
    Regarding the number of small business representation, paragraph 
(b) of Sec.  679.320 implements WIOA sec. 107(b)(2)(A)(ii), which 
describes Local WDB membership criteria and calls for members that 
``represent businesses, including small businesses.'' The Department 
interprets WIOA's use of the word ``businesses'' to indicate that the 
Local WDB is required to have more than one member representing a small 
business.
    Comments: One commenter requested a definition of the word 
``business'' and asked if it ``may include large non-profit 
organizations.'' Another commenter requested a definition of ``business 
organization,'' suggesting it ``include trade associations and chambers 
of commerce,'' and another commenter also requested clarity that 
``business organizations can be a local chamber of commerce or a 
regional entity.'' One commenter asked if sector representatives had to 
come from an established sector or if they also could represent 
``aspirational industries.''
    Department Response: WIOA sec. 3 contains definitions of terms used 
in the law. This section does not specifically define a business or a 
business organization. The groups suggested by the commenters may be 
included as long as they meet the membership criteria outlined in Sec.  
679.320. Title 20 CFR 679.320 implements WIOA sec. 107(b)(2) by 
describing the required members of a Local WDB. Paragraph (b) requires 
that a majority of the members of the Local WDB be representatives of 
businesses in the local area and paragraphs (b)(1) and (2) outline the 
required criteria. The Chief Elected Official (CEO) has the authority 
in WIOA sec. 107 and Sec.  679.320(e)(4) to appoint other members as 
he/she deems appropriate. Regarding the comment on ``aspirational 
industries,'' many organizations can meet the criteria outlined in 
Sec.  679.320(b) and the CEO has the authority to appoint additional 
members that meet the needs of the local area employers and job 
seekers. The Department concludes that no further definition is 
required and has

[[Page 56101]]

made no changes to the regulatory text in response to this comment.
    Comments: Multiple commenters stated that the Department cites WIOA 
sec. 3(25) regarding business representative requirements in Sec.  
679.320(b)(2) and it should reference sec. 3(23) instead. A commenter 
asked if trained members who have experience with eligible youth, as 
referenced in proposed Sec.  679.320(c)(4), would include 
representatives from local government funded programs such as 4-H.
    Department Response: The Department agrees that the reference to 
WIOA sec. 3(25) in Sec.  679.320(b)(2) is incorrect. WIOA sec. 3(23) 
defines in-demand industry sector or occupation. WIOA sec. 3(25) 
defines an individual with a disability which is not relevant to Sec.  
679.320(b)(2). The Department has made the correction in Sec.  
679.320(b)(2).
    Regarding the question of whether representatives from 4-H programs 
would qualify as members having experience with eligible youth, Sec.  
679.320 implements WIOA sec. 107(b) which outlines membership criteria 
for Local WDBs. As outlined in Sec.  679.320(a), for each local area in 
the State, the members of the Local WDB must be selected by the CEO 
consistent with the criteria established under statute and criteria 
established by the Governor, and must meet the requirements of WIOA 
sec. 107(c)(2). CEOs are required to establish a formal nomination and 
appointment process (Sec.  679.320(g)), which should answer specific 
questions about local area membership requirements. Due to the number 
of factors involved, the Department is not able to comment on if a 
specific entity would meet the requirements set forth by the Governor 
as well as all of the statutory requirements but advises interested 
parties to review the CEO's process in their area.
    Comments: Paragraph (b)(2) of Sec.  679.320 implements WIOA sec. 
107(b)(1)(C)(i)(II), which provides that Local WDB business 
representatives represent businesses that provide ``employment 
opportunities that, at a minimum, include high-quality, work-relevant 
training and development in in-demand industry sectors.'' Some 
commenters asked the Department to clarify the definition of ``work-
relevant training'' in proposed Sec.  679.110(b)(3)(i)(B). In 
particular, some of these commenters asked whether it pertains to for-
profit training providers. Another commenter stated while the 
definition of ``in-demand'' is located at WIOA sec. 3(23), there is no 
definitions for the terms ``high-quality'' and ``work-relevant.'' This 
commenter recommended that the Department allow these terms to be 
defined at the State or local level.
    Department Response: WIOA sec. 3 provides definitions of terms used 
in the law. The terms ``work-relevant'' training and ``high-quality'' 
are not defined in WIOA or in the regulations. The Local WDB's 
functions under WIOA sec. 107(d) and Sec.  679.370 include employer 
engagement, career pathways development, and identifying and 
disseminating promising practices. It is incumbent upon the Local WDB 
to apply the above terms so that it includes the members it determines 
best support its functions. No change to the regulatory text was made 
in response to these comments.
Nominations
    WIOA sec. 107 and Sec.  679.320 of this part outline the 
requirements for Local WDB membership.
    Comments: Commenters requested that a nomination process not be 
required in communities where there are multiple adult education 
providers.
    Department Response: WIOA sec. 107(b)(6) requires a nomination 
process if there are multiple eligible providers of title II adult 
education and literacy activities serving the local area (a similar 
process is required for multiple institutions of higher education in a 
local area). Section 679.320(g)(3) conforms with WIOA sec. 107(b)(6) 
and the Department made no changes to the regulatory text in response 
to these comments.
    Comments: Another commenter suggested that Local WDB members must 
be nominated by an appropriate body, and if no such body is clear, then 
the opportunity to present nominations should be required to be widely 
publicized.
    Department Response: WIOA does not require that the Local WDB 
nominations be from particular bodies, except that in instances of 
multiple adult education providers in a local area nominations will be 
accepted from those institutions in accordance with WIOA sec. 107(b)(6) 
and Sec.  679.320(g)(3). In accordance with WIOA sec. 107(b)(1) and 
Sec.  679.320(a) the CEO must follow the process established by the 
Governor, in partnership with the State WDB, for appointing members of 
the Local WDB which may include processes for soliciting nominations. 
No change to the regulatory text was made in response to these 
comments.
Individuals With Disabilities and Other Barriers to Employment
    Section 679.320 implements WIOA sec. 107(b) describing the required 
Local WDB membership.
    Comments: As with the State WDBs, many commenters from stakeholders 
with mandated representation under WIA, requested that they again be 
mandated members of the Local WDB, or that they be referenced in 
regulation.
    Department Response: WIOA reduced required Local WDB membership in 
an effort to streamline the Boards and provide Chief Elected Officials 
the flexibility to establish Local WDBs that best reflect the diversity 
of job seeker and employer communities. The Department recognizes that 
many important system partners with experience with specific job seeker 
populations, such as required one-stop partner programs, tribal 
organizations, other Department program grantees, and those serving the 
disadvantaged and disabled populations are no longer required members 
of the Board. However, Sec.  679.320(c) and (d) require the Board be 
comprised of workforce representatives that can include one or more 
representatives of community-based organizations that have demonstrated 
experience and expertise in addressing the employment, training, or 
education needs of individuals with barriers to employment. Paragraph 
(e)(4) of Sec.  679.320 says the CEO has the flexibility to appoint 
``other appropriate individuals as determined by the chief elected 
official'' which does not preclude any organization as the CEO deems 
appropriate. The Department encourages the CEO to ensure that Local WDB 
members represent the diversity of job seekers and employers in their 
local areas, which includes ensuring adequate representation on the 
Local WDB and ensuring appropriate expertise to address needs of 
individuals with barriers to employment. No change to the regulatory 
text was made in response to these comments.
Voting Rights
    Title 20 CFR 679.320 implements WIOA sec. 107 (b) which outlines 
Local WDB membership.
    Comments: Some commenters recommended that Board members from each 
core program must be individuals working specifically with core 
programming and they must get a vote on the Local WDB, including 
grandfathered Boards.
    Department Response: Title 20 CFR 679.320(e)(4) says the CEO has 
the flexibility to appoint ``other appropriate individuals as 
determined by the chief

[[Page 56102]]

elected official'' which does not preclude any organization as the CEO 
deems appropriate. The Department encourages the CEO to ensure that 
Local WDB members represent the diversity of job seekers, employers, 
and one-stop partner programs in the local area which includes ensuring 
adequate representation on the Local WDB. Title 20 CFR 679.320(i), 
which requires all required Local WDB members to have voting rights, 
also gives the CEO flexibility to convey voting rights to non-required 
members. No change to the regulatory text was made in response to this 
comment.
    Comments: One commenter asked how adult education programs that are 
not funded by the State and do not have voting rights can still 
contribute.
    Department Response: Title 20 CFR 679.360(a) permits the use of 
standing committees on the Local WDB. Standing committees may be 
established to provide information and assist the Local WDB in carrying 
out its responsibilities under WIOA 107. Standing committee members 
must include individuals who are not members of the Local WDB and who 
have demonstrated experience and expertise in accordance with Sec.  
679.340(b) and as determined by the Local WDB. Stakeholders with 
expertise may wish to contribute as members of standing committees, if 
the Local WDB establishes such committees. No change to the regulatory 
text was made in response to these comments.
Section 679.330 Who must chair a Local Workforce Development Board?
Section 679.340 What is meant by the terms ``optimum policy-making 
authority'' and ``demonstrated experience and expertise''?
    Comments: One commenter strongly supported both proposed 
definitions. Another commenter expressed concern regarding the language 
used to define ``optimum policy-making authority'' because TANF is 
administered at the State level and local leadership does not have 
``optimum policy-making authority'' for the agency. For this reason, 
the commenter requested that the Department clarify what ``optimum 
policy-making authority'' is at the local level.
    One commenter asked the Department if it thinks local 
administrators of State agencies meet the criteria for optimum policy-
making authority or if it expects this regulation will require the 
nomination and appointment of State capital-based agency executives.
    Regarding demonstrated experience and expertise, one commenter 
recommended that all staff working with job seekers and business 
customers should receive certification through programs like Certified 
Workforce Development Professional (CWDP) by the National Association 
of Workforce Development Professionals (NAWDP) to ensure they are 
qualified in their role.
    Department Response: 20 CFR 679.340 clarifies the term ``optimum 
policy-making authority'' as an individual who can reasonably be 
expected to speak affirmatively on behalf of the entity he or she 
represents and to commit that entity to a chosen course of action. The 
section also defines ``demonstrated experience and expertise'' at the 
local level, which includes a workplace learning advisor as defined in 
WIOA sec. 3(70); an individual who contributes to the field of 
workforce development, human resources, training and development, or a 
core program function; or someone the Local WDB recognizes for valuable 
contributions in education or workforce development related fields. The 
Department concludes that the Local WDB has flexibility to make the 
determinations of optimum policy-making authority and demonstrated 
experience and expertise within the outlined criteria. No change to the 
regulatory text was made in response to these comments.
Section 679.350 What criteria will be used to establish the membership 
of the Local Workforce Development Board?
    Comments: Title 20 CFR 679.350 affirms that the chief elected 
official appoints the Local WDB in accordance with the criteria in WIOA 
sec. 107(b) and applicable State criteria. Commenters sought additional 
detail on which industries can be represented, specifically asking 
about the healthcare industry and educational institutions. Commenters 
also requested that 501(c)(3) corporations be defined as businesses.
    Department Response: WIOA sec. 3 contains definitions of terms used 
in the law. This section does not specifically define a business or a 
business organization. The entities identified by the commenters may be 
included as long as they meet the membership criteria. No change to the 
regulatory text was made in response to these comments.
Section 679.360 What is a standing committee, and what is its 
relationship to the Local Workforce Development Board?
    Comments: 20 CFR 679.360 implements WIOA sec. 107(b)(4) and 
establishes the roles and responsibilities of standing committees 
within the Local WDB structure. Commenters supported the text, as well 
as suggested that the Department require or recommend particular 
groups, such as Job Corps, to be members of standing committees.
    Department Response: Standing committees were not legislated under 
WIA and are optional under WIOA as clarified in Sec.  679.360(b). The 
Department declines to mandate a specific entity be represented on a 
standing committee, but nothing would prevent Job Corps representatives 
from being appointed to standing committees under Sec.  679.360(b).
    Standing committees may be used to assist the Local WDB in carrying 
out its responsibilities as outlined in WIOA sec. 107.
    Comments: One commenter suggested changing the word ``must'' to 
``may'' regarding the requirement in Sec.  679.360(a) to include those 
appointed by the Local WDB in standing committees but who are not Board 
members.
    Department Response: The Department encourages the use of standing 
committees to expand opportunities for stakeholders to participate in 
Local WDB decision-making, particularly for representatives of 
organizations that may no longer sit on the Local WDB but continue to 
have a stake in the success of Local WDB decisions. Such committees 
also expand the capacity of the Local WDB in meeting required functions 
and expand opportunities for stakeholders to participate in Local WDB 
decision-making. For this reason, it is important to require the 
appointment of non-Board members. No change to the regulatory text was 
made in response to these comments.
Section 679.370 What are the functions of the Local Workforce 
Development Board?
Role and Function of the Local WDB
    Title 20 CFR 679.370 lists the functions of the Local WDBs as 
enumerated in WIOA sec. 107(d). Under WIOA, the Local WDB, in 
partnership with the CEO, must perform a variety of functions to 
support the local workforce system.
    Comments: Commenters recommended the addition of a variety of Local 
WDB functions.
    Department Response: In order to preserve Local WDB flexibility, 
the Department declines to enumerate additional functions. No change to 
Sec.  679.370 was made in response to these comments.
    Comments: Paragraph (b) of Sec.  679.370 discusses a new role for 
Local WDBs

[[Page 56103]]

that are part of a planning region that includes multiple local areas. 
This provision repeats the WIOA requirement that Local WDBs that are 
part of a planning region must develop and submit a regional plan in 
collaboration with the other Local WDBs in the region. Regarding Sec.  
679.370(b), a commenter recommended the Department include language 
allowing any local area that includes multiple jurisdictions and 
partners to have an automatic designation as a region and to consider 
that area's local plan to be a regional plan.
    Department Response: WIOA sec. 106(a)(2) clearly assigns the State 
the responsibility of identifying regions after consultation with Local 
WDBs and chief elected officials. As required in WIOA sec. 106(c)(2), 
the local plan is incorporated into the regional plan, where required, 
in accordance with Sec.  679.540. No change to the regulatory text was 
made in response to this comment.
Career Pathways (Sec.  679.370(f))
    WIOA sec. 3(7)(A) through (G) defines career pathways as a 
combination of rigorous and high-quality education, training, and other 
services that meet specified guidelines. WIOA sec. 101(d)(3)(B) 
enumerates ``the development of strategies to support the use of career 
pathways for the purpose of providing individuals, including low-
skilled adults, youth, and individuals with barriers to employment 
(including individuals with disabilities), with workforce investment 
activities, education'' as a function of the State WDB and is described 
in Sec.  679.130(c)(2). WIOA sec. 107(d) and Sec.  679.300 extends the 
requirement to Local WDBs.
    Comments: Commenters requested that the Department provide more 
comprehensive guidance on the implementation of career pathways. 
Several commenters provided recommended changes to the regulatory text 
that included adding criteria, including a section specific to Local 
WDB implementation of career pathways, requiring the State and Local 
WDBs to define the roles and responsibilities of WIOA programs related 
to career pathways, listing required partners (such as Job Corps, and 
public television), and developing strategies to include job seekers 
with specific barriers to employment.
    Department Response: The Department acknowledges the interest in 
implementing successful career pathway strategies. The ideas and 
suggestions provided by the commenters support that career pathways is 
a dynamic topic that involves input of multiple partners and 
stakeholders across the public workforce system. The Department agrees 
that further guidance and technical assistance is needed and will be 
issued. However, the statutory language provides general criteria for 
both State and Local WDBs to use in developing career pathway 
strategies meeting their needs. More prescriptive language may limit 
State and Local WDBs' ability to be proactive and innovative in 
developing career pathways to support individuals to retain and enter 
employment. No change to the regulatory text was made in response to 
these comments.
Strategies for Technological Improvements To Improve One-Stop Services 
(Sec.  679.370(h))
    Comments: Proposed Sec.  679.370(h)(1) requires that Local WDBs 
facilitate connections among the intake and case management information 
systems of the one-stop partner programs; a commenter asserted that 
connecting intake and case management information systems will raise 
significant issues in terms of staffing, technology, and 
confidentiality.
    Department Response: Title 20 CFR 679.370(h) does not outline 
specific technology requirements expectations, but rather the Board is 
responsible for developing strategies for aligning technology and data 
systems across one-stop partner programs. The Local WDB may connect 
intake and case management systems, but neither WIOA nor the 
regulations require a single case management system among one-stop 
partners. The regulation provides Local WDBs with flexibility to 
develop systems that best fit their needs and budgets. No change to the 
regulatory text was made in response to these comments.
Review of Adult Education Provider Applications (Sec.  679.370(n))
    Paragraph (n) of Sec.  679.370 reflects a number of new functions 
for the Local WDB related to coordination with adult education and 
literacy providers in the local area. This provision requires the Local 
WDB to review applications to provide adult education and literacy 
activities under title II to determine whether such applications are 
consistent with the local plan; the eligible agency retains approval 
authority. It also requires the Local WDB to make recommendations to 
the eligible agency to promote alignment with the local plan.
    Comments: Commenters requested clarification regarding the 
application review process. Further information regarding Local WDB 
coordination with adult education and literacy providers is provided at 
34 CFR part 463, which requires the eligible agency to establish in its 
competition a processes by which applicants must submit an application 
to the Local WDB for review prior to its submission to the eligible 
agency. This part also includes a role for the Local WDB in replicating 
and implementing cooperative agreements in accordance with subparagraph 
(B) of sec. 101(a)(11) of the Rehabilitation Act of 1973 (29 U.S.C. 
721(a)(11)), and implementing cooperative agreements in accordance with 
that section with the local agencies administering plans under title I 
of that Act (29 U.S.C. 720 et seq.) other than sec. 112 or part C of 
that title (29 U.S.C. 732, 741) to enhance the provision of services to 
individuals with disabilities and other individuals.
    Commenters expressed concerns that Local WDBs will not have the 
appropriate amount of time to review all adult education provider 
applications in a timely manner, particularly in large cities with many 
programs or for education programs serving jurisdictions with multiple 
Local WDBs. One commenter also expressed concern about the title II 
adult education provider application review process because Local WDBs 
do not understand enough about education programs and recommended that 
the regulations contain a clear conflict of interest policy as well as 
a process where the adult education stakeholders have the ability to 
help shape the local plan. One commenter suggested that the review and 
approval process outlined in Sec.  679.370(n) for adult education 
providers should be applied to all core partner plans.
    Department Response: The Department of Education provides 
additional information about the review of local applications for 
grants or contracts to provide title I adult education and literacy 
services at 20 CFR 463.20 which reiterates that the purpose of the 
review is to ensure that the application is consistent with the local 
plan. The section also advises that the review is taken into 
consideration when making funding decisions. The Department of 
Education advises that only appointed local WDB members who do not have 
a conflict of interest as defined in sec. 107(h) of WIOA are allowed to 
participate in the review of an eligible training provider application. 
Boards may arrange to offer training to local WDB members by adult 
education experts prior to participating in the review process. No 
change to the regulatory text was made in response to these comments.

[[Page 56104]]

Ensuring Appropriate Use and Management of WIOA Funds
    Comments: Under paragraph (h), a commenter asked if the State can 
limit a Local WDB's authority to increase the on-the-job training 
reimbursement rate if all factors required in regulation and policy are 
met.
    Department Response: Paragraph (h)(4)(i)(2) of Sec.  679.370 
requires Local WDBs, in partnership with the chief elected official for 
the local area, to ensure the appropriate use and management of funds. 
Therefore, local areas should establish policies, interpretations, 
guidelines, and definitions to implement provisions of title I of WIOA 
to the extent that such policies, interpretations, guidelines, and 
definitions are not inconsistent with WIOA and the regulations issued 
under WIOA, Federal statutes and regulations governing one-stop partner 
programs, and with State policies. States also should establish 
policies, interpretations, guidelines, and definitions to implement 
provisions of title I of WIOA to the extent that such policies, 
interpretations, guidelines, and definitions are not inconsistent with 
WIOA and the regulations issued under WIOA, as well as Federal statutes 
and regulations governing one-stop partner programs. Local WDBs, 
therefore, can set policies but those policies must not conflict with 
State policy, or WIOA. No change to the regulatory text was made in 
response to these comments.
Negotiation of Local Performance Indicators (Sec.  679.370(j))
    Comments: Under paragraph (j), a commenter stated that the 
regulations need to indicate that local areas have the final decision 
regarding performance negotiations.
    Department Response: WIOA sec. 107(d)(9) requires that locals 
negotiate performance and Sec.  679.510(a)(1)(viii) requires an 
agreement between Local WDBs and chief elected officials for how a 
planning region will collectively negotiate and reach agreement with 
the Governor on local levels of performance. No change to the 
regulatory text was made in response to these comments.
Negotiating Methods for Funding One-Stop Infrastructure Costs (Sec.  
679.370(k))
    Title 20 CFR 679.370(k) requires that the Local WDB negotiate with 
the CEO and required partners on the methods for funding the 
infrastructure costs of one-stop centers.
    Comments: Comments asked for clarification on the role of CEO.
    Department Response: The CEO is not required to provide 
infrastructure costs, nor is the CEO required to negotiate the 
infrastructure costs, but rather the Local WDB and the CEO must agree 
upon the methods that will be applied to determine the infrastructure 
funding. Section 678.500 (see Joint WIOA Final Rule) describes what 
must be included in the Memorandum of Understanding executed between 
the Local WDB, with the agreement of the CEO, and the one-stop partners 
relating to the operation of the one-stop delivery system in the local 
area, and provides for additional details regarding infrastructure 
costs. No change to the regulatory text was made in response to these 
comments.
Selection of Youth Services, Training, and Career Services Providers 
(Sec.  679.370(l))
    Comments: Under paragraph (l), a couple of commenters requested 
clarification that Local WDBs only can determine eligibility of 
training providers for their local areas and that eligibility is 
contingent on the providers being approved on the State eligible 
training provider list (ETPL).
    Department Response: WIOA sec. 122 and 20 CFR part 677 of the Joint 
WIOA Final Rule describe the process for determining the eligibility of 
training providers. Providers must be approved via the Governor's 
process, however, Local WDBs may set additional criteria for providers 
on the local list. No change to the regulatory text was made in 
response to these comments.
Section 679.400 Who are the staff to the Local Workforce Development 
Board and what is their role?
    Title 20 CFR 679.400 describes the Local WDB's authority to hire 
staff and the appropriate roles for Board staff as outlined in WIOA 
sec. 107(f).
    Comments: Commenters suggested that any prior agreements between 
Local WDBs and chief elected officials regarding staffing roles and 
responsibilities be recognized; that the regulations clarify that the 
State agency is to take responsibility for hiring; and that the 
regulations should reiterate that the hiring of a director is optional.
    Department Response: WIOA sec. 107(f) describes the authority of 
the Local WDB to hire a director. There is no mandate that Local WDBs 
hire staff. The authority to hire staff to support the Local WDB is 
granted under WIOA sec. 107(f) to the Local WDB, not the State agency.
    Prior agreements are not automatically recognized. It is in the 
best interest of the public workforce system to ensure the director of 
the Local WDB is competent and experienced with workforce programs and 
service delivery. Paragraph (b) of Sec.  679.400 requires the Local WDB 
to apply objective qualifications to the Board director, paragraph (d) 
limits the Local WDB staff's role to assisting the Board fulfill the 
functions at WIOA sec. 107(d) unless the entity selected to staff the 
Board enters into a written agreement with the Board and CEO as noted 
in Sec.  679.400(e). Title 20 CFR 679.400 aligns with WIOA sec. 107(f) 
and no change to the regulatory text was made in response to these 
comments.
Section 679.410 Under what conditions may a Local Workforce Development 
Board directly be a provider of career services, or training services, 
or act as a one-stop operator?
Selection as a One-Stop Operator (Sec.  679.410(a))
    Title 20 CFR 679.410 implements WIOA sec. 107(g) and explains the 
situations in which the Local WDB may directly act as a one-stop 
operator, a provider of career services, or training services provider.
    Comments: The Department received many comments supporting the 
requirement that one-stop operators be competitively procured. However, 
other commenters recommended waivers or exceptions to the requirement 
that one-stop operators be competitively procured. Some commenters 
recommended waivers for performance, direct designation of the Local 
WDB as the one-stop operator with the agreement of the CEO and 
Governor, and allowing Governors to designate the selection of one-stop 
operators in single-area States. Several commenters disagreed with the 
Department's interpretation that WIOA sec. 107(g), which allows for the 
selection of the one-stop operator with the agreement of the CEO and 
Governor, is an additional requirement under WIOA sec. 121(d)(2)(A) and 
not a separate path to designation.
    Department Response: A more detailed discussion of this issue is 
contained in 20 CFR part 678 of the Joint WIOA Final Rule. The 
Department maintains the interpretation, consistent with 20 CFR 678.605 
(see Joint WIOA Final Rule) and WIOA sec. 121(d)(2)(A), that the Local 
WDB must select the one-stop operator through a competitive process. In 
instances in which a State is conducting the competitive process, the 
State must follow the same policies and procedures it uses for 
procurement with non-Federal funds. State, Local, and non-Federal 
entities should follow the applicable procurement guidelines in the 
Uniform Guidance at 2 CFR part 200. Neither WIOA nor Sec.  679.410

[[Page 56105]]

prohibit Local WDBs from competing to become a one-stop operator if 
they could do so in accordance with the Uniform Guidance. The provision 
requires the competitive procurement of all one-stop operators. No 
change to the regulatory text was made in response to these comments.
Career Services Provider (Sec.  679.410(b))
    The Department specified in Sec.  679.410(b) that a Local WDB may 
act as a provider of career services only with the agreement of the CEO 
in the local area and the Governor.
    Comments: Commenters requested clarification regarding the 
circumstances under which a Local WDB may provide career services.
    Department Response: Although WIOA sec. 107(g) requires that one-
stop operators be competitively procured, there is no similarly clear 
statutory requirement for provision of career services and therefore 
Local WDBs do not have to undertake a competitive process to offer 
career services.
    Comments: Some commenters suggested that Local WDBs only be 
permitted to offer career services if the CEO and Governor agree that 
there are insufficient providers of career services in an area. Another 
commenter responded that many Local WDBs are currently delivering high 
quality career services and should not be forced to procure them.
    Department Response: The Department has interpreted WIOA sec. 
107(g)(2), which states that a Local WDB may provide career services 
described in WIOA sec. 134(c)(2) through a one-stop delivery system or 
be designated or certified as a one-stop operator only with the 
agreement of the CEO and the Governor, to mean that the Local WDB's 
delivery of career services is at the discretion of the CEO and 
Governor. Section 679.410(b) offers the CEO and Governor flexibility in 
deciding whether to pursue a competitive award of career services. 
However, the Department supports competition and maintains the opinion 
that Local WDBs acting as direct providers of these services is not 
optimal. No change to the regulatory text was made in response to these 
comments.
    Comments: Commenters also requested clarity regarding the role of 
Local WDB members in delivering training and career services but 
offered no suggested language changes.
    Department Response: Paragraph (d) of Sec.  679.410 provides 
language that extends the Local WDB limitations outlined in Sec.  
679.410(c) to Local WDB staff. No change to the regulatory text was 
made in response to these comments.
Training Services Provider (Sec.  679.410(c))
    WIOA sec. 107(g)(B) outlines a waiver process for Local WDBs to 
offer training services. Local WDBs wanting to offer training services, 
such as GED, are required to apply to the Governor for a waiver and 
meet the waiver restrictions outlined in WIOA sec. 107(g)(1) and Sec.  
679.410(c).
    Comments: Commenters asked for clarification regarding the 
penalties for violating this provision.
    Department Response: WIOA sec. 183 requires the Governor to monitor 
all locals and lays out the course of action for any deficiencies that 
are not corrected such as corrective action, sanctions, and 
reorganizing the Local WDB. Entities that do not comply are subject to 
appropriate administrative and fiscal actions, which may include 
revocation of the waiver as described in WIOA sec. 107. No change to 
the regulatory text was made in response to these comments.
Section 679.420 What are the functions of the local fiscal agent?
    Comments: The Department requested comment on Sec.  679.420 which 
addresses the roles of the local fiscal agent. Many commenters agreed 
with the regulation as proposed while others provided recommendations 
for expanding the role and suggested changes to the regulatory text to 
include requiring the permissible functions in Sec.  679.420(c). Other 
commenters requested additional guidance on specific concerns such as 
fees, policy development, clarification on entities that may act as a 
fiscal agent, and the role of the CEO. Noting that most commenters 
agreed with the fiscal agent role set forth in the proposed regulatory 
text, the Department made no changes to the fiscal agent functions 
under Sec.  679.420.
    One commenter said that that the definition of fiscal agent 
conflicts with Sec.  681.400.
    Department Response: The Department disagrees that the two 
regulatory sections are in conflict. Paragraph (b) of Sec.  679.420 
provides a list of the key functions of a fiscal agent. The appropriate 
role of fiscal agent is limited to accounting and funds management 
functions rather than policy or service delivery. Section 681.400 
provides that the local grant recipient may directly provide youth 
services. Entities serving multiple roles must adhere to WIOA title I, 
subtitle E (Administration) and Sec.  679.430 to ensure appropriate 
firewalls within a single entity performing multiple functions, 
including when a fiscal agent also functions as a direct provider of 
services. No change to the regulatory text was made in response to 
these comments.
Section 679.430 How do entities performing multiple functions in a 
local area demonstrate internal controls and prevent conflict of 
interest?
    Proposed 20 CFR 679.430 specified that a written agreement with the 
Local WDB and CEO is required when a single entity operates in more 
than one of the following roles: Local fiscal agent, Local WDB staff, 
one-stop operator, or direct provider of career services or training 
services.
    Comments: Several commenters requested clarification regarding how 
various entities should function in multiple roles.
    Department Response: This section requires a written agreement with 
the Local WDB and chief elected official when a single entity operates 
in more than one of the specified roles, but does not dictate the 
specific contents of the agreement, because the regulation cannot 
account for each individual Local WDB situation. However, the agreement 
must demonstrate how the organization will carry out its 
responsibilities while in compliance with WIOA and corresponding 
regulations, relevant Office of Management and Budget (OMB) circulars, 
the Uniform Guidance, and the State's conflict of interest policy. 
While it may be appropriate in some instances for a single organization 
to fulfill multiple roles, a written agreement between the Local WDB, 
chief elected official, and the organization fulfilling multiple roles 
is the best method to limit conflicts of interest or the appearance of 
conflicts of interest, minimize fiscal risk, and develop appropriate 
firewalls within a single entity performing multiple functions. Because 
the regulation must be adaptable to a variety of potential situations, 
the Department has determined that no regulatory change is appropriate 
in this section and no change to the regulatory text was made in 
response to these comments. However, to clarify the multiple roles this 
section is addressing, the regulatory text was revised to refer to 
``the direct provider of services'' instead of ``the direct provider of 
career and training services'' in order to include cases where the 
entity may be directly providing youth services under WIOA.

[[Page 56106]]

Other Comments on Local Workforce Development Boards
    Comments: A commenter expressed its support for all of the proposed 
part 679, subpart C, regulations. Multiple commenters said that Local 
WDBs should have more flexibility in the time allowable to become 
compliant with Federal and State laws during the program year 2015-
2016.
    Department Response: Regarding timelines, the Department agrees 
that clarification of the expectation for the process is needed and 
will add Sec.  679.500(c), which requires the Governor to establish and 
disseminate a policy for the submission of local and regional plans.
    Comments: One commenter asserted that the regulations are missing 
the vital role of a ``system coordinator'' that is truly necessary in 
complex areas like large metropolitan cities. The commenter described 
three options for designating a ``system coordinator'' that it asserted 
would maintain the Local WDB's authority to establish a vision for the 
local workforce development system, recognize the diversity in models 
for implementing WIOA, and maintain a competition to ensure the highest 
quality providers are selected to operate one-stop centers. These 
options were described as (1) the Local WDB taking on the role of 
system coordinator (provided it competitively selected one-stop 
operators per WIOA sec. 121(d)); (2) the Local WDB could, with 
agreement of the CEO, designate a local public agency or non-profit 
organization as the system coordinator (provided it competitively 
selected one-stop operators); or (3) a single one-stop operator could 
still play this role.
    Department Response: WIOA does not define or otherwise reference a 
role for a system coordinator. WIOA secs. 101 and 107 allow Boards to 
hire staff for the purposes of assisting in carrying out the Board 
required functions. The local option to create a role of a system 
coordinator is already covered in the Boards' authority to hire staff. 
No change to the regulatory text was made in response to these 
comments.
4. Subpart D--Regional and Local Plan
    Title 20 CFR 679.500 describes the purpose of the regional and 
local plans; WIOA provides designated regions and local workforce areas 
the responsibility and opportunity to develop employment and training 
systems tailored specifically to regional economies. These systems must 
meet the needs of the full range of learners and workers, including 
those with barriers to employment. The system must also address the 
specific needs of regional employers and the skills they require.
    WIOA requires the Local WDB, in partnership with the CEO, to submit 
a local plan to the Governor. If the local area is part of a planning 
region, the Local WDB will submit its local plan as part of the 
regional plan and will not submit a separate local plan. The local or 
regional plan provides the framework for local areas to define how 
their workforce development systems will achieve the purposes of WIOA. 
The regional or local plans serve as 4-year action plans to develop, 
align, and integrate the region and local area's job driven workforce 
development systems, and provides the platform to achieve the local 
area's visions and strategic and operational goals. Since the local 
plan is only as effective as the partnerships that operationalize it, 
it must represent a collaborative process among local elected 
officials, boards, and required and other partners (including economic 
development, education, and private sector partners) to create a shared 
understanding of the local area's workforce investment needs, a shared 
vision of how the workforce development system can be designed to meet 
those needs, and agreement on the key strategies to realize this 
vision. The Department received comments on the purpose, the content, 
and the structure of regional and local plans. In this subpart the 
Department addresses comments regarding how regions can be aligned.
Section 679.500 What is the purpose of the regional and local plan?
    WIOA sec. 106(c) addresses regional coordination and regional plans 
are addressed in WIOA sec. 106(c)(2). In accordance with WIOA sec. 
106(c), Sec.  679.500 describes the purpose of the regional and local 
plans.
    Comments: Commenters provided feedback for the content of the 
regional plan, expressed concern about the challenges of coordination, 
requested additional guidance on plan development, and asked for 
clarity regarding plan development and submission.
    Department Response: The Department has issued some guidance on 
planning and anticipates issuing additional guidance on planning to the 
public workforce system. Regarding timelines, the Department agrees 
that clarification of the expectation for the process is needed and has 
added Sec.  679.500(c), which requires the Governor to establish and 
disseminate a policy for the submission of local and regional plans.
Section 679.510 What are the requirements for regional planning?
Participation in a Regional Planning Process (Sec.  679.510(a)(1))
    WIOA sec. 106(c) governs regional coordination and regional 
planning requirements, which are clarified in Sec.  679.510.
    Comments: A commenter asked which local area within a region would 
be responsible for the performance negotiation process.
    Department Response: The representatives of each local area in the 
region are collectively responsible for the process. Establishing an 
agreement among the Local WDBs and local CEOs in the region concerning 
how the planning region will collectively negotiate and reach agreement 
with the Governor on local levels of performance for, and report on, 
the performance accountability measures is required by WIOA sec. 
116(c)(1)(H) and Sec.  679.510(a)(1)(viii). No change to the regulatory 
text was made in response to these comments.
Preparation, Submittal, and Approval of Regional Plans (Sec.  
679.510(a)(2))
    Comments: Commenters have suggested that a single local area could 
elect to participate in multiple planning regions through a memorandum 
of agreement.
    Department Response: In accordance with WIOA sec. 106, a single 
local area may not be split across two planning regions. Local areas 
must align with planning regions to align economic and workforce 
development activities and resources effectively. Local areas may be 
part of only one region. However, local areas are not prohibited from 
working or coordinating with other local areas, and regions may 
coordinate with other planning regions. Similarly, where a single local 
area is identified as a region, such a local area could reasonably 
coordinate with other local areas or planning regions. Coordination may 
be especially vital across States; the Department anticipates providing 
additional guidance regarding the creation and management of interstate 
planning regions. As the regulation aligns with WIOA and does not 
prohibit coordination, no change to the regulatory text was made in 
response to these comments.
    Comments: A commenter asked how the plans are to be submitted.
    Department Response: The plans must be submitted to the Governor as 
outlined in Sec.  679.510(a)(2) and any guidance issued by the 
Department (Sec.  679.510(a)(1)(i)).

[[Page 56107]]

Other Requirements for Regional Planning (Sec.  679.510(b), (c), and 
(d))
    Comments: Commenters suggested specific content for the regional 
plan including how the region coordinates core program services, 
economic development strategies, education attainment, credentialing of 
workforce skills to meet employer skill needs, and data regarding 
participants with disabilities.
    Department Response: WIOA sec. 106(c)(2) and Sec.  679.510 describe 
the requirements for regional planning, which already address the 
region's service strategies, regional labor market data, coordination 
efforts, etc. The Department plans to issue further guidance.
Section 679.520 What are the requirements for approval of a regional 
plan?
    Section 679.520 describes the regional plan approval process.
    Comments: The Department received comments regarding the timelines, 
including suggestions that the timeline for approval in Sec.  679.520 
of ``90 days after submission'' is inconsistent with WIOA sec. 108(e), 
which says the plan ``shall be considered to be approved by the 
Governor at the end of the 90-day period beginning on the day the 
Governor receives the plan.''
    Department Response: The Department agrees that 90-day period 
should be revised to track WIOA and has amended both Sec. Sec.  679.520 
and 679.570 to reflect the statutory language of 90 days after receipt 
of the local plan.
Section 679.530 When must the regional plan be modified?
    Title 20 CFR 679.530 describes when a regional plan must be 
modified and Sec.  679.580 requires the Governor to establish 
procedures governing local plan review and modification to ensure that 
the biennial review and modification of local plans is conducted 
consistently throughout the State. The circumstances identified in 
Sec.  679.530(b)(1) and (2) identify the significant changes that 
require modification but the Governor may require other factors. While 
sec. 106(c) of WIOA clearly describes the required contents of the 
regional plan, it provides less detail about the approval and 
modification process, saying only that officials in the planning region 
must ``prepare, submit, and obtain approval'' of the plan.
    Comments: Commenters requested that the language in this section 
and of Sec.  679.580 be narrowed to specify that modifications are 
required only in response to ``changes to local economic conditions, 
and any changes in the financing available'' to allow regions more 
flexibility.
    Department Response: Because the local plan is a component of the 
regional plan, the Department decided to apply the approval and 
modification requirements to the regional plan, which are reflected in 
Sec.  679.530(b)(2), and which require modification based on ``other 
factors affecting the implementation of the local plan, including but 
not limited to changes in the financing available to support WIOA title 
I and partner-provided WIOA services.'' In the Department's view, 
ensuring that regional and local plans remain up-to-date and relevant, 
and ensuring consistency between regional and local plan requirements, 
will improve the effectiveness of the public workforce system. No 
change to the regulatory text was made in response to these comments.
Section 679.540 How are local planning requirements reflected in a 
regional plan?
    Title 20 CFR 679.540 outlines how local planning requirements are 
reflected in a regional plan. WIOA is silent on the coordination of the 
regional and local plan, noting only that the regional plan must 
``incorporate local plans for each of the local areas in the planning 
region.'' The Department has determined that the most appropriate and 
least burdensome approach to implementing this provision is to include 
a copy of each local plan within the regional plan to accompany the 
plan's discussion of regional strategies. In this arrangement, the 
regional plan is completed in cooperation with the Local WDBs and CEOs 
in a planning region, per Sec.  679.510(a). Each individual Local WDB 
and CEO will respond to the local planning requirements at Sec.  
679.560(b) through (e) individually. The Local WDBs and CEOs in a 
planning region must cooperate to develop a common response to the 
local planning requirements that discuss regional labor market 
information, as required by Sec.  679.540(a), and any other appropriate 
requirements permitted by the Governor per Sec.  679.540(b). When these 
activities are completed, the planning region submits one regional plan 
to the Governor that includes the common discussion of regional labor 
market information and other requirements as required by the Governor, 
as well as each local plan in a single document.
    Comments: A commenter asked the Department to clarify if regions 
had to submit all of the separate local plans that are encompassed in 
the regional plan.
    Department Response: WIOA sec. 106(c)(2) requires the regional plan 
to incorporate local plans for each of the local areas in the planning 
region. As described above, the Department has determined that the most 
appropriate and least burdensome approach to implementing this 
provision is to include a copy of each local plan within the regional 
plan to accompany the plan's discussion of regional strategies. No 
change to the regulatory text was made in response to these comments.
Section 679.550 What are the requirements for the development of the 
local plan?
    Title 20 CFR 679.550 explains the requirements for the development 
of the local plan. This section emphasizes the importance of 
collaboration and transparency in the development and submission of the 
local plan and subsequent modifications.
    Comments: A commenter requested clarification regarding when it was 
necessary for a local area to submit a local plan.
    Department Response: Paragraph (a) of Sec.  679.550 implements sec. 
108(a) of WIOA and describes the general requirements for the 
preparation and content of the local plan. If the local area is part of 
a planning region, the Local WDB must comply with WIOA sec. 106(c) and 
Sec. Sec.  679.510 through 679.540 in the preparation and submission of 
a regional plan. The local plan is considered submitted when it is 
incorporated in the regional plan.
    Comments: Other commenters asked if the terms plan, the local plan, 
or the local workforce investment plan are synonymous and recommended 
consistency be used throughout the regulation.
    Department Response: The Department used all terms to refer to the 
local plan required in WIOA sec. 108 and refers to the local plan in 
the regulations.
Section 679.560 What are the contents of the local plan?
Contents of a Local Plan
    Title 20 CFR 679.560 is consistent with sec. 108(b) of WIOA and 
outlines the information that must be included in the local plan. These 
requirements set the foundation for WIOA principles, by fostering 
strategic alignment, improving service integration, and ensuring that 
the public workforce system is industry-relevant, responding to the 
economic needs of the local area and matching employers with skilled 
workers.

[[Page 56108]]

    Comments: The Department received comments supporting the proposed 
section, and some recommending changes to the content of the local 
plan, as well as comments requesting additional guidance.
    Department Response: The Department has determined it is 
appropriate for Sec.  679.560 to track closely with WIOA sec. 108(b), 
which outlines the content requirements of the local plan. No changes 
were made to the regulatory text in response to these comments. The 
Department recognizes the need for technical assistance in developing 
local plans and will issue guidance for State and Local WDBs to assist 
in developing compliant plans.
Local Levels of Performance
    Title 20 CFR 679.560(b)(4) explains that the Local WDB must 
describe how it will coordinate local workforce investment activities 
with regional economic development activities that are carried out in 
the local area and promote entrepreneurial skills training and 
microenterprise services.
    Comments: Commenters requested additional information on 
performance criteria for the ETPL and ``microenterprise development.''
    Department Response: Alignment between the public workforce system 
and local economic development activities is critical in order to 
identify and fulfill industry talent needs by training customers for 
emerging and in demand job skills. Furthermore, microenterprise 
development refers to training for the purposes of self-employment. 
This training strategy may be appropriate for individuals or 
participants with multiple barriers to employment, including persons 
with disabilities.
    Title 20 CFR 679.560(b)(5) focuses on the delivery of services 
through the one-stop delivery system in the local area and requires 
descriptions regarding how the Local WDB will ensure the continuous 
improvement of eligible providers of services--see part 680, subpart D, 
for additional information on the requirements of the eligible training 
provider list.
    Comments: Other commenters suggested that regulations detail the 
timeline for performance negotiations related to local plan submission.
    Department Response: The Department agrees that clarification is 
needed and has added Sec.  679.500(c), which requires the Governor to 
establish and disseminate a policy for the submission of local, and 
regional plans. This policy must account for the requirement that local 
areas in a region reach agreement on how they will negotiate 
performance indicators with the Governor, as provided in Sec.  
679.510(a)(1)(viii).
Priority of Service (Sec.  679.560(b)(21))
    Comments: Commenters requested additional clarification on the 
implementation of priority of service, and recommended methods to 
ensure consistent implementation.
    Department Response: Title 20 CFR 679.560(b)(21) requires that the 
plan include description of the process by which priority of service 
must be applied by the one-stop operator, but also clarifies that such 
priority is for adult career and training services and must be given to 
recipients of public assistance, other low-income individuals, and 
individuals who are basic skills deficient. Including the priority 
service policy in the local plan will help ensure a more uniform 
application of the policy throughout the local area. The Department has 
issued some guidance on planning and anticipates issuing additional 
guidance for State and Local WDBs to assist in developing compliant 
plans; no change to the regulatory text was made in response to these 
comments.
    Comments: A commenter suggested that the WIOA system should provide 
program participants with access to curriculum-aligned industry-
recognized certificates verifying attainment of the critical skills 
that employers are looking for, so that when opportunities open up, the 
match between job seeker and employment can be accelerated and career 
pathways can be illuminated.
    Department Response: Title 20 CFR 679.560(b)(2) requires that the 
Local WDB describe how such alignment will improve access to services 
and to activities that lead to a recognized postsecondary credential. 
The Local WDBs have the flexibility to consider many options; the 
Department declines to require a specific approach. However, the 
Department recognizes the need for technical assistance in developing 
local plans and will issue planning guidance for State and Local WDBs 
to assist in developing compliant plans. No change to the regulatory 
text was made in response to these comments.
Other Comments on Local Plans
    Comments: A commenter suggested deleting Sec.  679.560(b)(17) 
regarding becoming or remaining a high-performing Board.
    Department Response: The Department has determined that the 
requirement is consistent with WIOA sec. 108(b)(18) and has made no 
changes to the regulatory text in response to this comment.
    Comments: The Department received several comments regarding Sec.  
679.560(b)(20) regarding the requirement that a local plan include a 
description of how one-stop centers are implementing and transitioning 
to an integrated, technology-enabled intake and case management 
information system for programs carried out under WIOA and by one-stop 
operators. Commenters had specific questions regarding how such a 
system is to be implemented.
    Department Response: Paragraph (b)(20) of Sec.  679.560 reflects 
WIOA sec. 108(b)(21). There is a requirement that the plan detail the 
actions that will be taken but there is no mandate in this section of a 
particular approach. No change to the regulatory text was made in 
response to these comments.
Section 679.570 What are the requirements for approval of a local plan?
    Overarching Comments on the Approval of a Local Plan Timeline for 
Approval and Implementation
    The Department recognizes that the development of the local plan is 
dependent on several other essential State and local WIOA 
implementation activities and that local areas may not be able to 
respond fully to each of the required elements of the local plan in the 
timeframe provided. The Department sought comment on the scope of the 
challenges local areas may face regarding regional and local planning 
and potential actions that the Department can take to help local areas 
address these challenges.
    Comments: Several commenters requested that the amount of time be 
extended for both existing local plans that are already compliant with 
the initial designation criteria and local plans for new areas or 
regions. Commenters suggested that local plans be due 6 to 9 months 
after the State Plans are approved. Many commenters expressed concerns 
about the timeline in developing and submitting all plans. Several 
suggested timelines that should be regulated. Other commenters 
suggested that regulations detail the timeline for performance 
negotiations related to plan submission.
    Department Response: Title 20 CFR 679.570 implements WIOA sec. 
108(e). Paragraph (a) of Sec.  679.570 requires that the Governor 
review completed plans and stipulates that unless the Governor 
determines that the plan is deficient according to paragraphs (a)(1) 
through (3), the plan will be considered approved 90 days after the 
Governor receives the plan. The Department made a clarifying edit to 
paragraph (a) so that

[[Page 56109]]

it is clear the 90-day time period begins when the Governor receives 
the plan, rather than at submission. The Department also edited 
paragraph (a)(2) to update the citation to the regulation that 
implements WIOA sec. 188. Regarding timelines, the Department agrees 
that clarification of the expectation for the process is needed and, as 
described above, has added paragraph (c) to Sec.  679.500, which 
requires the Governor to establish and disseminate a policy for the 
submission of local and regional plans.
    With Training and Employment Guidance Letter No. 14-15, ``Workforce 
Innovation and Opportunity Act (WIOA) Requirements for Unified and 
Combined State Plans,'' dated March 4, 2016, and the WIOA State Plan 
ICR, published under OMB control number 1205-0522, the Department 
issued guidance on and requirements for Unified and Combined State 
Plans. The Department also intends to issue guidance or technical 
assistance on local and regional planning. Section 679.570 aligns with 
WIOA sec. 108, and the changes described above address the commenters' 
concerns. No additional change to the regulatory text was made in 
response to these comments.
    Paragraph (b) of Sec.  679.570 outlines the processes, roles, and 
responsibilities in the local plan process for situations in which the 
State is a single local area. Paragraph (b)(1) clarifies the State must 
incorporate the local plan in the State's Unified or Combined State 
Plan submitted to the Department. Paragraph (b)(2) states that the 
Secretary of Labor will perform the roles assigned to the Governor as 
they relate to local planning activities and Sec.  679.570(b)(3) 
indicates the Secretary of Labor will issue planning guidance for 
single-area States.
    Comments: Commenters asked why the Secretary of Labor would be 
performing the Governor's role, what those planning activities are, and 
if the Secretary of Labor should be limited to approving local plans.
    Department Response: Single-area States are required to submit the 
plan to the Secretary of Labor under WIOA sec. 108. The Secretary will 
perform the Governor's role in local planning as outlined in WIOA sec. 
108(a) and (e) regarding plan submission and approval. Section 679.570 
aligns with WIOA sec. 108 and the Final Rule makes no change to Sec.  
679.570(b) in response to these comments.
Section 679.580 When must the local plan be modified?
    Title 20 CFR 679.580 is consistent with WIOA sec. 108(a), which 
requires the Governor to establish procedures governing local plan 
review and modification to ensure that the biennial review and 
modification of local plans is conducted consistently throughout the 
State. Paragraph (b) of Sec.  679.580 explains that the Local WDB and 
appropriate CEOs must review the local plan every 2 years and submit a 
modification as needed, based on significant changes in labor market 
and economic conditions and other factors including changes to local 
economic conditions, changes in the financing available to support WIOA 
title I and partner-provided WIOA services, changes to the Local WDB 
structure, or a need to revise strategies to meet performance goals.
    Comments: A commenter recommended that modifications be limited to 
only substantive changes or as required by the State WDB. Other 
commenters requested guidance that included examples of changes 
warranting a local plan modification.
    Department Response: As outlined in Sec.  679.580, the Governor is 
required to establish procedures governing local plan review and 
modification. The Governor has the flexibility to further define the 
criteria under Sec.  679.580(b) that require a modification to the 
local plan. The Department does not agree that additional language is 
needed to require additional modification requirements. Moreover, as 
described in the discussion of regional plan modification in Sec.  
679.530, in the Department's view, ensuring that local and regional 
plans remain up-to-date and relevant, and ensuring consistency between 
local and regional plan requirements, will improve the effectiveness of 
the public workforce system. The Department declines to change the 
modification requirements and has made no changes to the regulatory 
text in response to these comments.
5. Subpart E--Waivers/WorkFlex (Workforce Flexibility Plan)
    This subpart describes the statutory and regulatory waiver 
authority provided by WIOA sec. 189(i), and the requirements for 
submitting a Workforce Flexibility Plan under WIOA sec. 190. The 
Department addresses comments regarding the purpose of the waiver 
authority in WIOA, and the circumstances under which a waiver may 
apply.
    WIOA provides States the flexibility to request a waiver of program 
requirements in order to implement new strategic goals for the 
improvement of the statewide workforce development system and to 
provide better customer service in exchange for accountability for 
expected programmatic outcomes. A Workforce Flexibility plan provides 
additional flexibility to the State. In general, a State with an 
approved Workforce Flexibility plan is given the authority to identify 
local level provisions to waive without further approval from the 
Secretary of Labor to achieve outcomes specified in the plan. A 
description of what provisions of WIOA and the Wagner-Peyser Act may 
and may not be waived is included, along with an explanation of the 
procedures for requesting a waiver. The subpart also describes what may 
and may not be waived under a Workforce Flexibility Plan, and the 
procedures for obtaining approval of a plan. The WIOA requirements for 
obtaining approval for a waiver or Workforce Flexibility Plan are 
similar to those in WIA secs. 189(i) and 192, respectively; therefore, 
many of the proposed regulations are the same as the regulations 
implementing WIA. No changes have been made to regulatory text in 
response to these comments.
Section 679.610 What provisions of the Workforce Innovation and 
Opportunity Act and the Wagner-Peyser Act may be waived, and what 
provisions may not be waived?
    WIOA sec. 189(i)(3)(A)(i) establishes the limitations of the 
Secretary's general waiver authority for WIOA title I, subtitles A, B, 
and E. As described in the regulation, the Secretary is statutorily 
prohibited from waiving any provisions related to the following:

 Wage and labor standards;
 Non-displacement protections;
 Worker rights;
 Participation and protection of workers and participants;
 Grievance procedures and judicial review;
 Nondiscrimination;
 Allocation of funds to local areas;
 Eligibility of providers or participants;
 The establishment and functions of local areas and Local WDBs;
 Procedures for review and approval of State and local plans;
 The funding of infrastructure costs for one-stop centers; and
 Other requirements relating to the basic purposes of title I 
of WIOA described in Sec.  675.100 of this chapter.

    Comments: A commenter suggested that the Department consider 
waivers of some of these provisions to the extent that they enhance 
wage and labor standards and non-displacement protections.
    Department Response: The Department does not have the authority to 
approve waivers that are prohibited

[[Page 56110]]

by statute and no change to the regulatory text was made in response to 
this comment.
Section 679.620 Under what conditions may a Governor request, and the 
Secretary approve, a general waiver of statutory or regulatory 
requirements under the Workforce Innovation and Opportunity Act?
    Title 20 CFR 679.620(a) through (f) implements WIOA sec. 189(i)(3) 
and describes the conditions under which a Governor may request, and 
the Secretary may approve a waiver of statutory or regulatory 
requirements. Title 20 CFR 679.620(a) explains that the Secretary will 
issue guidelines on waiving WIOA and Wagner-Peyser requirements. States 
will be required to follow the Secretary's guidelines, which supplement 
the requirements listed in 20 CFR 679.600 through 679.620.
    Comments: A commenter asked for more clarification regarding what 
the most recent data are that would be required to grant a waiver 
renewal, as required by proposed Sec.  679.620(d)(7).
    Department Response: In general, the Department has not required 
specific data sources when requesting a waiver under WIA or WIOA. The 
Governor has the discretion to use the data source or sources that most 
effectively demonstrates the need and/or benefit of the requested 
waiver. The Department has made no changes to the regulatory text in 
response to this comment.
    Comments: A commenter asked if existing WIA waivers that are 
approved to run past 2015 will be applicable under WIOA, and suggested 
that they remain in effect through the original period for which they 
were approved. With regard to the WIOA transition period, one commenter 
supported the current continuation of waivers as granted. Other 
commenters recommended the continuation of existing waivers until the 
WIOA State Plan is approved. Regarding States with existing WIA 
waivers, one commenter recommended that the Department allow such 
States to keep this flexibility until either the Federal government 
provides additional time or resources necessary for implementation of 
WIOA's new requirements, or the States provide evidence that they are 
prepared to implement the additional requirements.
    Department Response: The Department issued TEGL No. 01-15 
(``Guidance Regarding the Impact of Workforce Innovation and 
Opportunity Act Implementation on Waivers Under the Workforce 
Investment Act''), which addresses the status of waivers during program 
year 2015 and communicates the Department's position on waivers under 
WIOA. This guidance includes an attachment that discusses whether each 
waiver type will be continued into WIOA, as well as those that expired 
effective July 1, 2015. No change to the regulatory text was made in 
response to these comments.
Section 679.630 Under what conditions may the Governor submit a 
Workforce Flexibility Plan?
    Comments: One commenter expressed support for the language in this 
section that prohibits the waiver of certain requirements related to 
labor standards and worker protections.
    Department Response: WIOA sec. 189(i)(3)(A)(i) and (ii) describe 
the statutory limitations to the Secretary's WIOA title I and Wagner-
Peyser waiver authority. These prohibitions include any statutory 
provisions related to labor standards or worker rights. No change to 
the regulatory text was made in response to this comment.
Other Comments on Waivers/Work-Flex
    Comments: One commenter expressed support for the proposed language 
in part 679 subpart E regarding waivers and Work-Flex.
    To assist employers and job seekers best, one commenter requested 
that the Department offer waivers whenever possible. A State agency 
suggested that the Department add waiver provisions to the Final Rule 
regarding the application for continued eligibility of ETPs and to the 
internal control policy requirement provided that a written agreement 
pursuant to proposed Sec.  679.430 is in place.
    Department Response: Specific waiver requests must be requested 
through the waiver process. The Department declines to make changes to 
identify specific waivers in the regulatory text.
6. Other Comments on Statewide and Local WIOA Governance
    Comments: With regard to the alignment of title I and title II 
services to improve services for immigrant and LEP individuals, 
multiple commenters recommended that the Department provide additional 
guidance to States and localities (whether through regulations or 
policy directive) that allows for differing eligibility criteria across 
the titles and encourages States and localities to align services 
without precluding participation by individuals who may be eligible for 
services under one title but not another. Another commenter stressed 
the importance of aiding immigrant and refugee communities and asked 
that the Department include reference to the need for expertise in 
serving linguistically and culturally diverse populations in its 
discussion of part 679.
    One commenter expressed its concern about the challenge of meeting 
all WIOA requirements by July 1, 2015, particularly considering the 
late issuance of the WIOA regulations.
    Department Response: While the Department acknowledges the need to 
be sensitive to the employment and training needs of immigrant and LEP 
individuals, WIOA sec. 189(i)(3)(A)(i) prohibits the Department from 
waiving or otherwise altering eligibility criteria. No change to the 
regulatory text was made in response to these comments.
    The Department acknowledges the challenges inherent in implementing 
WIOA in the absence of a Final Rule. The Department issued Operating 
Guidance documents to inform the public workforce system how to comply 
with WIOA statutory requirements. The Operating Guidance provided a 
framework for program activities while regulations were finalized.
    Comments: Explaining that its local areas have utilized funding to 
serve customers in their jurisdiction only, one commenter asked whether 
the State can set policy to allow a broader use of funds under WIOA. In 
addition, this commenter asked whether, if State agencies grant adult 
education programs to local areas, the infrastructure costs should come 
from the local vendor or the State.
    Department Response: States have authority to set policy that is 
consistent with WIOA. The Department has determined that the State is 
in the best position to develop policy regarding allocating scarce 
Federal funds; the Department has not made changes to the regulatory 
text in response to this comment. Further, all funds must expended in 
accordance with the Uniform Guidance regulations and WIOA subtitle E 
(Administration). TEGL No. 15-14 (``Implementation of the New Uniform 
Guidance Regulations'') provides additional information on implementing 
the Uniform Guidance.
    Comments: One commenter suggested that Local WDBs should remain 
responsible for operation of local/regional workforce programs 
representing business sectors in their communities and that it is a 
conflict of interest for State governments to receive funding, develop 
and operate programs, and monitor and evaluate programs. This commenter 
asserted that State-operated workforce programs are primarily budget-
driven, rather than customer-driven, with primarily digital service 
structures that leave individuals

[[Page 56111]]

in rural communities lacking internet, transportation, and skills 
without access to services.
    Department Response: Section 679.100 implements WIOA sec. 101 and 
outlines the vision and purpose of the State WDB. Section 679.130 
implements WIOA sec. 101(d) and describes the roles and functions of 
the State WDB. The State WDB's purpose, as outlined in WIOA sec. 101 
and Sec.  679.100, is to convene State, regional, and local workforce 
system, and partners to align and improve the outcomes and 
effectiveness of Federally funded and other workforce programs and 
investments. Section 679.300 implements WIOA sec. 107 and explains the 
purpose of the Local WDB. In accordance with the functions of the Local 
WDB outlined in WIOA sec. 107(d), Sec.  679.300(b)(1) includes the 
function of providing strategic and operational oversight in 
collaboration with required and other partners to help the workforce 
development system achieve the purposes outlined in WIOA sec. 2, and 
assist in the achievement of the State's strategic and operational 
vision and goals outlined in the State Plan. Paragraphs (b)(2) and (3) 
of Sec.  679.300 require the Local WDB to assist in the achievement of 
the State's strategic and operational vision and goals as outlined in 
the Unified State Plan or Combined State Plan, and to maximize and 
continue to improve the quality of services, customer satisfaction, and 
effectiveness of the services provided.

D. Part 680--Adult and Dislocated Worker Activities Under Title I of 
the Workforce Innovation and Opportunity Act

1. Introduction
    In this part of the Final Rule, the Department describes 
requirements relating to the services that are available for adults and 
dislocated workers under WIOA. Adult services are provided to help job 
seekers who are at least 18 years old succeed in the labor market. WIOA 
establishes a priority in the adult program for serving low-income 
individuals, recipients of public assistance, and individuals lacking 
basic work skills. Dislocated worker services are provided to workers 
who have lost their job, through no fault of their own. The goal of 
dislocated workers services is to help these individuals obtain quality 
employment in in-demand industries.
    Under WIOA, adults and dislocated workers may access career 
services and training services. WIOA provides for a public workforce 
system that is universally accessible, customer centered, and training 
that is job-driven. In this part, the Department also discusses 
supportive services and needs-related payments that can be provided, 
based on customer needs, to enable them to participate in WIOA career 
and training services.
    The Department generally received comments that were supportive 
about the delivery of career and training services. It also received 
comments about the implementation of the statutory priority for the 
WIOA adult program, and how various populations, including individuals 
with disabilities, are able to access WIOA title I adult and dislocated 
worker services, which the Department has sought to clarify. In 
addition, the Department received comments about some of the new work-
based experience and training opportunities under WIOA, including how 
registered apprenticeship can be utilized by the one-stop delivery 
system, and clarifications on transitional jobs, on-the-job training, 
and incumbent worker training. These comments are discussed below, in 
the sections corresponding to subparts A-D and F-G. The Department also 
received a number of comments on the Eligible Training Provider (ETP) 
eligibility requirements, which are discussed below under subpart D. 
For the comments received that pertain to the WIOA sec. 116(d)(4) ETP 
annual performance reports, those comments are discussed in the 
preamble discussion accompanying 20 CFR 677.230 (see Joint WIOA Final 
Rule published elsewhere in this issue of the Federal Register).
    The analyses that follows provides the Department's response to 
public comments received on the proposed part 680 regulations. If a 
section is not addressed in the discussion below, it is because the 
public comments submitted in response to the NPRM did not substantively 
address that specific section and no changes have been made to the 
regulatory text. Further, the Department received a number of comments 
on this part that were outside the scope of the regulation and the 
Department offers no response. Lastly, the Department has made a number 
of non-substantive changes to correct grammatical and typographical 
errors to improve the readability and conform the document 
stylistically that are not discussed in the analysis below.
2. Subpart A--Delivery of Adult and Dislocated Worker Activities
Introduction
    This subpart discusses the role of WIOA adult and dislocated worker 
services delivered through the one-stop delivery system. The one-stop 
delivery system provides universal access to career services to meet 
the diverse needs of adults and dislocated workers. Adult and 
dislocated worker programs are required partners in the one-stop 
delivery system and as such, grant recipients are subject to the 
required partner responsibilities set forth in 20 CFR 678.415 (see 
Joint WIOA Final Rule).
    Career and training services, tailored to the individual needs of 
job seekers, form the backbone of the one-stop delivery system. While 
some job seekers may only need self-service or other basic career 
services like job listings, labor market information, labor exchange 
services or information about other services, some job seekers will 
need services that are more comprehensive and tailored to their 
individual career needs. These services may include comprehensive 
skills assessments, career planning, and development of an individual 
employment plan that outlines the needs and goal of successful 
employment. Under WIA, career services were identified as core and 
intensive services and participants generally would follow through each 
level of service to receive training eventually. WIOA provides an 
individual receiving services in one-stop centers the opportunity to 
receive the service needed to help him/her meet his/her employment and 
career goals. WIOA clarifies that an individual does not need to follow 
a fixed sequence of services that may not be necessary to meet his or 
her needs.
    Under WIOA, the Department classifies career services into two 
categories: Basic and individualized career services. This grouping is 
not designed to create barriers to training, but rather identifies the 
importance that these two types of career services can have in helping 
individuals obtain employment. Basic career services must be made 
available to all job seekers and include services such as labor 
exchange services, labor market information, job listings, and 
information on partner programs. Individualized career services 
identified in WIOA and described in these proposed regulations are to 
be provided by local areas as appropriate to help individuals to obtain 
or retain employment. Career and training

[[Page 56112]]

services are more fully discussed in subparts A and B of this part.
Section 680.100 What is the role of the adult and dislocated worker 
programs in the one-stop delivery system?
    Comments: A commenter expressed support for Sec.  680.100 as 
proposed. In contrast, another commented that CEOs should not be 
considered one-stop partners. The commenter stated that CEOs are 
involved in the governance and oversight of the one-stop delivery 
system through the Board members that they appoint and so neither CEOs 
nor Board members should be involved in the operation of a one-stop 
delivery system.
    Department Response: WIOA sec. 107 states that the CEO for the 
local area is the local grant recipient. WIOA sec. 107(c) provides for 
how CEOs are to be determined in the event that there are multiple 
units of local government in a workforce area. As the grant recipient 
for the adult and dislocated worker programs, the CEO or his/her 
designee is a required one-stop partner in the governance and delivery 
of services in the one-stop delivery system consistent with sec. 
121(b)(1) of WIOA and 20 CFR part 678 (see Joint WIOA Final Rule). No 
changes have been made to the regulatory text in response to the 
comments.
Section 680.110 When must adults and dislocated workers be registered 
and considered a participant?
    Comments: A one-stop center requested clarification on how 
registration can occur through an electronic submission. Specifically, 
this commenter asked whether eligibility can be determined based solely 
on an electronic submission. The commenter also requested clarification 
of the language in the preamble explaining that ``minimal'' assistance 
would trigger the need to register.
    Department Response: State and local areas have the discretion to 
determine appropriate intake methods, which may include electronic and 
virtual means. Additionally, a service being provided to an individual 
electronically or virtually can be sufficient for the individual to be 
considered a ``participant,'' provided it meets the standards of the 
definition provided at 20 CFR 677.150(a) (see Joint WIOA Final Rule).
    Comments: A few commenters agreed with the way in which the NPRM 
described participation for adult and dislocated worker involvement 
with WIOA services. Specifically, several commenter suggested that 
self-service and information service should be included as 
participation for the purposes of registering a person to measure 
performance.
    In contrast, several commenters disagreed with the proposed 
approach to describing participant or participation. A few commenters 
said that ``participant'' was described too narrowly, cautioning that 
the NPRM could lead to denial of services for individuals in need of 
assistance. Some commenters recommended revisions to Sec.  680.110(a) 
to describe a ``participant'' by referencing 20 CFR 677.150 rather than 
limiting it to those individuals who receive staff-assisted services 
(see Joint WIOA Final Rule). One commenter expressed support for this 
revision, explaining that removal of minimally assisted customers from 
metrics would potentially reduce investments in resource rooms, a self-
service facility that provides job seekers internet-based job search 
opportunities that are required by today's employer.
    Additionally, several commenters recommended revisions to Sec.  
680.110(b) to allow for the provision of WIOA services to individuals 
who are not participants. In contrast, one commenter recommended that 
paragraph (b) more broadly define those individuals who are not 
required to register and be designated as participants to include 
individuals receiving referral services.
    Another commenter requested clarification on the distinction 
between a ``staff assisted WIOA service'' and ``self service and 
informational activities.'' This commenter stated that WIA regulations 
with similar language had caused analogous confusion. A one-stop center 
asked whether a basic workshop would be considered ``informational 
services'' or a career service for purposes of performance 
accountability. A commenter asked if there was a distinction between 
basic and individual career services as it relates to participation. 
Noting that the NPRM explicitly specifies the activities that will not 
count towards participation but does not specify the activities that 
will count, a commenter asked whether it is up to the State to 
determine which career services will place the individual into 
participation or performance calculations. Expressing confusion over 
the meaning of participant, a commenter requested a definition of 
participant, including a clear indication of whether registration or 
utilization of services was necessary to be considered a participant, 
and asked the Department to identify the term for clients that are not 
registered and not participants.
    Several commenters stated that clarification is needed on where and 
when assessments and information collection efforts relevant to 
identify self-service individuals, reportable individuals, and 
participants will occur. Some commenters recommended that the 
Department provide a framework for how the designation of enrollment 
intertwines with career and training services, allowing maximum 
flexibility for States to design their approaches for both in-person 
and online services. In contrast, a commenter encouraged the Department 
to create a clear system that ensures a consistent approach across the 
States. Similarly, another commenter encouraged the Department to 
provide more details on the level/type of information required to be 
collected by individual and by required program titles to ensure data 
system integrity for reporting purposes.
    A commenter encouraged the Department to require enrollment in WIOA 
title I programs to occur when an individual employment plan (IEP) is 
developed. A commenter recommended the point at which funds must be 
dedicated to the client for their employment or training needs as the 
appropriate trigger for enrollment.
    Department Response: The Department made some non-substantive 
changes to align the definition of performance with 20 CFR 
677.150(a)(3) (see Joint WIOA Final Rule). It also changed the text of 
Sec.  680.110(a) to clarify when an individual is considered a 
``participant.'' The Department is providing additional clarity in 
guidance on what services count as self-services or information-only 
services and activities. Further guidance may be provided to explain 
which services cause an individual to be considered a ``participant.''
    The distinction between reportable individual and participant is 
used for the purposes of reporting on performance, and does not have 
any impact on eligibility or service provision. Further information on 
performance is discussed in 20 CFR part 677 (see Joint WIOA Final Rule 
published in this issue of the Federal Register), and information on 
the collection and data systems is being provided through the 
Department's ICRs and guidance.
    The Department notes that while an IEP will cause an individual to 
be considered a participant, there are other ways to qualify for 
participation because there is no sequence of services requirement in 
WIOA. An IEP is an individualized career service and can be provided 
under either title I of WIOA or under the Wagner-Peyser Act Employment 
Service (ES) (as amended by title III of WIOA). Individualized

[[Page 56113]]

career services (of which an IEP is one) may be provided with Wagner-
Peyser Act funds.
    Comments: A few commenters recommended that Sec.  680.110(c) be 
revised to require the collection of data from only those individuals 
actually receiving aid, benefits, services, or training.
    Department Response: The Department made a technical correction at 
Sec.  680.110(c), changing ``Employment Opportunity'' data to ``EO'' 
data because that is the data referred to in this section as defined in 
20 CFR 675.300. The collection of Equal Opportunity (EO) data on every 
individual who is interested in being considered for WIOA title I 
financially assisted aid, benefits, services, or training is necessary 
to ensure compliance with WIOA sec. 188. The regulations governing WIOA 
sec. 188 can be found at 29 CFR part 38.
    The point at which an individual has indicated ``interest'' in WIOA 
title I services is within the grant recipient's discretion; however, 
the recipient's request for and receipt of information triggers the 
accompanying responsibility to collect EO data at the same time. The EO 
data must be maintained in a manner that allows the individuals from 
whom the data was collected to be identified, and that ensures 
confidentiality. This responsibility is separate from, and might not 
arise at the same point in the process as, the registration 
responsibility.
Section 680.120 What are the eligibility criteria for career services 
for adults in the adult and dislocated worker programs?
    Comments: A commenter stated that there is a discrepancy between 
the preamble and the proposed regulation creating confusion whether 
individuals who are basic skills deficient also have to be low-income. 
Similarly, a few commenters stated that priority should be given to 
low-income adults and public assistance recipients and individuals who 
are basic skills deficient, in accordance with WIOA sec. 134(c)(3)(E). 
One commenter recommended that priority should also be given to adults 
who lack a regionally accredited secondary education diploma or high 
school equivalent (HSE).
    A commenter stated that the change from core and intensive services 
to career services as in proposed Sec.  680.120 would place a burden on 
States and local areas to revise policy and procedures. This commenter 
also requested that the Department define ``basic career services'' and 
``individualized career services'' and describe when participants get 
placed into training.
    Department Response: WIOA sec. 134(c)(3)(E) provides a statutory 
priority for public assistance recipients, other low-income 
individuals, and individuals who are basic skills deficient. The 
priority for these populations is not a criterion for eligibility for 
services under this program; rather, it is a statutory emphasis on 
providing individualized career services and training services to these 
populations under this program. The Department refers readers to Sec.  
680.600, which governs the priority provisions of the adult program. No 
changes have been made to the regulatory text in response to the 
comments.
    Individuals who are basic skills deficient are to be provided 
priority with funds for these adult services. Basic skills deficient is 
defined in WIOA sec. 3(5), and an individual who lacks a secondary 
education diploma or HSE may qualify based on this standard. 
Additionally, Sec.  680.600 provides Governors and Local WDBs with the 
authority to designate other priority populations. Individuals who lack 
a secondary education diploma or HSE could be designated by a Governor 
or Local WDB under that authority.
    Under WIA, priority with adult funds was to be provided in the 
event that funding was limited; that provision was removed from WIOA. 
Thus, priority and the policies and procedures for determining priority 
are statutory requirements for the WIOA title I adult program. The 
Department refers a commenter to 20 CFR 678.430 for definitions of 
``basic career services'' and ``individualized career services'' (see 
Joint WIOA Final Rule).
    In addition, when participants are to be placed into training is a 
decision that must be made consistent with WIOA sec. 134(c)(3) and 
Sec.  680.210.
Section 680.130 What are the eligibility criteria for career services 
for dislocated workers in the adult and dislocated worker programs?
    Comments: Commenters requested clarification on the meaning of 
``unlikely to return to a previous industry or occupation,'' and what 
is meant by ``unemployed as a result of general economic conditions in 
the community in which the individual resides or because of natural 
disasters.''
    One commenter encouraged the removal of the ``unlikely to return'' 
to their previous industry/occupation criteria from the definition of 
dislocated worker, because it hinders the ability to serve individuals 
that have been laid off or terminated.
    Further, a commenter stated that the process for determining 
eligibility as a dislocated worker through receipt of unemployment 
insurance or exhaustion of unemployment insurance currently is a 
cumbersome process. This commenter recommended that one-stop or the ES 
staff have real time access to the unemployment insurance database for 
verification of eligibility of dislocated workers.
    Department Response: WIOA defines ``dislocated worker'' under WIOA 
sec. 3(15), and requires the individual be ``unlikely to return to a 
previous industry or occupation'' under WIOA 3(15)(A)(iii). The 
regulation maintains this statutory definition. The Department has 
added regulatory text at Sec.  680.130(b)(3) allowing for Governors and 
Local WDBs to establish policies and procedures for one-stop centers to 
use in determining when an individual is unlikely to return to his or 
her previous industry or occupation. Any policy or procedure must be 
consistent with Sec.  680.660, which provides that separating service 
members meet this criterion.
    The Department may utilize guidance and technical assistance to 
assist States and local areas in determining when an individual is 
``unlikely to return to a previous industry or occupation'' or when an 
individual is ``unemployed as a result of general economic conditions 
in the community in which the individual resides or because of natural 
disasters.'' No other changes have been made to the regulatory text in 
response to the comments.
Section 680.140 What Workforce Innovation and Opportunity Act title I 
adult and dislocated worker services are Local Workforce Development 
Boards required and permitted to provide?
    Comments: A commenter requested a definition of how Local WDBs are 
allowed flexibility when providing services with adult and dislocated 
worker funds. This commenter also stated that there would be a burden 
on States to track local flexibility of funds. Another commenter asked 
whether subgrantees would need to report expenditures for job seeker 
services, employer services, or coordination activities, as listed in 
proposed Sec.  680.140(b)(1) through (3).
    Department Response: Section 680.140 describes the required and 
permissible employment and training activities with WIOA title I adult 
and dislocated worker funds. Paragraph (a) of Sec.  680.140 describes 
the required activities a Local WDB must provide,

[[Page 56114]]

which includes career and training services. These services are 
required under WIOA sec. 134(c)(2) and (3). Paragraph (b) lists the 
permissible activities a Local WDB may provide. Local WDBs have 
discretion in what permissible activities and services they provide. 
All expenditures must be tracked and documented by the State and Local 
WDB to ensure the proper administration of these funds. No changes have 
been made to the regulatory text in response to the comments. Section 
680.140(b) is further discussed below.
    Comments: A few commenters expressed support for the various 
provisions within proposed Sec.  680.140 covering services for 
individuals with disabilities and recommended additional language be 
added to the regulation to urge Local WDBs to focus their optional 
services on this population because these services are permissive and 
not mandatory. Two commenters also encouraged the Department to 
reference veterans' priority of service in Sec.  680.140(a).
    A couple of commenters encouraged the Department to mention bridge 
programs explicitly, which are programs that prepare individuals with 
limited academic or English skills to succeed in postsecondary 
education and training programs, as an acceptable activity under WIOA, 
and to encourage their use in the Final Rule. Another commenter 
recommended that referrals by one-stop centers to regionally accredited 
secondary-level educational programs providing entry-level workforce 
preparation and/or postsecondary education and training activities be 
included as a basic service and counseling service.
    Department Response: The commenters above refer to the permissible 
local employment and training activities under WIOA sec. 134(d) and 
Sec.  680.140(b). Paragraph (b)(1) of Sec.  680.140 describes the 
permissible ``job seeker services'' that may be provided. The one-stop 
delivery system plays a vital role in providing career and training 
services to individuals with disabilities, as well as the customer 
supports that may be provided to help individuals with disabilities to 
navigate multiple services. The Department understands the commenters' 
desire to make these services to individuals with disabilities 
mandatory; however, WIOA states that these are permissible activities 
under WIOA sec. 134(d). The Department does encourage Local WDBs to 
provide these services for individuals with disabilities, veterans, and 
other individuals with barriers to employment. No changes have been 
made to the regulatory text in response to the comments for Sec.  
680.140(b)(1)(i) through (iv). The citation to transitional jobs at 
Sec.  680.190 has been moved from Sec.  680.830 to reflect the 
Department's position that transitional jobs are a type of work 
experience, and thus a career service.
    Regarding the reference to veterans' priority of service, the 
regulation at Sec.  680.650 ensures priority of service for veterans in 
all Department-funded employment and training programs.
    The Department notes bridge programs may be an appropriate activity 
for individuals to obtain meaningful employment; however, bridge 
programs are not discussed in WIOA and are not included in the 
regulatory text.
    Comments: A commenter recommended that career services for self-
employed adults and dislocated workers be defined to include industry 
sector and/or entrepreneurship training for individuals who wish to 
remain self-employed.
    Department Response: The Department does not propose to mandate any 
particular career services for self-employed adults and dislocated 
workers; these decisions are best made locally based on individual 
need. Decision-making about career and other services and training 
should be informed by information about in-demand industry sectors and 
occupations. The Department notes that entrepreneurship training is 
allowed for adults and dislocated workers under WIOA sec. 134(c)(3)(D).
    Comments: A commenter requested clarification regarding employer 
services and the relationship to career services provided to job 
seekers versus employer services provided to businesses. This commenter 
explained that services provided to employers do not appear to be 
considered a career service because there would be no specific job 
seeker to register. Furthermore, the commenter stated that delivery of 
employer services does not need to be procured for a one-stop center, 
but can be designated by the local elected officials.
    Several commenters recommended that to serve both job seekers and 
employers effectively, the role of business services outreach staff 
should, in addition to supporting the priorities of the Local WDB, be 
focused on the goals of the individual WIOA titles. One commenter 
sought clarification on whether custom training, on-the-job training 
(OJT), and incumbent worker training were acceptable services to be 
offered under the business services function. This commenter also urged 
the Department to clarify the regulations to make clear that the 
operation of business services by the Local WDB itself and its staff 
are acceptable.
    A commenter encouraged the Department to define ``employment 
generating activities,'' which are prohibited by the proposed 
regulation.
    Department Response: Business and employer services are a 
permissible local activity under Sec.  680.140(b)(2); services to 
employers are not considered a career service that is a required 
activity under Sec.  680.140(a). No changes have been made to the 
regulatory text in response to the comments at Sec.  680.140(b)(2).
    The Department acknowledges the comments about defining 
``employment generating activities,'' and has addressed them in Sec.  
683.245 of the preamble and regulations. The Department notes that 
employer services described in Sec.  680.140(b)(2) must not be used to 
encourage business relocation to the local area from another State or 
local area.
    Comments: One commenter stated that it would be very difficult, if 
not impossible, to determine accurately when implementing a pay-for-
performance training contract the amount of administrative funds that 
were spent on this specific activity because administrative funds may 
be pooled and that pooling includes the youth program. This commenter 
asserted a similar concern for percentage limitations associated with 
incumbent worker training (Sec.  680.800), transitional jobs (Sec.  
680.820 in the NPRM; Sec.  680.195 in this Final Rule), and work 
experience activities in the youth program (Sec.  681.590).
    Department Response: WIOA allows Local WDBs to set aside and use up 
to 10 percent of their adult and dislocated worker funds on WIOA Pay-
for-Performance contract strategies (see WIOA sec. 134(d)(1)(A)(iii) 
and Sec.  683.500), up to 20 percent on incumbent worker training (see 
WIOA sec. 134(d)(4)), and up to 10 percent on transitional jobs (see 
WIOA sec. 134(d)(5)). See also Sec.  680.140(b)(1)(v), (b)(4), and 
(b)(8). Administrative activities necessary to initiate or procure Pay-
for-Performance contract strategies, incumbent worker training, and 
transitional jobs must be consistent with Sec.  683.215, which 
discusses how to determine whether an activity is administrative or 
programmatic for purposes of WIOA. If the activity would be considered 
programmatic under Sec.  683.215, then the cost would be subject to the 
caps discussed above. If the activity would be considered 
administrative under Sec.  683.215, it may be paid for out of the 
Boards' usual

[[Page 56115]]

administrative funds, and it is not subject to the caps. Therefore, the 
Board would not need to specifically account how much of the 
administrative funds are spent on these particular programs.
Section 680.150 What career services must be provided to adults and 
dislocated workers?
    Comments: A commenter stated that the definition of career services 
should be clarified to include pre-screening, application assistance, 
and colocation of application assistance services for the programs for 
which career services one-stop centers must provide information and 
referrals.
    Another commenter recommended that referrals to regionally 
accredited secondary-level educational programs providing entry-level 
workforce preparation and/or postsecondary education and training 
activities be included as part of basic services and counseling 
services. A commenter requested clarification regarding whether 
alternative secondary school (formerly General Education Diploma [GED]) 
preparation is considered a career service or a training service.
    One commenter recommended that Sec.  680.150(c) be revised to refer 
to activities provided for a ``participant'' and not a ``registered 
participant'' to avoid confusion resulting from ``registrants'' and 
``participants'' being two separately defined terms. Another suggested 
that the Department revise the regulations to allow participants to opt 
out of follow-up services, as was allowed under the WIA regulations. A 
few commenters requested clarification on the meaning of ``follow up 
services as appropriate.''
    A commenter recommended that supportive services such as tools, 
uniforms, bus passes, or childcare, be allowed for up to 1 year after 
the exit date of adults or dislocated workers, saying some individuals 
may need a little additional help to keep a job that may not have been 
known when the individual initially took the job.
    A commenter association recommended the addition of new paragraphs 
within Sec.  680.150 to (1) specify that career services can be 
provided by any of the one-stop partners, as opposed to having to be 
provided by a WIOA title I partner; and (2) create a framework by which 
prior interviews, evaluations, and assessments of participants can be 
used for purposes of evaluating eligibility for career services.
    Department Response: The Department has added ``basic'' before 
``career services'' to ensure consistency with 20 CFR 678.430(a) in how 
these services are described (see Joint WIOA Final Rule). No changes 
have been made to the regulatory text in response to the comments at 
Sec.  680.150(b).
    Career services are defined in 20 CFR 678.430 (see Joint WIOA Final 
Rule) and WIOA sec. 134(c)(2). Pre-screening, application assistance, 
referrals, and other information all would qualify as basic career 
services under 20 CFR 678.430(a). Basic career services under Sec.  
680.150(a) must be made available and are key to ensuring high quality 
services throughout the one-stop delivery system.
    The Department considers adult education and literacy activities 
(see WIOA sec. 3(3)) that lead to a secondary school diploma to be a 
training service. An entity that offers a program that leads to a 
secondary school diploma or its equivalent can be eligible as a State 
eligible training provider (ETP), see Sec.  680.420. The Department 
notes, however, that if title I adult and dislocated worker funds are 
used for these activities, they must be done concurrently or in 
coordination with any training activities in WIOA sec. 134(c)(3)(D)(i)-
(vii). The Department has added regulatory text to clarify this point 
at Sec.  680.350.
    The Department agrees with the suggestion that ``registered 
participant'' be changed to ``participant'' and has made this change in 
the regulatory text. The Department has added ``as determined 
appropriate by the Local WDB'' to proposed Sec.  680.150(c) to clarify 
how the determination is made to provide follow-up services. This 
addition is consistent with the statutory text at section 
134(c)(2)(xiii), which states that follow-up services are provided ``as 
appropriate.''
    The Department declines to make any change in regulatory text to 
allow the provision of supportive services for adult and dislocated 
workers for up to a year after exit; section 134(d)(2)(A) of WIOA 
requires that adults and dislocated workers must be participants to 
receive supportive services. The Department also declines to modify the 
regulatory text about the provision of career services. Career services 
are defined in 20 CFR 678.430, which is the one-stop section of the 
joint regulation, and they may be provided by any partner program. The 
Department has decided that the use of prior interviews, evaluations, 
and assessments of participants for the purpose of eligibility is to be 
determined by State and local policies.
Section 680.160 How are career services delivered?
    Comments: A few commenters expressed opposition to a requirement 
that Local WDBs obtain a waiver before providing career services. One 
of these commenters stated that the NPRM requirement that Local WDBs 
receive a waiver before being allowed to deliver career services would 
be a major change and a significant burden because getting a waiver is 
not an easy process. This commenter recommended that the Department 
provide States with an easier, quicker process for requesting waivers.
    A commenter recommended that, at a minimum, a waiver request should 
address: (1) Why the waiver is necessary, (2) how granting the waiver 
would provide service to the affected area superior to that which would 
have been provided as the result of a competitive process; (3) why the 
prospective designee is the best choice as the local one-stop operator 
or provider of career services; and (4) what process was used in making 
the determination (including the specific data that supports it).
    Department Response: For a Local WDB to provide career services, it 
must meet the requirements in WIOA sec. 107(g)(2), which allows for 
Local WDBs to be providers of career services of title I career 
services for adult and dislocated workers with the agreement of the CEO 
in the local area and the Governor. Although there is a waiver 
requirement for Local WDBs to provide training services under WIOA sec. 
107(g)(1)(B) and Sec.  679.410(c), which documents how Local WDBs may 
apply for a waiver with the State, there are no waiver requirements for 
Local WDBs to provide career services. No change is made in the 
regulatory text in response to these comments.
Section 680.170 What is the individual employment plan?
    The Department has moved the proposed Sec.  680.180 to Sec.  
680.170, so that the work experience regulation that was proposed as 
Sec.  680.170 can be renumbered as Sec.  680.180, closer to the 
transitional jobs provision at Sec.  680.190. In Sec.  680.170, the 
regulation also replaces the words ``case manager'' with ``career 
planner'' to be more consistent with the nomenclature used in WIOA.
    Comments: A few commenters requested clarification on the role of 
IEPs for all services categories of individuals and programs and urged 
the Department to ensure consistency at the program enrollment level, 
including when an IEP is required to be started/

[[Page 56116]]

completed and some flexibility in serving the general public job 
seeker. Another commenter asked whether: (1) The development of an IEP 
requires participation under WIOA title I, (2) this service can be 
delivered by ES staff, or (3) this determination can be made at the 
local level.
    Department Response: The Department strongly encourages the use of 
IEPs as a tool in the career planning process. However, there is no 
sequence of service requirement in WIOA and determining when an IEP is 
appropriate for individuals is a local decision. The Department 
encourages Local WDBs to develop policies and procedures for the 
appropriate use of IEPs.
    An IEP is an individualized career service and can be provided 
under either WIOA title I or the ES (as amended by WIOA title III and 
as described in Sec.  652.206), which is decided locally and is a part 
of the Memorandum of Understanding (MOU) governing the role of the ES 
in the one-stop delivery system.
Section 680.180 What is an internship or work experience for adults and 
dislocated workers?
    The Department has moved this proposed Sec.  680.170 to Sec.  
680.180, so that this work experience regulation is renumbered to be 
closer to the transitional jobs provision at Sec.  680.190.
    Comments: A commenter stated that it is important that WIOA 
participants who are placed in work experience or internships are fully 
protected by the nation's wage and hour laws and regulations. This 
commenter recommended that the Department revise proposed Sec.  680.170 
by deleting the language allowing for paid and unpaid work experiences 
and adding a cross reference to the U.S. Department of Labor Wage and 
Hour Division (WHD) regulations and guidance concerning unpaid 
internships. Similarly, a commenter requested clarification on when 
work experience can be unpaid, including assessment of the implications 
of unpaid work as a potential violation of the Fair Labor Standards 
Act.
    Department Response: The Department notes the comments and has 
added language to the regulatory text stating that internships and work 
experiences under WIOA may be paid or unpaid, as consistent with other 
laws, including the Fair Labor Standards Act. The Department will 
continue to use guidance and technical assistance to assist grantees in 
determining how WIOA intersects with other laws.
    Comments: A commenter encouraged the Department to maintain a broad 
definition of work experience that is applicable to all core programs, 
reasoning that work experience is an invaluable tool to engage 
businesses and to support job seekers in overcoming barriers by gaining 
experience that leads to unsubsidized employment.
    Department Response: The Department agrees with the commenter's 
suggestion and makes no change in the regulatory text.
    Comments: A commenter asked whether there were limitations on the 
percentage of funds to be utilized for paid work experience.
    Department Response: Work experiences may be paid or unpaid, 
consistent with the Fair Labor Standards Act and other applicable laws. 
Transitional jobs is a type of paid work experience described in 
Sec. Sec.  680.190 and 680.195. A Local WDB may use up to 10 percent of 
funds allocated to the local area under section 133(b) of WIOA to 
provide transitional jobs. (Sec. 134(d)(5) of WIOA.) Transitional jobs 
also are subject to certain eligibility criteria along with 
comprehensive career and supportive services requirements. In addition 
to transitional jobs, other work experiences may be paid; to be 
eligible for these work experiences an individual must meet adult and 
dislocated worker program eligibility and there is no requirement for 
comprehensive career and supportive services. These other types of paid 
work experiences are not subject to a statutory funding cap.
    Comments: Another commenter encouraged the Department to allow 
Local WDBs to determine the appropriate timeframe for internships and/
or work experience based upon multiple factors, including industry 
standard and/or practice and the sector-based accepted length of time 
needed to acquire one or more relevant skills and/or industry-
recognized credentials.
    Department Response: The Department has set no minimum or maximum 
duration requirements for work experiences. These factors may be used 
by Governors and Local WDBs in making such determinations.
Section 680.190 What is a transitional job?
    Comments: Many commenters asked for clarification of ``transitional 
jobs'' versus ``work experience;'' including exceptions to the 10 
percent cap on transitional jobs, the similarities between transitional 
jobs and work experiences, and distinctions from OJT.
    Another commenter expressed concern that the distinctions between 
transitional jobs and OJT contracts in the NPRM are not clear enough 
and recommended that the Department expand on the differences in the 
Final Rule several ways: (1) Unlike OJT, the program provider should 
act as employer of record and assume all responsibilities of the 
employer-employee relationship; (2) transitional jobs require a 100 
percent wage subsidy, while OJT subsidize up to 75 percent of wages; 
(3) funds for transitional jobs support all components of the service 
strategy; (4) transitional jobs should be targeted at those job seekers 
most in need of intervention; and (5) transitional jobs may be 
structured as offsite placements with private-sector, public-sector, or 
nonprofit employers or as in-house social enterprise or work crew 
placements.
    Department Response: The Department agrees with the recommendation 
of some commenters and has added language to Sec.  680.180, which 
defines what an internship or work experience is for adults and 
dislocated workers and clarifies that transitional jobs are considered 
to be a type of work experience. The Department also has moved proposed 
Sec. Sec.  680.830 and 680.840 to Sec. Sec.  680.190 and 680.195 
respectively.
    The Department agrees with the comments made about the OJT 
contracts, i.e., that in transitional jobs programs the program 
provider may act as the employer of record; however, there may be a 
joint employment relationship between the worker, the firm in which the 
worker is placed, and the program provider. The Department has added 
regulatory text defining transitional jobs as providing an individual 
with work experience that takes place within the context of an 
employee-employer relationship, in which the program provider may act 
as the employer, and with an opportunity to develop important workplace 
skills. The Department will provide further guidance and technical 
assistance on transitional jobs programs, including best practices.
    Comments: Some commenters asked the Department to define 
``inconsistent work history.'' One of these commenters also requested a 
substantive quantifiable definition of the term ``chronic 
unemployment.'' One commenter requested that the Department define 
``transitional jobs'' and asked for clarification of the required funds 
for career services and supportive services that must be provided with 
transitional jobs. A couple of commenters recommended that the 
Department strengthen the definition of ``transitional jobs'' with 
further guidance and technical support to States and localities. These 
commenters also

[[Page 56117]]

recommended that the Final Rule reiterate that the term means ``wage-
paid'' subsidized employment consistent with other definitions in 
Federal law and agency guidance. Similarly, another commenter 
recommended that the Department define ``transitional jobs'' as ``time-
limited wage-paid experiences that are subsidized for individuals with 
barriers to employment who are chronically unemployed or have an 
inconsistent work history.''
    Department Response: The Department has decided that the 
definitions of ``inconsistent work history'' and ``chronic 
unemployment'' should be left to the Local WDBs and has added language 
to the regulatory text in Sec.  680.190 to reflect this. The Department 
encourages Local WDBs to utilize information such as an individual's 
labor market history, unemployment status, durations of unemployment, 
long-term unemployment, and other factors that the Local WDB may 
determine appropriate for defining these terms. The Department has 
added language to better define transitional jobs, including adding the 
terms ``time-limited'' and ``wage-paid'' in Sec.  680.190. WIOA 
requires transitional jobs to include both comprehensive and supportive 
services. Local WDBs determine which comprehensive and supportive 
services are appropriate for each individual.
    Comments: One commenter recommended that the Department and the 
Internal Revenue Service (IRS) identify an acceptable means of paying a 
training stipend that does not trigger the Patient Protection and 
Affordable Care Act (PPACA) regulations. Another commenter recommended 
specific language to amend proposed Sec.  680.830 (as explained above, 
renumbered in the Final Rule to Sec.  680.190) to articulate that 
people who participate in transitional jobs are not counted toward 
labor participation rates, that is, not counted as ``employed persons'' 
by the BLS.
    Further, this commenter and others asserted that workers in 
transitional jobs should be classified as employees rather than 
contractors or trainees and should be subject to protections such as 
wage and hour laws, minimum wage laws, unemployment insurance, and 
workers compensation.
    Department Response: The ACA employer responsibility provisions are 
governed by the IRS and any training and employment agreements the 
grantees make may be subject to those provisions. The Department 
encourages grantees to utilize IRS resources and guidance when 
determining those responsibilities. The Department will issue 
subsequent guidance and technical assistance to help identify 
appropriate IRS resources and guidance. Transitional jobs and other 
work-based training often establish an employer-employee relationship 
that must follow applicable laws and regulations that govern such 
relationships, including: Wage and hour laws, minimum wage laws, 
unemployment insurance, and workers' compensation.
    The suggestion that transitional jobs not count in the labor force 
participation rate that is captured by the Current Population Survey 
that the BLS administers is not germane to WIOA or these regulations.
    Comments: A couple of commenters recommended that transitional jobs 
programs be targeted at populations with multiple employment barriers 
and people with sporadic, problematic and inconsistent work histories 
within the 2 years prior to engaging in the program. These commenters 
recommended targeting people experiencing homelessness; opportunity 
youth; people reentering communities from prison and those with 
criminal records; long-term recipients of TANF, SNAP and other public 
benefits; low-income noncustodial parents; and other chronically 
unemployed people.
    Some commenters recommended that allowable use of funds should 
include: Wages paid to transitional jobs program participants during 
their subsidized job placement; funding for employment-related case 
management and support such as transportation vouchers and clothing 
allowances; funding for job retention services for no fewer than 6 
months after placement in a subsidized job; supporting integration of 
literacy, adult basic education, training, and career advancement 
resources; and supporting program capacity-building needs, such as 
adding additional staff and/or infrastructure improvements as 
appropriate.
    Department Response: The Department considers these recommended 
criteria to be appropriate factors that a Local WDB may use when 
determining who is eligible for a transitional job and which groups to 
target. Thus, no change is made in the regulatory text. The Department 
will provide further guidance and technical assistance as appropriate.
    Allowable uses of transitional jobs funds include wages to the 
participant and supportive services such as transportation vouchers. 
The Department encourages local staff to align services and provide the 
appropriate mix of services to meet individuals' needs. Staff and 
infrastructure improvements are not allowable uses of transitional jobs 
funds.
    Comments: Commenters asserted that transitional jobs are typically 
3 to 9 months and seldom longer than 1 year. They recommended that 
transitional job arrangements include the following in order to avoid 
displacement of incumbent workers: Strong prohibitions against 
substitution and displacement; protections for recently laid-off 
employees, workers on leave, and striking workers; and preservation of 
recall rights under collective bargaining agreements for union 
employees of transitional job employer partners.
    Department Response: The regulations at Sec.  683.270 contain 
safeguards against displacement of employees that are applicable to 
WIOA title I employment and training activities, including transitional 
jobs. The Department also added Sec.  680.840, which clarifies that 
funds for work-based training and work experiences may not be used to 
fill openings that resulted from a labor dispute.
    Comments: Commenters recommended several ways to maximize the 
likelihood that workers are retained in unsubsidized employment after a 
transitional job program: (1) Monitoring participants and providing 
retention services for at least 6 months following unsubsidized job 
placement; (2) regular, frequent follow-up contacts by retention 
specialists; (3) ongoing retention-focused activities such as 
workshops, peer learning groups and support groups; (4) retention 
incentives in the form of monetary bonuses or nonmonetary incentives 
such as child care services; and (5) reemployment services for workers 
who are terminated from unsubsidized employment. The commenters also 
recommended several specific structure elements and polices that they 
asserted are essential: (1) A flexible length of time in subsidized 
employment based on the skill development needs of the individual; (2) 
subsidized employment offered should be no fewer than 20 hours per week 
and workers should be allowed to remain in the subsidized employment 
until unsubsidized employment slots are available for transition; (3) 
employers should support participant development and skill building; 
and (4) personal contact and consistent follow-up should be provided 
among program staff, participants, and employment supervisors, as well 
as opportunities to work with a case manager for the participant to 
address serious issues if they arise.
    Department Response: The Department declines to propose a

[[Page 56118]]

minimum or maximum duration for transitional jobs that could create 
unnecessary restrictions that may prevent an individual from obtaining 
unsubsidized employment. The Department also declines to create a one-
size-fits-all approach to transitional jobs, and considers these 
decisions are best made by the Local WDB and the individual's career 
planner. No changes have been made to the regulatory text in response 
to these comments. The Department will address these issues further 
through guidance and technical assistance.
    Comments: A commenter recommended that proposed Sec.  680.830 (as 
explained above, renumbered in the Final Rule to Sec.  680.190) be 
amended to refer to ``time-limited work experience'' to be consistent 
with the language and intent of WIOA sec. 134(d)(5).
    Department Response: The Department agrees with this comment and 
has amended the language in Sec.  680.190 to include the phrase ``time-
limited work experience.''
    Comments: Another commenter asked what is the employer 
reimbursement rate and contract length?
    Department Response: The employer reimbursement rate is to be 
determined by the Local WDB and can be up to 100 percent. The 
Department encourages Local WDBs to work with employers that are 
willing to provide a certain percentage of the cost of the transitional 
job.
Section 680.195 What funds may be used for transitional jobs?
    Comments: Some commenters requested clarification on the 10 percent 
limit on use of funds. In particular, some commenters asked if the 10 
percent limit would apply to work experience as an activity. A State 
WDB asked whether all adult and dislocated workers transitional job 
work experience is subject to the 10 percent cap.
    Department Response: The Department considers transitional jobs to 
be a targeted service that includes comprehensive career and supportive 
services. Non-transitional job work experiences have no requirement 
that they must be paid or unpaid, and they do not have the same 
requirements for comprehensive career and supportive services. They 
also are not subject to the 10 percent funding cap that transitional 
jobs are. The Department has added text to the regulatory text to 
further clarify the 10 percent cap and that transitional jobs, defining 
them as a certain type of work experience which is targeted to a 
specific population that is: ``chronically unemployed'' or has an 
``inconsistent work history.''
    Comments: A commenter asked for clarification on what 
``comprehensive career services'' means when required to be part of 
transitional jobs, and asked if it includes basic career services, 
individualized career services, or both, and if there is a sequence of 
services before service can be provided.
    Department Response: Comprehensive career services may include both 
basic and individualized career services and are based on the needs of 
the participant. Comprehensive career services and supportive services, 
which are required to be provided as part of any transitional jobs 
strategy, are not subject to the 10 percent cap described at Sec.  
680.195. However, the Department is providing flexibility to allow for 
these services to be provided with the funds set-aside for transitional 
jobs. Local areas determine which comprehensive and supportive services 
are appropriate for each individual. There is no sequence of service 
required.
3. Subpart B--Training Services
    Training services are discussed at Sec. Sec.  680.200 through 
680.230. WIOA is designed to increase participant access to training 
services. Training services are provided to equip individuals to enter 
the workforce and retain employment. Training services may include, for 
example, occupational skills training, OJT, registered apprenticeship 
(which incorporates both OJT and classroom training), incumbent worker 
training, pre-apprenticeship training, workplace training with related 
instruction, training programs operated by the private sector, skill 
upgrading and retraining, entrepreneurial training, and transitional 
jobs. Training services are available for individuals who, after 
interview, evaluation or assessment, and case management are determined 
to be unlikely or unable to obtain or retain employment that leads to 
self-sufficiency or higher wages than previous employment through 
career services alone. The participant must be determined to be in need 
of training services and possess the skills and qualifications to 
participate successfully in the selected program. It also must be 
determined that they are unlikely or unable to retain employment that 
leads to self-sufficiency or higher wages. Some participants may need 
additional services to assist their vocational training, such as job 
readiness training, literacy activities including English language 
training, and customized training.
    Comments: Comments generally were supportive of the Department's 
flexible approach to the delivery of training services for the WIOA 
title I adult and dislocated worker programs.
    Department Response: The Department has updated and clarified 
language regarding how registered apprenticeship and other 
apprenticeships may be utilized as a training solution for adult and 
dislocated worker customers.
Section 680.200 What are training services for adults and dislocated 
workers?
    Comments: Two commenters strongly recommended that local 
flexibility be preserved as it relates to determining the appropriate 
availability, structure, and mix of training services that are offered 
locally to individuals and employers. Another commenter encouraged the 
Department to avoid restrictive standards and allow customization of 
varying training practices because there is slower adoption among small 
businesses of newer best practices. This commenter stated that this 
flexibility is particularly important when considering the 
effectiveness of competency-based training versus number of hours 
trained.
    Department Response: The Department agrees that it is important to 
maintain local flexibility to make decisions about the appropriate mix 
of career and training services and has provided local flexibility in 
making those determinations.
    Comments: A few commenters provided input on pre-apprenticeships 
and non-registered apprenticeships. One commenter encouraged the 
Department to add more flexibility into the regulations as they relate 
to pre-apprenticeships and non-registered apprenticeships so that 
manufacturers can develop and use programs that best meet their unique 
needs. Another commenter cautioned the Department not to discriminate 
against non-registered apprenticeships because many smaller employers 
rely on these types of programs. One commenter recommended that 
employer-sponsored craft training programs that are not registered, but 
that lead to an industry-recognized credential, should have an 
automatic initial ETP determination and then, be required to satisfy 
continued eligibility requirements after 1 year.
    Department Response: WIOA sec. 122(a)(2)(B) provides automatic 
qualification for registered apprenticeship programs on eligible 
training provider lists (ETPLs) and WIOA in general provides an overall 
emphasis on registered apprenticeship

[[Page 56119]]

programs throughout the one-stop delivery system. The Department has 
used this emphasis to highlight the unique flexibilities the one-stop 
delivery system has in making use of registered apprenticeship programs 
to provide training services, including Individual Training Accounts 
(ITAs) and OJT. This in no way restricts pre-apprenticeship programs 
and non-registered apprenticeship programs from being an ETP according 
to the criteria in WIOA sec. 122(a). These training providers, in order 
to receive ITA payments, must go through the same eligibility criteria 
as other training providers on the ETPL. The Department considers 
programs that lead to an industry-recognized credential as valuable 
providers of training, and these programs are welcome to apply to 
become ETPs. The Department declines to make changes to the regulatory 
text in response to these comments.
    Comments: One commenter encouraged the Department to allow adult 
education providers to provide workforce preparation rather than 
training in sector work. The commenter stated that if community-based 
adult education providers were required to offer sector training, most 
of these providers would have to be completely transformed, would 
require significant capacity boosts, would be less likely to reach the 
hard-to-serve, and would have drastically reduced enrollment.
    One commenter requested clarification on the role of adult basic 
education.
    Department Response: Under WIOA sec 134(c)(3)(D)(x), title I adult 
and dislocated worker funds may be used to support adult education and 
literacy activities, provided concurrently or in combination with other 
training services. The Department has added regulatory text clarifying 
this use of WIOA title I adult and dislocated worker funds in Sec.  
680.350. This regulation involving appropriate uses of adult education 
and literacy activities only applies to WIOA title I adult and 
dislocated worker funds.
    Comments: A commenter expressed support for having both OJT and 
classroom training available to adult and dislocated workers. Two 
commenters supported the inclusion of integrated English literacy/
civics education programs in WIOA. These commenters recommended that 
the Departments of Labor and Education provide diverse examples of how 
such programs may be designed, including ways in which they may 
represent components of sector partnerships and/or career pathways 
initiatives, and how they may facilitate the economic, linguistic, and 
civic integration of participants.
    Department Response: The Department of Labor will work with the 
Department of Education to provide additional guidance and technical 
assistance on sector partnership and career pathways initiatives under 
WIOA, including how to integrate programs such as those the commenters 
highlighted.
    Comments: One commenter described the benefits of entrepreneurship 
training and encouraged the Department to revise performance indicators 
that would create a barrier to the inclusion of entrepreneurship 
training in the WIOA public workforce system.
    A few commenters requested clarification on what constitutes 
entrepreneurial training as cited at sec. 134(c)(3)(D)(vii) of WIOA.
    Department Response: Entrepreneurial training is an allowable 
training activity, and the Department will issue guidance and technical 
assistance to support its use and to address performance 
accountability. Additionally, the Department has addressed instances 
where quarterly wage records are not traditionally available for 
performance accountability purposes, as may be the case where 
participants have received entrepreneurial training, in 20 CFR 677.175 
(see Joint WIOA Final Rule).
    Comments: Two commenters recommended that the regulations 
explicitly recognize the need for direct support professionals to 
address the growing ``direct support worker crisis''.
    Department Response: WIOA sec. 108(b), which lists the required 
contents of local plans, states that the plans must include an analysis 
of existing and emerging in-demand industry sectors and occupations 
including the employment needs of employers in those sectors and 
occupations. Training programs for WIOA title I adult and dislocated 
worker programs are to be linked to in-demand industries and 
occupations in the local plan. The Final Rule does not explicitly 
recognize any specific industry or occupation needed to meet current 
workforce needs because these needs may change and often are based on 
State and local labor markets.
    Comments: One commenter suggested that the regulations should 
better articulate the important role for digital literacy instructions, 
reasoning that these skills are critical to job advancement as well as 
educational credentials, including high school equivalency diplomas. 
Additionally, this commenter urged the Department to adopt a flexible 
framework as it relates to the integration of occupational skills 
training, which the commenter stated should include a student-centered 
approach in which co-enrollment in workforce education programs be 
optional rather than required.
    Department Response: The Department considers digital literacy to 
be a pre-vocational service or a workforce preparation activity, both 
of which are considered to be individualized career services and not 
training services. The Department agrees that digital literacy is an 
important skill to succeed in the 21st century workforce, but considers 
it to be a service that may be made available based on individual need 
as determined by the local area. While WIOA encourages program 
alignment, and co-enrollment is one way to align service delivery, the 
Department does not require co-enrollment across programs.
    Comments: A commenter suggested that the Department provide the 
list of training services found in WIOA in the regulations rather than 
simply referencing the statutory citation.
    Department Response: The Department agrees with the recommendation 
and has adjusted the regulatory text of Sec.  680.200 to include the 
list of training services provided in WIOA sec.134(c)(3)(D).
    Comments: Commenters requested clarification on whether alternative 
secondary school (formerly GED) preparation is considered a career 
service or a training service.
    Department Response: The Department considers a program that leads 
to a secondary school diploma to be a training service. A program that 
leads to a secondary school diploma or its equivalent can be eligible 
as a State ETP, see Sec.  680.420.
Section 680.210 Who may receive training services?
    Comments: A commenter asked who would be responsible for 
determining what constitutes self-sufficiency when determining who may 
receive training services under proposed Sec.  680.210(a)(1).
    Department Response: Under WIOA sec. 134(a)(3)(A)(xii), States may 
use statewide funds reserved by the Governor for adopting, calculating, 
or commissioning for approval an economic self-sufficiency standard for 
the State that specifies the income needs of families, by family size, 
the number and ages of children in the family, and sub-State 
geographical considerations. Under WIOA sec. 134(d)(1)(A)(x), local 
areas may use employment and training funds to adjust the State 
standard for local considerations, or can adopt, calculate, or 
commission for approval a

[[Page 56120]]

self-sufficiency standard for the local area that specifies the same 
factors required of the State standard. Under WIOA sec. 134(c)(3)(A)(i) 
individuals who receive training must be unlikely or unable to obtain 
or retain employment that leads to economic self-sufficiency or wages 
comparable to or higher than wages from previous employment through 
career services. Additionally, they must be in need of training 
services to obtain or retain employment that leads to economic self-
sufficiency or wages comparable to or higher than wages from previous 
employment. The one-stop center is responsible for determining if an 
individual meets the self-sufficiency standard set by this process.
    Comments: A commenter requested clarification about the division of 
responsibilities between one-stop centers and local service providers, 
including clarification on who is responsible for determining who can 
receive training services.
    Department Response: The Department considers the ultimate 
responsibility for determining who can receive training services to 
rest with the Local WDB. However, through the service procurement 
process and other arrangements established through the local MOU, the 
board may delegate those responsibilities to the one-stop center or 
local service providers.
    Comments: A commenter disagreed with the language in proposed Sec.  
680.210(a) that indicates that a determination needs to be made that 
the training will result in receipt of wages higher than wages from 
previous employment, reasoning that economic conditions can make this 
difficult.
    Department Response: The Department notes that Sec.  680.210(a) 
mirrors the requirements for title I adult and dislocated worker 
services found in WIOA sec. 134(c)(3)(A), and that training that leads 
to a ``comparable wage'' also is allowed for individuals to receive 
training services. No changes have been made to the regulatory text in 
response to the comments.
    Comments: A commenter recommended that the Department make efforts 
to inform employers of the availability of training services to assist 
workers on short-term or long-term disability programs.
    Department Response: The Department considers this to be an example 
of an appropriate business or employer service that may be provided 
through the one-stop delivery system. While the Department will not add 
language to the regulatory text mandating specific employer services, 
the Department does recognize the importance of ensuring quality 
services for individuals with disabilities and will utilize guidance 
and technical assistance to ensure best practices in serving businesses 
and individuals with disabilities.
    Comments: A commenter suggested that the regulations should direct 
one-stop centers to take into account older workers' different training 
needs and lesser access to financial aid, and make sure that older 
workers are not discriminated against in access to WIOA-funded ITAs.
    Department Response: Older workers are identified as a target 
population for WIOA services, based on their inclusion in the 
definition of individuals with a barrier to employment in WIOA sec. 
3(24). The Department will issue guidance and technical assistance on 
best practices in providing career and training services to older 
workers.
Section 680.220 Are there particular career services an individual must 
receive before receiving training services under the Workforce 
Innovation and Opportunity Act?
    Comments: One commenter stated that there should be no required 
sequence of services prior to providing training services to allow more 
flexibility in meeting the needs of customers. Another commenter asked 
whether there is a frequency rate permitted to bypass career services 
and whether bypassing career services before training was considered to 
be an exception.
    One commenter requested further guidance and direction on how Local 
WDBs should document the circumstances that justify determinations that 
training services should be provided.
    Department Response: There is no sequence of service requirement 
and therefore, no requirement that career services must be provided 
before training services. Section 680.220(b) states, if training 
services are provided without career services, the Local WDB must 
document the circumstances that justified its determination to provide 
training without career services. Eligibility for training must be 
determined by an interview, evaluation, or assessment, and career 
planning or any other method through which the one-stop partner or 
partners can obtain enough information to make an eligibility 
determination for training services. Paragraph (b) of Sec.  680.220 
requires a case file that includes a determination of need for training 
services, based on the criteria discussed in Sec.  680.220(a). There is 
no frequency requirement; the need for training services should be 
determined prior to their provision. There have been no changes to the 
regulatory text in response to these comments.
    Comments: Several commenters requested clarification as to how far 
back an assessment could have been conducted to satisfy the 
prerequisite for training services.
    Department Response: The Department does not mandate a certain 
length of time that previous assessments may go back; however, the 
Department expects that the previous assessments must be recent. The 
Department recommends that Governors and Local WDBs develop policies 
for the use of recent assessments that are appropriate for the 
individual and the one-stop center. The recent assessment must have 
sufficient information to make an eligibility determination for 
training services.
    Comments: A commenter recommended replacing the references to 
``eligibility'' and ``eligible'' in proposed Sec.  680.220(a) with 
``determined appropriate,'' ``suitable,'' or ``ability to benefit'' to 
make it clear that this is not an additional eligibility determination 
beyond the eligibility determination conducted in Sec.  680.110.
    Department Response: WIOA sec. 134(c)(3)(A) refers to 
``eligibility'' for training services and this language is incorporated 
in the regulatory text. The Department recognizes that there are two 
types of eligibility--eligibility for program services and eligibility 
for training services. An individual must meet program service 
eligibility to be considered for training service eligibility.
    Comments: A commenter stated that the proposed steps required 
before a participant can receive training are appropriate for a 
customer who is in career transition, but questioned the 
appropriateness of the path where an employed worker is in need of 
skills upgrade to achieve economic self-sufficiency.
    Another commenter encouraged the addition of a provision that 
training for jobs that fall below economic self-sufficiency standards 
also must include ongoing training post-hire for career ladders within 
the industry and take into consideration other factors including 
benefits, retirement, vacation, and education that can mitigate and 
improve lower wage jobs.
    Department Response: The steps before a participant can be 
determined eligible for training services in the regulatory text are 
the minimum required by WIOA sec 134(c)(3)(A). The Department allows 
flexibility for local areas to develop methods to provide

[[Page 56121]]

services for individuals in need of a skills upgrade to achieve 
economic self-sufficiency. As part of the training eligibility, 
training services provided must be determined to lead to economic self-
sufficiency or wages comparable to or higher than previous employment.
Section 680.230 What are the requirements for coordination of Workforce 
Innovation and Opportunity Act training funds and other grant 
assistance?
    Comments: A commenter suggested that the Department revise the 
regulations to require, rather than recommend, that one-stop centers 
and partners take into account the full cost of training, including the 
cost of supportive services, when coordinating grant assistance.
    Department Response: The Department considers the full cost of 
training services to be an important factor when coordinating 
assistance from other grants or resources. The Department strongly 
encourages this coordination and consideration be taken into account. 
WIOA allows for one-stop centers or partners to make this a 
consideration and does not require it. Therefore, the Department has 
changed ``should'' to ``may'' in Sec.  680.230(a).
    Comments: Some commenters recommended revisions to the proposed 
regulations as they relate to reimbursement of WIOA funds for 
participants who eventually receive Pell Grants. Specifically, because 
of the difficulties associated with implementing the proposed 
framework, these commenters recommended that WIOA funds not be 
reimbursed in situations where a Pell Grant is subsequently awarded 
after a one-stop center has paid for training. A commenter asked 
whether required educational fees are considered part of the training 
expenses or education-related expenses. This commenter sought 
clarification on this issue, but recommended that they be considered 
training expenses and not education-related expenses.
    Department Response: The Department maintained the requirements of 
Pell Grant reimbursement, as described in Sec.  680.230(c). WIOA sec 
134(c)(3)(B)(ii) requires reimbursements to local areas from Federal 
Pell Grants to an individual who received WIOA title I training 
services while his or her Pell Grant was pending. The Department agrees 
with the commenters' suggestion that educational fees be considered 
part of the training expenses that should be reimbursed to the local 
area and has added language in Sec.  680.230(c) to require this 
reimbursement.
    Comments: A commenter stated that WIOA funds should be directed 
toward Temporary Assistance for Needy Families (TANF) recipients to 
enhance the work and training needs of the public assistance population 
without a requirement that TANF funds first be considered. Furthermore, 
the commenter stated that when resources in a local area are limited, 
local areas are best suited to determine which funds are dedicated to 
provide training and WIOA should be a primary funding source.
    Department Response: The Department declines to make a change in 
the regulatory text at Sec.  680.230(b). WIOA funds supplement other 
sources of training grants and do not supplant them.
    Comments: To ensure consistency with previous Federal guidance, a 
commenter suggested that the Department add language to Sec.  680.230 
to clarify that education and training benefits earned by veterans are 
not required to be coordinated with training funds available under WIOA 
title I.
    Department Response: While the Department declines to make a change 
in the regulatory text, it notes that the Department of Veterans 
Affairs benefits for education and training services are not included 
in the category of ``other sources of training grants'' listed in Sec.  
680.230(b). Therefore, veterans and spouses are not required to first 
use any available benefit entitlements associated with their military 
service before being considered eligible for WIOA funded training, and 
one-stop centers are not required to consider the availability of those 
funds.
    Comments: Some commenters recommended that the Department clarify 
that WIOA title I funds can support title II adult education programs, 
as the WIOA sec. 134(c)(3) definition of training includes ``adult 
education and literacy activities, including activities of English 
language acquisition and integrated education and training programs'' 
at sec. 134(c)(3)(x). Commenters asserted that this clarification was 
needed as expeditiously as possible so that the planning processes in 
the States can proceed efficiently.
    Department Response: Under WIOA sec. 134(c)(3)(D)(x), title I adult 
and dislocated worker funds may be used to support adult education and 
literacy activities, provided concurrently or in combination with other 
training services. The Department has added regulatory text clarifying 
this use of WIOA title I adult and dislocated worker funds in Sec.  
680.350. This regulation involving appropriate uses of adult education 
and literacy activities only applies to WIOA title I adult and 
dislocated worker funds.
    Comments: Because availability of training assistance depends on 
whether participants have access to other sources to pay for training, 
a commenter strongly encouraged the Department to stress to Local WDBs 
the importance of the optional services outlined in Sec.  680.140 for 
individuals with disabilities.
    Department Response: The Department identifies in Sec.  680.140 all 
of the required and permissible WIOA title I adult and dislocated 
worker services that Local WDBs may provide. The Department considers 
the permissible activities described in Sec.  680.140(b) that may help 
individuals with disabilities to navigate among multiple services and 
activities to be important. The Department also has listed ``reasonable 
accommodations for individuals with disabilities'' to be an allowable 
supportive service in Sec.  680.900.
4. Subpart C--Individual Training Accounts
    Individual Training Accounts (ITAs) are key tools used in the 
delivery of many training services. The Department seeks to provide 
maximum flexibility to State and local programs in managing ITAs. These 
regulations do not establish the procedures for making payments, 
restrictions on the duration or amounts of the ITA, or policies 
regarding exceptions to the limits. The authority to make those 
decisions resides with the State or Local WDBs. The authority that 
States or Local WDBs may use to restrict the duration of ITAs or 
restrict funding amounts must not be used to establish limits that 
arbitrarily exclude eligible training providers.
    Through the one-stop center, individuals will be provided with 
quality and performance information on providers of training and, with 
effective career services, case management, and career planning with 
the ITA as the payment mechanism. ITAs allow participants the 
opportunity to choose the training provider that best meets their 
needs. Under WIOA, ITAs can more easily support placing participants 
into registered apprenticeship programs.
Section 680.300 How are training services provided?
    Comments: A commenter expressed support for the ability to pay an 
ITA at the beginning of the training program rather than on an 
incremental basis, because it would allow Local WDBs to budget and 
manage their ITAs much

[[Page 56122]]

more easily, eliminates the concern about putting customers into 
training that straddles 2 program years, and simplifies the 
determination of how much carry over funding to include in the next 
program year's budget.
    Department Response: The Department considers it important to 
maintain flexibility in how ITA payments are made to support Local WDBs 
to use the most effective payment mechanisms. There have been no 
changes to the regulatory text in response to these comments.
Section 680.320 Under what circumstances may mechanisms other than 
Individual Training Accounts be used to provide training services?
    Comments: A few commenters expressed support for the approach 
proposed in Sec.  680.320. One commenter expressed support for the 
opportunity to contract for services rather than rely solely on ITAs, 
potentially support streamlining and more effective administration and 
planning for training providers. Another commenter expressed support 
for the training of cohorts, allowing States and local areas to 
contract with providers to assist groups of participants through one 
contract for services with defined goals and outcomes, rather than the 
administratively burdensome process of having each individual 
participant request services from providers through an ITA. Another 
commenter supported the Department's detailed list of circumstances 
under which a mechanism other than an ITA may be used to provide 
training services.
    Several commenters provided input on funding mechanisms for 
training for individuals with barriers to employment. One commenter 
expressed support for allowing local areas to contract directly with 
training providers to supply training that will effectively service 
individuals with barriers to employment, expanding innovative and 
effective models for helping participants obtain industry-recognized 
credentials. Another commenter recommended that the Department 
recognize the need for coordination with vocational rehabilitation 
programs when addressing services for individuals with disabilities to 
avoid duplication of effort.
    Department Response: The Department generally received supportive 
comments about the use of alternative methods to ITAs. The Department 
encourages coordination with Vocational Rehabilitation programs when 
serving individuals with disabilities to ensure effective service 
delivery. No changes have been made to the regulatory text in response 
to the comments, but the Department is adding, ``and the local area has 
fulfilled the consumer choice requirements of Sec.  680.340'' to Sec.  
680.320(a), to ensure that the statutory requirement at WIOA sec. 
134(c)(3)(G)(ii)(I) is included. This provision requires that a local 
area have a full ITA system in place even if it decides to provide 
training through contracts because one or more of the situations in 
Sec.  680.320(a)(1) through (5) applies. Section 680.320(c) provides 
that the local plan describe the process to be used in all cases to 
select training under a contract to be consistent with WIOA sec. 
108(b)(16).
    Comments: A few commenters recommended that the Department clarify 
which individuals are considered to have a barrier to employment as a 
result of being an English language learner. Specifically, these 
commenters asserted that the preamble and the regulatory text differ in 
that one requires that three elements be met ((1) English language 
learners, (2) individuals who have low levels of literacy, (3) 
individuals facing substantial cultural barriers) while the other 
allows any one element as triggering categorization of having a barrier 
to employment. One commenter asked that the Department add a definition 
of ``ex-offender'' and encouraged the Department to include individuals 
with deferred sentences to be included within the definition because 
these individuals encounter similar barriers to employment as those 
individuals who actually spend time incarcerated. Another commenter 
asserted that the regulation should include employer incentives to 
encourage the hiring of ex-offenders.
    Department Response: WIOA sec. 3(24) defines ``individuals with 
barriers to employment,'' and WIOA sec. 3(24)(I) includes the following 
groups that qualify for this definition: ``Individuals who are English 
language learners, individuals who have low levels of literacy, and 
individuals facing substantial cultural barriers.'' The Department 
clarifies that if an individual meets any one of the three criteria in 
WIOA sec. 3(24)(I), that individual may be considered to have a barrier 
to employment. WIOA defines ``English language learner'' in WIOA sec. 
203(7) and is one of the criteria that may be met to be considered an 
individual with a barrier to employment. The Department also considers 
the definition of ``literacy'' provided in WIOA sec. 203(13) as the 
standard to be used for determining if an individual is considered to 
have low literacy, and therefore a barrier to employment. The 
Department will use guidance and technical assistance to States and 
Local WDBs to aid in determining when these elements are met. The term 
``offender'' is defined in WIOA sec. 3(38) and the Department considers 
this to be the basis by which an individual is determined to be an 
``ex-offender.'' The Department declines to alter the regulatory text 
to include employer incentives for hiring of specific groups.
    Comments: One commenter expressed support for the inclusion of 
``older individuals'' in the list of barriers to employment, reasoning 
that the aging community has more challenges than younger workers in 
regaining employment once it has been lost and are more likely to be 
among the long term unemployed. Two commenters requested that the 
Department define the duration of unemployment that must be reached for 
an individual to be considered a long term unemployed individual.
    Department Response: The Department generally defers to the Bureau 
of Labor Statistics (BLS) definition and will provide additional 
guidance to States and local areas on long-term unemployed.
    Comments: Another commenter urged the Department to provide 
flexibility and guidance to use ITA funds concurrently or successively 
with paid work experience or OJT, reasoning that this combined use of 
ITA/OJT or ITA/paid work experience would provide additional benefits 
to the participants.
    Department Response: The Department notes that there is no 
prohibition on the combined use of ITAs and OJT as well as any other 
contracted training services under WIOA sec. 134(c)(3)(G)(iv). These 
decisions must be based on individual need and they must be paying for 
separate program elements. There also is no prohibition on using career 
services, such as work experience, in combination with ITAs.
    Comments: A commenter asked how the Department defines 
``institution of higher education'' as the term relates to funding 
mechanisms for training services in proposed Sec.  680.320.
    Department Response: The term ``institution of higher education'' 
is defined in WIOA sec. 3(28); the Department has added this citation 
into the regulatory text in Sec.  680.320(a)(4).
    Comments: One commenter recommended a minor technical correction to 
proposed Sec.  680.320(a)(4) to replace the phrase ``will facilitate'' 
with ``in order to facilitate.''
    Department Response: The Department agrees with the commenter's 
suggestion and has made

[[Page 56123]]

this nonsubstantive correction in the regulatory text in Sec.  
680.320(a)(4).
Section 680.330 How can Individual Training Accounts, supportive 
services, and needs-related payment be used to support placing 
participating adults and dislocated workers into a registered 
apprenticeship program and support participants once they are in a 
registered apprenticeship program?
    In this section, a new paragraph (a) was created, and proposed 
paragraph (a) is now (a)(1). Similarly, proposed paragraph (b) is now 
(a)(2). Proposed paragraph (c) has been renumbered to (b), and the 
following proposed paragraphs (d) and (e) are now (c) and (d).
    Comments: A few commenters expressed support for allowing ITA 
funding to be used to pay for supportive services and needs-related 
payments to support the placement of a participant into a registered 
apprenticeship program. A commenter asked whether supportive services 
would be provided throughout a multi-year apprenticeship and whether 
supportive services would be provided to an employed individual 
participating in an apprenticeship. Additionally, the commenter asked 
how WIOA would assist an already employed worker who moves up the 
career ladder and is put into an apprenticeship either through OJT, 
ITA, or support services. Another commenter stated that one-stop 
centers should provide career services and supportive services during 
the final year of an apprenticeship because this is a crucial time that 
can directly lead to employment.
    Some commenters stated that there should be no limitations placed 
on program service funding, including incumbent worker funding, which 
these commenters described as possibly the most appropriate funding to 
serve apprentices. In regard to incumbent worker funding, these 
commenters said that some companies may select current employees to 
upskill in a registered apprenticeship program given the length of the 
investment and the increased likelihood of the individual remaining 
engaged.
    Department Response: The Department refers to the regulatory text 
in Sec. Sec.  680.900 through 680.920, the general requirements for 
supportive services. Supportive services may be used for both employed 
and unemployed individuals to support their participation in career 
and/or training services. Decisions about the provision of supportive 
services, including the duration, timing, and type, are to be made by 
the Local WDB.
    The Department refers to the regulatory text in Sec. Sec.  680.700 
through 680.750 and in particular Sec.  680.710, which discusses the 
requirements for OJT contracts for employed workers. Incumbent worker 
training may be an appropriate service that would help an individual 
move up a career ladder within an apprenticeship program.
    Comments: A commenter recommended that the Department revise 
proposed Sec.  680.330(b) (renumbered in regulatory text as Sec.  
680.320(a)(2)) to allow for payments from ITAs to non-profit, joint 
labor-management training to defray the cost of providing 
apprenticeship or pre-apprenticeship training for programs that do not 
charge ``tuition.'' This commenter suggested that these payments should 
include not only the pro-rata cost of delivering direct training to 
enrollees, but also should cover costs incurred to retain third-party 
providers. Two commenters stated that ITAs could be used to pay for 
pre-requisites for apprenticeship such as math courses, required 
education courses, and/or certifications as part of the work-based 
experience. Another commenter encouraged the Department to support the 
use of ITAs for competency-based apprenticeship models.
    Department Response: The Department agrees with the comment that 
the term ``tuition'' does not reflect the funding arrangements of 
registered apprenticeship programs and has changed the text in Sec.  
680.330(a)(2) to change it to ``Training services provided under a 
registered apprenticeship program'' to address this and be consistent 
with the way the Department refers to other types of training. The 
other suggestions from commenters about allowable uses for ITA funds 
are acceptable as long as the providers of those services are on the 
ETPL. No other changes have been made to the regulatory text in 
response to the comments.
    Comments: A commenter recommended that the regulations should allow 
for contracted apprenticeship programs as well as the placement of 
trainees into these programs solely through the ITA system, which the 
commenter described as not allowing for the easy organization of 
cohort-based programs. This commenter asserted that cohort-based 
apprenticeships and pre-apprenticeships can work with students 
recruited through the one-stop delivery system as well as those 
recruited from outside the system but would require a threshold number 
of trainees to be cost effective. The commenter concluded that the 
availability of trainee cohort classes in apprenticeship and pre-
apprenticeship programs is a cost-effective approach to training.
    Department Response: The Department considers that these types of 
training cohorts are allowable provided that the individuals meet the 
training eligibility requirements and the training providers are on the 
ETPL.
    Comments: A commenter expressed the desire to be able to use ITAs 
to pay for apprenticeship programs that are not on the ETPL and that 
can last for many years to ensure that participants receive the 
training needed and that the local area is able to capture all 
applicable credentials received for performance purposes. Similarly, a 
commenter asked how long WIOA enrollment lasts past the 6 months of OJT 
if an apprenticeship lasts multiple years. This commenter also asked 
how a credential is documented if a WIOA participant exits the system 
prior to completion of the apprenticeship.
    Department Response: To receive funds from an ITA, the training 
provider must be on the ETPL. The Department encourages interested 
providers to apply to be ETPs. The Department is issuing guidance about 
the credential measures in performance. WIOA enrollment is governed by 
the definitions of ``participant'' and ``exit'' in 20 CFR 677.150 (see 
Joint WIOA Final Rule). Local areas can develop ITA contracts within 
the framework of these definitions and the requirements for ITAs. 
Training services should be provided based on the needs of the 
individual and ITAs should be structured to address those needs.
    Comments: To expand pre-apprenticeships and apprenticeships, some 
commenters recommended that the one-stop centers be given authority to 
initiate the application for registered apprenticeships. A commenter 
recommended that one-stop centers build and maintain relationships with 
apprenticeship programs that operate within their region to provide a 
point of contact for individuals that would like to enroll. To serve 
individuals enrolled in pre-apprenticeship or registered apprenticeship 
programs best, a commenter suggested including a regulatory requirement 
that the one-stop delivery system receive technical assistance to help 
expand one-stop center capacity to serve women entering these training 
programs.
    Department Response: There is no prohibition in WIOA on one-stop 
centers initiating applications for registered apprenticeships. The 
Department encourages Local WDBs to partner with registered 
apprenticeships, work to align service delivery, and make

[[Page 56124]]

appropriate arrangements to build on these partnerships. The Department 
encourages the one-stop delivery system to help populations access 
training in nontraditional employment and will provide technical 
assistance to share best practices on this subject.
    Comments: Two commenters listed the following ways in which a one-
stop delivery system could serve the pre-apprenticeship programs, 
including, marketing, referrals, training costs, direct placements in 
registered apprenticeships, and use of OJT funds.
    Department Response: The Department considers these recommendations 
to be examples of best practices to be shared through guidance and 
technical assistance.
    Comments: A commenter requested clarification on several issues 
related to pre-apprenticeships: (1) With pre-apprenticeship programs 
moving to ITAs and therefore onto the ETPL, is the expectation that all 
other intensive service providers also will be included in the ITAs and 
ETPL; (2) the treatment of pre-apprenticeship programs that are not 
linked to a registered apprenticeship under WIOA; and (3) whether an 
out-of-school youth under 18 or an in-school youth be approved for an 
ITA for a pre-apprenticeship program?
    Department Response: Pre-apprenticeship programs may be eligible 
for an ITA if they are on the ETPL. The Department encourages pre-
apprenticeship programs that provide training services under an ITA to 
apply to be an ETP. The Department considers pre-apprenticeship 
programs to be directly partnered with at least one registered 
apprenticeship program; programs that do not meet this criterion are 
not considered a pre-apprenticeship program for the purposes of WIOA. 
In order to receive an ITA under WIOA title I adult and dislocated 
worker programs, an individual must meet program eligibility criteria 
as well as the training eligibility criteria.
Section 680.340 What are the requirements for consumer choice?
    Comments: A commenter indicated that proposed Sec.  680.340 does 
not speak effectively to the concept of ``consumer choice.'' This 
commenter stated that it would take serious efforts by the Department 
to develop more extensive information regarding the learning providers 
to inform individuals seeking training opportunities properly. 
Furthermore, the commenter asserted that posting information about 
eligible trainers has not proven to assist the learner.
    Department Response: The regulations on consumer choice are 
consistent with the language in WIOA sec 134(c)(3)(F). The Department 
emphasizes the importance of performance information on training 
providers to ensure consumers may make an informed assessment of their 
training options. The Department considers the role of the career 
planner as critical to support individuals to make well-informed 
training decisions. Career planners are responsible for making training 
eligibility determinations, and these determinations require that 
States and local make available high quality performance information to 
participants to make informed training choices.
    Comments: One commenter suggested that the Department rewrite 
proposed Sec.  680.340(b) so that it is clear that there is no 
requirement for the employer to report outcomes when using OJT and 
customized training other than in those circumstances required by the 
Local WDB.
    Department Response: The Department agrees with the commenter and 
has changed the regulatory text in Sec.  680.340(b) to emphasize that 
the ETPL is a separate list from the list that the Governor may require 
for work-based training providers.
    Comments: A commenter recommended that proposed Sec.  680.340 be 
revised to make it clear that training funds are not an entitlement and 
that criteria in addition to eligibility are assessed prior to referral 
to a provider and program. Two other commenters requested clarification 
as to the reasons that training could be refused.
    Department Response: WIOA is not an entitlement program. 
Determinations for training are made consistent with the law, including 
WIOA sec. 134(c)(3)(A), State and local policies, funding availability, 
and other appropriate considerations. There have been no changes to the 
regulatory text in response to these comments.
    One commenter requested that the Department provide a definition 
for the term ``cost of referral'' as used in proposed Sec.  680.340(d).
    Department Response: The Department declines to define the term 
``cost of referral'' in the regulatory text.
    Comments: A commenter expressed support for the prioritization of 
funding for training programs that result in a recognized postsecondary 
credential.
    Department Response: The Department acknowledges the comment and 
has added language to the regulatory text in Sec.  680.340(f) 
referencing the citation for WIOA sec. 3(52), which defines a 
recognized postsecondary credential.
    Comments: A commenter recommended a technical correction to 
proposed Sec.  680.340(b) to reference paragraph (d) in WIOA sec. 122 
rather than paragraph (e).
    Department Response: The Department agrees and has made this 
nonsubstantive correction in the regulatory text in Sec.  680.340(b).
Section 680.350 May title I adult and dislocated worker funds be used 
to directly support adult education and literacy activities?
    Comments: Some commenters recommended that the Department clarify 
that WIOA title I funds can support title II adult education programs, 
as the WIOA sec. 134(c)(3) definition of training includes ``adult 
education and literacy activities, including activities of English 
language acquisition and integrated education and training programs'' 
at sec. 134(c)(3)(D)(x). A commenter recommended that referrals to 
regionally accredited secondary-level educational programs providing 
entry-level workforce preparation and/or postsecondary education and 
training activities be included as part of basic services and 
counseling services. A commenter requested clarification regarding 
whether alternative secondary school (formerly General Education 
Diploma [GED]) preparation is considered a career service or a training 
service.
    Department Response: Under WIOA sec. 134(c)(3)(D)(x), title I adult 
and dislocated worker funds may be used to support adult education and 
literacy activities, provided concurrently or in combination with other 
training services. The Department has added regulatory text clarifying 
this use of WIOA title I adult and dislocated worker funds in Sec.  
680.350. The Department notes that these activities for title I adult 
and dislocated worker funds must be done in coordination with other 
training activities in WIOA sec. 134(c)(3)(D)(x).
5. Subpart D--Eligible Training Providers
    This subpart describes the process by which organizations qualify 
as eligible training providers of training services under WIOA. It also 
describes the roles and responsibilities of the State and Local WDBs in 
managing this process and disseminating the State Eligible Training 
Providers and Programs List (ETPL). Throughout the preamble, the 
Department refers to the State Eligible Training Providers and Programs 
List as the ``State List,'' the List, and the ETPL. The State ETPL and 
the related

[[Page 56125]]

eligibility procedures ensure the accountability, quality, and labor 
market relevance of programs of training services that receive funds 
through WIOA title I, subtitle B. The regulations emphasize that the 
List and accompanying information must be easily understood and 
disseminated widely in order to maximize informed consumer choice and 
serve members of the public.
    The State plays a leadership role in ensuring the success of the 
eligible training provider system in partnership with Local WDBs, the 
one-stop delivery system, and the one-stop's partners. The Governor, in 
consultation with the State WDB, must establish eligibility criteria 
and procedures for initial and continued eligibility for training 
providers and programs to receive funds under WIOA title I, subtitle B. 
In doing so, the Governor may establish minimum performance levels for 
initial and continued eligibility and the Department encourages 
Governors to do so. In establishing minimum performance levels for 
eligibility, the Governor should take into consideration the need to 
serve targeted populations. Except for with respect to registered 
apprenticeship programs, the Local WDB may establish higher performance 
levels or require additional information from State eligible training 
providers to receive funds through the local area Individual Training 
Accounts (ITAs).
    The regulations in this subpart implement WIOA sec. 122 and refer 
to WIOA secs. 107, 116, and 134 where those sections affect program and 
provider eligibility, the ETPL, the use of ITAs, and the inclusion of 
registered apprenticeship programs on the ETPL. In Sec.  680.410, the 
regulations clarify what entities can be eligible training providers. 
Section 680.470 provides that registered apprenticeship programs, which 
WIOA treats differently than other eligible training providers in some 
respects, are automatically eligible to be included on the ETPL. 
Finally, Sec.  680.500 requires the Governor or State Workforce Agency 
(SWA) to disseminate the State ETPL with accompanying performance and 
cost information to Local WDBs in the State and to members of the 
public through specified means. The performance information must be 
presented in a way that is easily understood, in order to maximize 
informed consumer choice and serve all individuals seeking information 
on training outcomes, including WIOA participants and individuals with 
disabilities. Separately, 20 CFR 677.230 (see Joint WIOA Final Rule) 
addresses the ETP annual performance reports mandated at WIOA sec. 
116(d)(4), which require providers to report on, among other things, 
the levels of performance for the WIOA primary indicators of 
performance for all individuals enrolled in the program of study.
    In response to concerns expressed by stakeholders that some 
providers of training would face difficulties in participating in this 
WIOA-revised system, the Department has clarified the interrelated 
eligibility requirements and explained that while WIOA places an 
emphasis on quality training as measured by performance criteria, State 
and Local WDBs and training providers must work together in achieving 
this goal. The regulations emphasize the Governor's role in offering 
financial or technical assistance to training providers where the 
information requirements of this section result in undue cost or 
burden. Making a wide variety of high-quality programs of training 
available to participants will increase customer choice and training 
providers may find performance information useful to improve their 
programs of study, which in turn will provide a direct benefit to 
participants. The Department also encourages the Governor to work with 
eligible training providers to return aggregate performance information 
to the providers in ways that will help the providers improve their 
program performance. The State and Local WDBs must work together to 
ensure sufficient numbers and types of training providers and programs 
to maximize customer choice while maintaining the quality and integrity 
of training services. In addition, the regulations explain that 
community-based organizations (CBOs) can be eligible training 
providers, provided they meet the requirements to become eligible 
training providers in WIOA sec. 122 and this subpart. Because of WIOA's 
emphasis on ensuring the provision of quality training, and the 
importance of using performance criteria to obtain such quality, the 
Department does not intend to waive the requirement to submit 
performance information at this time.
    Throughout this subpart, the Department has changed references from 
the Eligible Training Provider List to the list of eligible training 
providers and programs to convey that the list is a compilation of the 
programs of training services for which ITAs can be used. The 
Department has also made revisions throughout this subpart for 
consistency in the use of the term ``program of training services'' and 
to incorporate the use of youth funds for ITAs for out-of-school youth 
(OSY) aged 16-24.
    The Department received a number of comments that pertain to the 
WIOA sec. 116(d)(4) ETP annual performance reports. The Department 
notes that submission of the ETP annual performance reports is required 
by WIOA sec. 116(d)(4) and comments and responses relating to this 
report are addressed in the Joint WIOA Final Rule preamble section for 
20 CFR 677.230. This subpart D of part 680 addresses the ETP 
eligibility requirements.
Section 680.400 What is the purpose of this subpart?
    Proposed Sec.  680.400 explained the purpose of this subpart. It 
stated that the list must be accompanied by relevant performance and 
cost information and made publicly available online through Web sites 
and searchable databases as well as any other means the States use to 
disseminate information to consumers. The Department has made non-
substantive corrections for consistency in how the Department uses 
terms throughout this section. Additionally, the Department has made 
substantive changes to paragraphs (a) and (b) of this section which are 
described in detail below.
    Comments: A commenter requested that Local WDBs ensure the 
availability of training providers that understand the unique needs of 
individuals with disabilities. Another commenter cited the challenges 
faced by older workers and recommended that the regulations direct one-
stop centers to take into account older workers' different training 
needs and lesser access to financial aid, and make sure that older 
workers are not discriminated against in access to WIOA-funded ITAs.
    Department Response: The unique needs of individuals with 
disabilities require a minor revision to Sec.  680.400 to emphasize the 
importance of disseminating the State ETPL to individuals with 
disabilities. One of WIOA's stated purposes is to increase access to 
employment and training for individuals with barriers to employment, 
which is defined in WIOA to include individuals with disabilities as 
well as older individuals. Individuals with disabilities (e.g., those 
who are blind or hearing-impaired) may have unique needs that prohibit 
access to information through the Internet or other common databases. 
To fulfill the statutory purpose of WIOA, the Department has added 
language to Sec.  680.400(b) that requires States to disseminate 
information to consumers in formats accessible to individuals with 
disabilities. In response to the comment that the regulations direct 
one-stop centers to take into account older

[[Page 56126]]

workers' different training needs, the Department notes that the 
ability to provide services to individuals with barriers to employment 
is a factor that must be taken into account in the Governor's 
eligibility procedures under Sec.  680.460(f)(9) and that WIOA sec. 
3(24)(D) and (E) define ``individual with a barrier to employment'' to 
include individuals with disabilities and older individuals. Because 
this is a required factor in the eligibility procedures, the Department 
has decided not to address this in the purpose section of the 
regulation. No changes were made to the regulatory text in response to 
these comments.
    Comments: Another commenter requested that the Department explain 
whether programs other than those authorized by WIOA title I must use 
the eligible training provider list. A few commenters recommended that 
Sec.  680.410 specify that the requirements apply to entities providing 
training to participants paid for with WIOA title I adult or dislocated 
worker funding only and are not more generally applicable to all 
entities providing training to adult and dislocated workers.
    Department Response: WIOA's requirements regarding the State list 
of eligible training providers pertains to WIOA title I, subtitle B 
funds only. Core programs and partners other than the title I programs 
are not required to use the list of eligible training providers and 
programs, although States may choose to employ their ETP list for other 
activities. No changes were made to the regulatory text in response to 
this comment.
    Comments: The Department received a number of comments regarding 
whether youth may use ITAs in response to proposed Sec.  681.550 (Are 
Individual Training Accounts permitted for youth participants?).
    Department Response: In Sec.  680.400, the Department has added 
that this subpart describes the process for determining eligible 
training providers and programs for the adult, dislocated worker, and 
youth programs. More information about this is provided in the preamble 
corresponding to Sec.  681.550. The Department has updated Sec. Sec.  
680.400(a), 680.430, and 680.490 to clarify which requirements of this 
subpart apply to the eligible training providers and programs that 
serve OSY aged 16 through 24 with ITAs.
Section 680.410 What is an eligible training provider?
    The Department made non-substantive edits for consistency in how 
the Department uses terms throughout this section. Additionally, the 
Department has made significant substantive revisions to this section 
that are explained below.
    The Department significantly revised this section to more clearly 
define the term ``eligible training provider'' (ETP) and changed the 
section's title to reflect this change. The Department made these 
changes to clarify which entities are considered ETPs, as many of the 
requirements of WIOA sec. 122 apply only to those entities that are 
considered ETPs under WIOA. This clarification responds to commenters' 
requests for clarification on which requirements of WIOA sec. 122 apply 
to which entities.
    Section 680.410(a) through (c) lays out the defining 
characteristics of ETPs. Specifically, revised Sec.  680.410(a) 
provides that ETPs are the only types of entities that can receive 
funding for training services through an ITA. This means that if an 
entity is not on the State ETPL, the entity may not receive ITA funds 
to pay for training services. Section 680.410(b) was revised to make 
clear that ETPs must be included on the State ETPL. The Department 
added new Sec.  680.410(c) to provide that ETPs must provide a program 
of training services as that term is defined at Sec.  680.420.
    The Department also added new Sec.  680.410(d) to describe the 
kinds of entities that can be ETPs. Eligible training providers can be 
institutions of higher education that provide a program which leads to 
a recognized postsecondary credential, entities that carry out programs 
registered under the National Apprenticeship Act (29 U.S.C. 50 et 
seq.), and other public or private providers of training services, 
which may include community-based organizations (Sec.  
680.410(d)(3)(i)), joint labor-management organizations (Sec.  
680.410(d)(3)(ii)), and eligible training providers of adult education 
and literacy activities under WIOA title II if such activities are 
provided in combination with the training services described at Sec.  
680.350 (Sec.  680.410(d)(3)(iii)).
    The Department deleted proposed paragraph (b) of Sec.  680.410 to 
clarify that this subpart is focused on ETPs and the State list of 
ETPs. The requirements for individuals receiving training from entities 
other than ETPs are addressed in Sec. Sec.  680.320 and 680.530. 
Further description of the training that can be provided to individuals 
through entities other than ETPs can be found in Sec.  680.530.
    Part of the reason for this revision to this section is to make it 
clear that only entities that have gone through the Governor's ETP 
eligibility procedures and registered apprenticeship programs are 
considered ETPs, are able to be on the State ETPL, and can receive 
funding through ITAs. Additionally, because only these entities are on 
the State ETPL, only these entities, except for registered 
apprenticeship programs, are required to provide information for the 
ETP annual eligible training provider performance report required by 
WIOA sec. 116(d)(4).
    Comments: Many commenters provided input on specific categories of 
training providers. A few commenters supported allowing Local WDBs to 
provide training services as long as the Local WDB is licensed, 
registered, or otherwise exempt by the State office of education. Some 
commenters requested guidance on approval of distance learning 
providers requesting to be put on the ETPL. One commenter requested 
that the Department define and add a distance learning category as a 
potential ETP.
    Another commenter encouraged the Department to expand the 
definition of eligibility for training providers to include platforms 
that work with accredited institutions of higher education to provide 
Massive Open Online Courses (MOOCs). Several commenters encouraged the 
Department to revise Sec.  680.410(a) to identify public television 
stations explicitly as an ETP with demonstrated expertise in developing 
and implementing evidence-based training services. Another commenter 
recommended that Sec.  680.410 explicitly identify public libraries as 
potential providers, and particularly for enhanced digital literacy 
training and services. One commenter recommended that industry-based 
multi-employer training programs with a minimum of 50 percent employer 
representatives be eligible for inclusion on the ETPL to allow for 
training funds to be included as providers who would then be eligible 
for WIOA support. Another commenter urged the Department to consider 
integrating microenterprise development organizations, entities that 
help people in the very earliest stages of creating their own 
businesses, into the WIOA system. In addition, one commenter suggested 
a revision to paragraphs (a)(1) through (3) of Sec.  680.410 to 
include, as examples of eligible training providers of training 
services with WIOA adult funds under title I, public or private 
organizations that have demonstrated effectiveness in providing 
regionally accredited secondary-level educational programs that include 
entry-level workforce preparation and/or postsecondary education and 
training activities.
    Department Response: The Department has determined it is not 
appropriate in the regulation to specify

[[Page 56127]]

types of public and private entities that are appropriate to be ETPs, 
as many of these entities could be ETPs if they meet the requirements 
for initial and continued eligibility under Sec.  680.410(d)(3). 
Instead, the Department has defined broadly the kinds of entities which 
are eligible to be ETPs based on WIOA sec. 122(a)(2). The public and 
private entities commenters encouraged for inclusion on the ETPL are 
within the parameters of entities under Sec.  680.410(d) that can be 
ETPs, provided they meet all other applicable requirements, such as the 
Governor's eligibility requirements. In addition, the Department has 
not regulated to require training to be delivered in a specific format; 
programs may be delivered in-person, online, or in a blended approach. 
Nothing in the regulation precludes any of these approaches to 
training; therefore, it is unnecessary to regulate specifically that 
these are permissible types of training. In addition, the Department is 
clarifying that Local WDBs may provide training services, if they meet 
the conditions of WIOA sec. 107(g)(1), which includes the information 
required in a written waiver request to the Governor. This provision is 
addressed in Sec.  679.410. In response to the commenter that suggested 
Local WDBs can provide training as long as the Local WDB is licensed, 
registered, or otherwise exempt by the State office of education, the 
Department notes that WIOA sec. 107(g)(1) establishes the requirements 
that must be met if a Local WDB wishes to provide training. Therefore, 
the Department has not included this in this section.
Section 680.420 What is a ``program of training services''?
    This section defines the term ``program of training services'' that 
is used throughout the regulations. The Department proposed to define 
the term as one or more courses or classes, or a structured regimen 
that leads to specified outcomes, including recognized postsecondary 
credentials, secondary school diplomas or their equivalent, employment, 
or measurable skill gains toward such credentials or employment. The 
Department made non-substantive edits for consistency in how the 
Department uses terms throughout this section. The Department also made 
substantive revisions to paragraphs (a) and (b) which are described in 
detail below.
    In the NPRM preamble, the Department explained that the definition 
of a WIOA ``program of training services'' includes a structured 
regimen that leads to an industry-recognized credential. The NPRM 
preamble indicated that the outcomes in the definition of program of 
training services aligned with performance requirements in WIOA sec. 
116(b)(2)(A).
    Comments: Many commenters requested that the definition of 
``program of training services'' be clarified with options to recognize 
``non-credentialed training, such as incumbent worker training, work-
based learning opportunities, or single courses that fall within a 
career pathway for employment.'' These commenters also requested 
clarification of ``industry-recognized credentials'' to avoid confusion 
over which programs should qualify as eligible for WIOA funding. 
Several commenters requested clarification regarding how or when a 
program of training services leads to ``a recognized postsecondary 
credential, secondary school diploma or its equivalent.'' A few 
commenters recommended that Sec.  680.420 include training programs 
that lead to a ``recognized postsecondary degree or industry recognized 
credential'' to avoid a potential debate over what constitutes a 
``postsecondary credential.'' Other commenters suggested that a 
definition of ``recognized industry credential'' include a degree, 
diploma, or certification provided by an educational institution, 
third-party industry association, or industry accreditation body if it 
is not widely recognized by multiple employers in a region or industry. 
One commenter recommended that the term ``industry-recognized 
credentials'' as used in the preamble to the NPRM be added to the 
regulatory text. Another commenter asked whether having a group of five 
employers state the certificate of completion from a training provider 
is ``industry recognized'' would meet the definition of industry-
recognized credential. One commenter recommended a change to Sec.  
680.420(a) through (c), to include, as outcomes of programs of training 
services, regionally accredited secondary education diplomas and career 
certification for entry-level work force preparation earned as a part 
of a secondary education program.
    Department Response: The Department has revised the regulatory text 
of Sec.  680.420 to further clarify which programs qualify as WIOA 
``programs of training services.'' The introductory text of Sec.  
680.420 was modified to clarify that a ``program of training services'' 
is one that provides the services in Sec.  680.200 and leads to any of 
the outcomes listed in paragraphs (a) through (d) of this section, 
making clear the relationship between the definition of ``program of 
training services'' in this section and the definition of ``training 
services'' in Sec.  680.200.
    Section 3(52) of WIOA defines the term ``recognized postsecondary 
credential,'' which was used in the Department's proposed definition of 
a ``program of training services.'' The Department has revised Sec.  
680.420(a) to include all of the credentials, certificates, licenses, 
and degrees included in the WIOA definition of ``recognized 
postsecondary credential.'' However, the Department removed the term 
``recognized postsecondary credential'' from the definition of 
``program of training services'' in response to comments that this may 
be read as too limiting if it is interpreted to mean that these 
credentials can only be obtained by individuals who have a secondary 
degree, or a high school diploma or its recognized equivalent. The new 
definition of ``program of training services'' remains consistent with 
the program outcomes described in WIOA sec. 116(b)(2)(A) and 20 CFR 
part 677 (see Joint WIOA Final Rule).
    The Department chose not to define the term ``industry-recognized 
credential'' in the subpart and used the term ``industry-recognized 
certificate or certification'' in the definition of ``program of 
training services'' in order to mirror the definition of ``recognized 
postsecondary credential'' under WIOA. The term ``industry-recognized 
credential'' is an evolving term and the Department determined that 
defining it in the regulation may limit future innovation around 
industry-relevant training.
    The Department agrees that programs of training services should be 
inclusive of non-credentialed training, such as incumbent worker 
training, work-based learning opportunities, or single courses that 
fall within a career pathway. The introduction to Sec.  680.420 
emphasizes that training services that ``lead to'' any of the outcomes 
listed at Sec.  680.420, which includes employment, is a program of 
training services. Therefore, programs that are components of such a 
regimen may be eligible programs.
    In addition, as explained in Sec. Sec.  680.410 and 680.350 and 
associated sections of the preamble, WIOA title I adult and dislocated 
worker funds may be used for programs of training services that provide 
adult education and literacy activities if they are provided 
concurrently or in combination with occupational skills training and 
training services specified in Sec.  680.350. For example, English as a 
second language may be part of a program of training services that 
leads to measurable skill gains toward postsecondary credentials, 
industry-recognized credentials, or

[[Page 56128]]

employment. The Department has added a cross reference to Sec.  680.350 
in Sec.  680.420(b) to clarify that a participant may utilize a program 
offering a secondary school diploma or its equivalent only when that 
program is offered in conjunction with occupational skills training and 
other training options listed at Sec.  680.350. The revised definition 
of program of training services and the acceptable outcomes to which a 
structured regimen may lead align with the definitions within WIOA sec. 
116(b)(2)(A) and in 20 CFR part 677 (see Joint WIOA Final Rule). 
Section 680.420(d) provides that a program of training services is one 
that leads to measurable skill gains towards a credential described in 
paragraph (a) or (b) of this section. In this context, the term 
``measurable skill gains'' is used similarly to its use in 20 CFR part 
677 and the accompanying ICR. For clarification, the Department notes 
that the ETP annual performance report layout required under WIOA sec. 
116(d)(4) uses the term ``training program,'' which is synonymous with 
``program of training services.''
Section 680.430 Who is responsible for managing the training provider 
eligibility process?
    Section 680.430 outlines the roles and responsibilities of the 
Governor, the State WDB, any designated State agencies, and Local WDBs 
in establishing and implementing criteria and procedures for 
determining the eligibility of training providers. The Department 
received several comments addressing Sec.  680.430. The Department made 
non-substantive edits for consistency in how the Department uses terms 
throughout this section and to this section's title. The Department 
also made substantive changes to paragraphs (a), (c)(3), and (d), and 
these changes are described in detail below.
    The title to this section of the NPRM was ``Who is responsible for 
managing the eligible provider process.'' The Department is making a 
non-substantive edit and inserting the word ``training'' between 
``eligible'' and ``provider'' for consistency.
    The Department modified Sec.  680.430(a) to clarify that the 
Governor, in consultation with the State WDB, establishes the criteria, 
information requirements, and procedures, including procedures 
identifying the roles of the State and local areas, governing 
eligibility of providers and programs of training services to receive 
funds for out-of-school youth as described in Sec.  681.550.
    The Department renumbered and re-arranged paragraph (d) and added 
paragraph (e) for consistency with other portions of this subpart, 
including Sec. Sec.  680.450, 680.460, and 680.470, in regard to what 
is required for registered apprenticeship programs to be an eligible 
training provider. These provisions of the subpart make it clear that 
registered apprenticeship programs are not required to follow the 
Governor's eligibility procedures (initial or continued) in order to be 
eligible training providers. This is consistent with WIOA sec. 
122(a)(3), which provides that registered apprenticeship programs are 
maintained on the State List for so long as the program is registered 
under the National Apprenticeship Act. Therefore, the Department 
modified this section to ensure that the registered apprenticeship 
programs are not subject to the additional standards that may be 
established by a local area.
    Because registered apprenticeship programs are not subject to the 
Governor's criteria and information requirements or required to report 
on their levels of performance for eligibility, Local WDBs cannot 
establish additional criteria and information requirements or establish 
higher levels of performance for these entities to receive training 
services in the local area. Moreover, permitting the Local WDBs to 
establish additional criteria and performance standards for registered 
apprenticeship programs would be in tension with what the Department 
has determined is a key purpose of sec. 122(a)(3): Encouraging the 
integration of the registered apprenticeship program into the WIOA 
system. Section 680.430(d) provides that the Local WDB can make 
recommendations to the Governor on the procedure used in determining 
the eligibility of providers and programs. This is not a change from 
the NPRM.
    The Department has added new Sec.  680.430(e), which contains the 
provisions from proposed Sec.  680.430(d)(2) and (3), but clarifies 
that the provisions do not apply with respect to registered 
apprenticeship programs. Except for registered apprenticeship programs, 
the Local WDB may establish higher performance levels or require 
additional information from State eligible training providers to 
receive funds through local area ITAs. Paragraph (e)(1) provides that 
the Local WDB can, except with respect to registered apprenticeship 
programs, require additional criteria and information from local 
programs to become or remain eligible, and paragraph (e)(2) states that 
the Local WDB can set higher levels of performance, except with respect 
to registered apprenticeship programs, than those required by the State 
for local programs to become or remain eligible. In paragraph (e)(2), 
the Department made a non-substantive edit changing the phrase ``local 
providers'' to ``local programs'' to clarify that eligibility is 
determined on a program-by-program basis and removed the word 
``particular'' from this paragraph as unnecessary.
    Comments: One commenter commended the Department for outlining the 
responsibilities of State and Local WDBs to ensure adequate 
availability of training services for individuals with disabilities and 
recommended that Sec.  680.430(c)(3) similarly remind Local WDBs to 
disseminate and maintain lists of providers in formats accessible to 
individuals with disabilities.
    Department Response: As noted above under Sec.  680.400, the State 
List must be made publicly available in a format this is accessible to 
individuals with disabilities. One of WIOA's stated purposes is to 
increase access to employment and training for individuals with 
barriers to employment, which WIOA defines as including individuals 
with disabilities as well as older individuals. Individuals with 
disabilities (e.g., those who are blind or hearing-impaired) may have 
unique needs that prohibit them from accessing information through the 
Internet or other common databases. To fulfill one of the statutory 
purposes of WIOA articulated in WIOA sec. 2(1), the Department has 
added language to Sec.  680.430(c)(3) requiring that Local WDBs ensure 
that the State list of eligible training providers and programs is 
disseminated through the one-stop delivery system in formats accessible 
to individuals with disabilities.
    Comments: A commenter asked the Department to revise Sec.  
680.430(d)(1) to require the Governor to engage with the Local WDB and 
to require an equal exchange of information that allows for mutual 
consent in the management of the ETP process.
    Department Response: The Department considered this comment; 
however, WIOA sec. 122 explicitly states that the Governor, in 
consultation with the State WDB, is to establish the criteria, 
information requirements, and procedures governing the eligibility of 
providers and programs and the Department will not create an additional 
requirement that the Governor obtain mutual consent of the Local WDBs. 
Moreover, Sec.  680.430(d) already provides a role for the Local WDB in 
this process: It allows Local WDBs to make recommendations to the 
Governor on

[[Page 56129]]

the procedures used to determine eligibility of providers and programs. 
The Department encourages Local WDBs to make such suggestions and 
strongly encourages the Governor to carefully consider and incorporate 
the Local WDBs' suggestions, as they are most familiar with the 
training needs of their specific area. No changes were made to the 
regulatory text in response to this comment.
    Comments: One commenter recommended that the regulation explicitly 
require a Governor to make the process for becoming an ETP transparent 
and ensure adequate access for CBOs to become ETPs. The commenter 
stated that a transparent and accessible process is necessary in order 
to expand access to a variety of high-quality providers and programs 
for individuals seeking employment and a way out of poverty.
    Department Response: The Department notes that Sec.  680.410 was 
modified to include paragraph (d)(3)(i), which explicitly acknowledges 
that CBOs may be eligible training providers. Moreover, CBOs can 
provide training through training contracts with the Local WDB under 
Sec.  680.320. The Department agrees that a transparent process is 
important. Section 680.450(c) requires the Governor to solicit and take 
into consideration recommendations from Local WDBs and providers, 
provide an opportunity for interested members of the public to comment, 
and designate a specific time for doing these things. Additionally, 
Sec.  680.460(e) requires that the Governor's procedures be described 
in the State Plan, which is subject to the public comment requirements 
for State Plans. Because the Department concludes the process will 
already be transparent as public comment is required in the development 
of the procedures and in the development of the State Plan, no changes 
were made to the regulatory text in response to this comment.
    Comments: Another commenter recommended that ``may'' be changed to 
``must'' in Sec.  680.430(c)(2), to ensure that States with large 
Indian, Alaska Native and Native Hawaiian populations focus attention 
on the special circumstances of these populations.
    Department Response: The Department notes that Sec.  680.430(c) 
requires the Local WDB to carry out the activities in Sec.  
680.430(c)(2) and already uses the term ``must.'' This section of the 
regulation implements WIOA sec. 107(d)(10)(E), which requires the Local 
WDB to work with the State to ``ensure there are sufficient numbers and 
types of providers of career services and training services (including 
eligible training providers with expertise in assisting individuals 
with disabilities and eligible training providers with expertise in 
assisting adults in need of adult education and literacy activities) 
serving the local area and providing the services involved in a manner 
that maximizes consumer choice, as well as providing opportunities that 
lead to competitive integrated employment for individuals with 
disabilities.'' This section is focused on ensuring consumer choice for 
individuals with disabilities and adults in need of adult education and 
literacy activities. However, the Department interprets Sec.  
680.430(c)(2) to ensure that there are sufficient numbers and types of 
providers of career services and training services, to include ensuring 
that such services are available to assist specific populations such as 
the Indian, Alaska Native, and Native Hawaiian populations. No changes 
to the regulatory text were made in response to these comments.
Section 680.440 [Reserved]
    The NPRM included a proposed Sec.  680.440 implementing WIOA sec. 
122(c), which allowed the Governor to establish a transition procedure 
for training providers eligible under WIA to maintain their eligibility 
and the eligibility of their programs under WIOA until December 31, 
2015. In this Final Rule, the Department has removed Sec.  680.440 in 
its entirety because the time during which providers could retain their 
eligibility under WIA into WIOA has elapsed. Therefore, this provision 
is no longer necessary. Although this provision is not in the Final 
Rule, the Department received several comments on the proposed rule and 
is addressing them below.
    Comments: Commenters addressed the Department's proposed timeline 
and transition procedures for implementation of the continued 
eligibility provisions for ETPs eligible under WIA. A handful of 
commenters expressed support for exempting ETPs eligible under WIA from 
initial eligibility procedures and for providing these ETPs a 
transition period before requiring compliance with the application 
procedures to establish continued eligibility.
    A number of commenters requested that the Department allow States 
more time to implement the continued eligibility procedures. One 
commenter recommended that the Department extend the time allowed for 
transition of ETPs to meet the new requirements under WIOA until June 
30, 2016. Another commenter recommended that the Department allow all 
ETPs to receive initial and/or subsequent eligibility under WIA 
regulations until the State publishes and implements its new 
eligibility procedures, no later than June 30, 2016, reasoning that 
this approach would be consistent with the Department's transition 
authority in sec. 503 of WIOA. One commenter cautioned that the 
procedures for initial and continued eligibility are lengthy and that 
there would not be enough time for implementation, then urged the 
Department to adopt more flexible procedures for easier implementation.
    A few commenters recommended that a waiver provision be added in 
the WIOA Final Rule relating to the application for continued 
eligibility of ETPs. Another commenter recommended a longer period of 
transition (i.e., more than 12 months) because of the additional 
information required from applicants to become an ETP under WIOA as 
well as the additional programming needed to electronically capture 
this information.
    One commenter recommended that States be allowed to use existing 
procedures for new providers and develop and implement new procedures 
by July 1, 2016, consistent with the start date of Unified State Plans. 
The commenter reasoned that this timeframe would allow States to 
identify best procedures and update software programming and user 
training and communicate these to potential providers. Other commenters 
recommended that the timeframe relevant in Sec.  680.440 be determined 
by each individual State policy as determined by the Governor, without 
providing additional detail about the specific activities of concern. 
One commenter requested that continued eligibility be implemented as a 
phased transition.
    Department Response: In order to facilitate the transition from WIA 
to WIOA and give the states sufficient time to create robust 
eligibility policies and procedures for ETPs, the Department exercised 
its transition authority and issued guidance (Training and Employment 
Guidance Letter (TEGL) 41-14, Change 1) that extended the timeline for 
implementation of continued eligibility requirements for training 
providers eligible under WIA by 6 months through June 30, 2016, unless 
the Governor determined that an earlier date was possible. While this 
is not the 12-month extension requested by a commenter, the Department 
concluded this was sufficient time for States to implement the 
continued eligibility procedures. The Department has chosen not to 
regulate waiver policy in the Final Rule.

[[Page 56130]]

    WIOA sec. 122(b)(4)(B) requires providers not previously approved 
under WIA to complete the initial eligibility procedure. WIOA sec. 
122(i) requires that the Governor and Local WDBs implement these 
requirements no later than 12 months after the date of enactment. 
Although States are required to implement new procedures for initial 
eligibility and continued eligibility, rather than using existing 
procedures, the regulation at Sec.  680.460(f)(1)(v) allows the 
Governor to use alternate factors for performance until performance 
information is available to establish continued eligibility. The 
Department notes that the Governor has discretion to determine what the 
alternate factors for performance are; thus the Governor's procedure 
may take into account existing performance information. Moreover, the 
regulation at Sec.  680.450(e)(2) requires the initial eligibility 
procedures to take into account ``a factor related to'' the indicators 
of performance which may take into account existing performance 
information.
    It is unclear what the commenter is suggesting by a ``phased 
transition.'' The Department notes that the Governor's transition 
procedures could have been implemented in phases if the Governor chose 
to conduct the transition this way, as long as the continued 
eligibility procedures were implemented in a timely way to ensure that 
continued eligibility was established prior to the end of the 
transition period in that State, which, consistent with ETA guidance, 
could have extended no later than June 30, 2016.
    The Department notes that it also received comments on this section 
related to the eligible training provider annual performance report 
required under WIOA sec. 116(d)(4). The Department addresses these 
comments and provides responses in the preamble to 20 CFR 677.230 (see 
Joint WIOA Final Rule).
    Comments: Several commenters expressed confusion about how 
providers designated under WIA between WIOA's enactment on July 22, 
2014, and implementation of WIOA's ETP provisions on July 22, 2015, 
were to be treated. One commenter requested that the Department clarify 
the date at which States are no longer allowed to use their old 
eligibility-determination process. Another commenter recommended either 
grandfathering or offering States the discretion to allow training 
providers that become eligible under WIA between July 22, 2014, and 
June 30, 2015, to remain eligible training providers until December 31, 
2015, or to an earlier date according to the Governor's transition 
procedures.
    Department Response: The Department is clarifying that WIOA sec. 
122(i) covers all providers and programs that were previously eligible 
under WIA. Thus, any provider that was previously eligible under WIA 
procedures, regardless of whether this was before or after the date of 
WIOA's enactment on July 22, 2014, is subject to the continued 
eligibility procedures under WIOA. This reading is consistent with WIOA 
and with the Department's intention stated in the NPRM to grandfather 
all WIA providers through the duration of the Governor's transition 
period. The Department modified Sec.  680.460(a)(1) to make the 
treatment of providers and programs eligible under WIA consistent, 
regardless of whether they became eligible before, on, or after July 
21, 2014. This interpretation is in accord with WIOA secs. 122(b)(4)(B) 
and 122(i) because all WIA providers determined eligible through June 
30, 2015, were deemed eligible under the version of WIA sec. 122 
requirements in effect on July 21, 2014 (the day before enactment of 
WIOA).
Section 680.450 What is the initial eligibility process for new 
providers and programs?
    Section 680.450 establishes the requirements for the initial 
eligibility procedures for new providers and programs. The Department 
made non-substantive edits for consistency in how the Department uses 
terms throughout this section. The Department also made substantive 
edits to paragraph (b), which are discussed in detail below.
    Comments: The Department received comments addressing various 
issues relating to Sec.  680.450. Several commenters expressed support 
for the proposed initial eligibility process. Other commenters 
suggested that provisions for waivers be included in Sec. Sec.  680.450 
(initial eligibility) and 680.460 (continued eligibility) of the Final 
Rule, and that WDBs be given authority to waive eligibility 
requirements on a case-by-case basis where it is in the best interest 
of those receiving training services. Some commenters recommended that 
Governors be given authority to approve public higher education schools 
automatically, similar to the proposed approach for registered 
apprenticeship programs, including eliminating the need for these 
institutions to be subject to initial or continued eligibility. These 
commenters stated that this was a duplicative burden on these 
institutions that are already required to report on programs to their 
primary funding sources. Several commenters recommended that National 
Farmworker Jobs Program (NFJP) grantees be presumed to be ETPs and be 
included on their States' ETPLs automatically to encourage and 
streamline the ability of WIOA adult and dislocated worker programs to 
co-enroll participants who also qualify for NFJP. In addition, one 
commenter expressed concern that its State would be unable to implement 
a new process that includes creating a technical system to track 
provider performance and other new WIOA requirements, as well as have 
public comment and implement by July 22, 2015, the date by which 
initial eligibility procedures are required to be implemented. Another 
commenter stated that even though local areas may set more stringent 
standards for performance for eligible training providers, because 
providers can apply to any Local WDB for approval to the statewide 
list, these more stringent standards are ineffective in ensuring 
provider quality. This commenter suggested that local areas should have 
full control over their Eligible Training Provider List, provided 
minimum standards are met.
    Department Response: The Department is clarifying in this preamble 
that States and local areas are the only entities authorized to 
determine new provider or program eligibility under WIOA. WIOA sec. 
122(a) requires the Governor to determine eligibility procedures. State 
and Local WDBs do not have authority under WIOA to waive initial or 
continued eligibility requirements. The Department is therefore not 
including such waiver authority in this subpart. However, the 
eligibility requirements in the regulations are quite flexible because 
although they require the Governor to take certain factors into 
account, they do not proscribe what weight is given to any one factor. 
Additionally, Local WDBs may use contractual arrangements under 
Sec. Sec.  680.320 and 680.530 to ensure that training is available. 
Automatic approval of higher education institutions or NFJP grantees as 
eligible training providers is not permitted under WIOA; these 
institutions and grantees will need to apply for initial eligibility in 
the same manner as all other training providers. In response to 
comments about duplicative burden, the Department acknowledges that 
there may be some duplication of requirements. However, the Department 
encourages these institutions to examine where there is overlap in the 
reporting requirements to minimize duplicative

[[Page 56131]]

work in complying with all of the institution's reporting requirements. 
Therefore, no change was made in response to this comment.
    The Department has made no change to the timeline for implementing 
initial eligibility procedures in order for new training providers and 
programs to be included on the State Eligible Training Provider and 
Programs List. The States must implement initial eligibility procedures 
within 1 year of WIOA's enactment as is required under WIOA sec. 
122(c).
    The Department corrected the reference to paragraph (d) in Sec.  
680.450(c) to paragraph (e).
    Comments: Several commenters provided input on the specific 
performance information that the Governor of each State is required to 
request from potential training providers under Sec.  680.450(e).
    Department Response: The Department considered commenters' 
suggestions on what kinds of information could be considered a ``factor 
related to the indicators of performance'' to meet Sec.  680.450(e)'s 
requirement. However, with regard to the comments on the performance 
information requirements in Sec.  680.450(e), no substantive changes 
were made to the regulatory text in response to these comments. In 
part, because the factors related to performance that a Governor must 
take into account to establish initial eligibility are set forth in 
WIOA sec. 122, the regulations are consistent with the statutory 
requirements. Moreover, WIOA sec. 122 gives the Governor the discretion 
to determine the procedures for initial eligibility and establish 
minimum performance standards and the Department wants to allow the 
Governor the flexibility to establish procedures that are most relevant 
and applicable to the Governor's State.
    Section 680.450(e)(2) requires the initial eligibility procedures 
to take into account ``a factor related to the indicators of 
performance . . . .'' This does not mandate a specific factor and it is 
at the Governor's discretion to determine what information to require 
for the applicant to meet this requirement. The Department has listed 
below the comments and responses received on the requirement at Sec.  
680.450(e)(2).
    Finally, the Department notes that it revised Sec.  680.450(e)(4) 
to clarify its implementation of WIOA sec. 122(b)(4)(E)(iii). This 
provision of WIOA permits the Governor to require other factors that 
indicate high-quality training services, including the factor described 
at WIOA sec. 122(b)(1)(H). WIOA sec. 122(b)(1)(H) requires an analysis 
of the quality of a program of training services, including programs of 
training services that lead to recognized postsecondary credentials. 
Therefore, the Department has made a minor revision to Sec.  
680.450(e)(4) to reflect that the Governor's criteria may require 
applicants to provide information demonstrating the program is a high 
quality program, which can include information related to training 
services that lead to recognized postsecondary credentials.
    Comments: A few commenters described the burden associated with the 
proposed performance information requirements and cautioned that they 
may limit the options available to training customers. Similarly, one 
commenter stated that the performance information requirements under 
both Sec. Sec.  680.450 and 680.460 were too burdensome for small 
training providers, who are generally not equipped for tracking 
employment outcomes.
    Department Response: The Department considered commenters' concerns 
about the burden of providing performance information under Sec. Sec.  
680.450 and 680.460. However, the information required for submission 
is set out in WIOA sec. 122 and the sections implement WIOA's 
requirements for initial and continued ETP eligibility. The Department 
encourages States and providers to consider the benefit to the programs 
of training of having robust performance outcome data that can be used 
to evaluate and advertise the effectiveness of their programs of 
training. No changes were made to the regulatory text in response to 
these comments.
    Comments: A commenter cautioned against requiring past performance 
information for new training providers that do not have past 
performance information to evaluate. Another commenter recommended 
requiring applicant training providers to present average earning rates 
after exit rather than median earnings.
    Department Response: The Department considered the commenter's 
recommendation, but determined that the Governor's flexibility to 
determine what factors related to the performance indicators will be 
selected as part of the initial eligibility criteria is sufficient. 
This includes determining what factor related to performance may be 
used for new training providers. The Department notes that while the 
Governor has discretion to determine the factor related to performance 
that may be used for initial eligibility, once eligibility is 
established, WIOA sec. 116(b)(2)(A)(i)(III) requires approved ETP 
programs to report on median earnings. However, this does not prohibit 
the Governor from also requiring ETP programs to report on average 
earnings. No changes were made to the regulatory text in response to 
these comments.
    Comments: One commenter requested changes in training provider 
eligibility criteria for providers that are different from WIA 
occupational skill providers (e.g., pre-apprenticeships, 
entrepreneurial training, customized and incumbent worker training, and 
youth services).
    Department Response: As explained above, the provider eligibility 
criteria are left to the Governor's discretion. No changes have been 
made to the regulatory text in response to this comment. However, the 
Department notes that it is within the Governor's discretion to have 
specific eligibility criteria for providers that provide training that 
is distinct from traditional WIA-occupational skill providers, as long 
as the criteria also comply with Sec. Sec.  680.450 and 680.460 and are 
included in the State's policies. Section 680.530 and its preamble 
provide additional information on how States may provide customized and 
incumbent worker training.
    Comments: One commenter asked whether each State is required to 
specify which elements from Sec.  680.450(e)(2) training providers need 
to provide information on or whether the training provider can submit 
information on any of the factors listed.
    Department Response: The State procedure must specify which 
elements from Sec.  680.450(e)(2) training providers need to provide 
information on and what verifiable information will satisfy this 
requirement.
    Comments: Another commenter sought clarification of the definition 
of ``partnership with a business'' as used in NPRM Sec.  680.450(e)(3), 
and asked how this would impact the eligibility of a training provider.
    Department Response: The Department is clarifying that information 
about whether a provider is ``in a partnership with a business'' under 
Sec.  680.450(e)(3) could include information about the quality and 
quantity of employer partnerships. However, the Department did not 
include this example, or others in the regulation text, as States may 
have other methods for determining whether the provider is in a 
partnership with a business and including one example may be seen as 
limiting State options. The impact of this factor on the eligibility of 
the training provider is

[[Page 56132]]

determined by the Governor's initial eligibility procedure.
    Comments: One commenter requested flexibility in initial 
eligibility requirements for training providers in rural areas and 
those serving the hardest to serve populations.
    Department Response: The Governor may require additional 
information in order to ensure that the needs of the State are being 
met, including in rural areas and in serving hard-to-serve populations. 
The Governor's procedure determines how these additional factors may 
impact initial eligibility. In addition, the Local WDB must work with 
the State to ensure there are sufficient numbers and types of providers 
of training services, including eligible training providers with 
expertise in assisting individuals with disabilities and eligible 
training providers with expertise in assisting adults in need of adult 
education and literacy activities described under WIOA sec. 
107(d)(10)(E), serving the local area. No changes were made to the 
regulatory text in response to this comment.
    Comments: Another commenter urged the Department to require new 
applicants to be subject to the same anti-discrimination provisions as 
registered apprenticeship programs under 29 CFR part 30. This commenter 
suggested that new applicants provide the following: A plan for 
recruitment to ensure underrepresented populations have access to 
nontraditional opportunities; capacity to deliver equitable training 
practices and classroom and OJT training environments that support 
underrepresented populations' success and retention in the training 
program; and support services, case management, mentorship, and other 
strategies necessary for underrepresented populations' success in 
training and employment.
    Department Response: Title 29 CFR part 30 governs the policies and 
procedures to promote equality of opportunity in apprenticeship 
programs registered with the U.S. Department of Labor and State 
apprenticeship programs registered with recognized State apprenticeship 
agencies. Therefore, the Department will not apply 29 CFR part 30 to 
all eligible training providers. However, for all other programs, the 
Department notes that the Governor has discretion to consider a wide 
range of factors when determining initial and continuing eligibility 
under Sec. Sec.  680.450 and 680.460. Therefore, if the Governor wishes 
to consider factors such as an eligible training provider's treatment 
of underrepresented populations, this is within the Governor's 
discretion. The Department has determined that applying criteria 
developed for one type of program of training to all types of training 
programs may unnecessarily limit the types of programs of training 
available to participants in WIOA programs. No changes were made to the 
regulatory text in response to this comment.
    Comments: The Department also received responses to the specific 
solicitation in the NPRM requesting comments about the types of 
verifiable program-specific information the Governor must require from 
providers seeking initial eligibility as ETPs under Sec.  680.450(e).
    Department Response: The Department has carefully analyzed the 
comments regarding verifiable program specific performance information, 
including the suggestions of specific factors and methods of providing 
verifiable information in the least costly manner. The Department has 
determined that no substantive changes to regulatory text are necessary 
in response to these comments. Instead, the Department is clarifying 
that the Governor and the States have discretion when developing their 
initial eligibility criteria and requirements to decide what 
constitutes verifiable program specific performance information and the 
factors related to indicators of performance. This flexibility will 
enable States to meet the individual needs of each State and allow each 
State to establish requirements that the ETPs and the State are able to 
manage given their current levels of technology. Examples of potential 
criteria include average earnings rates, average cost of training, and 
criteria based on information available in UI wage records. However, 
these examples are not intended to be an exhaustive list and States are 
not limited to the Department's suggestions.
    In meeting the requirement that the factor be ``related'' to the 
WIOA sec. 116 reporting requirements in Sec.  680.450(e)(2), this 
factor need not be limited to WIOA participants, even though under sec. 
116 the primary indicators of performance require reporting on WIOA 
participants. This is because programs of training applying for initial 
eligibility will be applying to serve WIOA participants for the first 
time and will not have results available for WIOA participants.
    Comments: One commenter stated that the easiest-to-verify 
information that providers could furnish would be customer-level data 
that States can match to unemployment insurance (UI) wage records to 
determine employment outcomes. The commenter stated that providers 
would be expected to submit that information if they are placed on the 
ETPL because this information would be required for the ETP annual 
performance report. The commenter asserted that requiring information 
for an eligibility determination that matches information required for 
the ETP annual performance report would reduce costs for both providers 
and States and increase data integrity. A few commenters stated that 
the most valid, reliable, and efficient way to measure training 
providers' performance is for the State to first collect a small set of 
seed records from each provider for each student (e.g., social security 
number, program of study, start date, end date, credential, and 
demographic characteristics) and then link the records with UI wage 
records and other administrative records used to determine outcomes.
    Department Response: The Department notes that these are potential 
options for States and the Governor may choose to utilize these 
approaches. However, the Department has chosen not to require States to 
implement these approaches for initial eligibility to give States the 
flexibility to determine the most effective method for obtaining 
verifiable program specific performance information for determining 
initial eligibility. As explained earlier, the Department recognizes 
that there is overlap between what is required for eligibility and the 
WIOA sec. 116(d)(4) ETP annual performance report. The Department 
strongly encourages States and ETPs to work together to find 
efficiencies in how information can be reported in the performance 
report and for eligibility purposes. No changes were made to the 
regulatory text in response to these comments.
    Comments: Another commenter stated that the regulations should 
encourage ETPs to focus their follow-up efforts on participants who do 
not appear in the UI wage records, relieving data collection burdens on 
the individual participants and the non-public training providers.
    Department Response: The Department recognizes that social security 
numbers will not be available for each participant and has determined 
that supplemental follow-up methods will be allowable. The use of 
supplemental information in performance reporting is further discussed 
in 20 CFR part 677 (see Joint WIOA Final Rule) and the associated ICR.
    Comments: Another commenter requested that the system used to 
gather ETP data should be accurate by nature

[[Page 56133]]

so that Local WDBs are not required to monitor or ensure accuracy of 
information.
    Department Response: The Governor or the Governor's designated SWA 
(or appropriate State entity) is responsible for ensuring that programs 
meet eligibility criteria and performance levels established by the 
State, including verifying the accuracy of the information. The Local 
WDB must carry out the procedures assigned to the Local WDB by the 
State, including monitoring and ensuring accuracy of the information. 
No changes were made to the regulatory text in response to this 
comment.
    Comments: One commenter recommended specific performance 
information to be collected, including average cost of training to 
include tuition, supplies, and supportive service needs; loan default 
rates; employer partners; and the completion rates of all students 
rather than the exit rates.
    Department Response: The Departments have included in the subpart 
only the performance information required by WIOA secs. 122 and 116. 
However, as described in Sec.  680.490(c), the Department notes that 
the Governor may require additional specific performance information 
that the Governor determines to be appropriate to determine or maintain 
eligibility. No changes were made to the regulatory text in response to 
this comment.
    Comments: One commenter stated that wages and retention should be 
verified using the employment base wage.
    Department Response: The Department is unclear what the commenter 
intends by ``employment base wage.'' However, the Department has chosen 
not to require States to implement these approaches for initial 
eligibility. States have the flexibility to determine the most 
efficient method for obtaining and verifying program specific 
performance information for determining initial eligibility.
    Comments: A few commenters suggested that States should be allowed 
to use supplemental/existing data because most schools are already 
required to report on programs to their primary funding sources, making 
the ETP reporting requirement a duplicative effort. These commenters 
asserted that the local area should determine if a training provider's 
performance is acceptable and whether the training provider should 
continue to be listed on the ETPL.
    Department Response: The Department recognizes that some of the 
information ETPs are currently reporting might overlap with the 
information required for reporting for initial eligibility. The 
Department encourages States to examine closely WIOA reporting 
requirements and the other requirements ETPs are subject to, to find 
overlap and reporting efficiencies. Regarding the commenter's 
suggestion that the local area determine if a training provider's 
performance is acceptable, the Department notes that WIOA sec. 
122(b)(3) and Sec.  680.430(e) provide that Local WDBs can establish 
criteria and information requirements, in addition to the Governor's, 
and require higher levels of performance than the Governor for purposes 
of determining the continuing eligibility of providers to receive funds 
to provide training services in the Local WDB's area. No changes to the 
regulatory text have been made in response to this comment.
    Comments: Some commenters recommended that the Department allow 
States to determine the definition of verifiable information. Another 
commenter requested clarification regarding the ``program specific'' 
indicators required by the Department and recommended that States be 
allowed the flexibility to define what those mandated indicators will 
be through their ETP State policy.
    Department Response: As explained above, this subpart leaves the 
Governor the flexibility to determine what constitutes ``verifiable 
program-specific information.'' No changes were made to the regulatory 
text in response to this comment.
    Comments: One commenter suggested that providers report data on 
(and States determine eligibility for) all similar degree programs as 
one. For example, all bachelor's degree programs at that provider are 
reporting as one bachelor's degree program, rather than breaking them 
out into bachelor's in education, bachelor's in biology, bachelor's in 
math, etc. This commenter also suggested that providers report data on 
(and States determine eligibility for) the main program of study, 
rather than all of the individual courses that make up the program. 
Further, this commenter recommended that providers do not need to 
report on (and States determine eligibility for) courses that are pre-
vocational intensive service or skills upgrade courses, or courses that 
cross industry sectors and occupations or which are less than 3 days in 
duration.
    Department Response: In response to the recommendation that 
eligibility be determined generally at the degree level, the Department 
is clarifying that eligibility is determined at the level of ``program 
of training'' as described in Sec.  680.420, rather than at the class, 
course or general degree level. A program of training may involve one 
course or a course of fewer than 3 days in duration, if the course 
leads to one of the outcomes as described in the definition of a 
program of training services at Sec.  680.420. In order for such a 
program of training to receive WIOA title I adult, dislocated worker, 
or youth training funds through an ITA, the program must be determined 
eligible and is therefore subject to reporting requirements. Registered 
apprenticeship programs are an exception to the eligibility 
requirements. Work-based training options do not receive training funds 
through an ITA, and are described at Sec.  680.530. No changes were 
made to the regulatory text in response to this comment.
    Comments: One commenter recommended that States be given an 
additional 2 years to implement the performance information 
requirements in Sec. Sec.  680.450(e) and 680.460(f). After stating 
that the Department does not anticipate complete performance data 
derived from wages until PY 2018, a few commenters suggested allowing 
eligibility to be based on completion rates and credentials until 
complete employment and wage performance data can be collected.
    Department Response: The Department has determined that a 
regulation change is not necessary given the flexibility in the 
regulation at Sec. Sec.  680.460(f)(1) and 680.450(e)(2). Under Sec.  
680.460(f)(1), the State may use alternate factors for performance 
until data from the conclusion of each performance indicator's first 
data cycle is available. Under Sec.  680.450(e)(2), the Governor's 
procedure must require applicant providers to provide information 
addressing a factor related to performance indicators, meaning that the 
Governor's initial eligibility procedure may not require the provision 
of the results for each of the indicators of performance. The required 
factors for initial and continued eligibility allow the Governor's 
procedure to determine whether to set minimum performance standards and 
how much emphasis to put on any one factor that is taken into account.
    Although the Department determined no change to the regulation was 
necessary in response to those comments, the Department has made a 
revision to Sec.  680.450(f) by inserting the word ``performance'' 
between ``minimum standards'' to clarify that the minimum standards a 
Governor may set refer to minimum performance standards. Additionally, 
in response to commenters who requested that initial

[[Page 56134]]

eligibility last for longer than a year because more time is needed to 
generate enough exiters to provide a meaningful outcome measurement 
given the data lag for performance indicators, the Department is 
clarifying that Sec.  680.460(f)(1)(v) allows the Governor to take into 
account alternate factors related to the performance indicators 
described in Sec.  680.460(f)(1) until performance information is 
available. Similarly, for initial eligibility, the Governor may use a 
factor related to performance in determining eligibility. Thus, the 
Governor's ability to establish continued eligibility procedures and to 
take other factors into account enable the State to build in 
consideration of the limits of initially eligible training providers to 
supply performance information after only 1 year. The Department notes 
that it also plans to launch an intensive technical assistance effort.
    Comments: A commenter requested that initial eligibility under 
Sec.  680.450(g) last longer than 1 year because more time is needed to 
generate enough exiters to provide a meaningful outcome measurement 
given the data lag for performance indicators, such as earnings in the 
fourth quarter after program exit.
    Department Response: The Department has determined that initial 
eligibility will be maintained at 1 year. WIOA sec. 122(b)(4)(B) 
provides that initial eligibility is ``for only 1 fiscal year.'' 
However, because program eligibility is not aligned with a fiscal year, 
the Department has removed the word ``fiscal'' from paragraph (g) in 
this section. Since initial eligibility may be determined at any time 
during a calendar year or program year, requiring initial eligibility 
to be for 1 year, rather than 1 fiscal year enables the State to 
establish a 12-month initial eligibility period for each program.
    Comments: One commenter recommended that the Department launch an 
intensive technical assistance effort for States to develop the IT 
infrastructure needed to meet these requirements. Another commenter 
requested that the regulation allow States and localities to waive the 
reporting requirements for libraries when developing lists of ETPs in 
the first year, on the grounds that libraries would be prevented from 
providing training with WIOA funding without such a waiver. A few 
commenters stated that reductions in overall funding and limited 
funding for the Governor's set-aside will make performance reporting 
requirements, including the need to modify data reporting systems, 
difficult. As a solution to this concern, commenters recommended that 
the full Governor's set-aside be reinstated. One commenter encouraged 
the Department to pay particular attention to the impact that the 
requirements would have upon students that have expressed a desire to 
reengage back into the educational system and obtain their accredited 
high school diploma. The commenter made several specific 
recommendations about programs that would be helpful for this 
particular population, including making State WIOA program eligibility 
to be dictated by regional accreditation.
    Department Response: The Department has already deployed technical 
assistance for ETP requirements, including webinars and a Quick Start 
Action Planner and plans to engage in a technical assistance effort to 
assist with ensuring adequate information technology infrastructure to 
implement the new WIOA requirements.
    The Department has chosen not to regulate waiver policy in the 
Final Rule. The Department does not have authority under WIOA to 
provide States and local areas the ability to grant waivers. Therefore, 
the Department has not included such waiver provisions in the Final 
Rule for libraries. However, the Department notes that small CBOs, such 
as libraries, can provide programs of training services under contracts 
with local areas as described at Sec. Sec.  680.530 and 680.320. 
Programs of training services provided under such contracts are not 
eligible training providers and are not included on the State ETPL. 
Thus, they are not required to comply with the requirements to be on 
and stay on the list. The Department additionally notes that because 
CBOs providing training services through a contract are not on the 
State ETPL, they are also not required to submit the WIOA sec. 
116(d)(4) ETP annual performance report.
    The set-aside amount is determined by Congress as part of the 
annual appropriations process and is therefore outside the scope of 
this regulation.
    The Governor's procedure for initial eligibility may require other 
information in order to demonstrate high quality training services and 
such information may include regional accreditation and the ability to 
serve students who wish to reengage the educational system. As 
described under Sec.  680.420, a program of training services may lead 
to a secondary diploma or its equivalent, as long as this is consistent 
with Sec.  680.350. No changes to the regulatory text were made in 
response to this comment.
    However, the Department has made a change to the regulatory text at 
Sec.  680.450(b) to align with changes made to Sec.  680.470, providing 
that apprenticeship programs registered under the National 
Apprenticeship Act are exempt from initial eligibility procedures and 
must be included and maintained on the State ETPL unless the program is 
removed from the list for the reasons in Sec.  680.470. This change was 
made to conform with changes made to Sec.  680.470, which are discussed 
in the preamble corresponding to that section. Although this is 
discussed more fully in the preamble to 20 CFR 677.230 (see Joint WIOA 
Final Rule), the Department notes that registered apprenticeship 
programs are not required to submit the WIOA sec. 116(d)(4) ETP annual 
performance report. Outcomes for WIOA participants in WIOA-funded 
registered apprenticeship programs must still be included in the 
State's annual performance report under WIOA sec. 116(d)(2). The 
Department also made a non-substantive change to this provision by 
removing the word ``corresponding'' from the phrase ``corresponding 
program'' as the word ``corresponding'' did not provide needed 
clarification and therefore was unnecessary.
Section 680.460 What is the application procedure for continued 
eligibility?
    Section 680.460 sets out the requirements for the application 
procedure for continued eligibility. The Department has made non-
substantive edits to this section for consistency with how the 
Department uses terms throughout the regulation. The Department has 
also made substantive revisions to paragraphs (c), (f)(1) and (10), and 
(j). The Department made edits to (i) to clarify the requirements for 
biennial review of eligibility information. These changes are discussed 
in further detail below.
    Comments: Several commenters supported requiring public comment 
during the development of continued ETP eligibility procedures as well 
as allowing the Governor discretion to set the timetable for 
consultation and public comment. One commenter recommended that the 
regulations be revised to provide assurance that the biennial review is 
transparent and that it allows for adequate input from employers, as 
well as to provide guidance on specific ways in which Governors may 
hold providers accountable for meeting the needs of local employers. 
Another commenter suggested that the Department provide more structure 
for the process of including education programs on the ETPL and include 
specific examples for

[[Page 56135]]

gauging program quality by demanding standards of effective practice.
    Department Response: The Department has determined that no changes 
to the regulatory text are necessary to address the concerns raised by 
commenters as the section already achieves the commenters' suggestions. 
The Governor's procedure for biennial review may take into 
consideration factors to ensure that the State will meet the needs of 
local employers. The Governor establishes the procedure after taking 
into consideration recommendations from Local WDBs and training 
providers and providing an opportunity for comment from interested 
members of the public, including representatives of business and labor 
organizations as required by Sec.  680.460(b)(1) through (3). In 
addition, States must describe the eligibility procedures in their 
State Plans, which are subject to public comment requirements that 
include allowing for input from key stakeholders such as employers. 
This is further discussed in 20 CFR part 676 (see Joint WIOA Final 
Rule) and the WIOA State Plan ICR. Therefore, commenters' concerns 
about public comment during the development of the policies are already 
addressed.
    In response to commenters' concerns about the Governor setting up a 
timetable for consultation with the public, the Department notes that 
Sec.  680.460(b)(3) requires the Governor to set up a time period for 
soliciting and considering recommendations from Local WDBs and 
providers and giving the public an opportunity for comment. However, 
this section of the regulation does not prescribe a specific time 
period. Therefore, the Governor has discretion to set up a timetable 
for considering recommendations and public comment. Per Sec.  
680.460(f)(4), the Governor must take into account the degree to which 
programs of training relate to in-demand industry sectors and 
occupations in the State. Further, as described in Sec.  
680.460(f)(11), the Governor may take into account other factors such 
as ensuring that one-stop centers are meeting the needs of local 
employers and participants. It is unclear what additional structure the 
commenter is recommending in order to gauge program quality by 
demanding standards of effective practice. WIOA performance 
accountability requirements, as addressed in the ETP performance 
reports in 20 CFR 677.230 (see Joint WIOA Final Rule), are highly 
structured. Through technical assistance, States will have 
opportunities to share effective practices to gauge program quality.
    The Department modified proposed Sec.  680.460(c). In the NPRM, 
this paragraph required programs registered under the National 
Apprenticeship Act (NAA) to be included and maintained on the list for 
as long as the program was registered and required the Governor's 
eligibility procedures to include a mechanism for registered 
apprenticeship programs to indicate interest in being on the list as 
described in Sec.  680.470. The Department reorganized this paragraph 
for clarity, moving the sentence that procedures for including 
registered apprenticeship programs on the list are found in Sec.  
680.470 to the beginning of the paragraph, instead of the end of the 
paragraph, and made a substantive revision for consistency with Sec.  
680.470. This section now provides that programs registered under the 
NAA are automatically eligible to be on the State's list and must 
remain on the State's list unless they are removed from the list for 
the reasons set forth in Sec.  680.470. This is a conforming edit to 
changes made in Sec.  680.470 and more can be read about that change 
below. The Department also made a non-substantive edit to this section 
removing the word ``corresponding'' as it was unnecessary.
    Comments: Many commenters responded to our request for comment 
under proposed Sec.  680.460(f)(1) on the alternate factors that may be 
used until performance data are available. The Department revised Sec.  
680.460(f), breaking the requirements into separate subsections for 
clarity and consistency with WIOA sec. 122(b)(1)(A)(i) and (ii). The 
flexibility for the Governor to use alternate factors until performance 
data are available is now located at Sec.  680.460(f)(1)(v). The 
regulation at Sec.  680.460(f)(1)(v) allows the Governor to use 
alternate factors for performance until performance information is 
available to establish continued eligibility. Several commenters 
suggested that alternate factors for performance be left to the 
Governor and Local WDBs to decide, while others offered a variety of 
specific alternate factors that the Governor could take into account. 
These suggestions included: WIA criteria; use of other information 
already supplied for State and Federal accountability measures, such as 
Carl D. Perkins Act performance indicators; three letters from local 
employers; completion rates; credentials; gainful employment measure; 
and graduation rates.
    Department Response: The Department acknowledges that the 
suggestions provided by commenters offer appropriate options for the 
Governor's procedure, but has chosen not to include these in the 
regulation text to give Governors flexibility in choosing what 
performance information to use. In this way, the Governor's procedure 
can be tailored to the best performance data available among applicant 
training providers in that State.
    Comments: A few commenters recommended a separate, lower set of 
performance standards for training providers who serve hard to serve 
participants, such as tribal colleges and programs specifically 
designed to provide combined workplace language and workplace skills to 
new Americans needing English literacy instructions. A few commenters 
recommended allowing States and local areas to grant waivers to CBOs 
for the reporting of data to ensure that these entities have the 
capacity to qualify as ETPs. However, a few other commenters stated 
that CBOs, including those serving hard to serve participants, must be 
held to the same standards as any other provider on the list.
    Department Response: The regulatory language authorizes the 
Governor to take into account such factors as meeting the needs of 
hard-to-serve participants and programs specifically designed to 
provide combined workplace language and workplace skills to new 
Americans needing English literacy instruction when developing the 
State's continued eligibility procedures. Section 680.460(f)(9) 
specifically requires the Governor to take into account the ability of 
providers to provide training services to individuals who are employed 
and individuals with barriers to employment. In addition, local areas 
may enter into contracts to provide training services under specific 
circumstances, including with CBOs. Because CBOs which are providing 
programs of training through contracts are not considered ETPs, they do 
not need to meet the initial and continuing eligibility requirements of 
this subpart. However, CBOs that are included in the State List of 
Eligible Training Providers and receive payment for the training 
services through ITAs, rather than contracts, are subject to the 
eligibility and reporting requirements of the State list. No changes to 
the regulatory text were made in response to these comments.
    Comments: Commenters addressed the performance information under 
Sec.  680.460(g) that the Governor must require for continued 
eligibility for the State list of ETPs. One commenter questioned 
whether 20 CFR 677.230, which requires reporting performance

[[Page 56136]]

information on all participants, is in conflict with Sec.  680.460(g) 
which requires reporting on WIOA-participants only.
    Department Response: The Department does not consider these 
provisions as being in conflict as they are derived from different 
statutory provisions and serve different purposes under WIOA. The ETP 
annual performance report is required by WIOA sec. 116(d)(4) and 
explicitly requires information on the levels of performance for all 
individuals in a program of study. As explained above, more information 
about this requirement can be found in 20 CFR 677.230 and its 
corresponding preamble (see Joint WIOA Final Rule). Separately, the 
requirements for a training provider to continue to be on the State 
List of Eligible Training Providers and programs are found in WIOA sec. 
122, and sec. 122(b)(2)(A) explicitly identifies the performance 
information the ETP must provide for this purpose. Thus, the WIOA sec. 
116(d)(4) annual report is for reporting on performance, while the 
requirements in Sec.  680.460 are for staying on the State List of 
Eligible Providers and Programs. In order to continue to be eligible, 
the ETP must provide information on the performance accountability 
measures in sec. 116 of WIOA for ``participants'' whose training is 
funded under title I, subtitle B. However, the Department notes that 
both the Governor, under WIOA sec. 122(b)(1)(J), and the Local WDB, 
under WIOA sec. 122(b)(3), have authority to require additional data 
from ETPs, which might include data on all students. In addition, WIOA 
sec. 122(b)(1)(A)(ii) explicitly permits the Governor to require 
reporting on all individuals enrolled in the programs in which WIOA-
funded participants studied.
    Comments: Several commenters cited the potential problem of a small 
number of participants (``small in size'') when providing WIOA-
participant-only data. These commenters stated that the resulting data 
would be too small to yield useful outcome information and would risk 
revealing personally identifiable information (PII). Other commenters 
suggested that Sec.  680.460(g) specifically include instructions 
similar to those found in WIOA sec. 116(d)(6)(C), which states that the 
disaggregation of data for the State performance reports is not 
required when the number of participants is too small to yield 
statistically reliable information or when results would reveal PII 
about an individual participant. One commenter said that an alternative 
approach is needed for using performance results for management, 
provider selection, and public/consumer information, but did not 
specify what the alternative approach would be. Some commenters 
suggested that the State List require reporting on all students in 
order to yield a larger data set. One commenter urged the Department to 
require biannual reporting of all completers and placement numbers for 
the previous year utilizing a standardized template to collect data to 
ensure an educated training program selection process. Several 
commenters recommended that the materials to be considered when 
determining ETP continued eligibility include information reported to 
State agencies on Federal and State training programs other than WIOA 
title I, subtitle B, and asked for submission of performance results 
for all students and not just those who received training subsidized by 
WIOA title I adult or dislocated worker funds.
    However, several commenters supported a requirement that 
performance reports include only WIOA-funded students. One commenter 
cautioned that the cost for reporting all students and not just WIOA-
funded students by program could result in training providers not 
accepting WIOA-funded students to avoid the reporting burden. One 
commenter stated that in order to avoid revealing data on any 
individual, it would normally not be required to disclose performance 
information on any program with a small number of participants and that 
performance data would be relatively meaningless if too few individuals 
are in the performance cohort. This commenter recommended that the 
regulations specifically recognize that this information shouldn't be 
revealed for those programs with low participant numbers.
    Department Response: With respect to the privacy concerns that 
arise from the small numbers in participant data, the Department notes 
that the regulation already addresses this issue. Paragraph (e) of 
Sec.  680.500 addresses privacy concerns for the dissemination of the 
ETPL by requiring that the State List and accompanying information be 
made available in a manner that does not reveal personally identifiable 
information about an individual participant and that, in developing the 
information to accompany the State List of Eligible Training Providers 
and Programs, disclosure of personally identifiable information from an 
education record must be carried out in accordance with the Family 
Educational Rights and Privacy Act, including the circumstances 
relating to prior written consent. Accordingly, additional regulatory 
text for Sec.  680.460 is not needed. While the Governor must take into 
account all of the information listed in WIOA sec. 122(b)(1) in setting 
the criteria for eligibility on the State ETPL, the Department 
interprets WIOA sec. 122(b)(1)(A)(ii) to provide discretion to the 
Governor to determine whether reporting on all students is an 
``appropriate'' measure of performance outcomes under that paragraph. 
The Department is not regulating State eligibility procedures to 
require reporting on all students in order to yield a larger data set; 
however, the Governor may choose to do so as part of the State's 
eligibility procedures.
    With respect to the minimum size of a data set that would ensure 
participant confidentiality and the reliability of outcomes data, the 
Department has determined that States will maintain confidentiality and 
reliability of data by complying with relevant State law and with WIOA 
itself. WIOA sec. 122(d)(3) states that the State List and accompanying 
information must be made available to such participants and to members 
of the public through the one-stop delivery system in the State in a 
manner that does not reveal PII about an individual participant. WIOA 
sec. 122 does not require that the performance information that 
accompanies the State List be statistically reliable in the same way 
that WIOA sec. 116(d)(6)(C) does for the annual performance reports. 
Therefore, the Department has not regulated this as a requirement.
    In response to commenters suggesting that the Department require 
biannual reporting of all completers and placement numbers for the 
previous year utilizing a standardized template, the Department has 
chosen not to require a template for the State List of Eligible 
Training Providers. While a standardized template is required for the 
reporting of information in the ETP Performance Reports, as described 
in 20 CFR 677.230 (see Joint WIOA Final Rule), the Department has 
concluded that WIOA intends the development of the State List to be at 
the State's discretion in order to meet the needs of individuals 
seeking training in that State. In addition, the flexibility to 
determine the format and presentation of the State List enables the 
State to accommodate additional information that the Governor may 
choose to require as part of the State's eligibility procedures.
    In response to commenters that suggested that eligibility 
information include materials submitted to State agencies on Federal 
and State training

[[Page 56137]]

programs other than programs within WIOA title I, subtitle B, this is 
already reflected in the factors that the Governor's continued 
eligibility must take into account under Sec.  680.460(f)(3).
    The Department again wishes to clarify that reporting on all 
participants is a requirement of the ETP performance reports described 
in 20 CFR 677.230. Suggestions that the ETP performance reports include 
WIOA-funded students only, and related comments citing potential 
concerns by training providers, are addressed in that section.
    Comments: Several commenters requested that the Department add 
waiver provisions to ease the transition to WIOA or to adjust reporting 
requirements for providers applying for continued eligibility for the 
ETPL. Other commenters disagreed with the proposed continued 
eligibility procedures for ETPs eligible under WIA and described them 
as a time-consuming burden for State and Local WDBs.
    Department Response: Because of WIOA's emphasis on ensuring the 
provision of quality training, and the importance of using performance 
criteria to obtain such quality, the Department is not including 
waivers in the regulation. In transitioning to collection of WIOA data, 
Sec.  680.460(f)(1) already provides sufficient flexibility by allowing 
the Governor to use alternate factors for performance until WIOA 
performance information is available for an ETP. No changes were made 
to the regulatory text in response to these comments.
    Comments: The Department received comments in response to the 
request for ideas on how to reduce the burden and avoid duplication of 
effort to meet reporting requirements under WIOA secs. 122 (provider 
eligibility) and 116 (performance accountability).
    A few commenters responded to the requirement that the State 
criteria for continued eligibility take into account the timely and 
accurate submission of ETP performance reports. Several commenters 
commented on the ETP annual performance report requirements under WIOA 
sec. 116(d)(4). Comments related to this report are more fully 
addressed in the preamble to 20 CFR 677.230 (see Joint WIOA Final 
Rule). A commenter cautioned that requiring training providers to 
submit appropriate, accurate, and timely information to the States to 
create the ETPL under Sec.  680.460(f)(10) is an unnecessary burden 
because most case management systems already capture and validate this 
information as part of case management, and that collecting this 
information from training providers would compromise the accuracy, 
validity, and consistency of the information. This commenter 
recommended that States be granted flexibility to capture this 
information in the manner that best balances the validity of data and 
efficiency of progress, rather than strictly from training providers. 
Another commenter stated that the Governor and local WDBs should have 
the discretion to utilize alternative data sources in the interim to 
determine ETPs' performance outcomes and that these data outcomes 
should not be prescribed by the Department because local case managers 
have real-time participant outcomes not subject to the lag time 
associated with DOL performance indicators. One commenter disagreed 
with the proposed WIOA continued eligibility requirements and 
recommended that the Department continue to use the WIA requirements.
    One commenter, referring to Sec.  680.460(l), questioned what 
qualifies as an ``undue cost or burden'' to remove a training provider 
from the performance requirement.
    Department Response: The information required under Sec.  680.460 
to maintain continued eligibility is separate from the ETP annual 
performance reports required under 20 CFR 677.230 (see Joint WIOA Final 
Rule). Paragraph (e)(3) of 20 CFR 677.230 addresses coordination and 
dissemination of the ETP performance reports and the State list of 
eligible training providers as described at Sec.  680.500. With respect 
to the commenter's recommendation that the requirement to consider 
whether a provider timely and accurately submits information for the 
WIOA sec. 116(d)(4) ETP annual report to the State, the Department 
acknowledges that there will be some overlap in what is required for 
inclusion in the WIOA sec. 116(d)(4) report and the information the 
State already has in its case management files. The Department 
recommends that States work with training providers to minimize the 
reporting burden and utilize integrated systems as much as possible. No 
change in the regulation text was made in response to this comment.
    Additionally, the Department notes that the provision at Sec.  
680.460(l) does not allow a State to remove a training provider from 
this performance requirement based on undue cost or burden. Rather, 
this provision allows the Governor to establish procedures and 
timeframes for providing technical assistance to training providers 
that are failing to meet the criteria and information requirements due 
to undue cost or burden. The Governor's procedures determine what 
constitutes undue cost or burden. The Department has chosen not to 
regulate what constitutes ``undue cost or burden'' in order to provide 
Governors the flexibility needed to best address the particular needs 
of the ETPs in each State.
    WIOA, not WIA, dictates the continued eligibility requirements and 
the Department declines to substitute WIA requirements for WIOA 
requirements. WIOA sets forth factors and the Governor's continued 
eligibility procedures determine how these WIOA-required factors are 
taken into account. WIOA and the regulations further provide that the 
Governor's criteria for eligibility and information requirements may 
include any appropriate additional information that the Governor may 
require. In addition, WIOA allows for WIA-eligible providers to remain 
eligible through December 31, 2015.
    Comments: One commenter requested clarification on the timeline for 
initial eligibility compared to the beginning of the biennial review 
and renewal period.
    Department Response: States have discretion in how they implement 
eligibility procedures and timelines for biennial review. Some States 
may find it efficient to review the entire State list every 2 years, 
while others may have a system for reviewing each provider on the 
second anniversary of when that provider established continued 
eligibility under WIOA. The timeline for how initially eligible 
training providers are deemed continued eligible training providers and 
thereby incorporated into the review system will vary from State to 
State. The Department made minor edits to Sec.  680.460(i) for clarity 
regarding the requirement for biennial review of eligibility 
information by inserting the word biennial before the word ``review.''
    The Department modified Sec.  680.460(j) on the biennial review to 
provide that, in addition to the verification of the registration 
status of registered apprenticeship programs, the biennial review also 
must include removal of any registered apprenticeship programs that are 
removed from the list under Sec.  680.470. This change was made to 
conform with changes to Sec.  680.470. More can be read about the 
Department's changes to proposed Sec.  680.470 below.
    Paragraph (f)(10) of Sec.  680.460 proposed to require the 
Governor, in establishing the eligibility criteria for continued 
eligibility, to take into account whether providers timely and 
accurately submitted the information needed for the WIOA sec. 116(d)(4) 
ETP report. The Department also revised this

[[Page 56138]]

provision to require the Governor to take into account whether the 
provider timely and accurately submitted the information required for 
initial and continued eligibility. Additionally, the Department revised 
this provision to require that the Governor consider whether the 
provider submitted ``all of the'' information for the report and 
eligibility procedures, which means the Governor must take into account 
whether the information the provider submitted is complete.
    In response to comments and to ensure that providers comply with 
the requirement to timely and accurately submit all of this 
information, the Department added Sec.  680.460(l) to require that the 
Governor's procedure include what the Governor considers to be a 
substantial violation of Sec.  680.460(f)(10). And Sec.  680.460(l)(2) 
requires those providers that substantially violate this requirement be 
removed from the State list of eligible training providers and programs 
consistent with Sec.  680.480(b).
    These modifications were made for consistency with WIOA sec. 
122(f)(1)(B), which requires programs be removed from the State list of 
eligible programs and providers when a provider substantially violates 
any of the requirements of title I of WIOA. Given WIOA's focus on 
performance accountability in WIOA sec. 116 and informed consumer 
choice in WIOA sec. 122, the Department has concluded that failure to 
timely and accurately submit the information required for the WIOA sec. 
116(d)(4) ETP report and the initial and continued eligibility 
constitutes a substantial violation of WIOA title I requirements.
    Because WIOA sec. 122(f)(1)(B) requires the determination of a 
substantial violation to be made by an individual or entity specified 
in the Governor's procedures, Sec.  680.460(l) gives the Governor the 
discretion to determine what constitutes a substantial violation of the 
requirement to timely and accurately submit all of the required 
information. Therefore, the Governor has the flexibility to take into 
account the specific circumstances in the State that affect a 
provider's ability to submit the required information. Moreover, the 
Department notes that paragraph (l)(1) requires the Governor's 
determination of what constitutes a substantial violation of the 
requirement to timely and accurately submit all of this information to 
take into account exceptional circumstances beyond the provider's 
control, such as natural disasters, unexpected personnel transitions, 
and unexpected technology-related issues. The Department included this 
provision specifically to address instances in which, through no fault 
of its own, a provider may not be able to timely or accurately submit 
all of the information required. In those instances, the Governor may 
not determine that a substantial violation has occurred. Additionally, 
the Department notes that the list of the exceptional circumstances in 
this regulatory provision is not exhaustive and the Department 
encourages Governors to consider the particular needs of providers in 
the State in creating the policy and determining what constitutes 
exceptional circumstances beyond the provider's control.
    The Department also has made a clarifying change to Sec.  
680.460(f)(10) adding the words ``information required for completion 
of'' between ``submitted'' and ``eligible'' to clarify that while the 
ETPs are required to provide accurate and timely information for 
purposes of completion of the ETP performance report required by WIOA 
sec. 116, an ETP will not have all of the information to complete that 
report.
    Finally, the Department removed paragraph (k) because the authority 
for the Local WDBs to require higher levels of performance for local 
programs is already referenced in Sec.  680.430(e). Therefore, this 
provision was unnecessary. The Department renumbered what was 
previously proposed paragraph (l) to paragraph (k) to conform to this 
change.
Section 680.470 What are the procedures for including and removing 
registered apprenticeship programs on a State list of eligible training 
providers and programs?
    Section 680.470 described the process for including and maintaining 
registered apprenticeship programs on the ETPL. The Department made 
non-substantive edits for consistency in how the Department uses terms 
throughout this section. The Department also made substantive changes 
to Sec.  680.470(a) and (b), and added new paragraphs (c) and (f). The 
Department received comments regarding Sec.  680.470(d), which is now 
renumbered as (e).
    Proposed Sec.  680.470(a) provided that all registered 
apprenticeship programs would be automatically eligible to be included 
on a State Eligible Training Providers and Programs List and required 
the Governor to establish a mechanism by which registered 
apprenticeship programs may indicate whether they wish to be included 
on the State Eligible Training Providers and Programs List. The NPRM 
required registered apprenticeship programs to indicate interest to be 
included in the State Eligible Training Providers and Programs List. 
Due to concern that some registered apprenticeship programs may not 
wish to be on the State ETPL, proposed Sec.  680.470(b) provided that 
registered apprenticeship programs will remain on the List until they 
are deregistered or have notified the State that they no longer wish to 
be included on the List. The proposed section was silent on whether a 
registered apprenticeship program could be subject to the provisions 
for removal from the ETPL under Sec.  680.480, and Sec.  680.480 did 
not provide an express exclusion from those procedures for registered 
apprenticeship programs. Proposed Sec.  680.470(d) encouraged Governors 
to consult with State and Local WDBs and other entities to establish 
voluntary reporting of performance information for registered 
apprenticeship programs, because WIOA sec. 122(a)(3) specifically 
exempts registered apprenticeship programs from the criteria and 
information requirements and Governor-established procedures required 
for inclusion on the State ETPL, and therefore the NPRM did not require 
registered apprenticeship programs to provide performance information 
in order to be included on the ETPL. In addition, 20 CFR 677.230(b) of 
the Joint WIOA NPRM (regarding information required for the ETP 
performance report) exempted registered apprenticeship programs from 
reporting information for purposes of the ETP performance report 
required by WIOA sec. 116(d)(4) but specified that any such information 
submitted voluntarily to a State must be included by the State in the 
ETP annual performance report required by 20 CFR 677.230. A number of 
changes were made to this Sec.  680.470 in response to comments 
received and for purposes of clarity.
    Comments: Several commenters expressed support for automatic 
qualification of registered apprenticeship programs for the State ETPL. 
In addition, several commenters offered suggestions on how registered 
apprenticeship programs are added to and removed from a State List of 
Eligible Training Providers and Programs. One commenter urged the 
Department to create a uniform standard for all Governors to follow 
when developing a mechanism by which registered apprenticeship programs 
request inclusion on the List. The commenter warned that nationally 
registered apprenticeship programs that offer training in various 
States would need to assess each State's process, which could prove 
overly burdensome

[[Page 56139]]

if States have different mechanisms. Another commenter objected to 
placing the burden on registered apprenticeship training programs to 
ensure inclusion on the ETPL, in part because of the statutory mandate 
that registered apprenticeship programs be eligible to be included on 
the List. The commenter expressed concern that the added requirement to 
indicate interest would create confusion and cause delay in getting 
registered apprenticeship programs on the State List. A few commenters 
were concerned that States with a history of being unfriendly or 
hostile to unions or of having significant bureaucratic inertia may use 
the requirement as an excuse to disfavor registered apprenticeship 
programs. Another commenter recommended revising the regulations to 
create an opt-out framework rather than an opt-in framework, such that 
registered apprenticeship programs would be included on the ETPL unless 
the program took steps to be excluded. This commenter stated that an 
opt-out system would allow program sponsors that may not wish to be on 
the State List to remove themselves while avoiding ill-designed opt-in 
procedures that could preclude or delay, intentionally or accidentally, 
the sponsors of registered joint labor-management apprenticeship 
programs from appearing on the State ETPL. Other commenters supported 
the proposal to require registered apprenticeship programs to opt in. 
Some commenters suggested revising the regulation to clarify when 
registered apprenticeship programs may be removed from the State List 
of Eligible Training Providers and Programs and whether registered 
apprenticeship programs are exempt from the enforcement provisions of 
WIOA sec. 122(f) that were set forth in proposed Sec.  680.480. One 
commenter asked how States should monitor registered apprenticeship 
programs for compliance and what the criteria are to qualify as a 
registered apprenticeship program.
    One commenter stated that proposed Sec.  680.480 was inconsistent 
with WIOA to the extent that it allows registered apprenticeship 
programs to be removed from the List for any reason other than 
deregistration because, in this commenter's view, the requirement in 
WIOA sec. 122(a)(3) that registered apprenticeship programs shall be 
included and maintained on the State ETPL for so long as the program is 
registered precludes removal for any reason other than deregistration. 
According to the commenter, the standards for deregistration under the 
National Apprenticeship Act are sufficient to trigger removal from the 
ETPL where appropriate, and application of the enforcement provisions 
in WIOA sec. 122(f) is inappropriate and unnecessary. The commenter 
states that regulations implementing the National Apprenticeship Act 
already include clearly-defined, qualitative standards governing when 
such a program can be deregistered. The commenter suggested a change to 
the enforcement section of the ETP requirements at proposed Sec.  
680.480 to affirm that registered apprenticeship programs are not 
subject to these enforcement provisions. The commenter suggested adding 
language to Sec.  680.480(a) that states: ``Except for a provider 
described in section 122(a)(3) of WIOA, a training provider may lose 
its eligibility pursuant to this section.''
    Department Response: The Department has made revisions to Sec.  
680.470(a) to clarify the process for including registered 
apprenticeship programs on the State List of Eligible Training 
Providers and Programs. Through a mechanism established by the 
Governor, registered apprenticeship programs must be informed of their 
automatic eligibility and must be provided an opportunity to consent to 
their inclusion before being placed on the State Eligible Training 
Providers and Programs List. The Department chose this approach in 
order to ensure that the States include registered apprenticeship 
programs that are interested in accepting WIOA participants while at 
the same time ensuring that all registered apprenticeship programs are 
readily included with minimal burden. The Department chose to allow 
Governors to develop such a process, rather than create a uniform 
standard for all States, in keeping with the Governor's discretion to 
implement procedures regarding the State List of Eligible Training 
Providers. This approach will also allow each Governor to establish a 
procedure that works best for the registered apprenticeship programs in 
that specific State.
    While the NPRM provided that the Governor's mechanism ``should'' be 
developed based on guidance from the U.S. Department of Labor Office of 
Apprenticeship representative in the State or the assistance of the 
recognized State apprenticeship agency, Sec.  680.470(a) now requires 
the procedures to be developed based on such guidance. This guidance 
includes how to ensure that national registered apprenticeship programs 
are included as eligible training providers. Finally, this paragraph 
has been amended to add a requirement that the Governor develop a 
process to impose only minimum burden on registered apprenticeship 
programs. In response to commenters' concerns that States with a 
history of being unfriendly or hostile to unions or of having 
significant bureaucratic inertia may use the requirement as an excuse 
to disfavor registered apprenticeship programs, these changes together 
with Departmental technical assistance and guidance ensures that States 
are inclusive of registered apprenticeship programs.
    These revisions will provide registered apprenticeship programs the 
opportunity to consent to being included on the State List of Eligible 
Training Providers and Programs while minimizing the affirmative burden 
placed on them to do so. The Department has concluded that this type of 
process will increase the participation rate of registered 
apprenticeship programs on the ETPL and further the aims of the 
registered apprenticeship program by having such programs included on 
the State List as soon and as easily as possible. The Department chose 
not to revise the regulation to require registered apprenticeship 
programs be included on this List unless they choose to opt out, in 
order to reduce the potential confusion for participants utilizing the 
List. Allowing for registered apprenticeship programs to consent allows 
States to ensure that only providers that are willing to accept WIOA 
participants are included on the State List of ETPs.
    The Department has also revised the regulation at Sec.  680.470(b) 
and added a new Sec.  680.470(c) to clarify that registered 
apprenticeship programs may be removed from the State List of Eligible 
Training Providers and Programs for violations of WIOA and that 
enforcement provisions may apply in such cases. The regulation now 
includes Sec.  680.470(b)(3), which provides that a registered 
apprenticeship program may be removed from the State List of Eligible 
Training Providers and Programs for having intentionally supplied 
inaccurate information or substantially violated any provision of WIOA 
title I (e.g., civil rights or discrimination violations) or WIOA 
regulations.
    Section 680.470(c) provides that removal from the List for reasons 
under Sec.  680.470(b)(3) will result in a termination of eligibility 
for the ETPL for not less than 2 years and liability to repay all 
training funds received during the period of noncompliance, consistent 
with the requirements under Sec.  680.480 for all other ETPs. Section 
Sec.  680.470(c) further provides that the Governor must specify in 
enforcement procedures

[[Page 56140]]

established under Sec.  680.480 the process for and the entity making 
the determination of ineligibility, and must provide an opportunity for 
hearing. The Department has concluded that the process used for all 
non-compliant eligible training providers must be applied to 
noncompliant registered apprenticeship programs, including removal from 
the State ETPL. This is needed to maintain the integrity and quality of 
the State ETPL. Application of the WIOA enforcement provisions to 
registered apprenticeship programs enables the State to take action to 
remove a registered apprenticeship program from the State List, if that 
program is in significant violation of WIOA. The Department wishes to 
avoid a scenario where a registered apprenticeship program that is in 
significant violation of WIOA could remain on the State List of ETPs 
until that program's registered status is reviewed under the National 
Apprenticeship Act.
    In addition, the Department disagrees that WIOA requires the 
Department to exclude registered apprenticeship programs from the 
enforcement provisions of WIOA sec. 122(f). WIOA sec. 122 contains 
express statutory exceptions for registered apprenticeship programs 
from providing performance information as a requirement for inclusion 
and maintenance on the State ETPL but WIOA sec. 122 contains no similar 
exception for registered apprenticeship programs from the enforcement 
provisions. In fact, WIOA sec. 122(h) contains express exemptions from 
the enforcement provisions for several types of providers, but does not 
include registered apprenticeship programs on that list of exempted 
entities. The Department interprets this silence to mean that the 
regular WIOA enforcement provisions apply to registered apprenticeship 
programs. Accordingly, the Final Rule now allows the State to take 
action as appropriate, in addition to the enforcement and 
deregistration process under the National Apprenticeship Act.
    The Department has also revised the wording in the title of Sec.  
680.470 to reflect that this section addresses both inclusion and 
removal of registered apprenticeship programs from the State List of 
Eligible Training Providers and Programs.
    Comments: A few commenters encouraged mandatory reporting of 
performance information for all training programs, including registered 
apprenticeship programs, that seek to be included on a State's List of 
Eligible Training Providers and Programs. Several commenters stated 
that registered apprenticeship programs should not be exempt from 
reporting ETP performance data, reasoning that this information is 
valuable in determining the effectiveness of registered apprenticeship 
programs in leading individuals to unsubsidized employment. One 
commenter supported exempting registered apprenticeship programs from 
the application procedures, information requirements, and performance 
reporting requirements of other training providers in light of the 
rigorous process for registering apprenticeship programs with the 
Department. Several commenters opposed any additional reporting for 
registered apprenticeship programs and requested that the regulation 
clearly describe applicable reporting requirements for registered 
apprenticeship programs. One commenter pointed out that States and 
local areas will have to determine and establish data collection for 
tracking for performance and asked whether the Department will define 
the measures for registered apprenticeship program performance.
    Department Response: The Department has decided to maintain the 
wording of proposed Sec.  680.470(d) in the Final Rule, renumbered to 
Sec.  680.470(e), because of the addition of new Sec.  680.470(c). The 
exception for registered apprenticeship programs from providing 
performance information to be included or maintained on the State ETPL 
is required by WIOA sec. 122(a)(3). However, the Department is 
clarifying that voluntary reporting of performance information by 
registered apprenticeship programs is encouraged under the regulation. 
More information can be read on this in the preamble to 20 CFR 677.230 
(see Joint WIOA Final Rule). In addition, the Department is maintaining 
the exception for registered apprenticeship programs from providing 
performance information for the ETP performance report required under 
20 CFR 677.230 for the reasons discussed in the preamble to that 
section, but notes that outcomes for WIOA participants in WIOA-funded 
registered apprenticeship programs must still be included in the 
State's annual performance report under WIOA sec. 116(d)(2).
    Comments: A few commenters recommended that apprenticeship programs 
be required to demonstrate recruitment of underrepresented populations. 
One commenter suggested that a key qualification for apprenticeship 
programs' integration into the use of ITAs be adherence to existing 
requirements under 29 CFR part 30, which prohibits discrimination based 
on race, color, religion, national origin, or sex in apprenticeship 
programs. Another commenter suggested that the WIOA regulations should 
ensure that older workers are not discriminated against in 
apprenticeship programs.
    Department Response: The Department has concluded that putting 
additional requirements on registered apprenticeship programs in order 
to participate in the State List of ETPs or to use ITAs is outside the 
scope of this regulation because WIOA designates registered 
apprenticeship programs as eligible to serve as ETPs. In addition, 
registered apprenticeship programs are already required to comply with 
20 CFR part 30 anti-discrimination provisions.
    Comments: Other commenters recommended that pre-apprenticeship 
programs be included on the State ETPL but with a performance 
measurement model that is more appropriate for the activity, for 
example, enrollment in an apprenticeship program or a community college 
program would both be positive outcomes.
    Department Response: The commenter did not specify whether it meant 
that pre-apprenticeship programs should be included under the exception 
for registered apprenticeship programs or included through the 
Governor's eligibility procedures for eligible training providers. 
However, the Department acknowledges the need to clarify how pre-
apprenticeship programs are treated for inclusion on the State ETPL. 
The Department has added a Sec.  680.470(f) to clarify that because 
pre-apprenticeship programs are not registered under the National 
Apprenticeship Act and are not included in the exceptions for 
registered apprenticeship programs under WIOA sec. 122(a)(3), they must 
follow the Governor's procedure for eligibility in this subpart. Pre-
apprenticeship providers that wish to use WIOA funds to provide 
training services may go through the normal training provider program 
application procedure to be included on the State List of Eligible 
Training Providers and Programs. Therefore, such pre-apprenticeship 
programs would be subject to the eligibility and information reporting 
requirements of the State ETPs.
    Comments: One commenter expressed concern throughout the regulation 
that in defining how individual training accounts may be used, and 
defining the use of on-the-job training funds, preference is given to 
registered apprenticeship programs. The commenter urged the Department 
to revise the regulation to reflect the

[[Page 56141]]

importance of other OJT programs. The commenter emphasized the robust 
and valuable non-registered apprenticeship programs embraced by many 
manufacturers, and that training for in-demand skills is available in 
multiple venues and that these programs should be considered based on 
the value of their training, rather than their registration status with 
a government entity. However, the commenter did not provide suggestions 
on how the Department could address the commenter's concerns.
    Department Response: The Department has determined that no changes 
to the regulatory text are needed in response to this comment. Both the 
requirement that registered apprenticeship programs shall be included 
on the State ETPL and the exemption for registered apprenticeship 
programs from the requirement to submit performance information for 
inclusion on the State List are specifically limited to registered 
apprenticeship programs by WIOA sec. 122(a)(3). Regarding the commenter 
suggesting a revision to the regulatory text to emphasize OJT, it is 
unclear what revisions to the regulation the commenter is suggesting. 
The Department has made revisions to Sec.  680.530 to clarify how 
exceptions to the eligible training provider List, which may provide 
training through contracts with the Local WDB, including OJT, are to be 
treated; more about this change can be read in the preamble to Sec.  
680.530. The Department agrees with the commenter that non-registered 
apprenticeship programs and work-based training are important training 
options.
Section 680.480 May an eligible training provider lose its eligibility?
    Section 680.480 describes the enforcement provisions available to 
apply to training providers who are not in compliance with WIOA and 
WIOA regulations. The Department made non-substantive edits for 
consistency in how the Department uses terms throughout this section. 
The Department also made substantive changes to paragraphs (b) and (c) 
which are further described below.
    The Department made a clarifying edit to Sec.  680.480(a). The 
Department is deleting the phrase ``deliver results'' and replacing it 
with language to clarify that this provision requires that training 
programs meet the Governor's eligibility requirements and that training 
providers provide accurate information.
    The Department also made a clarifying edit to Sec.  680.480(e) to 
clarify that if a training program is removed from the eligible 
training providers in a local area because the training program failed 
to meet the local area's higher performance standards, the training 
provider may appeal this eligibility denial under Sec.  683.630(b). 
This provision no longer requires Local WDBs to create an appeals 
procedure for these purposes.
    Proposed Sec.  680.480(b) provided that providers whose eligibility 
is terminated under this section are liable to repay all adult and 
dislocated worker funds received during the period of non-compliance. 
The Department revised this paragraph for consistency with Sec.  
681.550 that permits youth funds to pay for training for out-of-school 
youth aged 16-24 and such funds are also subject to the requirement to 
repay funds received during non-compliance.
    Comments: The Department received only a handful of comments 
addressing proposed Sec.  680.480. As discussed above, one commenter 
stated that proposed Sec.  680.480 was inconsistent with WIOA to the 
extent that it allows registered apprenticeship programs to be removed 
from the List for any reason other than deregistration.
    Department Response: The Department revised Sec.  680.480(c) by 
adding language stating that registered apprenticeship programs may 
only be removed from the List for reasons set forth in Sec.  680.470. 
The regulation includes registered apprenticeship programs within the 
enforcement provisions in WIOA sec. 122(f) for the reasons set forth in 
the preamble to Sec.  680.470. WIOA sec. 122 does not require 
registered apprenticeship programs to supply performance information in 
order to be determined eligible training providers, in light of the 
extensive vetting process that registered apprenticeship programs 
undergo in order to become registered. Therefore, the Department is not 
regulating that registered apprenticeship programs be removed from the 
State List of Eligible Training Providers for reasons related to 
performance.
    Comments: Another commenter stated that training providers should 
be considered to be noncompliant when less than 50 percent of those 
enrolled complete the program in the allotted training period or when 
less than 50 percent of completers fail to find employment within 180 
days of completion. The commenter stated that these statistics should 
be based on all enrolled students, not just WIOA-funded individuals. In 
addition, a commenter suggested that ETPs that do not provide 
performance information as required under WIOA should be removed from 
the State ETPL, as those that are non-compliant or intentionally 
provide inaccurate information. The commenter said that such providers 
should also be liable for repayment of adult and dislocated worker 
funds. Another commenter asked how monitoring of training providers 
will be conducted and who has ultimate responsibility for this task.
    Department Response: The Governor's procedures for establishing 
eligibility may establish minimum performance standards for all 
providers other than registered apprenticeship programs. Under Sec.  
680.480(c), the Governor may remove provider programs from the State 
List during its biennial renewal procedure for failure to meet State 
eligibility criteria, including any minimum performance levels 
established. The Department has not regulated specific threshold 
amounts for compliance because it is within the Governor's authority 
under WIOA to establish appropriate minimum standards through its 
procedure. Under Sec.  680.430(e), the Local WDB may establish higher 
levels of performance than those required by the Governor for a 
provider to be eligible to receive training funds from that local area. 
The Department made a minor revision to Sec.  680.480(e) for 
consistency with Sec.  680.430(e) to clarify that if the Local WDB has 
established higher performance standards pursuant to Sec.  680.430(e), 
the Local WDB can remove a program of training services from the 
eligible programs in that local area for failure to meet those higher 
performance standards. In response to the comment suggesting that ETPs 
who do not provide performance information should be removed from the 
State ETPL, the Department refers readers to Sec.  680.460 and its 
accompanying preamble.
    Regarding comments on which entity is responsible for monitoring 
ETPs, the Department notes that under WIOA sec. 122, States and local 
areas are responsible for monitoring eligible training providers and 
for determining how such monitoring is conducted. Per Sec.  
680.430(b)(2) and (c), the Governor or the Governor's designated SWA 
(or appropriate State entity) is responsible for ensuring that programs 
meet eligibility criteria and performance levels established by the 
State, including verifying the accuracy of the information, and the 
Local WDB must carry out procedures assigned to the Local WDB by the 
State.

[[Page 56142]]

Section 680.490 What kind of performance and cost information must 
eligible training providers other than registered apprenticeship 
programs provide for each program of training services?
    Section 680.490 describes the information that training providers 
must submit to the State to meet initial and continued eligibility 
criteria for inclusion on the State List of Eligible Training Providers 
and Programs under Sec.  680.460(h). Proposed Sec.  680.490(d) required 
the Governor to establish a procedure and methods to assist training 
providers who demonstrate that providing the required information is 
unduly burdensome or costly. This section has been adopted as proposed, 
with revisions for clarity and consistency of terms and one substantive 
change at paragraph (c).
    The Department revised proposed Sec.  680.490(a) for clarity. 
Proposed Sec.  680.490(a) provided that, in accordance with Sec.  
680.460(h), every 2 years training providers are required to submit 
appropriate, timely, and accurate performance and cost information. 
However, the Department changed the reference to Sec.  680.460(h) in 
this paragraph to Sec.  680.460(i) to clarify that eligible training 
providers, except registered apprenticeship programs, must submit this 
information at least every 2 years in accordance with the State's 
continued eligibility policy.
    The Department also modified Sec.  680.490(c) by adding that the 
Governor may require additional performance information if the Governor 
determines it is appropriate to better inform consumers. This paragraph 
originally provided that the Governor could add this information if the 
Governor determined it was appropriate for determining or maintaining 
eligibility. However, WIOA sec. 122(b)(1)(J)(iii) provides that the 
Governor's criteria and information requirements can include other 
factors the Governor determines are appropriate to ensure informed 
choice of participants among training service providers, and the 
modification to this section reflects this authority.
    Comments: Several commenters agreed with the Department's message 
that the Governor must assist providers in supplying the information 
required of them under WIOA and the NPRM. These commenters urged that 
the State ETPL coordinators at the State level be required to maintain 
a list of available technical assistance for training providers and 
that a probationary period be included for all those who may miss 
eligibility. One commenter encouraged the Department to ensure that the 
regulations provide maximum flexibility for the State to work with 
training providers to report on the primary indicators of performance.
    Department Response: The Department cannot require States to 
provide a probationary period or maintain technical assistance lists. 
However, the Governor has significant flexibility under Sec.  
680.490(d). For example, if a provider demonstrates that providing 
additional information required under this section would be unduly 
burdensome or costly, the Governor may provide additional resources 
from funds for State workforce investment activities reserved under 
WIOA secs. 128(a) and 133(a)(1) as provided in Sec.  680.490(d)(2) to 
assist providers in the information collection. Further, in addition to 
the required factors, the regulations allow the Governor to take any 
appropriate additional factors into account when developing procedures 
for providers to be included and maintained on the State List of 
Eligible Training Providers and Programs. No changes to regulatory text 
were made as a result of these comments.
    Comments: Several commenters supported the Sec.  680.490(d) 
requirement that Governors have a procedure in place to address the 
costs and burden of any increased reporting requirements. One commenter 
expressed appreciation for the Department's recognition of the 
potential cost and burden of WIOA's requirements for ETPs in meeting 
their performance reports and urged the Department to issue guidance to 
the States on how to streamline performance reporting for training 
providers and minimize the burden associated with reporting on multiple 
programs through the ETP performance reports required by WIOA sec. 116 
and the performance information required by WIOA sec. 122 for inclusion 
and maintenance on the State ETPL. A number of comments appear to 
reflect confusion between these two types of performance information.
    A few commenters stated that many of the requested reporting 
elements are not valuable to the consumer and asserted that local areas 
should determine if a provider should continue to be listed on the ETPL 
because local areas' performance is directly related to the quality of 
the training programs. One commenter suggested that for each program of 
study, the following information be collected: Number enrolled, number 
completed, number of completers employed at 90 and 180 days after exit, 
and wage at placement of those employed.
    Department Response: WIOA sec. 122 requires specific information 
that must accompany the State List of Eligible Training Providers and 
Programs. The Departments of Education and Labor are issuing joint 
guidance on data sharing. Submission of ETP performance reports is 
required by WIOA sec. 116(d)(4) and addressed in 20 CFR 677.230 of the 
regulations (see Joint WIOA Final Rule). This section of the preamble 
addresses Sec.  680.460 and is focused on the requirements for ETP 
eligibility and maintenance of the State ETPL. Comments related to the 
ETP annual performance reports required under WIOA sec. 116(d)(4) and 
other issues related to specific performance indicators are addressed 
in the Joint WIOA Final Rule preamble section relating to 20 CFR part 
677. In addition, the Governor's procedure for continued eligibility 
and for publishing the State List may include the specific information 
suggested by the commenter. No changes were made to the regulatory text 
in response to these comments.
    Comments: Several commenters stated that flexibility is needed in 
the performance reporting requirements for inclusion on the State ETPL 
to allow Local WDBs to assess providers at the course, program, or 
institutional level because the proposed ETP performance reporting 
requirements could raise data privacy concerns where PII is provided. 
One commenter suggested that performance information be maintained at 
the participant level and not across programs.
    Department Response: The Department has determined that reporting 
requirements for inclusion and maintenance of the State ETPL must be 
established at the program level only. WIOA clearly establishes initial 
and continued eligibility requirements for provider programs. 
Eligibility and performance reporting is thus determined on a program-
by-program basis for each provider under the regulations. Therefore, 
reporting is done through the program of study, rather than the 
individual courses that make up the program. All performance reporting 
requirements must be carried out consistent with all applicable Federal 
and State privacy laws and the Department is issuing guidance to assist 
States in complying with these laws.
    In addition, the Department made a revision to the title of Sec.  
680.490 to clarify that registered apprenticeship programs are not 
subject to these performance reporting requirements. As the Department 
explained in the preamble addressing Sec.  680.470, WIOA exempts 
registered apprenticeship

[[Page 56143]]

programs from ETP performance reporting requirements for inclusion on 
the ETP list. However, voluntary reporting of performance information 
by registered apprenticeship programs is encouraged under the 
regulation. The Department also modified Sec.  680.490(a) to clarify, 
consistent with the decision that registered apprenticeship programs 
are exempt from the performance reporting requirements, that registered 
apprenticeship programs are not required to submit the performance and 
cost information required by this section.
    Finally, as noted in the preamble to Sec.  680.400, Sec.  
680.490(b) has been revised to require performance reporting on all 
WIOA participants enrolled in a program of training services and 
receiving funding through an ITA for the performance information on 
WIOA participants required by Sec.  680.490(b). This includes OSY aged 
16-24. As the Department is permitting youth program funds for OSY aged 
16-24 to use ITAs, it is important that the performance information 
required encompass these WIOA participants. However, the ETPs will 
report based on the adult primary indicators of performance for these 
youth to provide comparability and to eliminate the burden that would 
be imposed if ETPs were required to report on separate performance 
indicators for adults and dislocated workers and for the subset of 
youth who may receive training through ITAs.
Section 680.500 How is the State list of eligible training providers 
and programs disseminated?
    Section 680.500 describes the requirements for distributing the 
State List of Eligible Training Providers and Programs and accompanying 
cost and performance information to Local WDBs and to the general 
public. Other than non-substantive changes for consistency of terms, 
the Department has adopted this section as proposed.
    Comments: One commenter supported making the ETPL publicly 
accessible in a consumer friendly format. Another commenter stated that 
only one List per State should be permitted to be published because 
multiple publications within a State would be confusing for 
participants and ETPs. One commenter recommended that States be 
required to identify and list credentialing organizations and helpful 
information about key or high growth sectors on the homepages of the 
State Lists of Eligible Training Providers and Programs, including 
providing a list of high growth industries. This commenter stated that 
when a nationally-recognized, industry-driven credential has been 
discovered by a State or local entity, or the Federal government, this 
information should be shared publicly to raise the bar on training 
programs and help ensure that tasks are performed to the highest 
standards available, while maintaining and improving American 
competitiveness.
    Department Response: WIOA requires the State to generate and 
disseminate its List of ETPs that contains, at a minimum, the 
information required by WIOA sec. 122(d) and Sec.  680.500. However, as 
provided at Sec.  680.430(e), Local WDBs may establish higher 
performance standards or additional information and criteria, except 
with respect to registered apprenticeship programs. In addition, the 
Department notes that States have the discretion to identify 
credentialing organizations or to restrict the types of providers 
included on the State List. It is up to the State to determine what 
providers meet its initial and continued eligibility criteria in order 
to be included on the State List. Some of this information, including 
whether a provider organization provides an industry-recognized 
credential may be noted on the State List. No changes were made to the 
regulatory text in response to these comments.
    Comments: Several commenters responded to the Department's request 
for comments on the value of a summary sheet to accompany the ETPL. A 
few commenters stated that a summary sheet was not necessary because 
applicants only need the following key data to make an informed choice: 
Completion rate, placement rate, credential, and wages. In contrast, 
another commenter encouraged the use of a uniform summary sheet to help 
prospective students compare information across all participating 
programs. This commenter recommended that the summary sheet include 
detailed information about the programs, including many data points 
that are part of the ETP performance reports, such as comparative 
information about costs, program completion, and job placement rates, 
average starting salaries, and debt upon completion. Other commenters 
recommended that each State be allowed to design its own accompanying 
information. One commenter suggested that the information required for 
the ETP be detailed in a simple chart format with cohort information 
for completion and placement information, and that the public site 
should include information that is pertinent to the customer. One 
commenter urged the Department to consider the work of Local WDBs that 
already have scorecards. Another commenter encouraged developing ``ease 
of use reports'' that meet the needs of training seekers while 
minimizing the reporting burden on providers and States. Another 
commenter recommended allowing States to design their own display.
    Department Response: The Department has determined that no 
revisions to the regulatory text are needed in response to these 
comments. The list of ETPs and accompanying cost and performance 
information must be disseminated in coordination with the ETP annual 
performance reports in accordance with 20 CFR 677.230(e)(3) (see Joint 
WIOA Final Rule). The ETP annual performance report must include the 
information required under WIOA sec. 116(d)(4) and must be provided 
using a template created by the Department. In contrast, WIOA sec. 
122(d) does not require that the State List of Eligible Training 
Providers and Programs and accompanying information comport with a 
Federal template or format. The Department, therefore, has decided that 
the statutory mandate is best met by leaving it to the States' 
discretion to determine: (1) What information should accompany the 
State ETPL provided that the accompanying information meets statutory 
requirements (including the requirement in WIOA sec. 122(d)(1) that the 
accompanying information identify the recognized postsecondary 
credential); (2) the best format to provide that information to users; 
and (3) how to coordinate its distribution with the ETP performance 
reports. The Department plans to issue further guidance to States 
regarding the relationship between ETP performance reports and the 
State List of Eligible Training Providers and Programs.
    Comments: One commenter stated that some State laws include 
additional restrictions on data sharing beyond the Federal law 
requirements and encouraged the Department to consider how regulations 
and guidance can help States interpret or revise their own laws to 
allow greater access to data for strategic planning and evaluation 
purposes. One commenter urged the Department to issue guidance and 
technical assistance on how data shared for WIOA performance reporting 
may be incorporated into Statewide Longitudinal Data Systems (SLDS) in 
compliance with both UI confidentiality provisions and the Family 
Educational Rights and Privacy Act (FERPA). The commenter stated that 
the data collected would be useful for a variety of stakeholders, 
including for longitudinal

[[Page 56144]]

research and evaluation to improve the mix and targeting of program 
services.
    Department Response: Privacy concerns in regard to how the State 
List and accompanying information are made available are addressed 
under the regulations in Sec.  680.500(e). In developing the 
information to accompany the State List described in Sec.  680.490(b), 
disclosure of personally identifiable information from an education 
record must be carried out in accordance with the Family Educational 
Rights and Privacy Act, including the circumstances relating to prior 
written consent. No changes were made to the regulatory text in 
response to these comments. Instead, the Department intends to provide 
additional guidance on this issue and will also provide technical 
assistance to States who face legal barriers in complying with 
performance reporting requirements.
Section 680.510 In what ways can a Local Workforce Development Board 
supplement the information available from the State list of eligible 
training providers and programs?
    The Department did not receive any comments addressing Sec.  
680.510 other than a general statement of support for the provision as 
drafted. The Department made non-substantive edits to the title of this 
section for uniformity in use of the term ``State list.'' The 
Department also modified Sec.  680.510 to clarify that, as explained 
above, the Local WDB cannot supplement the criteria and information 
requirements established by the Governor for registered apprenticeship 
programs.
Section 680.520 May individuals choose training providers and programs 
located outside of the local area or outside of the State?
    Section 680.520 governs when an individual can choose to attend a 
training program located outside of the local area or State. The 
Department has made non-substantive revisions to this section for 
consistency in the use of terms, and made revisions for clarity to this 
section.
    Section 680.520(a) provides that individuals may choose training 
providers and programs outside of the local area provided that the 
training program is on the State List and it is consistent with local 
policies and procedures. For State ETPs that are outside of the local 
area or that do not meet the local area's criteria for eligibility, 
local policies and procedures determine whether participants in the 
local area may utilize ITAs for training. However, the local area may 
choose to make exceptions to its local eligibility criteria. The local 
policies and procedures must be consistent with State policies and 
procedures in order for the program to receive funds through an ITA.
    Section 680.520(b) provides that individuals may choose eligible 
training providers and programs outside of the State consistent with 
State and local policies and procedures and that State policies and 
procedures may provide for reciprocal or other agreements established 
with another State to permit eligible training providers in a State to 
accept ITAs provided by the other State. The State policies and 
procedures may allow training providers or programs located outside of 
that State to receive funds through a participant's ITA within specific 
circumstances, or a State may enter into a broader agreement with 
another State to establish that ETPs in the other State are eligible in 
the ``home'' State. State policies may determine whether the training 
providers and programs in another State must meet any or all of the 
``home'' State's eligibility criteria order to receive the ITA funds 
provided by the State. In either case, the local policies and 
procedures can have more stringent standards than the State policy, and 
therefore any use of ITAs for training providers and programs outside 
of the State must be consistent with both State and local policies and 
procedures.
    Comments: The Department received a handful of comments addressing 
proposed Sec.  680.520. One commenter supported allowing participants 
to choose training located outside the local area or in other States. 
Another commenter agreed with allowing individuals to choose training 
providers located outside of the local area as long as the training 
providers meet the performance criteria set by the Local WDB in the 
local area where the person resides.
    One commenter urged the Department to work with inter-governmental 
organizations to develop guidance for the active inclusion of out-of-
area and eLearning options into the training approaches of Local WDBs. 
This commenter stated that guidance would be preferable to reciprocity 
agreements to reduce the time required to understand and implement the 
specifics of interstate agreements.
    Department Response: The Department has concluded that reciprocity 
agreements will be maintained in Sec.  680.520 because they are 
specifically authorized under WIOA sec. 122(g) and they further the 
goals of WIOA. Reciprocity agreements reduce the burden on States and 
providers by eliminating duplicative procedures. They also expand the 
array of training options available to individuals seeking training. 
The Department recommends that States consider how best to establish 
and implement reciprocity agreements, and how these agreements may be 
used to expand distance and online training options. The Department 
notes that its revisions to this section, in Sec.  680.520(b), permit 
the States to develop other agreements that permit ETPs in a State to 
accept ITAs provided by another State. This provides additional 
flexibility to the States as the agreement does not have to be 
reciprocal. The Department will consider whether there is a need for 
additional guidance on this issue in the future.
Section 680.530 What eligibility requirements apply to providers of on-
the-job training, customized training, incumbent worker training, and 
other training exceptions?
    Section 680.530 explains that providers of OJT, customized 
training, incumbent worker training, internships, paid or unpaid work 
experience, or transitional jobs are not subject to the same WIOA 
eligibility requirements of sec. 122(a) through (f) that are 
established for providers listed on the State List of Eligible Training 
Providers and Programs. Section 680.530 requires local one-stop 
operators to collect any separate performance information required by 
the Governor and determine whether these providers meet the Governor's 
performance criteria. The Department made non-substantive edits for 
consistency in how the Department uses terms throughout this section 
and made substantive edits to the provision which are further explained 
below.
    The Department reorganized this section for clarity by breaking 
what was one paragraph into several paragraphs. Paragraph (a) now 
provides that providers of OJT, customized training, incumbent worker 
training, internships, paid or unpaid work experience, or transitional 
jobs are not subject to the requirements applicable to providers and 
programs which are included on the State ETPL. Paragraph (b) now 
provides that the Governor may establish performance criteria those 
providers must meet to receive funds through the adult or dislocated 
worker programs pursuant to a contract consistent with Sec.  680.320. 
Thus, while these kinds of programs cannot be paid for with ITAs, Local 
WDBs may enter into a contract with these entities to provide these 
training services. More information can be read about this in Sec.  
680.320 and its accompanying preamble. Paragraph (c) provides that one-
stop operators must

[[Page 56145]]

collect any performance information required by the Governor and 
determine if the provider meets these performance standards. For those 
that meet the Governor's standards, paragraph (d) requires the one-stop 
operator to distribute information about those programs, with the 
relevant performance information, throughout the system.
    Comments: Several comments requested clarification of whether these 
other training providers are exempted from the State eligibility 
process required by WIOA sec. 122 and/or from the ETP performance 
reporting process required by WIOA sec. 116, if they are not included 
on the State List of Eligible Training Providers and Programs. Other 
commenters supported allowing local areas to contract with providers 
not on the State List of Eligible Training Providers for customized 
training, incumbent worker training, internships, paid or unpaid work 
experience, and transitional employment. One commenter expressed 
support for exempting OJT, customized, and incumbent worker training 
from the ETP process but recommended that these training programs be 
subject to performance reporting. Another commenter recommended 
revising Sec.  680.530 to provide that OJT, customized training, 
incumbent working training, and other training exceptions are not 
exempt from rigorous performance standards even though they are exempt 
from the general performance metrics in WIOA sec. 122 and must be 
subjected to rigorous performance standards suited to the type of 
program. This commenter recommended that Sec.  680.530 be revised to 
emphasize that local one-stop operators must collect the performance 
information that the Governor shall require and to emphasize that local 
one-stop operators must disseminate this list of training exceptions. 
This commenter recommends requiring inclusion of the Governor's 
performance criteria for OJT, customized training, and incumbent worker 
training in the State Plan and annual reports and that the monitoring 
of these programs be referenced in Sec.  680.530. Further, this 
commenter recommended that performance of these programs be detailed by 
industry, company, and occupation at the quarterly meetings of Local 
and State WDBs Another commenter suggested the Local WDB must concur 
with the Governor that such information is worth collecting and that 
the Local WDB should determine how best to collect the information. 
This commenter felt that requiring the operator to collect such 
information is likely to be less efficient that obtaining the 
information directly from the service provider or UI wage records, and 
that local areas should decide if it is worth collecting data on every 
work-based, customized, incumbent worker training, internship, or work 
experience arrangement.
    One commenter recommended that work experience programs be excluded 
from reporting. Another commenter suggested that the Department require 
the Governor's performance standards for these exceptions to be 
described in the State Plan. Some commenters recommended that these 
exceptions be subject to the same accountability, transparency, and 
monitoring standards that apply to all programs regulated by WIOA. One 
commenter recommended that where a Local WDB is using short-term and/or 
eLearning assisted ``training,'' these training services should be 
regarded as being provided by the Local WDB, and these approaches 
should be exempted from the ETP process. This commenter stated that 
these training programs should be subject to performance reporting. One 
commenter stated that OJT and customized training providers should not 
be included on the State ETPL because these should be matters of 
negotiation between Local WDBs and affected business entities. Finally, 
one commenter said that customized training, registered apprenticeship, 
or OJT are all work-relevant, but the section-by-section discussion in 
the regulation should clarify that these are examples and not an 
exhaustive list of the types of training that would have to be provided 
by a business. Such limitation could deem ineligible representatives of 
the business community who may successfully offer alternative types of 
training such as a non-registered apprenticeship.
    Department Response: The Department has made changes to the 
regulatory text of Sec.  680.530 to clarify that the training providers 
listed in this section are not included on the State ETPL. The 
Department is including among these exceptions the types of work-based 
training included at WIOA section 122(h), which does not specifically 
identify non-registered apprenticeship programs but does include on-
the-job training, customized training, incumbent worker training, 
internships, paid or unpaid work experience, and transitional jobs. 
There is no Federal restriction on States and Local WDBs including non-
registered apprenticeship programs on the ETPL; however, these programs 
must apply through the Governor's eligibility procedure to become an 
eligible training provider, just as any other potential eligible 
training provider would. Additionally, there is no restriction on non-
registered apprenticeship programs participating in on-the-job training 
or customized training through contracts as described in Sec.  680.530, 
if it is determined appropriate by the State and Local WDB. This 
decision is based on the exception in WIOA sec. 122(h) exempting these 
providers from the requirements for inclusion on the List, maintenance 
on the List, and removal from the List. Notwithstanding this exclusion, 
that exemption in WIOA sec. 122(h) further authorizes the Governor to 
require the local area to collect performance information on these 
providers. That information can be the same as that required for ETPs 
or may be different information.
    Local WDBs may provide training services, including short-term and/
or eLearning assisted training, if the Local WDB meets the conditions 
of WIOA sec. 107(g)(1), which includes the information required in a 
written waiver request to the Governor.
    The revised regulatory text at Sec.  680.530(d) clarifies that one-
stop operators must disseminate information identifying providers and 
programs that have met the Governor's performance criteria and the 
relevant performance information as required by the Governor throughout 
the one-stop delivery system. Local WDBs are not required to concur 
with the Governor regarding the value of the performance information 
that the Governor chooses to require.
    While States are not required in their State Plans to describe the 
State's performance standards for on-the-job training, incumbent worker 
training, transitional jobs, and customized training, the State is 
required to describe the State's strategies for how these exceptions 
ensure high quality training for both the participant and the employer. 
State Plan requirements are fully described in the WIOA State Plan ICR 
and 20 CFR part 676 (see Joint WIOA Final Rule).
    The Department does not have the authority to require State or 
Local WDBs to review performance information by industry at quarterly 
meetings.
    Further, the regulatory text has been modified to clarify that 
these other training providers are eligible to receive WIOA funding 
through a contract for services rather than through ITAs. The 
regulatory text was also edited to remove the statement that approved 
providers under this section are considered eligible training providers 
services, which could inappropriately suggest that these entities may 
serve as

[[Page 56146]]

ETPs and receive funding through ITAs without going through the 
Governor's eligibility procedures. As explained, this is not the case. 
The regulation text was also revised to clarify that these providers 
are not subject to the other requirements that training providers and 
programs which are on the State ETPL must fulfill. However, these 
providers are still subject to other requirements of WIOA outside of 
this subpart.
    The Department has also made a change to the terminology used in 
reference to transitional employment. For consistency with other areas 
of the WIOA Final Rule, the Department is using the term transitional 
jobs.
    Comments: One commenter recommended that Sec.  680.530 be revised 
to ensure that non-credit training and education be included on the 
ETP, and that performance-related elements are consistent across all 
ETPs, including community colleges, to ensure better program outcomes 
and a level playing field for all ETPs. Two commenters suggested that 
work experience should be excluded from any reporting required of these 
training exceptions.
    Department Response: Section 680.530 describes programs that are 
not included on the State ETPL. The programs listed in this section may 
or may not offer credit, and the eligible training providers included 
in the State List of Eligible Training Providers and Programs may or 
may not offer credit. For performance reporting, the performance-
related elements required by WIOA are consistent across all eligible 
training providers, except for registered apprenticeship programs. For 
eligibility procedures, the performance-related elements in the 
Governor's procedure should be consistent across all programs in the 
State. However, the Governor's performance criteria for the work-based 
training exceptions described at Sec.  680.530 may be quite different 
and these programs are not a part of the State List of Eligible 
Training Providers. No changes were made to the regulatory text in 
response to these comments.
    Comments: Several commenters requested clarification of how the 
Governor may treat providers who fall within the exceptions to ITAs 
described at Sec. Sec.  680.320 and 680.530 as to whether these 
excepted providers may use ITAs or only contracts, and what is required 
if they are to be on the State ETPL.
    Department Response: As described above, local areas may contract 
for these work-based training exceptions and these programs of training 
services do not need to be on the State List nor are they subject to 
the ETP eligibility procedures. However, these providers also could 
have programs of training that are not excepted under Sec.  680.530 and 
that the provider wishes to be eligible to use ITAs. As explained 
above, only ETPs on the State List are able to use ITAs. Therefore, 
when a provider that provides a program of training services through 
contract to a local area wishes to be eligible to receive students 
using ITA funding, the training provider would need to complete the ETP 
eligibility process described in this subpart. These programs would be 
subject to the Governor's eligibility procedure. An example of such a 
case would be a company that provides OJT through a contract with a 
local area and also offers classroom training or credentialing; the 
classroom training could be a regular ETP while the company could have 
a contract for the OJT. More information about the ETP exceptions can 
be found in Sec.  680.320. No changes were made to the regulatory text 
in response to these comments.
6. Subpart E--Priority and Special Populations
Introduction
    The services provided with adult funds can be a pathway to the 
middle class for low-income adults, public assistance recipients, and 
individuals who are basic skills deficient. The regulations implement 
the statutorily-required priority for the use of adult funds, and 
ensure any other priorities or designations are consistent with the 
statutory priority. This subpart contains regulations about how 
participants from certain populations are able to access adult and 
dislocated worker services, and regulations establishing priority 
access to these services. WIOA sec. 134(c)(3)(E) provides that priority 
for adult training services and certain career services must be given 
to recipients of public assistance, other low-income individuals, and 
individuals who are basic skills deficient. Under WIOA, priority access 
to services by members of this group is always in effect regardless of 
funding levels. Nonetheless, WIOA allows one-stop centers to provide 
individualized career services to individuals who are not members of 
these groups, if determined appropriate by the one-stop center.
    The Department encourages close cooperation between WIOA-funded 
programs and other Federal and State sources of assistance for job 
seekers. Coordination between WIOA-funded programs and the TANF program 
is a crucial element in serving individuals who are on public 
assistance. TANF is a required partner in the one-stop delivery system. 
Through close cooperation, each program's participants will have access 
to a much broader range of services to promote employment retention and 
self-sufficiency than if they relied only on the services available 
under a single program.
    In this subpart, the Department explains how displaced homemakers 
may be served with both adult and dislocated worker funds. Under WIOA, 
a displaced homemaker qualifies as an ``individual with a barrier to 
employment'' (see WIOA sec. 3(24)(A) and Sec.  680.320(b)). 
Additionally, displaced homemakers meet the definition of a 
``dislocated worker,'' as defined in WIOA sec. 3(15)(D). Displaced 
homemakers, whose work, albeit without a formal connection to the 
workforce, is recognized for its value, may need WIOA services to 
develop further work skills. WIOA also expands the definition of 
displaced homemakers to include dependent spouses of the Armed Forces 
on active duty to ensure they have access to WIOA title I services.
    This subpart ensures that veterans and certain service members have 
access to adult and dislocated worker programs. Under WIOA, as was the 
case under WIA, veterans receive priority of service in all Department-
funded employment and training programs. The regulations in this 
subpart describe what is meant by ``priority of service.'' The 
regulation is consistent with guidance it issued in TEGL No. 22-04 
(``Serving Military Service Members and Military Spouses under the 
Workforce Investment Act Dislocated Worker Formula Grant''), dated 
March 22, 2005 (http://wdr.doleta.gov/directives/attach/TEGL22-04.pdf) 
and expanded in TEGL No. 3-15 (``Guidance on Services Provided through 
the Adult and Dislocated Worker Program under the Workforce Innovation 
and Opportunity Act (WIOA or Opportunity Act) and Wagner Peyser, as 
Amended by WIOA, and Guidance for the Transition to WIOA Services''), 
dated July 1, 2015 (http://wdr.doleta.gov/directives/attach/TEGL/TEGL_03-15.pdf) that separating service members meet the eligibility 
requirements for dislocated worker activities. This regulation will 
ensure that service members will have access to the full array of 
services available through the one-stop delivery system.

[[Page 56147]]

Section 680.600 What priority must be given to low-income adults and 
public assistance recipients and individuals who are basic skills 
deficient served with adult funds under title I?
    Comments: Several commenters expressed general support for giving 
priority for service to recipients of public assistance, other low-
income individuals, and individuals who are basic skills deficient. In 
contrast, a few commenters expressed disagreement with the priority of 
service provisions, reasoning that the regulations fail to address 
employer needs and focus instead solely on the needs of the employee. 
Two commenter recognized the need to be responsive to both the 
employers and the employees.
    Department Response: The Department notes that WIOA sec. 
134(c)(3)(E) requires priority be given to individuals who are public 
assistance recipients, low income, or basic skills deficient, with 
regard to the provision of individualized career services and training 
services. This priority applies to funds allocated to a local area for 
the WIOA title I adult program, It is not an eligibility criterion for 
the program, but it is the means to ensure an emphasis on providing 
services to these populations. This priority is not required for the 
WIOA title I dislocated worker program. The Department recognizes the 
need to serve not only low-skilled individuals but also those with more 
advanced skills and training who also need assistance. The Department 
also recognizes the importance of the one-stop delivery system's 
employer customer, assisting them to find, hire, train, or upskill 
their workforces. The one-stop delivery system connects the provision 
of career services and training to help individuals get good jobs and 
build careers and the development of the skilled workers employers need 
and their match to employers. Work-based training focuses on employer 
workforce needs, particularly incumbent worker training, where the 
employer is the primary customer.
    Comments: A few commenters supported the removal of the WIA 
``limited funding'' exception. Two commenters strongly urged the 
Department to clarify in the Final Rule that the priority is in effect 
regardless of funding. Two commenters stated that it was preferential 
to apply the proposed priority of service provisions when funds are 
limited. One commenter questioned whether the regulations pre-suppose 
that limited funding exists and expressed support for the development 
of criteria that would give local areas the authority to set priority 
of service thresholds that would take effect only during times of 
limited funding.
    Department Response: The application of priority under the title I 
adult program applies at all times as required in WIOA sec. 
134(c)(3)(E).
    Comments: A commenter recommended that the regulation allow for 
local definition of low income rather than the Federally defined Lower 
Living Standard Income Level (LLSIL), reasoning that an individual 
might not be below the low-income level as defined by the LLSIL, but 
still be far below the level of self-sufficiency in the local area. 
Another commenter asked what the definition of ``family'' would be when 
determining whether someone is considered low income in regard to 
priority of service. One commenter recommended incorporating the 
definition of family from WIA sec. 101(15) into the regulations to 
clarify the meaning of low income. One commenter questioned how the 
priority groups included in the regulation relate to Equal Employment 
Opportunity (EEO) considerations and requested clarification within the 
regulation that EEO applies within the priority groups rather than 
before prioritization is considered.
    A few commenters asserted that insufficient detail was provided in 
the regulations (e.g., family income calculations) and expressed 
concern with an approach that provided these details through guidance, 
reasoning that guidance allows for requirements to change over time.
    Department Response: The term ``low-income individual'' is 
statutorily defined in WIOA sec. 3(36); it includes language that the 
LLSIL is determined by the Secretary. The Department agrees with the 
commenters requesting a definition of ``family'' and has added language 
to the definitions in part 675 of this Rule. Discussion of the added 
definition is provided in the preamble accompanying part 675.
    The non-discrimination provisions of WIOA sec. 188 do not provide 
for preference for services. They protect against discrimination in the 
provision of services and prevent individuals from being otherwise 
adversely affected because of their membership in a protected class. 
Therefore, the Department has declined to make changes in the 
regulatory text in response to this comment.
    Comments: Several commenters recommended a revision to proposed 
Sec.  680.600(c) to clarify that any designation of priority for other 
eligible individuals must be subject to both the veterans priority of 
service requirements at Sec.  680.650 and the WIOA statutory priority 
of service requirements in sec. 134(c)(3)(E). A commenter suggested 
that any guidance in this area, including guidance on expectations for 
State and local implementation, should support flexibility to allow 
States and localities to serve their unique and diverse populations 
best. One commenter questioned the relative priority that should be 
applied to other groups of individuals designated by the Local WDB or 
Governor as receiving priority of service compared to those explicitly 
listed in WIOA.
    Department Response: The Department agrees with the commenters' 
suggestion that any additional priority populations identified by the 
Governor must be consistent with the statutory priority as well as the 
veteran's priority of service. The Department has made changes to the 
regulatory text at Sec.  680.600(c) to reflect this suggestion. The 
Department will issue guidance and technical assistance about the 
implementation of these priority requirements.
    Comments: Several commenters stated that the Department must revise 
proposed Sec.  680.600(a) to align with WIOA and allow for priority to 
be given to ``recipients of public assistance, other low-income 
individuals, and individuals who are basic skills deficient,'' not 
``recipients of public assistance, other low-income individuals, who 
are basic skills deficient,'' as was proposed. A commenter requested 
clarification as to whether being basic skills deficient alone would 
quality an individual for priority of service.
    Department Response: The Department agrees with the commenters and 
has modified the regulatory text in Sec.  680.600(a) to make clear that 
individuals who are basic skills deficient is its own category to be 
eligible for priority of service in the WIOA title I adult program.
Basic Skills Deficient
    Comments: A commenter provided several recommendations about 
priority of service for individuals who are basic skills deficient: (1) 
Basic skills deficient should include computer literacy skills as a 
skill necessary to function on the job; (2) the process for identifying 
basic skills deficient should allow self-attestation and observation by 
one-stop staff; (3) a standard tool for measuring basic skills 
deficient should be developed and should include consideration of 
career-oriented employability skills; and (4) any individual who meets 
the definition of basic skills deficient should be eligible for 
services.

[[Page 56148]]

    A few commenters cautioned against using a definition of basic 
skills deficient that considered how the individual's skill set would 
allow them to ``function on the job.'' These commenters reasoned that 
such a definition could create a loophole that might diminish the 
priority of service requirement by permitting services to otherwise 
non-low- income individuals who simply lack some skill needed to do a 
specific job. A few commenters recommended that the methodology for 
determining basic skills deficiency should be identified in State or 
local policy, rather than in regulation or Department policy.
    Department Response: The term ``basic skills deficient'' is defined 
in WIOA sec 3(5). States and Local WDBs have flexibility in determining 
when an individual meets this definition.
    Comments: A commenter stated that proposed paragraphs (a) and (c) 
of Sec.  680.600 included inconsistent language when describing 
individuals who are basic skills deficient, one paragraph using the 
term ``basic skills deficient'' and the other using the term 
``individuals without basic work skills.'' The commenter asserted that 
consistent terminology is important.
    Department Response: The Department agrees with these comments and 
has modified the regulatory text to incorporate this suggestion.
Implementation of Priority of Service Requirements
    Comments: Several commenters requested guidance on the 
implementation of the priority of service requirements. A few 
commenters stated that guidance should include an explanation of how 
States and localities will be monitored to ensure that an appropriate 
process or protocol is established and details on what the protocols 
should include. Because the priority groups could be seen as a threat 
to successful performance tracking, one commenter stated that reporting 
and incentives should be put into place to ensure these participants 
are actually served and supported.
    Several commenters provided additional input on how to implement 
the priority of service requirements, including the following 
recommendations, building on the Department's use of veterans' priority 
of service, utilizing technical assistance and best practices, 
developing performance metrics and benchmarks, and coordination with 
immigration and refugee organizations and State Refugee Coordinators.
    A few commenters described how U.S. Census data could be used to 
implement or verify the priority of service requirements. To verify 
that the priority of service has been properly implemented, two 
commenters recommended that the Department require that State and local 
planning efforts utilize the most current Census and administrative 
data available to develop estimates of each priority service population 
in their planning efforts and update these data year to year. 
Additionally, these commenters recommended that this data be used in 
Federal reviews of State Plans to ensure that system designs and 
projected investments are equitably targeted to service priority 
populations. The commenters also stated that this data should be used 
to benchmark system performance in actual implementation of the 
priority of service from year to year.
    Department Response: The Department will provide further guidance 
to clarify how priority of service should be implemented and monitored.
Section 680.610 Does the statutory priority for use of adult funds also 
apply to dislocated worker funds?
    Comments: A commenter sought clarification as to whether the same 
priority given to adult funds applied to dislocated worker funds that 
were transferred to the adult program.
    Department Response: The Department considers funds transferred 
from the dislocated worker program to the adult program to be adult 
program funds and fall under the priority requirements of the adult 
program. Likewise, any transfer of funds from the adult program to the 
dislocated worker program will fall under the requirements of the 
dislocated worker program.
    Comments: Commenting that older workers are more likely to show up 
in the dislocated worker program than in the adult program, one 
commenter recommended that priorities and protections should be 
established within the dislocated workers program.
    Department Response: There is no priority in the dislocated worker 
program, other than veteran's priority of service. Participants must 
meet the dislocated worker eligibility criteria in order to participate 
in this program. No changes have been made to the regulatory text in 
response to the comments.
Section 680.620 How does the Temporary Assistance for Needy Families 
program relate to the one-stop delivery system?
    Comments: A commenter suggested that the statement in the NPRM 
introduction to subpart E that the ``Department strongly encourages 
close cooperation'' between WIOA-funded programs and other Federal and 
State sources of assistance for job seekers does not convey the 
strength needed to have full coordination between WIOA-funded programs 
and the TANF program. This commenter recommended changing the wording 
to ``mandates close coordination with funding tied to coordinated 
partnerships.''
    One commenter recommended that the Department seek out 
opportunities for increased alignment between WIOA common performance 
indicators and TANF. This commenter stated that one challenge is that 
TANF programs are not measured by the same accountability measures as 
the other core WIOA programs.
    Department Response: WIOA delegated the authority to Governors and 
Local WDBs, to decide how closely to align and coordinate their plans 
with WIOA programs and other sources of public assistance like TANF. 
The Department encourages strong partnership and close alignment with 
TANF at the State and local level.
    Comments: A commenter requested clarification on whether TANF 
funding had to be used, rather than WIOA funds, if available, and how 
TANF organizations should document that TANF funds are not available.
    Department Response: Under Sec.  680.230(b) and WIOA sec. 
134(c)(3)(B), one-stop centers are required to consider the 
availability of other sources of grants to pay for training costs, 
which includes TANF funds. The Department will provide additional 
guidance and technical assistance to one-stop centers to answer 
questions about how to document whether funds from other sources such 
as TANF are available.
    Comments: Several commenters recommended that the Department ensure 
that Local WDBs or their standing youth committees identify how 
connections will be made with TANF partners at one-stop centers to 
ensure policy and programmatic alignment for the young adult population 
under 25, who may receive a different set of services if they are not 
served though WIOA title I youth programs. These commenters asserted 
that WIOA and TANF differ greatly from each other, requiring specific 
policy and

[[Page 56149]]

programmatic alignment by the State and Local WDBs to service TANF 
recipients in a WIOA program.
    Department Response: Coordination between TANF and WIOA services 
must take place at the State and local level and therefore, States and 
local areas are responsible for establishing policies and MOUs, and 
aligning plans wherever they deem to be appropriate to serve 
participants best. The Department recognizes that there are challenges 
associated with such planning and coordination and will continue to 
provide guidance and technical assistance to assist with these 
processes. No change is made in the regulatory text.
Section 680.630 How does a displaced homemaker qualify for services 
under title I?
    Comments: A commenter expressed support for the inclusion of 
spouses of members of the Armed Forces on active duty as a displaced 
homemaker. Two commenters encouraged the Department to urge States to 
highlight the displaced military spouse homemakers in dissemination of 
information about services to this population.
    Department Response: The Department agrees with the commenters' 
suggestion and encourages States and Local WDBs to highlight the 
eligibility for displaced military spouse homemakers in the information 
they disseminate about this program. No changes have been made to the 
regulatory text in response to the comments.
Section 680.640 May an individual with a disability whose family does 
not meet income eligibility criteria under the Workforce Innovation and 
Opportunity Act be eligible for priority as a low-income adult?
    Comments: A few commenters expressed support for the provisions in 
Sec.  680.640 as proposed. One comment also expressed support for the 
provisions in proposed Sec.  680.640 to keep a family's income separate 
from the adult with a disability's income to that services are provided 
to all individuals who need it and that another eligibility barrier is 
not created to ensuring access to these services.
    One commenter requested clarification on whether the provisions 
specifying the circumstances under which an individual with a 
disability may still qualify as a priority low-income adult, even when 
family income does not meet the low-income eligibility criteria, also 
apply to persons receiving Social Security Disability Insurance.
    Another commenter recommended the Department clearly identify 
receipt of Social Security disability benefits as a barrier to 
employment.
    Department Response: The circumstances that allow these individuals 
to qualify still as a low-income adult, regardless of family income, do 
not apply to persons receiving Social Security Disability Insurance 
(SSDI). The Department considers WIOA to be very specific about what 
does count and what does not with regard to income-based eligibility in 
its definition of ``low-income individual'' in WIOA sec. 3(36). This 
definition allows individuals on Supplemental Security Income (SSI) to 
be considered low-income, but does not consider individuals on SSDI to 
be considered low-income of the basis of that status alone. Also, SSDI 
payment cannot be excluded when making income-based eligibility 
determinations. However, individuals receiving SSDI meets the 
definition of an individual with a disability, which means the 
individual meets the criteria of an individual with a barrier to 
employment under WIOA sec. 3(24) and Sec.  680.320(b). The Department 
encourages individuals receiving SSDI who are seeking to return to 
employment to access services through the one-stop delivery system. 
WIOA is subject to 38 U.S.C. 4213, and therefore military benefits are 
excluded from income-based eligibility determinations under WIOA.
7. Subpart F--Work-Based Training
    Sections 680.700 through 680.850 are regulations for work-based 
training under WIOA. The regulations apply to (OJT) training, 
customized training, incumbent worker training, and transitional jobs. 
The regulations include specific information about general, contract, 
and employer payment requirements. Work-based training is employer-
driven with the goal of unsubsidized employment after participation. 
Generally, work-based training involves a commitment by an employer or 
employers to employ successful participants fully after they have 
completed the program. Registered apprenticeship training is a type of 
work-based training that can be funded in the adult and dislocated 
worker programs; additionally pre-apprenticeships may be used to 
provide work experiences that can help participants obtain the skills 
needed to be placed into a registered apprenticeship.
    Work-based training can be an effective training strategy that can 
provide additional opportunities for participants and employers in both 
finding high quality work and in developing a highly skilled workforce. 
Each of these work-based models can be effectively used to meet a 
variety of job seeker and employer needs. OJT is primarily designed to 
first hire the participant and provide them with the knowledge and 
skills necessary for the full performance of the job. Incumbent worker 
training is designed to ensure that employees of a company are able to 
acquire the skills necessary to retain employment and advance within 
the company or to provide the skills necessary to avert a layoff. 
Customized training is designed to provide local areas with flexibility 
to ensure that training meets the unique needs of the job seekers and 
employers or groups of employers.
    Both training providers and employers providing OJT opportunities 
must be providing the highest quality training to participants. OJT 
contracts must be continually monitored so that WIOA funds provided 
through OJT contracts are providing participants the training to retain 
employment successfully. It is important that OJTs provide participants 
with relevant skills and opportunities for career advancement and 
provides employers with a skilled workforce.
    Under WIOA, the statute enables a Governor or Local WDB to increase 
the reimbursement rate for OJT from 50 to 75 percent. This is designed 
to give States and Local WDBs additional flexibility in developing OJT 
opportunities that work best with the participating employers and in 
the local economy.
    WIOA also explicitly allows for incumbent worker training at the 
local level. WIOA introduces incumbent worker training as an allowable 
type of training for a local area to provide. Incumbent worker training 
is designed to either assist workers in obtaining the skills necessary 
to retain employment or to avert layoffs and must increase both a 
participant's and a company's competitiveness. Local areas may use up 
to 20 percent of their local adult and dislocated worker funds for 
incumbent worker training. The Department seeks to ensure that 
incumbent worker training is targeted to improving the skills and 
competitiveness of the participant and increasing the competitiveness 
of the employer. The training should, wherever possible, allow the 
participant to gain industry-recognized training experience and 
ultimately should lead to an increase in wages. To receive incumbent 
worker funding under WIOA, an incumbent worker must have an employer-
employee relationship, and an

[[Page 56150]]

established employment history, with the employer. Incumbent workers 
are employed at the time of their participation, and the contract funds 
are paid to the employer for training provided to the incumbent worker 
either to avert a lay-off or otherwise retain employment. A ``model'' 
incumbent worker training would be one where a participant acquires new 
skills allowing him or her to move into a higher skilled and higher 
paid job within the company, thus permitting the company to hire a job 
seeker to backfill the incumbent worker's pre-training position.
    Comments: A commenter recommended that the regulations clarify that 
OJT, customized, and incumbent worker training are exempt from the ETP 
process.
    Department Response: Work-based training and work experiences are 
subject to the dissemination requirements of WIOA sec. 134 (a)(2)(B)(v) 
and the requirements of WIOA sec. 122(h) as the Governor may require. 
These requirements are separate from the ETP section of WIOA sec. 
122(a) through (f). The Department has modified the language of the 
regulatory text in Sec.  680.340(b), which requires Local WDBs to 
disseminate the list of ETPs, to make clear that the work-based 
training provider information requirements are separate from the 
requirements governing the ETPL. These provisions of WIOA sec. 122(h) 
apply to providers of work-based training.
On-the-Job Training
    Comments: A commenter expressed support for the proposed 
requirements regarding OJT. Another asked the Department to earmark 
funding either on the national or State level for employer education as 
to the benefits of hiring after training is received.
    Department Response: The Department considers employer engagement 
to be critical to the success of these programs. It plans to provide 
additional guidance and technical assistance for this purpose.
    Comments: A commenter expressed concern that the different 
``employer match'' requirements for OJT, customized training, and 
incumbent worker training would present a challenge to explain to 
employers, and recommended that the Department simplify the match 
requirements and lower them for small businesses to encourage their 
participation in the programs. Specifically, this commenter recommended 
that the match requirement be the same across all three types of 
training and be differentiated based on business size.
    Department Response: The matching requirements training for these 
three types of training are specified in WIOA, and are provided, 
consistent with WIOA, at: Sec.  680.700 for OJT, Sec.  680.760 for 
customized training, and Sec.  680.820 for incumbent worker training. 
Each type of training emphasizes a different need of employers and 
individuals, and the employment match is designed to reflect the 
differences in those training types. No change is made in the 
regulatory text.
Section 680.700 What are the requirements for on-the-job training?
    Comments: Two commenters asked if it would be permissible to enter 
into an OJT contract with a public non-profit agency such as a local 
fire department or board of education.
    Department Response: Yes, as long as the requirements of Sec. Sec.  
680.700 through 680.730 are met, this type of OJT contract would be 
allowable.
    Comments: Regarding the circumstances under which adult and 
dislocated worker funding may not be used to enter into an OJT 
contract, two commenters recommended adding to Sec.  680.700(b) that 
OJT training contracts may not be entered into with employers that have 
unpaid unemployment insurance and workers compensation taxes.
    Department Response: The Department considers this to be at the 
discretion of State and Local WDBs and declines to modify the 
regulatory text to include this requirement.
    Comments: Two commenters recommended adding language to Sec.  
680.700 requiring OJT contracts that cover ``apprenticeable 
occupations'' and pre-apprenticeship programs to be attached to 
registered apprenticeship programs. These commenters also recommended 
adding an additional condition to the list of factors that the Governor 
or Local WDB must take into account when exercising discretion to 
increase the reimbursement rate for OJT contracts in Sec.  680.730(a). 
Specifically, these commenters recommended that the Department add a 
new subparagraph that would prohibit reimbursements for OJT programs 
for apprenticeable occupations unless they are part of a registered 
apprenticeship program.
    This commenter also suggested that this new regulatory provision 
require the Governor to consider whether the OJT contracts are 
harmonized with registered apprenticeship programs such that no OJT 
contract operates to train in an apprenticeable occupation unless it is 
part of a registered apprenticeship program (or comparable program 
determined by the Secretary not to undermine registered apprenticeship 
programs) and that any contract for pre-apprenticeship is articulated 
with at least one registered apprenticeship programs.
    Department Response: Section 680.740 specifies how registered 
apprenticeship program sponsors or participating employers in 
registered apprenticeship programs may be contracted to provide OJT. 
The Department declines to add language that restricts the OJT portion 
of non-registered apprenticeships from receiving OJT funds providing 
that they meet the requirements of Sec. Sec.  680.700 through 680.730 
and any criteria established by the Local WDB.
    Comments: One commenter requested that the Department amend Sec.  
680.700 to include work-based learning activities that are identified 
and linked to training provided by ETPs.
    Department Response: There are no prohibitions to ETPs providing 
work-based learning activities, provided that those activities meet the 
conditions of Sec. Sec.  680.700 through 680.730.
    Comments: To prevent hiring workers for the duration of the OJT 
with no job continuity afterwards, a commenter recommended there be a 
minimum standard to address performance relating to both employment and 
career pathways to which all Governors would be required to adhere.
    Department Response: OJT participants are part of the performance 
accountability system under WIOA which includes employment related 
outcomes, and performance information will be collected on all 
participants in OJT. This approach will help to ensure that States and 
local areas are utilizing high quality training providers for both ITAs 
and work-based training. In addition to the required performance 
information, Governors may set additional performance criteria for 
work-based training under WIOA sec. 122(h). The Department will 
continue to support collaboration across all WIOA title I programs.
    Comments: Regarding the duration of an OJT contract, a commenter 
recommended that OJT be used for 6 to 12 months with discretion resting 
with the Local WDB.
    Department Response: The Department is not requiring specific OJT 
duration limitations. The Department agrees with the comment that the 
discretion should be left to the Local WDBs and declines to make 
changes to the regulatory text at Sec.  680.700(c). Comment: Two 
commenters requested that Sec.  680.700 include a reference to 
agreements with registered apprenticeship programs under

[[Page 56151]]

Sec.  680.740(a), to make clear OJT can be provided by registered 
apprenticeship programs.
    Department Response: The Department has added language to Sec.  
680.700 to be clear that OJT contracts may be written with registered 
apprenticeship program sponsors.
Section 680.710 What are the requirements for on-the-job training 
contracts for employed workers?
    Comments: A commenter stated that the determination of a ``self-
sufficient wage'' should be left to the State and local areas and 
driven by local circumstances.
    Department Response: The Department maintains the self-sufficiency 
standard. States may develop a State self sufficiency standard, and 
local areas may adjust the standard, within the set parameters of WIOA 
sec. 134(c)(3) and (d)(1)(a).
    Comments: A commenter recommended insertion of a reference to 
``workers with barriers to employment, including people with 
disabilities'' in Sec.  680.710(a) and broadening OJT contracts to 
include introduction of accessible technology and other workplace 
accommodations for workers with emerging disabilities in need to 
training to stay on the job.
    Department Response: Title I adult and dislocated worker funds are 
to be used to target services to individuals with barriers to 
employment as defined in WIOA sec. 3(24). Individuals with disabilities 
are a part of this definition. The Department has added ``reasonable 
accommodations for individuals with disabilities'' as an allowable 
supportive service in Sec.  680.900, which can be used to help enable 
an individual to participate in OJT training.
Section 680.720 What conditions govern on-the-job training payments to 
employers?
    Comments: Several commenters concurred with the Department's 
decision not to define ``extraordinary costs'' through the regulation, 
allowing for flexibility. One commenter would leave the definition up 
to the States, while another recommended that it be left to local 
discretion to ensure their OJT arrangements are applicable to local 
market conditions.
    One commenter recommended that ``extraordinary costs'' be defined 
according to the Association for Talent Development Guidelines, which 
divide expenses according to whether they are direct or indirect. The 
commenter suggested that at a minimum that the regulations provide 
explicit coverage of unrecoverable material expenses (i.e., materials 
and articles nonproductively expended in training that do not create a 
usable product) and of participant trainees and trainers lost from 
productive work.
    Two commenters recommended deleting proposed Sec.  680.720(c), 
which specified that employers are not required to document the 
extraordinary costs associated with training OJT participants and 
replace it with a requirement that the Governor collect performance 
data regarding OJT to ensure that OJT contracts are fulfilling the 
purposes of WIOA.
    Department Response: The Department declines to require additional 
cost or other documentation from employers to avoid creating an 
unnecessary burden. States and local areas may further define what 
constitutes an ``extraordinary cost'' at their discretion.
Section 680.730 Under what conditions may a Governor or Local Workforce 
Development Board raise the on-the-job training reimbursement rate up 
to 75 percent of the wage rate?
    Comments: A commenter requested clarification about when a Local 
WDB may increase the rate for OJT contracts up to 75 percent, and 
specifically asked if a Governor may limit the Local WDB's authority to 
increase the reimbursement rate if all factors required in the 
regulation and under local policy are met.
    Department Response: The Governor may not limit the Local WDB's 
authority to increase the reimbursement rate for OJT contracts provided 
with funds allocated to the local area. The difference between the 
Governor and the Local WDB with respect to OJT reimbursement rates is 
what funding source each is allowed to raise the reimbursement rate 
for. The Governor may increase the reimbursement rate for OJT contracts 
provided with Governor's Reserve funds or NDWG funds. Local WDBs may 
increase the reimbursement rate for OJT contracts provided with funds 
allocated to the local area.
    Comments: A commenter suggested that employers paying above the 
median wage for the occupation should be eligible for increased 
reimbursement as follows: ``Entry Level'' at 50 percent, ``Median'' at 
60 percent, and ``Experienced'' at 75 percent.
    Another commenter described its current waiver that allows for a 
graduated rate of OJT reimbursements based on the size of the company, 
which it asserted has helped small businesses gain funding and skilled 
employees.
    Department Response: The Department declines to add these factors 
into the regulatory text. They may be determined appropriate by the 
Governors or Local WDBs under Sec.  680.730(a)(4).
    Comments: One commenter asked if a State needs to seek a waiver to 
reimburse employers more than 75 percent of the OJT wage, and if the 
waiver could be obtained before July 1, 2015. This commenter described 
its current waiver to provide up to a 90 percent employer reimbursement 
rate.
    Department Response: The Department is not considering waiver 
requests as part of this rule making. All WIOA title I adult and 
dislocated worker OJT projects going forward are expected to adhere to 
the reimbursement rates set forth in WIOA.
    Comments: A commenter urged the Department to provide guidance to 
State and Local WDBs on coordinating the increased reimbursement 
criteria with high-road economic development strategies that improve 
wages, benefits, and other job quality factors for front-line 
employment in a State and region.
    Department Response: The Department will issue guidance and 
technical assistance on work-based learning, including OJT, sector 
strategies, and industry partnerships.
    Comments: A commenter recommended that the Department include a 
reference to individuals with disabilities in Sec.  680.730(a)(1) to 
provide an incentive to State and Local WDBs to focus on this 
population.
    Department Response: Paragraph (a)(1) of Sec.  680.730 states that 
Governors may take the characteristics of the participants into 
consideration when raising the reimbursement rate, emphasizing 
``individuals with barriers to employment'' as defined in WIOA sec. 
3(24). Individuals with disabilities are included in this definition. 
No change is made to the regulatory text.
    Comments: Some commenters stated that the factors to be considered 
regarding the relation of training to the competitiveness of the 
participant should be the size of the employer or the characteristics 
of the participant as determined by the Governor or Local WDB. A 
commenter agreed that employer size should be a factor related to 
increasing an OJT reimbursements rate, stating that smaller employers 
often need additional support.
    Two commenters requested that the Department numerically clarify or 
define ``small businesses'' as it applies to the employer size factor 
under Sec.  680.730(a)(2). Similarly, two commenters recommended that 
the Department clarify the meaning of ``with an emphasis on small 
businesses'' in Sec.  680.730(a)(2). One commenter

[[Page 56152]]

recommended that the Department rely upon the Small Business 
Administration's (SBA's) definition of ``small business.'' Another 
commenter requested that ``size of the employer, with an emphasis on 
small businesses'' be removed from Sec.  680.730(a)(2), or at least 
clarified to ensure that it does not negatively impact medium and large 
employers seeking a higher OJT reimbursement rate.
    Department Response: The Department included ``the size of the 
employer'' as a factor that Governors and Local WDBs may take into 
account when deciding to raise the reimbursement rate for a particular 
OJT project. The Department recognizes that providing these services to 
small businesses, which may need additional support in providing OJT, 
is an important factor in determining the reimbursement rate for OJT. 
However, there is not requirement that only small businesses may 
receive a higher reimbursement rate. The Department recommends that 
Governors and Local WDBs refer to SBA's definition of ``small 
business'' as a guide which varies by industry; it can be found at 
https://www.sba.gov/content/summary-size-standards-industry-sector.
    Comments: A commenter stated that before entering training, all 
individuals should be thoroughly assessed to determine appropriateness 
of training--including demand of an occupation, post-training wages, 
and other individualized customer-level criteria--to be as efficient as 
possible with limited training resources. Several commenters 
specifically addressed the ``competitiveness of the participant'' 
factor (proposed Sec.  680.730(a)(4)); including, its use in the 
provision of incumbent worker training, a measure used in determining 
wages for eligibility purposes, job retention, and credential 
attainment.
    Department Response: In order for an individual to receive 
training, he or she must meet the criteria in WIOA sec 134(c)(3)(A). 
The Department notes that there is no sequence of service requirement; 
however, the eligibility for training must be established by the Local 
WDB. An assessment is one appropriate ways of determining training 
eligibility. The Department considers the ``competitiveness of a 
participant'' to be an appropriate factor that Governors or Local WDBs 
may use when determining the OJT reimbursement rate, under Sec.  
680.730(a)(4). The Department agrees with the commenters' 
recommendation and declines to define ``competitiveness of a 
participant'' through regulation. Governors and Local WDBs may develop 
a policy or criteria to be used in determining ``competitiveness of a 
participant.''
Section 680.740 How can on-the-job training funds be used to support 
placing participants into a registered apprenticeship program?
    Comments: Many commenters addressed the issue of maximum amount of 
time for OJT funds to be used to support registered apprenticeships; 
including, what entity decides the duration, flexibilities in 
determining duration, and tailoring to the needs of the participant.
    Department Response: The Department has considered these comments 
and declines to make changes to the regulatory text that would limit 
the flexibility of States and local areas to determine the appropriate 
duration for OJT funds used to support placing apprentices into a 
registered apprenticeship program. These decisions to be best made on a 
case-by-case basis at the State and local level based on individual 
need.
    Comments: One commenter stated that WIOA funding for apprenticeship 
is useful only if it: (1) Could support a pre-apprenticeship class of 
15 to 20 students for a 90-day training class; and (2) provide 
additional funding for State-approved apprenticeship training, and if 
funding could go directly to the program and not an intermediary like 
the State WDB. The commenter warned that most registered apprenticeship 
programs are multi-employer, which makes it difficult to offer OJT 
contracts to employers as a hiring incentive; instead, the commenter 
suggested that it would be more productive to use OJT contracts as an 
incentive to enroll OJT contract-eligible individuals in their 
apprenticeship programs.
    Two commenters requested clarification regarding management of 
reimbursement to employers by the registered apprenticeship training 
program when relationships with multiple employers exist; for example, 
when registered apprenticeship participants work for multiple employers 
during an OJT to maintain full-time employment.
    A commenter urged the Department to revise Sec.  680.740 to provide 
that OJT contracts may be written with a registered apprenticeship 
program, an employer participating in a registered apprenticeship 
program, or both. This commenter stated that having registered 
apprenticeship programs as signatories to OJT contracts guards against 
OJT becoming an employer subsidy without advancing the worker's 
progress. Further, the commenter recommended that OJT funds initially 
be received by the apprenticeship program, then reimbursed to the 
participating employer for the ``extraordinary costs.''
    Several commenters said that States would benefit from guidance and 
technical assistance on facilitation and implementation of 
apprenticeships.
    Department Response: The Department recognizes the value of pre-
apprenticeships and encourages pre-apprenticeship programs to become 
ETPs through WIOA sec. 122(d). Pre-apprenticeship programs do not 
automatically qualify to be on the ETPL like RA programs do; however, 
if they meet the requirements under the provisions of sec. 122(a-f) to 
become ETPs, they can be funded using ITAs. To provide information and 
new technical assistance resources for starting and enhancing 
registered apprenticeship programs, the Department issued Training and 
Employment Notice No. 20-15, dated January 11, 2016 (http://wdr.doleta.gov/directives/attach/TEN/TEN_20-15.pdf). The Department 
plans on issuing additional guidance and technical assistance 
clarifying pre-apprenticeship and registered apprenticeship use in the 
one-stop delivery system. The Department has changed the regulatory 
text in Sec.  680.740(a) to make it clear that OJT contracts may be 
entered into with registered apprenticeship program sponsors or 
participating employers in a registered apprenticeship program for the 
OJT portion of the registered apprenticeship program.
    Comments: Commenters urged the Department to revise the regulation 
to allow OJT funding to be used for non-registered apprenticeship 
programs. Similarly, two different commenters stated that Sec.  680.740 
should not limit OJT funds to registered apprenticeship programs.
    Department Response: WIOA sec. 122(a)(2)(B) provides automatic 
qualification for registered apprenticeship programs on ETPLs and 
provides an overall emphasis on registered apprenticeship programs 
throughout the one-stop delivery system. The Department has used this 
emphasis to highlight the unique flexibilities the one-stop delivery 
system has in making use of registered apprenticeship programs to 
provide training services, including ITAs and OJT. The regulatory text 
in Sec.  680.740 is designed to highlight those flexibilities for OJT. 
This in no way restricts other appropriate uses of OJT, including for 
use with non-registered apprenticeships. The Department declines to 
make a regulatory text change include all allowable training

[[Page 56153]]

types; however, because of WIOA's emphasis on registered 
apprenticeship, the Department has determined it appropriate to 
highlight.
    Comments: A commenter expressed support for combining funds to 
support registered apprenticeship training under Sec. Sec.  680.740 and 
680.750.
    Department Response: This allows for the combined use of OJT and 
ITAs to support placing participants in a registered apprenticeship 
program. The Department notes that there is no prohibition on the 
combined use of ITAs and OJT as well as any other contracted training 
services under WIOA sec. 134(c)(3)(G)(iv). However these decisions must 
be based on individual need, and they must be paying for separate 
program elements. No changes have been made to the regulatory text in 
response to the comment.
Section 680.760 What is customized training?
    Comments: A commenter requested clarification of the ``commitment'' 
by the employer to employ all individuals upon successful completion of 
customized training; specifically, whether it must be by written letter 
or verbal, and whether an employer may use a temporary agency for the 
first 90 days of employment. Similarly, another commenter urged that 
the regulations address an employer's expectation to commit to hire.
    Department Response: The ``commitment'' is a statutory requirement 
in WIOA sec. 3(14) and 134(c)(3)(g)(1) requires a contract between the 
employer and the Local WDB for customized training. Local WDBs have 
flexibility in determining what constitutes an appropriate commitment 
to hire the individuals on behalf of the employer.
    Comments: One commenter requested that the Department include 
language in Sec.  680.760 that would exempt the requirement that ``the 
employer pays a significant cost of the training'' when the Local WDB 
determines that the workers are ``at-risk'' for layoff. This commenter 
reasoned that customized training seems the most appropriate support to 
provide when workers are determined to be vulnerable to layoff or 
closure and have basic skills but may lack a preferred credential and/
or industry-recognized certification.
    Department Response: WIOA sec. 3(14) states that for customized 
training, employers must pay for a significant cost of the training, 
which is to be determined by the Local WDB. Customized training is 
generally for hiring new or recent employees and not for retraining 
existing employees. Incumbent worker training may be used to provide 
training for current employees as a layoff aversion strategy. No 
changes have been made to the regulatory text in response to the 
comments.
    Comments: Two commenters asked if the Sec.  680.760(c) requirement 
that an employer pay a ``significant cost of the training'' means the 
employer must pay for more than 50 percent of the cost of training. One 
commenter recommended that ``significant cost of the training'' should 
be eliminated as a criterion for customized training under Sec.  
680.760 because it is vague and arbitrary.
    Department Response: WIOA sec. 3(14)(C) requires that employers pay 
a ``significant cost of the training'' of WIOA. Local WDBs have the 
discretion to define the term ``significant cost of the training'' as 
is appropriate for their local areas. No change is made in the 
regulatory text.
    Comments: A commenter proposed adding a paragraph (d) to the 
definition of customized training in Sec.  680.760 stating, ``For which 
the training results in a degree, certificate, or industry-recognized 
credential.''
    Department Response: The requirements for customized training are 
defined in WIOA sec. 3(14). No change is made to the regulatory text. 
The Department encourages the use of customized training that leads to 
credentials, but this is not a requirement of customized training.
Section 680.770 What are the requirements for customized training for 
employed workers?
    Comments: Two commenters recommended that the Department remove the 
requirement for employed workers to be under the self-sufficient wage 
to participate in customized training because it is a deterrent for 
many companies and does not provide an optimal situation for new hires. 
Other commenters asserted that the provision would prevent dislocated 
workers reemployed at a lower wage but still above the self-sufficiency 
wage from participating in customized training that could help them 
reach their prior wage levels. One commenter recommended that the 
Department eliminate ``self-sufficient wage'' as a criterion or 
standard for use by Local WDBs in determining work-based training 
arrangements under Sec.  680.770 because it is arbitrary and holds 
different meanings in different communities. This commenter asserted 
that wage gain is a more objective measure.
    One commenter expressed concern that the self-sufficient wage 
requirement and the requirement for training to incorporate new 
technologies, processes, or procedures are too restrictive.
    Department Response: The Department is maintaining the self-
sufficiency standard for employed workers to be eligible for customized 
training, consistent with eligibility for training services under WIOA 
sec. 134(c)(3)(A). The Department considers wage gain an important 
measure that a Local WDB may consider when determining if customized 
training would be appropriate.
    Comments: A commenter recommended adding a criterion to the 
regulation that would allow customized training for individuals making 
more than self-sufficient wage if it would prevent them from being 
unemployed as a result of a layoff.
    Department Response: The Department considers incumbent worker 
training to be the most appropriate type of training for layoff 
aversion. Customized training is generally for hiring new or recent 
employees and not for retaining existing employees, although there may 
be instances where customized training is appropriate in that 
circumstance. In those instances customized training may be used for 
individuals making more than self-sufficient wages if all appropriate 
criteria are met. Lastly, customized employment can be used for 
individuals making more than self-sufficient wages as long as it leads 
to comparable to or higher than previous employment.
    Comments: A commenter cautioned that if customized training and 
incumbent worker training are differentiated for low-skilled workers 
below the self-sufficiency wage, the regulations should add language 
that requires local areas to fund and promote both options to 
employers.
    Department Response: Under WIOA, both incumbent worker training and 
customized training are permissible activities, each with specific 
eligibility, funding, and allowable criteria. Local WDBs have the 
flexibility to provide the appropriate types of training and services 
needed by their local area.
    Comments: One commenter recommended that small businesses and Local 
WDBs be given maximum flexibility to develop customized training 
programs tailored for their individual needs. This commenter stated 
that customized training should definitely include OJT. Expressing 
concern that proposed Sec.  680.770 is overly burdensome and would 
erect a

[[Page 56154]]

significant barrier for access to training funds, another commenter 
stated that, by definition, if a manufacturer is providing the training 
then it is in-demand and valuable in the workplace.
    Department Response: Customized training and OJT are two distinct 
types of allowable training. OJT participants learn on the job, while 
customized training is generally designed so that participants are 
trained by a third party for the employer. The regulatory text at Sec.  
680.770 is consistent with WIOA sec. 134(c)(3)(A) about how individuals 
may qualify to receive training services. Local WDBs determine training 
service investments based upon an analysis of the employment needs of 
the employers in current and emerging in-demand industry sectors and 
occupations and the needs of the area's labor force.
    Comments: A commenter stated that for customized training involving 
multiple employers, opportunities must be offered to contract directly 
with a training provider without triggering procurement requirements.
    Department Response: Grant recipients and subrecipients must adhere 
to the procurement standards set forth by the Uniform Guidance at 2 CFR 
200.317 through 200.326. When procuring property and services under a 
Federal award, States must follow the same policies and procedures used 
for procurements from its non-Federal funds [2 CFR 200.317]. All 
entities that are not States must ensure that procurements are 
conducted in a manner that is consistent with 2 CFR 200.318 through 
200.326.
    Comments: Several commenters addressed the distinction between OJT 
and customized training; including, customization, use of classroom 
training, and needs of the participant and employer.
    Department Response: WIOA defines both customized training and OJT 
at WIOA sec. 3(14) for customized training and sec. 3(44) for OJT and 
provides the differentiation, which is primarily OJT is focused on 
learning on the job, while customized training is generally classroom 
based and is often provided by a third party for the employer. There 
have been no changes to the regulatory text in response to this 
comment.
Section 680.780 Who is an ``incumbent worker'' for purposes of 
statewide and local employment and training activities?
    Comments: One commenter expressed concern that the definition of 
``incumbent worker'' was unclear and stated that if the definition of 
incumbent worker is to be refined by Governors, factors such as hours 
worked and skill level should be considered. Another commenter stated 
that there was confusion under WIA about the distinctions between 
``employed'' and ``incumbent'' workers.
    Department Response: While the Department agrees that hours worked 
and skill level are appropriate considerations that may be used by 
Governors and the Local WDBs when deciding when an employer is eligible 
to receive incumbent worker training under Sec.  680.810. Any further 
definition may occur outside of the regulation, including by Governors 
and Local WDBs.
    Incumbent worker training is designed to meet the workforce needs 
of an employer or group of employers. The employer must meet the 
eligibility criteria established in Sec.  680.810. The incumbent worker 
must meet the requirements established in Sec.  680.780 and the 
incumbent worker training requirements described in Sec.  680.790, 
which discuss the requirements for incumbent worker training for 
individuals receiving training and the standard by which incumbent 
worker training should be provided. An incumbent worker does not have 
to meet the eligibility criteria for WIOA title I adult and dislocated 
worker programs. An employed worker must meet title I eligibility 
criteria for adult and dislocated worker programs in order to receive 
career services, and/or must meet the wage requirements of WIOA sec. 
134(c)(3)(A)(i) and Sec.  680.210(a)(1) and (2) to receive training 
services while also being employed at the beginning of participation in 
career and training services. No changes have been made to the 
regulatory text in response to these comments.
    Comments: Many commenters addressed the issue of the appropriate 
amount of time an employee must have worked for an employer before 
being eligible for incumbent worker training. There was a range of 
timeframes recommended, ranging from 3 months to 1 year, and some 
commenters recommending no minimum timeframe. Some commenters stated 
that it should be when an employee is off of probationary status or 
once the employer-employee relationship is established. One commenter 
discussed that new employees are often the most in need of training. 
One commenter wanted Local WDBs to develop policies on employee tenure 
with a company. A commenter recommended that the Department utilize a 
standard that is based on the company's tenure in a community as the 
standard not to incentivize business relocation. Lastly, a commenter 
wanted the Department to ensure there was no maximum duration of time 
an employee could work for a company and not be eligible for incumbent 
worker training.
    Department Response: Incumbent worker training is intended for 
workers with an established work history with the current employer, and 
who have the knowledge, skills, and abilities needed by their current 
employer but because of changes in the necessary skills to remain in 
their position, to advance in the company, or to avoid a layoff, the 
employees now need additional training. Thus, the Department has 
decided to retain the 6-month requirement for incumbent workers.
    The Department does not consider incumbent worker training to be 
part of the occupational training for the position in which the new 
employee was hired. This type of training is most appropriate for an 
OJT or customized training. However, given that some incumbent worker 
training may be provided for a cohort of employees, the Department 
recognizes the concern about excluding certain members of a cohort 
based on this criterion and has added language into the regulatory text 
in Sec.  680.780 to create an exception for cohort training, stating 
that a majority of the cohort must meet the 6-month requirement.
    Comments: Many commenters recommended adding specific language to 
Sec.  680.780 recognizing the need for incumbent training services to 
assist long-term workers who were hired when skill level requirements 
were much lower.
    Department Response: While the Department has established a 6-month 
rule for the minimum duration of employment for incumbent worker 
training eligibility, it has not set a maximum duration of employment. 
Long-term workers who are looking to gain new skills may benefit from 
incumbent worker training.
    Comments: The Department received a number of comments on the 
requirement incumbent worker training ``must satisfy the requirements 
in WIOA sec. 134(d)(4) and Sec.  680.790 and increase the 
competitiveness of the employee or employer.'' Because this sentence is 
more properly included in Sec.  680.790, which discusses what incumbent 
worker training is, the Department removed the text from Sec.  680.780 
and instead included it in Sec.  680.790. The comments received about 
this text are discussed below, in the discussion of Sec.  680.790.
    The Department made one final clarifying change at the end of Sec.  
680.780. The NPRM stated that an

[[Page 56155]]

incumbent worker does not necessarily have to meet the eligibility 
requirements for career and training services for adults and dislocated 
workers under WIOA. The Department has added language to make clear 
that if the worker is receiving other services in addition to incumbent 
worker training, the individual must meet the eligibility requirements 
like all other adult or dislocated worker participants.
Section 680.790 What is incumbent worker training?
    Comments: Two commenters urged the Department to define how 
incumbent worker training should ``increase the competitiveness of the 
employee or employer'' and recommended that such training be designed 
to retain a skilled workforce or avert the need to lay off employees. 
Another commenter urged the Department to define ``improving the skills 
and competitiveness of the participant'' and ``increasing the 
competiveness of the employer'' and to stipulate how competitiveness 
will be initially assessed and continuously measured. One commenter 
recommended that ``increasing the competitiveness of the employee or 
employer'' be defined in State policy to allow for flexibility or, 
alternatively, be defined as training that retains and advances a 
skilled workforce.
    Department Response: The Department agrees that the phrase 
``increase the competitiveness of the employee or employer'' may be 
defined under State and Local WDB policy, as consistent with the 
discussion below, and with any future guidance provided by the 
Department. No change is made to the regulatory text.
    Comments: A commenter stated that incumbent worker training should 
be ``employer driven'' and ``competitiveness of the participant'' 
should be a factor only for determining if incumbent worker training is 
appropriate.
    Another commenter recommended that States be allowed to develop 
incumbent worker training policies while the Department provides 
technical assistance and guidance. This commenter urged against relying 
on layoff aversion and recommended using available labor market data 
and sector strategies to target occupations for training.
    Some commenters urged the Department to omit layoff aversion as a 
criterion for incumbent worker training, asserting that it would have a 
chilling effect and would not be offered during healthy economic times. 
One commenter asserted that proposed Sec.  680.790 is too restrictive 
in focusing only on averting layoffs or retaining employment. This 
commenter recommended that the Department add specific language 
allowing incumbent training ``to promote the competitiveness of both 
the participant and the employer'' and ``to ensure an employee's skill 
set is advanced.''
    One commenter stated that incumbent worker training should be used 
for individuals who are at a self-sufficient wage and require training 
that helps the employer stay competitive and retain a skilled workforce 
or avert a layoff.
    Department Response: WIOA sec. 134(d)(4)(B) states that incumbent 
worker training is to assist workers in obtaining the skills necessary 
to retain employment or avert layoffs. The Department considers these 
to be two distinct, although not mutually exclusive, types of 
requirements for the training, and the regulatory text retains the 
requirements at Sec.  680.790. Further definition of these terms may be 
articulated in State and local policies. There have been no changes to 
the regulatory text in response to this comment.
    Comments: Some commenters recommended using earnings growth in the 
6 months following incumbent worker training to measure increased 
competitiveness of the employee. One commenter recommended measuring 
increased competitiveness by higher wages 1 year after training, 
portability, layoff aversion, and progress toward self-sufficiency.
    Another commenter recommended measuring ``competiveness of the 
employee'' by documented wage increases; access to other documented 
benefits, bonuses, or commissions; obtaining industry-recognized 
certificates or credentials; or ascension of the worker into an 
advanced job classification or pay grade. This commenter stated that 
identifying opportunities for increased competitiveness of employers 
might require access to confidential business information.
    One commenter recommended that the Department require the following 
to ``increase the competitiveness of the employee and employer'': (1) 
Training takes place on company time and trainees are compensated at no 
less than their normal rate of pay while attending training; (2) 
training is short-term and ideally 6 months or less; (3) training 
focuses on occupational skills; and (4) businesses must demonstrate 
that the costs of training are reasonable.
    Department Response: Section 680.810 outlines the factors that a 
Local WDB must consider when determining eligibility for an employer to 
receive incumbent worker funds and provides flexibility to the Local 
WDB to establish other factors in making such a determination. The 
Department notes that some ideas commenters provided about how to 
provide incumbent worker training have merit, and the Department will 
include them in guidance and technical assistance. No changes have been 
made to the regulatory text in response to these comments.
    Comments: One commenter recommended the following metrics for 
evaluating the effectiveness of incumbent worker training: Revenue 
increase, contracts awarded, sales data, geographic expansion, wage 
increase, increased education attainment, and increased credential 
attainment. Another commenter stated that incumbent worker training 
arrangement should be flexible, with success measured by metrics such 
as earnings gains, new skills and competencies gained, new 
certifications received and/or number of employees migrating into new 
employment, especially in the case of layoff aversion. One commenter 
recommended that an employer should demonstrate where incumbent worker 
training would increase revenue and lead to an increase in wage level 
within 90 days of training completion.
    Department Response: With respect to eligibility for incumbent 
worker training, many of these metrics are what the Department 
considers to be possible factors for a State or local area in 
determining incumbent worker training eligibility for training 
providers, employers, and employees, as included under Sec. Sec.  
680.780 and 680.810. The Department may issue further guidance on this 
subject.
    The Department clarifies that, because of the unique nature of the 
Incumbent Worker Training Program, where the Local WDB only evaluates 
the employers for eligibility consistent with Sec.  680.810, 
individuals receiving Incumbent Worker Training are not subject to the 
eligibility criteria that apply to participants in the adult or 
dislocated worker programs, unless they are also receiving other 
services under those programs. Therefore, individuals who only receive 
incumbent worker training and no other WIOA title I service do not fall 
within the definition of ``participant'' in 20 CFR 677.150(a) (see 
Joint WIOA Final Rule). As such, they are not included in calculations 
for the State Primary Indicators of Performance. The Department is 
making a change to be consistent with this in Sec.  680.810(a) and (b) 
by removing the word ``participant'' and inserting ``individual'' to 
reflect that incumbent

[[Page 56156]]

worker training eligibility is decided at the employer level.
    States and Local WDBs are, however, required to report on 
individuals who receive incumbent worker training, including employment 
status after training, wages after training, and credential attainment, 
the details of which are provided through the Department's ICR process 
and subsequent guidance. As part of future collections and guidance, 
the Department may seek to collect additional employer data, such as 
employer size, industry, and other information that may be used to 
evaluate the effectiveness of Incumbent Worker Training programs for 
both the employer and employee.
    Regarding the development and provision of Incumbent Worker 
Training by States and local areas, the Department encourages States 
and local areas to cultivate opportunities and develop policies that 
can appropriately support employers in their efforts to develop a more 
competitive workforce or avert potential layoffs and that provide 
incumbent workers with opportunities for advancement and wage gains 
within their company. Incumbent Worker Training policies must be 
aligned with State and Local Plans, as well as with sector strategy 
approaches for in-demand occupations.
    In addition to the required performance indicators, WIOA sec. 
122(h)(2) says that the Governor may require and use performance 
information relating to incumbent worker training and other work-based 
training to determine whether providers meet such performance criteria 
as required by the Governor. More detailed information on performance 
definitions and metrics are in 20 CFR part 677 (see Joint WIOA Final 
Rule).
    Comments: Several commenters said that it is unrealistic to expect 
incumbent worker training to result in the employee being promoted; 
instead, local areas need flexibility on timing of training and hiring 
new workers that coincides with the needs of business. In response to 
the NPRM preamble statement that ideal incumbent worker training would 
result in promotion and hiring to backfill the incumbent worker's 
position, two commenters asked if it is realistic to expect a company, 
through a round of training to retain workers, to also be able to add 
new employees. One of these commenters stated that this is an ideal 
structure that would be better served under customized training for 
employed workers. However, one commenter agreed with the Department's 
goal of using incumbent worker training to ``advance-and-backfill'' to 
benefit two employees.
    Department Response: The Department clarifies that the ideal 
incumbent worker training strategy of upskilling and backfilling 
employee positions is meant as an illustrative example of an ideal 
incumbent worker opportunity and not as the only type of successful 
incumbent worker training strategy. In a situation where incumbent 
worker training is needed to avert a layoff, the alternative of 
upskilling and backfilling positions would be unlikely. The Department 
is committed to ensuring that the regulations maintain flexibility for 
States and local areas to develop incumbent worker training strategies 
that best fit the needs of their State and community.
    Comments: One commenter asked if the definition of incumbent worker 
training would allow for contracted training through business and 
industry, adult education, etc.
    Department Response: The Department declines to specify all of the 
incumbent worker training contracting options in regulatory text. 
However, to secure incumbent worker training, grant recipients and 
subrecipients must adhere to the procurement standards set forth by the 
Uniform Guidance at 2 CFR 200.317 through 200.26. When procuring 
property and services under a Federal award, States must follow the 
same policies and procedures it uses for procurements from its non-
Federal funds [2 CFR 200.317]. All entities that are not States must 
ensure that procurements are conducted in a manner that is consistent 
with 2 CFR 200.318 through 200.326.
    Comments: A commenter recommended that incumbent worker training be 
structured to incorporate the biggest return on investment for Local 
WDBs, workers, and businesses by using economies of scale to upskill 
many workers at a time.
    Department Response: The Department agrees with this concern and 
has added language to Sec.  680.780 to clarify that cohort training is 
an acceptable use of incumbent worker training funds.
    Comments: A commenter stated that apprenticeship should be an 
approved expense for incumbent worker training if it would lead to a 
higher paid, higher skilled job.
    Department Response: The Department considers apprenticeship 
training to be an allowable incumbent worker training expense, provided 
the requirements for incumbent worker training in Sec. Sec.  680.780 
and 680.790 are met.
    Comments: A commenter recommended that cost reimbursement be 
limited to: Costs of outside vendors or in-house trainers; costs of 
textbooks and training materials; distance learning fees; and 
credentialing exam fees. This commenter stated that trainees should be 
full-time or part-time employees with a permanent, year-round 
attachment to the business, so that temporary employees, seasonal 
employees, public employees, and volunteers would not be eligible.
    Department Response: Allowable costs of incumbent worker training 
are consistent with the allowable costs rules for all types of 
training. The allowability regulations are explained in Departmental 
guidance. To be eligible, the incumbent worker must be employed, meet 
the Fair Labor Standards Act requirements for an employer-employee 
relationship, and have an established employment history for more than 
6 months. The Department may utilize guidance to clarify specific types 
of employment relationships that are eligible for employers to receive 
incumbent worker training funds.
Section 680.800 What funds may be used for incumbent worker training?
    Comments: A commenter asked the Department to clarify if the 20 
percent in proposed Sec.  680.800(a) refers to total dollars or program 
dollars and does not include administrative funds. Another commenter 
recommended that the regulations clearly indicate the difference 
between employed workers and incumbent workers and that the 20 percent 
limitation on training for incumbent workers would not apply to 
employed workers.
    Department Response: WIOA sec. 134(d)(4) allows Local WDBs to set 
aside up to 20 percent of their total allocation of title I adult and 
dislocated worker funds on incumbent worker training, this includes 
administrative funds. The Department agrees with the commenter about 
the 20 percent restriction only applying to incumbent workers and not 
employed workers.
    Comments: A commenter asked for clarification to distinguish 
customized from incumbent worker training, and commented that 
Sec. Sec.  680.800, 680.810, and 680.820 seem to apply to customized 
training for employed workers rather than incumbent worker training.
    Department Response: Customized training, as defined in WIOA sec. 
3(14), is used to train individuals who are not employed with the 
participating employer at the start of participation. Incumbent worker 
training, as defined

[[Page 56157]]

in WIOA sec. 134(d)(4), is used to enhance the competitiveness of the 
employee/employer and/or avert a layoff. Incumbent workers are employed 
with the participating company when the training begins consistent with 
Sec.  680.780. The Department will provide further clarification 
through guidance and technical assistance.
    Comments: A commenter stated that it may be difficult, if not 
impossible, to determine accurately the amount of administrative funds 
that were spent on incumbent working training and transitional jobs.
    Department Response: WIOA allows Local WDBs to set aside up to 10 
percent of their adult and dislocated worker funds on Pay-for-
Performance contract strategies (see WIOA sec. 134(d)(1)(A)(iii)), Up 
to 20 percent on incumbent worker training (see WIOA sec. 134(d)(4)), 
and up to 10 percent on transitional jobs (see WIOA sec. 134(d)(5)). 
These provisions are discussed in Sec.  680.140(b)(1)(v), (b)(4), and 
(b)(8). Administrative activities necessary to initiate or procure a 
Pay-for-Performance contract strategies, incumbent worker training, and 
transitional jobs must be consistent with Sec.  683.215, which also 
discusses how to determine whether an activity is administrative or 
programmatic for purposes of WIOA. If the activity would be considered 
programmatic under Sec.  683.215, then the cost would be subject to the 
caps discussed above. If the activity would be considered 
administrative under Sec.  683.215, it may be paid for out of the Local 
WDBs' usual administrative funds, and it is not subject to the caps. 
Therefore, the Local WDB would not need to specifically account how 
much of the administrative funds are spent on these particular 
programs.
Section 680.810 What criteria must be taken into account for an 
employer to be eligible to receive local incumbent worker funds?
    Comments: A commenter asserted that proposed Sec.  680.810 would 
impose a burden on States to write a policy for use of funds for 
incumbent worker training and asked what is the requirement for 
performance.
    Department Response: The Department acknowledges that State and 
local policy must be developed to govern the use of funds for incumbent 
worker training; however, since this activity was required to properly 
perform incumbent worker training under WIA, it is not an increase in 
burden. Incumbent worker training is a permissible activity; if a State 
or Local WDB decide to utilize incumbent worker training as a workforce 
strategy for local businesses then they need to have clear State and 
local policies on its use.
    The Department declines to add specific language to the regulatory 
text addressing the concern about performance requirements. Specific 
definitions of metrics that will be used to evaluate performance are 
defined through the WIOA Joint Performance ICR. More detailed 
information on performance definitions and metrics are at 20 CFR part 
677 (see Joint WIOA Final Rule). The Department plans to issue guidance 
on incumbent worker training, including how it is impacted by 
performance.
    The Department notes, as explained above, that it made a clarifying 
change to Sec.  680.810 to replace the word ``participant'' with 
``individual'' to reflect that incumbent worker training eligibility is 
decided at the employer level; individual workers participating in 
incumbent worker training are not considered ``participants'' under 20 
CFR 677.150(a), unless they receive other adult or dislocated worker 
services (see Joint WIOA Final Rule).
    Comments: Two commenters requested that the Department add a 
paragraph (d) directing that incumbent worker training contracts may 
not be entered into with employers that have unpaid unemployment 
insurance and workers compensation taxes.
    Department Response: The Department declines to add specific 
language to the regulatory text addressing this concern. The Department 
considers the suggested factor to be an allowable consideration under 
Sec.  680.810(c).
Section 680.820 Are there cost sharing requirements for local area 
incumbent worker training?
    Comments: A commenter suggested that the required non-Federal share 
for incumbent training be waived for companies that are close to a 
layoff.
    Department Response: The non-Federal share for incumbent worker 
training is required under WIOA sec. 134(d)(4). The Department expects 
Local WDBs to adhere to the requirements for non-Federal share 
contributions as set forth in WIOA. Thus, the Department declines to 
discuss waivers of this provision and makes no change to the regulatory 
text.
    Comments: A commenter asked if Sec.  680.820 is meant to ensure 
that no other funding source is contributing to the cost of the 
incumbent worker training or that the employer is paying 100 percent of 
the cost from its own funds, excluding the Federal contribution.
    Department Response: Under WIOA sec. 134(d)(4) employers 
participating in incumbent worker training are responsible for paying 
the non-Federal share of the cost of providing training to their 
incumbent workers. Employers have flexibility in how they arrange to 
pay for these costs; however, the payments must not come out of any 
other Federal funds.
Section 680.830 May funds provided to employers for work-based training 
be used to assist, promote, or deter union organizing?
    Comments: The Department received comments in support of Sec.  
680.850 (renumbered as Sec.  680.830) as proposed, regarding the 
relationship between work-based training funds and union organizing.
Section 680.840 May funds provided to employers for work-based training 
and other work experiences be used to fill job openings as a result of 
a labor dispute?
    Comments: A commenter suggested that for transitional jobs there 
should be protections around the displacement of workers.
    Department Response: The Department has added a new section to the 
regulatory text at Sec.  680.840 entitled ``May funds provided to 
employers for work-based training and other work experiences be used to 
fill job openings as a result of a labor dispute?'' This section 
clarifies that funds for work-based training may not be used for this 
purpose. It is consistent with WIOA and with the Wagner-Peyser Act 
regulatory text in Sec.  652.9 to remain neutral in matters relating to 
union organizing and activities that would promote or deter 
organization.
8. Subpart G--Supportive Services
    This section defines the scope and purpose of supportive services 
and the requirements governing their disbursement. A key principle in 
WIOA is to provide local areas with the authority to make policy and 
administrative decisions and the flexibility to tailor the public 
workforce system to the needs of the local community. To ensure maximum 
flexibility, the regulations provide local areas the discretion to 
provide the supportive services they deem appropriate subject to the 
limited conditions prescribed by WIOA. Local WDBs must develop policies 
and procedures to ensure coordination with other entities to ensure 
non-duplication of resources and services and to

[[Page 56158]]

establish limits on the amount and duration of such services. Local 
WDBs are encouraged to develop policies and procedures that ensure that 
supportive services are WIOA-funded only when these services are not 
available through other agencies and that the services are necessary 
for the individual to participate in title I activities. Supportive 
services may be made available to anyone participating in WIOA title I 
activities.
    A commenter expressed support for the proposed regulations in 
subpart G.
Section 680.900 What are supportive services for adults and dislocated 
workers?
    Comments: A commenter recommended that Sec.  680.900 include an 
exhaustive list of available support services consistent with the 
approach in the section on support services for youth. Another 
commenter strongly supported the inclusion of legal aid services in the 
Department's list of examples of supportive services, noting that legal 
aid can uniquely address certain barriers to employment, including 
access to driver's licenses, expunging criminal records, and resolving 
issues with debt, credit, and housing. One commenter recommended that 
supportive services involving WIOA funding be available to cover all 
steps/aspects of the licensing process (e.g., testing and transcripts).
    Because access to many supportive services is an impediment to 
individuals with disabilities in entering or re-entering the workforce, 
one commenter recommended specific reference to this population in 
subpart G.
    Department Response: The Department agrees with the commenter that 
supportive services for adults and dislocated workers under WIOA title 
I programs be aligned with the supportive services available under the 
title I youth program. The Department has modified the regulatory text 
to include a list of supportive services that may be made available at 
Sec.  680.900(a) through (l). This list is not intended to be 
exhaustive, but rather to illustrate the types of supportive services 
that may be made available. The changes to the regulatory text also 
include a couple of suggestions that commenters provided regarding the 
addition of providing assistance with books, fees, school supplies, and 
other necessary items for students enrolled in postsecondary education 
classes. The Department concurs that legal aid can uniquely address 
certain barriers to employment, as enumerated by the commenter. 
Therefore, the Department has included legal aid services under Sec.  
680.900 and made a corresponding change to the list of supportive 
services allowable in the youth program in Sec.  681.570. Additionally, 
the Department added that payments and fees for employment and 
training-related applications, test, and certifications be covered, 
because these costs may be a barrier to entry for individuals looking 
for unsubsidized employment. The Department also has added ``Reasonable 
accommodations for individuals with disabilities'' as Sec.  680.900(g).
    Comments: Citing the requirement that participants first obtain 
supportive services through other programs before relying on WIOA title 
I funding, a commenter stated that it is vital that the programs 
covered by WIOA work closely together to ensure that job seekers 
receive all the benefits to which they are entitled under all aspects 
of the law.
    Department Response: The Department agrees with this comment and 
encourages that programs work closely together in order to align 
programs better and leverage resources as WIOA is intended to do to 
serve job seekers better.
Section 680.910 When may supportive services be provided to 
participants?
    Comments: The Department received a comment regarding the 
importance of coordinating across programs allowed in Sec.  680.140, 
because Sec.  680.910 states that supportive services must be provided 
through non-WIOA programs first. The commenter particularly emphasized 
the need for coordinating services with vocational rehabilitation 
programs so individuals with disabilities receive the supportive 
services they need.
    Department Response: The Department agrees with the commenter that 
coordinating services across the WIOA core programs, as well as non-
core programs is vital to help individuals with barriers to employment, 
including individuals with disabilities, obtain the support they need 
to successfully participate in and complete WIOA career and training 
services and ultimately, obtain unsubsidized employment. Local WDBs are 
responsible for developing supportive service policies, and the 
Department considers how these services are coordinated to be a key 
part of those policies.
Section 680.920 Are there limits on the amount or duration of funds for 
supportive services?
    Comments: A commenter recommended that the definition of supportive 
services and extended case management include ongoing, extended 
services as participants proceed through training and employment.
    Department Response: Supportive services under WIOA sec. 134(d)(2) 
are provided to allow an individual to participate in career and 
training services. The commenter was interested in extending supportive 
services after the period of exit from the WIOA title I adult and 
dislocated worker programs; however, this is outside of the authority 
of WIOA. Supportive services are provided to enable participation in 
career and training services. No changes have been made to the 
regulatory text in response to the comment.
    Comments: Two commenters raised a similar concern about the 
authority related to the one-stop center determining what supportive 
services may be provided if the one-stop center is not the WIOA service 
provider in a local area.
    Department Response: To guide supportive service determinations, 
the Local WDB ultimately is responsible for developing a supportive 
service policy for the area, including eligibility, types of supportive 
services to provide, and the methods of service delivery.
Section 680.930 What are needs-related payments?
    Comments: A few commenters provided input on needs-related 
payments. One commenter suggested that the Department consider whether 
the underemployed should be considered for needs-related payments. One 
commenter stated that funding levels are not adequate to support needs-
related payments, which the commenter stated will result in these 
services being provided on a very limited basis. Some commenter focused 
on funding levels for needs-related payments.
    Department Response: To receive needs-related payments, individuals 
must be unemployed and must not qualify for (or have ceased to quality 
for) unemployment compensation. While underemployed individuals are not 
eligible for needs-related payments under WIOA sec. 134(d)(3), there is 
no prohibition on providing supportive services to the underemployed, 
other than needs-related payments. Additionally, WIOA sec. 134(d)(1)(B) 
allows for work support activities for low-wage workers. The Department 
may provide additional guidance on how to ensure quality services to 
individuals who are underemployed. No changes have been made to the 
regulatory text in response to the comments. The Department notes that 
needs-related payment levels are permissible and

[[Page 56159]]

thus, are left to the discretion of the Local WDB.
Section 680.970 How is the level of needs-related payments determined?
    Comments: Two commenters recommended that States be allowed to 
determine the amount for needs-related payments for State funded 
projects.
    Department Response: The Department agrees with the suggestion that 
States be allowed to make determinations for needs-related payments for 
State funded projects and has added language to the regulatory text at 
Sec.  680.970(a) to reflect this change. No other changes have been 
made to the regulatory text in response to the comments.
Other Comments on Adult and Dislocated Worker Activities Under WIOA 
Title I
Limited English Proficiency Individuals
    Comments: A commenter encouraged the Department to provide 
additional guidance, whether through regulation or other types of 
policy directives, to States and localities regarding the alignment of 
WIOA title I and title II services to improve services to immigrant and 
limited English proficiency (LEP) individuals. This commenter 
recommended that the guidance acknowledge and allow for differences in 
eligibility criteria across the titles, encouraging States and 
localities to align services without precluding participation by 
individuals who may be eligible for services under one title but not 
another.
    Department Response: The Department agrees with the commenter on 
the importance of aligning services among titles to ensure that 
individuals receive the services they need. The Department will provide 
guidance and technical assistance on this issue.
Industry or Sector Partnerships
    Comments: A few commenters recommended the establishment of a new 
subpart H covering industry or sector partnerships. These commenters 
discussed at length the topics they believed should be addressed in 
this proposed new subpart, including, the purpose of industry and 
sector partnerships, permissible partners, who may lead partnerships, 
evaluating effective partnerships, and ensuring minimum standards.
    Department Response: The Department recognizes the importance of 
the industry and sector partnerships as an important strategy for 
economic and workforce development. Due to the constantly changing 
nature of business and industry, these partnership strategies continue 
to be most appropriately addressed through guidance and technical 
assistance issued by the Department.

E. Part 681--Youth Activities Under Title I of the Workforce Innovation 
and Opportunity Act

1. Introduction
    WIOA affirms the Department's commitment to providing high quality 
services for youth and young adults beginning with career exploration 
and guidance; continuing support for educational attainment, 
opportunities for skills training in in-demand industries and 
occupations; and culminating with a good job along a career pathway or 
enrollment in postsecondary education. All of the Department's youth-
serving programs continue to promote evidence-based strategies that 
also meet the highest levels of performance, accountability, and 
quality in preparing young people for the workforce.
    WIOA maintains WIA's focus on out-of-school youth (OSY) in Job 
Corps and YouthBuild, while greatly increasing the focus on OSY in the 
WIOA youth formula-funded program. The shift in policy to focus on 
those youth most in need is based on the current state of youth 
employment. In 2015, an estimated 5.5 million or 13.8 percent of 16 to 
24 year olds in our country were not employed or in school. WIOA youth 
programs provide a continuum of services to help these young people 
acquire skills and pursue careers. The Department, working with its 
Department of Education and Health and Human Services partners, plan to 
provide intensive technical assistance around meeting the needs of this 
population.
    WIOA calls for customer-focused services based on the needs of the 
individual participant. This includes the creation of career pathways 
for youth in all title I youth programs, including a connection to 
career pathways as part of a youth's individual service strategy (ISS) 
in the youth formula-funded program. The ISS must directly link to one 
or more of the performance indicators. WIOA also calls for participants 
to be intimately involved in the design and implementation of services 
so the youth voice is represented and their needs are being met.
    This integrated vision also applies to the public workforce 
system's other shared customer--employers. Employers have the 
opportunity to build a pipeline of skilled workers: They are critical 
partners that provide meaningful growth opportunities for young people 
through work experiences that give them the opportunity to learn and 
apply skills in real-world settings and ultimately jobs.
    WIOA includes a number of significant changes for the youth 
formula-funded program. WIOA shifts to focus resources primarily on 
OSY, increasing the minimum percentage of funds required to be spent on 
OSY from 30 to 75 percent. The Department recognized the transition to 
serve more OSY would take time to implement, and, as explained in WIOA 
operating guidance TEGL No. 23-14 (``Workforce Innovation and 
Opportunity Act (WIOA) Youth Program Transition''), found at http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm, the 
Department has provided States and local areas a year to show progress 
towards meeting the 75 percent minimum OSY expenditure rate 
requirement. In addition, WIOA increases the focus on providing youth 
with work experience opportunities, with a requirement that local areas 
must spend a minimum of 20 percent of local area funds on work 
experience.
    Under WIOA, work experience becomes the most critical of the 
program elements. WIOA also introduces 5 new program elements: 
Financial literacy; entrepreneurial skills training; services that 
provide labor market and employment information about in-demand 
industry sectors or occupations available in the local areas; 
activities that help youth prepare for and transition to postsecondary 
education and training; and education offered concurrently with and in 
the same context as workforce preparation activities and training for a 
specific occupation or occupational cluster.
    During the 60-day comment period for the NPRM, the Department 
received hundreds of comments that expressed general support for the 
proposed youth program regulations as well as some constructive 
feedback that made the Final Rule clearer.
    The most significant change between the NPRM and the Final Rule 
occurs in Sec.  681.400. This section clarifies that youth activities 
may be conducted by the local grant recipient and that only when the 
Local WDB chooses to award grants or contracts to youth service 
providers, such awards must be made using a competitive procurement 
process in accordance with WIOA sec. 123. While this revision 
represents a significant change in that it provides Local WBDs with 
flexibility in determining which WIOA youth services to procure, the 
Department expects Local WDBs to continue to

[[Page 56160]]

contract with youth service providers to provide the program elements 
that youth service providers are best positioned to offer participants 
based on prior success in serving youth.
    The analyses that follows provides the Department's response to 
public comments received on the proposed part 681 regulations. If a 
section is not addressed in the discussion below, it is because the 
public comments submitted in response to the NPRM did not substantively 
address that specific section and no changes have been made to the 
regulatory text. Further, the Department received a number of comments 
on this part that were outside the scope of the regulation and the 
Department offers no response. Lastly, the Department has made a number 
of non-substantive changes to correct grammatical and typographical 
errors to improve the readability and conform the document 
stylistically that are not discussed in the analysis below.
2. Subpart A--Standing Youth Committees
Section 681.100 What is a standing youth committee?
    This section describes a standing youth committee. WIOA does not 
require Local WDBs to establish a youth council; however, the Local 
WDBs are encouraged to establish a standing youth committee to provide 
information and to assist with planning, operational, and other issues 
relating to the provision of services to youth (WIOA sec. 
107(b)(4)(A)(ii)). The Department received many comments on standing 
youth committees and in response to the comments made a small addition 
to the regulation text as explained here.
    Comments: One commenter expressed support for all of the proposed 
regulations regarding standing youth committees. Several commenters 
also supported the proposed language that would allow Local WBDs to 
maintain existing effective youth councils as standing youth 
committees. Several commenters recommended that the proposed language 
allow Local WDBs the flexibility to maintain existing effective youth 
councils, have the Local WDB secure the role of the standing youth 
committee, or create a new standing youth committee.
    Department Response: The Department notes the comments received 
about standing youth committees. The language in Sec. Sec.  681.100 and 
681.110 provides Local WDBs with the flexibility to maintain existing 
effective youth councils; have the Local WDB take on the role of the 
standing youth committee; or create a new standing youth committee.
    Comments: One commenter expressed disappointment with the removal 
of mandated youth councils and stated that the Department should 
strongly encourage Local WDBs to establish standing youth committees.
    Department Response: The Department recognizes the challenges some 
local areas experienced in finding and retaining the required youth 
council members. In the final regulations, the Department accepted the 
suggestion to ``encourage'' Local WDBs to establish standing youth 
committees rather than the proposed language, ``a Local WDB may choose 
to establish a standing committee.'' This change recognizes that Local 
WDB have a choice as to whether or not they have a standing youth 
committee while at the same time reflects the Department's support of 
such entities.
    Comments: A couple of respondents stated that because the proposed 
regulations did not mandate the implementation of a standing youth 
committee or any other youth organization, a Local Workforce 
Development Board (WDB) should be able to assemble a group to oversee 
youth activities without having to formally create a standing youth 
committee that would be subject to regulations.
    Department Response: As discussed above, the Department recognizes 
the challenge of bringing together required partners and understands 
the local area's interest in taking advantage of the flexibility under 
WIOA to form an ad hoc group that would informally advise the Local WDB 
on youth matters. The Department supports Local WDBs seeking outside 
youth expertise to inform the programs. If such groups do not have the 
required members as outlined in Sec.  681.110, however, they may not 
call themselves standing youth committees.
    Comments: Second, a commenter raised the concern over how a Local 
WDB could efficiently oversee youth activities without the expertise of 
a standing youth committee with prior experience in handling the youth 
activities. This commenter requested additional clarification as to how 
the Local WDB would provide efficient oversight. The commenter further 
asked if the Department would provide recommended models in order to 
ensure that they were implementing youth activities effectively and if 
the Department will provide recommended approaches in future technical 
assistance activities.
    Department Response: If a Local WDB chooses not to delegate this 
function to a standing youth committee, it is still responsible under 
WIOA sec. 107(d)(8)(A)(i) for conducting oversight in partnership with 
the CEO for the local area of youth workforce investment activities 
under WIOA sec. 129(c). The Department notes the commenter's concern 
and recognizes that without youth experts it may be hard for a local 
area to oversee its youth program properly. The Department will address 
this commenter's concerns through technical assistance.
Section 681.110 Who is included on a standing youth committee?
    This section describes the members of a standing youth committee.
    Comments: Two commenters recommended that Local WDBs be given the 
maximum flexibility possible when determining membership requirements 
for their standing youth committee, stating that the Local WDBs would 
have the best understanding of their local area's needs. One of these 
commenters reasoned that there should be no rigid membership 
requirements for standing youth committees because the committees would 
be optional under the proposed language. Similarly, another commenter 
remarked that Local WDBs should be able to define the appropriate level 
of experience needed for members of the standing youth committee. This 
commenter stated that Local WDBs also should have the ability to 
establish the standards for what a community-based organization's 
(CBO's) ``demonstrated record of success'' must be.
    One respondent suggested that the Department provide more specific 
guidance on committee membership requirements. This commenter further 
recommended that the committee should include individuals from CBOs who 
serve youth with disabilities, as well as individuals from the local 
education system.
    Department Response: The Department concurs with the commenters 
that said the Local WDBs need the maximum flexibility possible when 
establishing membership requirements for their standing youth 
committee. The NPRM and Final Rule reflect the WIOA requirements found 
in sec. 107(b)(4)(A)(ii). The Department does not define a CBO's 
demonstrated record of success in the proposed regulation or Final 
Rule. The Department did accept the suggestion to add disability 
organizations and local education entities to the list of possible 
standing youth committee members.

[[Page 56161]]

Section 681.120 What does a standing youth committee do?
    This section describes the duties of a standing youth committee. 
Commenters expressed support for the proposed roles of standing youth 
committees.
    Comments: Several commenters suggested that the Department include 
a list of suggested tasks in the final regulation that a standing youth 
committee could be charged with. These commenters recommended that the 
Department reemphasize that if the Local WDB chooses not to establish a 
youth council or standing youth committee, oversight of the suggested 
activities listed in the regulations will fall under the jurisdiction 
of the Local WDB, which will then be responsible for overseeing the 
activities and providing opportunity for stakeholder comment. These 
commenters also suggested that the Department should require that Local 
WDBs and/or their standing youth committees state how they will:
     Facilitate co-enrollment of individuals across core 
programs, especially for those individuals between the ages of 18 and 
24 who could be served under WIOA titles I, II, and IV.
     Implement specific provisions related to career pathways 
requirements.
     Adapt the procurement and request for proposal processes, 
in order to encourage longer-term and more thorough services for OSY.
     Align Temporary Assistance for Needy Families (TANF) with 
WIOA youth programs, so that TANF recipients who are under 25 can 
benefit from OSY programs when appropriate.
    Department Response: The Department concluded that standing youth 
committees need as much flexibility as possible to reflect the needs of 
their local area. The Department will provide technical assistance to 
local areas and plans to incorporate many of the commenters' ideas. No 
change to the regulatory text was made in response to these comments.
3. Subpart B--Eligibility for Youth Services
Section 681.210 Who is an ``out-of-school youth''?
    This section describes how one meets the eligibility for an OSY for 
purposes of the title I WIOA youth program. OSY youth must not attend 
any school, be between the ages of 16 and 24 at time of enrollment, and 
meet one or more of a list of nine criteria. The section clarifies that 
age is based on time of enrollment and as long as the individual meets 
the age eligibility at time of enrollment he or she can continue to 
receive WIOA youth services beyond the age of 24. Low income is not a 
requirement to meet eligibility for most categories of OSY under WIOA. 
Low income is, however, a part of the criteria for youth who need 
additional assistance to enter or complete an educational program or to 
secure or hold employment. Also, WIOA has made youth with a disability 
a separate eligibility criterion.
    Comments: A few commenters expressed their support of the expansion 
of the age requirements from 21 to 24. One commenter stated that this 
increase would be a positive change as it continues to see greater 
numbers of older young adults who are seeking employment and training 
services. Another commenter expressed support of the proposed 
regulations' focus on the needs of OSY. The Department recognizes that 
many youth service providers moved to serving more OSY under WIA. In 
Program Years 2011 and 2012, the national OSY expenditure rate was 57 
percent.
    On the other hand, a number of commenters noted that the proposed 
regulations mark a substantial change in the delivery of services to 
youth, specifically shifting service priorities from ISY to OSY. These 
commenters stated that because of this significant change, Governors 
and Local WDBs should have jurisdiction over defining the eligibility 
requirements for OSY.
    Department Response: The Department acknowledges that WIOA's focus 
on OSY represents a significant change in the focus of the youth 
formula program. The Department also acknowledges the important role 
State and local leaders play in implementing the law. Nonetheless, WIOA 
clearly defines the eligibility requirements for OSY. No change was 
made in the regulatory text in response to these comments.
    Comments: Several commenters proposed additions to the OSY 
definition. A few commenters offered that any individual who does not 
pass the high school exit exam should automatically be considered an 
OSY as well.
    Department Response: The impact of high school exit exams on 
individual youth represents only one reason why the Department has 
concluded that under WIOA, local areas will need to work closer than 
ever with the local education providers to ensure the success of their 
participants. In-school or out-of-school eligibility status is 
determined at the time of enrollment. Therefore, a student enrolled in 
high school when taking high school exit exam, would count as an ISY.
    Comments: Another commenter recommended that the definition of OSY 
be broadened to include ``youth ages 16-24 who may be enrolled in 
school, but in fact are spending less than 10 hours per week at that 
school or adult education center,'' noting that often students are 
technically enrolled in school but in reality hardly ever attend. 
Similarly, a commenter expressed concern that ``if compulsory school 
attendance is defined by State law as 16, what happens to 14 and 15 
year olds who are out-of-school?''
    Department Response: The Department understands that many students 
attend high school irregularly and are at great risk of becoming 
disconnected. In the cases where compulsory-age students do not attend 
school on a regular basis, under WIOA they count as ISY. WIOA clearly 
defines the eligibility requirements for OSY. No changes were made to 
the regulatory text in response to these comments.
Measuring Attendance by School Year Quarters
    WIOA includes a new criterion for determining OSY eligibility: A 
youth who is within the age of compulsory school attendance, but has 
not attended school for at least the most recent school year calendar 
quarter. The school year quarter is based on how a local school 
district defines its school year quarters.
    Comments: One commenter asked the Department to include an 
alternative definition for OSY requirements for schools that do not 
utilize school year quarters. This commenter suggested that the 
Department could use calendar year quarters as an alternative 
benchmark. Another commenter expressed a concern over the proposed 
language's reliance on school year quarters as a benchmark to measure 
OSY eligibility because it would require local areas to have an 
understanding of the local school district's school year quarters.
    Department Response: In Final Rule text, the Department added 
language clarifying that when schools do not use a quarter system, 
schools must use calendar year quarters. The Department encourages 
local areas to know their local school system's leaders as a strategy 
to ensuring that all youth know about the public workforce system and 
maximizing the limited resources available in an area. Conversations 
around school year calendars may serve as an entry point for future 
collaboration. Both commenters requested further clarification from the 
Department as to the measurement of length of attendance by school year

[[Page 56162]]

quarters. The Department will issue additional guidance on school year 
quarters.
Definition of Attending
    Comments: A number of commenters recommended that the Department 
define what ``attending'' means when determining the eligibility of an 
individual. These commenters asked the Department for clarification as 
to whether taking one course at a community college would count as 
``attending'' and thus, render an individual ineligible for OSY 
services. These commenters also asked the Department whether or not 
being enrolled in a non-credit granting course or continuing education 
class would be classified as attending school, making those individuals 
ineligible for OSY services.
    Another commenter requested clarification around the definition of 
OSY and a concern that youth with disabilities who are involved in 
remedial, non-credit coursework would be excluded from title I youth 
programs under WIOA. The commenter noted that non-credit education and 
remedial coursework often provide a vital opportunity to strengthen 
basic skills needed in order to enroll in credentialing programs and to 
maximize independence. The commenter suggested the Department include 
language creating an exception to ensure that students with 
disabilities in need of remedial coursework will remain eligible for 
title I youth programs under WIOA.
    Another commenter noted that the OSY definition language includes 
``an individual that is not attending any school as defined under State 
law'' and it creates inconsistency in the application of State 
regulations resulting in a different treatment of youth from one State 
to the next. The commenter proposed clarification to the regulation to 
include attendance at an alternative high school for eligibility in the 
OSY component, for all States.
    Department Response: The Department will provide further guidance 
around ``attending'' and non-credit granting courses, continuing 
education classes, and one community college course.
General Education Development (GED) & Dropout Prevention/Recovery 
Program Eligibility
    Comments: A few commenters expressed support for the proposed 
language that would classify individuals enrolled in a GED class as 
OSY. These commenters further recommended that youth in GED programs be 
classified as ``high school drop-outs'' in the proposed regulations so 
that they would not be subjected to compliance with the low-income 
eligibility requirements, and suggested that because they did not 
complete their high school education, it would be illogical to define 
them as ISY. Two commenters recommended that individuals enrolled in 
GED or high school equivalency programs be considered OSY.
    Two other commenters suggested that individuals enrolled in a 
dropout re-engagement program also be classified as OSY under the 
proposed regulations. Specifically, a commenter recommended adding the 
following language, ``. . . for purposes of WIOA, the Department does 
not consider providers of dropout re-engagement programs or providers 
of adult education . . . to be schools.'' This commenter stated that 
this language would provide clarification that after an individual has 
dropped out of school, he or she can continue his or her education in 
an alternative form without being considered an ISY. Another commenter 
suggested that youth in these programs are not participating in 
traditional schools and therefore should not be classified as ISY.
    Department Response: Based on the recommendation of commenters, the 
Department has added high school equivalency programs and dropout re-
engagement programs as additional types of programs in Sec.  681.230 
that are not considered ``schools'' for the purposes of determining 
school status.
    Comments: Other commenters asked for clarification from the 
Department as to whether an individual recruited and persuaded to 
return to school through a dropout recovery program would be considered 
an OSY under the proposed regulations, even if he or she had not missed 
an entire semester of school. One commenter also asked for 
clarification from the Department regarding why an individual would be 
required to wait an entire semester to be classified as an OSY.
    Department Response: As a point of clarification, WIOA does not 
require a person to miss an entire semester; rather, the law considers 
school year quarters. Further, the Department reminds service providers 
that ISY or OSY status determination occurs when a youth enrolls into 
the WIOA Youth Formula Program and does not change as the youth moves 
though the program. Therefore, an OSY who returns to school through a 
dropout recovery program remains classified as an OSY for WIOA 
purposes.
Foster Care Individuals/Individuals in the Justice System
    Comments: Regarding the eligibility requirements for individuals in 
the foster care or justice systems, one respondent commented that the 
proposed regulation's definition of OSY would not efficiently serve 
individuals in the foster care or juvenile justice systems, stating 
that the proposed language would require individuals in the juvenile 
justice system or foster care system to drop out of school in order to 
be eligible to receive WIOA youth services, which the commenter 
suggested would put them at an even greater risk. Another commenter 
recommended that the Department amend the OSY eligibility criteria 
regarding youth in foster care to include youth who were formerly in 
foster care, but may have returned to their biological families before 
turning 18, sharing that although these individuals are no longer in 
foster care and did not technically ``age out'' of the system, they are 
still disadvantaged and in need of assistance. Two commenters 
recommended that any incarcerated youth be automatically considered an 
OSY.
    Department Response: Although the Department recognizes that a few 
State-level foster care policies may result in this practice occurring, 
the Department does not interpret WIOA to require individuals in the 
juvenile justice system or foster care system to drop out of school in 
order to be eligible to receive WIOA youth services. Nor is it the 
Department's intent to have youth leave school in order to receive WIOA 
youth program services.
    Relating to the comment that individuals who stay in foster care 
until late adolescence may not technically ``age out'' of the system 
but remain disadvantaged, the Department agrees. The Department 
consulted with the Department of Health and Human Services John H. 
Chafee Foster Care Independence Program and added ``or an individual 
who has attained 16 years of age and left foster care for kinship 
guardianship or adoption,'' to the final regulation for Sec. Sec.  
681.210 and 681.220 to encompass this fragile population.
    Further, to make the regulation easier to understand, the 
Department separated foster care youth and homeless and runaway youth 
into two separate eligibility categories. In addressing the comments 
around individuals involved in the juvenile justice system, WIOA uses 
slightly different wording between ISY and OSY eligibility criteria. 
For OSY eligibility WIOA at sec. 129(a)(1)(B)(iii)(IV) states,

[[Page 56163]]

``An individual who is subject to the juvenile or adult justice 
system,'' while for ISY, sec. 129(a)(1)(C)(iv)(III) says, ``offender.'' 
WIOA sec. 3(38) defines ``offender'' as ``an adult or juvenile-- (A) 
who is or has been subject to any stage of the criminal justice 
process, and for whom services under this Act may be beneficial; or (B) 
who requires assistance in overcoming artificial barriers to employment 
resulting from a record of arrest or conviction.'' The Department 
changed the wording in the Final Rule to use ``offender'' for the 
eligibility criteria for both ISY and OSY, to clarify that the OSY 
eligibility criterion at Sec.  681.210(c)(4) includes all individuals 
who fit the definition of ``offender'' under sec. 3(38). The Department 
concluded that the intent of the OSY eligibility criterion is not to 
treat youth who were subject to the juvenile or adult system 
differently from those who are currently subject, but rather to call 
attention to the fact that both the juvenile and adult justice systems 
may include OSY.
Homeless Individuals
    Comments: A commenter expressed support for the inclusion of 
homeless individuals as one of the possible eligibility criteria for 
OSY in the proposed regulations. This commenter further recommended 
that the definition of homeless individual in Sec.  681.210(c)(5) be 
derived from the Runaway and Homeless Youth Act (42 U.S.C. 5601 et 
seq.) and read ``. . . a homeless child or youth (as defined in sec. 
725(2) of the McKinney Vento Homeless Assistance Act (42 U.S.C. 
11434a(2))), a runaway or homeless youth (as defined by 42 U.S.C. 5601 
et seq.) who is referred to the labor board by an RHY provider . . . 
.'' This commenter also suggested that homeless status of an individual 
should be determined by referral from a runaway or homeless youth (RHY) 
or other homeless youth provider, but that pure self-attestation by the 
individual should also count as sufficient evidence of homelessness.
    Department Response: Runaway and Homeless Youth programs serve 
individuals as young as 12 years old, which is younger than permitted 
by WIOA youth formula program statute. Therefore, no changes were made 
in the regulatory text in response to these comments. The Department 
will provide future guidance and technical assistance around provider 
referrals and self-attestation when determining program eligibility. 
The Department did add language to clarify that for the OSY category, 
all homeless individuals qualify up to the age of 24.
Individual Who Is Pregnant or Parenting
    Comments: A commenter asked the Department to clarify that an 
``individual who is pregnant or parenting'' includes noncustodial 
parents, such as fathers. Suggesting that re-engagement of fathers and 
noncustodial parents is critical to supporting children, this commenter 
pointed out that because youth served by its members often are 
parenting a child whose paternity has never been determined, these 
partners are in fact parenting, even if not legally custodial.
    Department Response: The Department recognizes the role all 
parents, custodial and non-custodial, play in the lives of their 
children and plans to provide future technical assistance on this 
subpopulation.
Disability
    Comments: Another respondent noted that the NPRM defines OSY as an 
individual who meets criteria in paragraphs (a) and (b) in this 
section, as well as one or more of the criteria identified in paragraph 
(c). Two of the criteria described in this part are: (8) An individual 
with a disability; (6) a low-income individual who requires additional 
assistance to enter or complete an educational program or to secure or 
hold employment. The commenter further described that low income is a 
part of the criteria for youth who need additional assistance to enter 
or complete an educational program or to secure or hold employment, and 
WIOA has made youth with a disability a separate eligibility criterion. 
The commenter asked the Department to state specifically that low 
income is not an eligibility requirement for serving youth with a 
disability.
    Department Response: The commenter's observation does not 
necessitate a change to the Final Rule. For OSY, low income is not an 
eligibility requirement for serving youth with a disability. For ISY 
with disabilities, low-income eligibility requirements exist. However, 
for ISY with disabilities, WIOA sec. 3(36)(A)(vi) provides that the 
income level for eligibility purposes is based on the individual's own 
income rather than his/her family's income. The Department plans to 
provide additional technical assistance around serving youth with 
disabilities.
Section 681.220 Who is an ``in-school youth''?
    This section describes how one meets the eligibility for an ISY for 
purposes of the WIOA title I youth program. ISY youth must be attending 
school, including secondary or postsecondary school, be between the 
ages of 14 and 21 at time of enrollment, be low-income, and meet one or 
more of a list of eight criteria. These are essentially the same 
criteria as under WIA but the disability criterion has been separated 
from the ``needs additional assistance'' criterion. The section 
clarifies that age is based on time of enrollment and as long as the 
individual meets the age eligibility at time of enrollment, he or she 
can continue to receive WIOA youth services beyond the age of 21. WIOA 
includes a youth as low-income if he or she receives or is eligible to 
receive a free or reduced-price lunch under the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1751, et seq.).
Foster Care Individuals
    Comments: A commenter recommended that the Department amend the OSY 
eligibility criteria regarding youth in foster care to include youth 
who were formerly in foster care, but may have returned to their 
biological families before turning 18 because although these 
individuals are no longer in foster care and did not technically ``age 
out'' of the system, they are still disadvantaged and in need of 
assistance.
    Department Response: The Department concluded that same logic 
applies to Sec.  681.220: Individuals who leave foster care after 
remaining there until late adolescence may not technically ``age out'' 
of the system and yet remain disadvantaged. The Department, in 
consultation with the Department of Health and Human Services John H. 
Chafee Foster Care Independence Program, added ``or who has attained 16 
years of age and left foster care for kinship guardianship or 
adoption,'' to the final regulation for Sec. Sec.  681.210 and 681.220 
to encompass this fragile population.
Homeless Individuals
    Comments: A commenter expressed support for the inclusion of 
homeless individuals as one of the possible eligibility criteria for 
OSY in the proposed regulations. This commenter further recommended 
that the definition of homeless individual in Sec.  681.210(c)(5) be 
derived from the Runaway and Homeless Youth Act (RHYA) (42 U.S.C. 5601 
et seq.) and would read ``. . . a homeless child or youth (as defined 
in sec. 725(2) of the McKinney Vento Homeless Assistance Act (42 U.S.C. 
11434a(2))), a runaway or homeless youth (as defined by 42 U.S.C. 5601 
et seq.) who is referred to the labor board by an RHY provider. . . .'' 
This commenter also suggested that homeless

[[Page 56164]]

status of an individual should be determined by referral from an RHY or 
other homeless youth provider, but that pure self-attestation by the 
individual should also count as sufficient evidence of homelessness.
    Department Response: The Department consulted with the Department 
of Health and Human Service's Administration for Children and Families 
when considering this comment. The Department learned that the Runaway 
and Homeless Youth programs serve individuals as young as 12 years old 
which is younger than permitted by WIOA youth formula program statute. 
No changes were made to the regulatory text in response to this 
comment. The Department will provide future guidance and technical 
assistance around provider referrals and self-attestation when 
determining program eligibility.
    Similar to the OSY criteria, the Department added language to 
clarify that for the ISY category, homeless individuals aged 14-21 
qualify. Also similar to the OSY criteria, to make the regulation 
easier to understand, the Department separated foster care youth and 
homeless and runaway youth into two separate eligibility categories. 
This more accurately distinguishes between the types of barriers youth 
may experience.
Individual Who Is Pregnant or Parenting
    Comments: A commenter asked the Department to clarify that an 
``individual who is pregnant or parenting'' includes noncustodial 
parents, such as fathers. Suggesting that re-engagement of fathers and 
noncustodial parents is critical to supporting children, this commenter 
pointed out that because youth served by its members often are 
parenting a child whose paternity has never been determined, these 
partners are in fact parenting, even if not legally custodial.
    Department Response: An individual who is pregnant or parenting 
does include noncustodial parents, such as fathers. The Department 
recognizes the role all parents, custodial and non-custodial play in 
the lives of their children and plans to provide future technical 
assistance on this subpopulation.
Section 681.230 What does ``school'' refer to in the ``not attending or 
attending any school'' in the out-of-school and in-school eligibility 
criteria?
    The eligibility criteria for the WIOA title I youth program for 
out-of-school youth at WIOA sec. 129(a)(1)(B)(i) requires that the 
individual is ``not attending any school (as defined in State law),'' 
and for in-school youth, sec. 129(a)(1)(C)(i) requires that the 
individual is ``attending school (as defined in State law).'' The 
Department has changed the title of Sec.  681.230 to clarify that the 
terms the section uses are from those eligibility criteria. The term 
``school'' refers to both secondary and postsecondary school as defined 
by the applicable State law for secondary and postsecondary 
institutions. Section 681.230 provides that for purposes of title I of 
WIOA, the Department does not consider providers of adult education 
under title II of WIOA, YouthBuild programs, or Job Corps programs as 
schools. Therefore, if the only ``school'' the youth attends is adult 
education provided under title II of WIOA, YouthBuild, or Job Corps, 
the Department will consider the individual an OSY youth for purposes 
of title I of WIOA youth program eligibility.
    Comments: The Department received comments on several provisions 
within this section. Some commenters expressed concern over the 
proposed allowance of State law to determine the definition of 
``school.'' Discussing the fact that their particular State's laws only 
apply to grades K-12 and do not include postsecondary school, these 
commenters suggested that the definition of ``school'' should be 
clarified, and amended to address potential inconsistencies that would 
arise due to varying State laws. One commenter recommended that each 
State WDB should be given the flexibility to determine whether to 
include postsecondary education as in-school or out-of-school, if the 
State does not specify it in its statutes. A number of commenters 
suggested that the definition of OSY be expanded to include individuals 
who are enrolled in postsecondary education. Similarly, a commenter 
stated that States do not support the definition in the proposed 
regulations that would classify youth engaged in postsecondary programs 
as ISY because the proposed language would lead to fewer youth in 
postsecondary education being served due to the 75 percent OSY 
expenditure requirement. Another commenter suggested that youth 
enrolled in postsecondary developmental education courses be considered 
OSY.
    Department Response: WIOA's increased OSY expenditure rate is 
designed to increase focus on disconnected youth. All State education 
agencies recognize 2- and 4-year colleges as ``schools,'' and the 
Department has determined that both secondary and postsecondary 
institutions are considered ``schools'' for the purpose of determining 
school status for WIOA youth program eligibility.
    Comments: A number of commenters recommended that the definition of 
OSY include individuals attending alternative schools. One of these 
commenters stated that an individual who attends an alternative school 
is at as great a risk as those who are attending no school. Some of 
these commenters suggested that an individual's enrollment at an 
alternative school is an implicit indicator of need for WIOA youth 
services because of the low graduation and high dropout rates 
associated with alternative schools. A commenter recommended that the 
Department enhance the definition of school to include: Individuals in 
court-mandated programs, alternative schools, community schools, 
incarcerated youth, those who have not passed the high school exit 
exam, and individuals who attend independent studies programs.
    Department Response: The Department did not incorporate the term 
``alternative school'' into the definition of an OSY because 
alternative school is a general term that may encompass many different 
types of programs. Rather, the Department has incorporated into the 
Final Rule additional types of programs that it does not consider 
schools, such as high school equivalency programs and dropout re-
engagement programs.
    Comments: A number of commenters recommended that youth 
participating in a dropout re-engagement program be considered out of 
school for the purposes of WIOA and suggested clarifying that in Sec.  
681.230. Another commenter encouraged the Department to clarify further 
that youth in high school equivalency programs, such as GED programs, 
also are considered dropouts.
    Department Response: Based on the recommendation of commenters, the 
Department has added high school equivalency programs and dropout re-
engagement programs as additional types of programs that are not 
considered ``schools'' for the purposes of determining school status.
    Comments: With regard to the eligibility of individuals who are 
enrolled in adult education programs, a number of commenters expressed 
support for these individuals' eligibility as OSY. Several of these 
commenters stated that the potential for co-enrollment would be very 
beneficial to youth in need of these services. Citing data from a 
survey that found low rates of co-enrollment, two commenters stated 
that because of this past evidence of low percentages of co-enrollment, 
they supported the proposed

[[Page 56165]]

regulations, which would not define adult education programs as 
schools. Another commenter recommended that the Department expand the 
provision to include those individuals who are officially enrolled in 
school, but who in actuality only are receiving an education at an 
adult education center. A number of commenters requested that 
individuals who are enrolled in an adult education program would be 
considered OSY under WIOA title I, regardless of how the adult 
education services are funded. Several commenters suggested that many 
individuals attend adult education programs that are not funded by 
title II of WIOA, and that limiting eligibility for OSY services solely 
to those who attend programs funded by title II would limit the number 
of youth who would be eligible for co-enrollment.
    Department Response: The Department agrees that the determination 
of whether an adult education program is considered a ``school'' should 
not be based on funding source. Providers of adult education under 
title II of WIOA do not need to be wholly funded by title II in order 
to meet the provision described in Sec.  681.230.
    Comments: Regarding the school status of individuals participating 
in YouthBuild programs not funded by the Department of Labor, a few 
commenters recommended that the Department revise the proposed 
regulation to apply to all YouthBuild programs regardless of how they 
are funded. Another commenter also stated that the exception of not 
classifying YouthBuild programs as schools should be applied to all 
YouthBuild programs, suggesting that many YouthBuild programs have a 
variety of funding sources outside of Department grants and that the 
individuals enrolled in those programs should not be penalized because 
of how their program is funded.
    Department Response: The Department agrees that the determination 
of whether a YouthBuild program is considered a ``school'' should not 
be based on funding source. All YouthBuild programs, whether funded by 
the Department of Labor wholly, partially, or not at all meet the 
provision described in Sec.  681.230 and are not considered schools for 
purposes of WIOA youth program eligibility determination.
    Comments: One commenter stated that all individuals enrolled in Job 
Corps programs should be considered OSY for WIOA youth services. A 
number of commenters requested clarification from the Department as to 
whether individuals involved in all Job Corps programs would be 
considered OSY, since Job Corps students may finish accredited high 
school diploma program or complete a high school equivalency 
certificate or diploma.
    Department Response: The Department does not consider any Job Corps 
program to be a ``school'' for purposes of determining WIOA youth 
program eligibility regardless of whether students in the Job Corps 
program are pursuing a high school diploma a high school equivalency 
certificate.
Section 681.240 When do local youth programs verify dropout status?
    This section provides that dropout status is determined at the time 
of enrollment for eligibility as an OSY and that once a youth is 
enrolled as an OSY, that status continues, for purposes of the minimum 
75 percent OSY expenditure requirement, for the duration of the youth's 
enrollment, even if the youth later returns to a school.
    Comments: Several commenters expressed their support for the 
proposed language. A number of these commenters specifically expressed 
their support for the allowance of youth who are determined eligible to 
receive services at the time of their enrollment to continue to receive 
services and maintain eligibility even if they are placed later in an 
alternative school. These commenters recommend that an individual's 
status be portable when moving across other WIOA funding streams as 
long as that movement is part of the individual career plan and part of 
an articulated agreement among the partners. One commenter recommended 
changing an individual's school status from ISY to OSY when a youth 
graduates from high school as this would assist States with achieving 
the required minimum 75 percent OSY expenditure rate and will 
accurately reflect the status of youth with WIOA expenditures.
    Department Response: The Department has concluded that the most 
straightforward and least burdensome approach is for school status to 
remain the same throughout the program. In addition, this policy will 
encourage local programs to assist OSY re-engage in school without 
concern that re-engaging them in school would negatively impact their 
minimum OSY expenditure rate.
    Comments: A number of commenters expressed concerns over the 
provision that would allow States to define the term ``alternative 
school.'' Some of those commenters suggested that States with broad 
definitions of schools could end up preventing youth who have dropped 
out of school and are attending alternative schools from receiving WIOA 
OSY services. One of the commenters recommended that the Department not 
leave the definition of alternative schools up to States, saying that 
there should be a consistent definition across States. Another 
commenter recommended that, consistent with the State's definition of 
alternative education, any youth that attends an alternative school 
also be considered an OSY.
    Department Response: The Department agrees on the importance of 
consistent definitions across States. Because the term ``alternative 
school'' is a general term that may encompass many different types of 
programs, the Department deleted all references to the term 
``alternative school'' in Sec.  681.240, and it is no longer required 
to be defined in State Plans. Rather, as discussed in Sec.  681.230 
above, the Department has added high school equivalency programs and 
dropout re-engagement programs as additional types of programs that are 
not considered ``schools'' for the purposes of determining school 
status.
Section 681.250 Who does the low-income eligibility requirement apply 
to?
    This section discusses the low-income eligibility criteria for OSY 
and ISY. All ISY must be low-income with the exception that up to 5 
percent of ISY youth who meet all the other eligibility requirements 
need not be low-income. The up to 5 percent is calculated based on all 
newly enrolled youth who would ordinarily be required to meet the low-
income criteria in a given program year. For OSY, only those youth who 
are the recipient of a secondary school diploma or its recognized 
equivalent and are either basic skills deficient or an English language 
learner and youth who require additional assistance to enter or 
complete an educational program or to secure or hold employment must be 
low-income.
    Comments: Commenters expressed support for the amended low-income 
eligibility requirements, and their streamlined documentation and 
process requirements, with one commenter remarking the change would be 
beneficial to youth. Another commenter stated that the OSY low-income 
eligibility criteria would be confusing.
    Department Response: The Department concurs with these commenters 
that the new low-income eligibility requirements will lead to 
streamlined documentation and process requirements.
    Comments: A commenter expressed concern over needing to document 
low-income status for ISY, fearing it may

[[Page 56166]]

create a challenge in working with schools on career pathway 
activities. The commenter noted that schools prefer to provide all 
students with the same experience regardless of family income.
    Department Response: The Department notes the concern expressed 
about the compatibility between how schools and workforce partners 
approach youth. The Department cannot change the ISY income level 
requirements as WIOA defines them. The Department plans to provide 
tools on approaches to implementing career pathways.
    Comments: A commenter recommended that all OSY be exempt from 
having to meet low-income eligibility requirements, stating that there 
is a high correlation between being disconnected from school and work 
and the likelihood of entering poverty, especially at a young age. 
Similarly, a commenter recommended that the low-income requirement be 
removed from the OSY eligibility criteria for individuals who need 
additional assistance to complete an educational program or to secure 
or hold employment, and for recipients of a secondary school diploma 
who are basic skills deficient or an English language learner, 
asserting that the OSY requirements would be more effective if the low-
income criteria were removed from these two categories of individuals.
    Department Response: The Department recognizes the high correlation 
between being disconnected from school and work and the likelihood of 
entering poverty. It also understands that removing low-income criteria 
from all of the OSY eligibility criteria would simplify the program. 
Nonetheless, these eligibility requirements are statutory comments in 
WIOA, and therefore the Department cannot change them in regulation.
    Comments: Another commenter requested that the Department revise 
the proposed regulations so that OSY may be considered low-income if 
they receive or are eligible to receive free or reduced lunches, 
asserting that currently the proposed regulations are written so that 
only ISY who are eligible for free or reduced price lunches are 
considered to be low-income.
    Department Response: The Department considered the commenter's 
suggestion that OSY may be considered low-income if they receive or are 
eligible to receive free or reduced lunches. The Department decided not 
to change the Final Rule because youth must be enrolled in school to be 
eligible for the Richard B. Russell National School Lunch Act.
    Comments: A commenter requested clarification from the Department 
concerning the criteria that would be used to determine if an 
individual is an English language learner for the purposes of the low-
income eligibility requirement.
    Department Response: The Department understands the need for 
criteria for determining if an individual is an English language 
learner for the purposes of the low-income eligibility requirement. 
There will be guidance and technical assistance provided on this topic 
in the future. No regulatory change was made in response to this 
comment.
    Comments: A person commented that the proposed regulations would 
make youth with a disability a separate eligibility requirement from 
low-income requirements. This commenter and another commenter suggested 
that the Department specifically clarify that for youth with a 
disability, low income would not be an eligibility requirement under 
the proposed regulations for OSY with a disability.
    Department Response: Upon analyzing these comments the Department 
discovered a technical error in the NPRM. The Final Rule clarifies that 
OSY with disabilities do not need to meet low-income eligibility 
requirements and the Department has changed the regulatory text to read 
as follows: ``All other OSY meeting OSY eligibility under Sec.  
681.210(c)(1), (2), (4), (5), (6), (7) and (8) are not required to be 
low-income. Additionally, the Department clarified in Sec.  681.280 
that OSY with disabilities are not required to be low income. For ISY 
with a disability, the youth's own income rather than his or her 
family's income must meet the low-income definition and not exceed the 
higher of the poverty line or 70 percent of the lower living standard 
income level.
    Comments: A commenter suggested that any youth who attends a school 
that is considered by the U.S. Department of Education to be a 
``designated low-income school'' should be considered a low-income 
youth for the purpose of WIOA services. Similarly, another commenter 
requested that the Department add to the regulations that any youth who 
attend a title I school would automatically be considered low-income 
for eligibility purposes for WIOA youth services.
    Department Response: The Department analyzed these two similar 
suggestions and did not modify the regulation text. The Department 
reviewed the Department of Education's title I designation and 
concluded that the WIOA high poverty threshold represents a more 
impoverished area than the Department of Education's title I school 
status.
    Comments: A commenter asked for clarification as to whether this 5 
percent of youth means new youth enrollees in a given program year or 5 
percent of all youth enrolled. Another commenter asked whether the 5 
percent who do not have to be low income includes youth that are 
eligible because of non-income applicable criteria such as being 
homeless, a member of the juvenile justice system, or having dropped 
out of high school.
    Department Response: The Department clarified in the regulation 
text that for the 5 percent low-income exception, the 5 percent of 
youth means new youth in a given program year. In addition, the 
Department has clarified in regulatory text that the calculation for 
the 5 percent exception is based on only those youth who would 
ordinarily need to be low income. It is not based on all youth since 
many of the OSY categories do not require low-income status. In fact, 
all nine categories at Sec.  681.210(c) except for paragraphs (c)(3) 
and (9) do not require low-income status. Because not all OSY are 
required to be low-income, the 5 percent low-income exception under 
WIOA is calculated based on the 5 percent of youth enrolled in a given 
program year who would ordinarily be required to meet the low-income 
criteria. For example, a local area enrolled 200 youth and 100 of those 
youth were OSY who were not required to meet the low-income criteria, 
50 were OSY who were required to meet the low-income criteria (i.e., 
either Sec.  681.210(c)(3) or (9)), and 50 were ISY. In this example 
the 50 OSY required to be low income and the 50 ISY are the only youth 
factored into the 5 percent low-income exception calculation. 
Therefore, in this example, 5 of the 100 youth who ordinarily would be 
required to be low-income do not have to meet the low-income criteria 
based on the low-income exception. This percent is calculated at the 
end of a program year based on new enrollees in that program year.
    Comments: A few commenters were concerned that setting a limit on 
the percent of youth that may be deemed eligible based on needing 
additional assistance limits who can be served when there is not an 
abundance of youth that have one of the other eligibility 
characteristics. A number of commenters requested that the Department 
consider recommending that the 5 percent limitation be removed at such 
time that WIOA is amended that states that 5 percent of youth who meet 
all other WIOA youth services eligibility

[[Page 56167]]

requirements do not have to be low income.
    Department Response: While the Department did not include language 
in the NPRM relating to the 5 percent limitation on the ``requires 
additional assistance'' criterion for ISY, that was an unintentional 
omission. The Department has added Sec.  681.310(b), which describes 
the 5 percent ISY limitation for the ``requires additional assistance'' 
criterion. The Department will take the concerns about the 5 percent 
limitation into consideration when providing any technical assistance 
to Congress on WIOA reauthorization.
    Comments: A few commenters asked for clarification regarding a 
definition for ``family'' for the purposes of determining low-income 
eligibility for WIOA title I youth program. Another commenter 
recommended that the Department incorporate the definition of 
``family'' from WIA sec. 101(15) into the WIOA regulations. A request 
was made that the Department provide an updated version of the WIA 
definition that is more inclusive of all family types, including same-
sex marriages and domestic partnerships.
    Department Response: In response to the comments seeking 
clarification of ``family'' in WIOA, the Department added a definition 
of family in 20 CFR part 675, and it is further discussed in the 
preamble that applies to that part.
    Comments: Some commenters asked what items would be included for 
determining if an individual is in a family with total family income 
that does not exceed the poverty line. In particular, these commenters 
asked the Department if sources of funding such as pensions, foster 
care child payments, or unemployment compensation would be included 
when determining a family's low-income status. A commenter asked the 
Department what the definition of a dependent child would be for 
purposes of determining income eligibility and up to what age could an 
OSY be considered a dependent child of the parent or guardian.
    Department Response: When determining up to what age an OSY could 
be considered a dependent child of the parent or guardian use the IRS 
definition of dependent. The Department will provide additional 
guidance on eligibility.
Section 681.260 How does the Department define ``high poverty area'' 
for the purposes of the special rule for low-income youth in the 
Workforce Innovation and Opportunity Act?
    WIOA contains a new provision that allows for youth living in a 
high poverty area to meet automatically the low-income criterion that 
is one of the eligibility criteria for ISY and for some OSY.
    Comments: The Department received many comments on how to define 
``high poverty area.'' A number of the commenters focused on the 30 
percent rate as set every 5 years using American Community Survey 5-
Year data and if that was the appropriate threshold. For example, a few 
commenters expressed their support for the proposed language in this 
section, suggesting that the 30 percent threshold for defining a high 
poverty area would be an accurate measure. In particular, an entity 
commented that the proposed regulation would help to relieve some of 
the burden of meeting income eligibility requirements on youth.
    However, another commenter wrote that the proposed 30 percent 
threshold would be unreasonable, and requested additional clarification 
regarding the calculation methods of contiguous tracts in determining 
high poverty areas. Specifically, this commenter asked the Department 
whether it would measure high poverty thresholds for a contiguous tract 
using an average of the contiguous tracts, or just whether a contiguous 
tract meets the threshold.
    Citing data from the American Community Survey, another commenter 
suggested that there are actually few census tracts that would meet the 
30 percent poverty threshold. This commenter further stated that census 
data, particularly for low-income neighborhoods, often includes a large 
margin of error. This commenter recommended that the Department modify 
the definition of high poverty area to reflect actual geographic 
concentrations of OSY better.
    A few commenters suggested that the definition of high poverty area 
should not be higher than 20 percent of the population meeting the low-
income threshold. Other commenters recommended that the proposed high 
poverty area definition be lowered from 30 percent of the population to 
25 percent.
    Citing statistics a commenter said that in Maine, there are no 
areas in which the 30 percent poverty threshold would be met, one 
commenter recommended that the Department lower the low-income 
threshold from 30 percent in order to accommodate more rural and less 
densely populated States.
    One commenter recommended that the regulations be modified to state 
that if any measure of poverty in a census tract exceeds 30 percent, 
the census tract should be considered a high poverty census tract, 
stating that in some cases the overall high poverty may be under 30 
percent but certain measures within the overall tract could be over 30 
percent.
    Two commenters recommended that the Department allow States to 
define their own poverty area thresholds between 20 and 40 percent that 
is consistent with the State's demographics. Another commenter 
recommended that the Department allow Local WDBs to determine the 
thresholds for poverty in their local areas.
    Another commenter recommended that Local WDBs submit documentation 
to the Department concerning extenuating circumstances in their area 
that would cause them to need to lower their low-income threshold.
    Department Response: After analyzing the many comments received on 
the proposed regulation, the Department concluded that a poverty rate 
of at least 30 percent as set every 5 years using American Community 
Survey 5-Year data was too high. The regulation text was changed to 
reflect a poverty rate of at least 25 percent as set every 5 years 
using American Community Survey 5-Year data. Local areas must decide 
how to combine census tracts into larger contiguous areas and the 
weighted average of the poverty rates of the census tracts in each 
contiguous area to meet the threshold. The Census Bureau defines a 
``poverty area'' as a census tract where at least 20 percent of the 
residents are poor. Therefore, the term ``high poverty'' must be 
greater than 20 percent; the Department concluded that 25 percent was 
the most appropriate threshold. Because allowing States to define their 
own poverty threshold would lead to inconsistencies in eligible youth 
across the country, the Department did not include that recommendation 
in the Final Rule.
    Comments: Citing statistics regarding the high poverty rates in 
Merced County and all of San Joaquin valley, a commenter recommended 
that the ``area'' measured when determining whether an area is high 
poverty, be amended from using counties to cities. A different 
commenter recommended that the Department modify the proposed 
regulations to include ``city'' as an additional geographical division 
that could be used when determining low-income status of an area. 
Another commenter recommended that any city with more than 20 percent 
of its census tracts considered ``high poverty'' should be considered a 
high poverty area, expressing that poverty areas are not always 
contiguous and can be separated by land occupied by government 
buildings, shopping malls, and colleges.

[[Page 56168]]

    Department Response: Because most cities include multiple 
neighborhoods and census tracts that can vary greatly in their levels 
of poverty, the Department decided that using city as the geographical 
area is too large of an area to use.
    Comments: A commenter recommended that the Department should use 
zip codes to determine low-income levels instead of census tracts, 
asserting that there are often sub-areas of high poverty within a 
census tract and that census tracts often do not reflect these 
concentrated area of high poverty.
    Department Response: The Department analyzed the effect of adding 
city and zip code as an additional geographic division and decided to 
stay with the proposed set of contiguous census tracts as the Census 
Bureau defines poverty areas using census tracts. The conclusion will 
result in a more consistent implementation of the regulation.
    Comments: A few commenters suggested that the Department revise the 
proposed regulations so that the 30 percent poverty threshold is 
defined using the numbers from the population in an area who are 
eligible to participate in the program (ages 16 through 24), and not 
using the percentage from the general population. Two commenters also 
recommended that high poverty areas be defined by the youth poverty 
rate of an area, stating that census tract data are minimally useful 
for the purpose of determining the level of poverty in an area. 
Similarly, one commenter asserted that using the American Community 
Survey 5-Year data for all ages in an area could be limited in its 
usefulness. This commenter suggested that the data be limited to 
individuals who are under 18 living in an area. This commenter 
recommended that the Department clarify whether the American Community 
Survey data should be limited to youth in an area or whether States 
have discretion to decide which data to use.
    Department Response: While the Department acknowledges the value 
behind using poverty data that reflect the population the program 
serves, it concluded that because this measure applies to ISY (14-21) 
and OSY (16-24), and these age ranges are not currently easily 
accessible with the American Community Survey, it would not specify 
that the data need to reflect a specific subpopulation as a requirement 
in the regulatory text.
    Comments: Another respondent sought clarification from the 
Department regarding the proposed method of defining high poverty 
areas. Similarly, one commenter stated that the Final Rule would need 
to be clearer as to how a local area can determine whether or not they 
are considered a high poverty area. Another commenter asked the 
Department to clarify how a service provider would document that an 
individual has met the income eligibility requirements for WIOA youth 
services by living in a high poverty area. One commenter asked if Local 
WDBs could use the U.S. Department of Housing and Urban Development 
(HUD) Web site to determine if an area is high poverty.
    Department Response: The Department recognizes that several 
commenters want directions and tools on how a local area could 
determine whether they are considered a high poverty area. The 
Department will provide technical assistance to youth service 
providers, making it easier to calculate if an area qualifies as a high 
poverty area for WIOA purposes.
    Comments: Several commenters recommended that the regulations 
include a variety of measures to determine whether an area is ``high 
poverty.'' Specifically, some of these commenters recommended that the 
Department revise the NPRM to include additional high poverty area 
proxies to capture low-income youth such as living in areas contiguous 
to high poverty areas, living in public housing, or living in an area 
where over a certain percent of the student population is eligible for 
free or reduced price lunches. An entity recommended using additional 
low-income proxies for high poverty area, sharing that the current 
proposed language would exclude individuals from participation in these 
services based on their zip code.
    One commenter suggested that school district borders be used to 
define areas of high poverty instead of State or county borders, 
asserting that this would decrease economic disparity between 
communities.
    Another commenter recommended that the Department use the most 
current data available to determine high poverty areas. This commenter 
suggested using data from other sources instead of solely relying on 
data from the American Community Survey, and recommended also using 
data from Empowerment Zones and other partner agency information 
systems.
    Department Response: The Department considered all of the 
alternative measures suggested and decided to use the proposed 
calculation method, with a slight adjustment to 25 percent from 30 
percent poverty rate in order to keep the calculation relatively 
straightforward, easy to understand, and not burdensome to document or 
implement.
    Comments: Another commenter stated that the proposed method of 
classifying high poverty areas is not consistent with WIOA's intent of 
serving the neediest youth, asserting that eligibility should be based 
on individual needs instead.
    Department Response: The Department appreciates the concern 
regarding serving the neediest youth. WIOA sec. 129(a)(2) includes the 
phrase ``high poverty area,'' which the Department interpreted to mean 
a geographic area and not an individual determination.
    Comments: Finally, a commenter suggested that the Department revise 
proposed Sec.  681.260 to make it more precise and eliminate ambiguity 
in the term ``tribal area.''
    Department Response: The Department accepted the commenter's 
suggestion and replaced, ``Indian Reservation, tribal land, or Native 
Alaskan Village'' with ``an American Indian Reservation, Oklahoma 
Tribal Statistical Area (as defined by the U.S. Census Bureau), Alaska 
Native Village Statistical Area or Alaska Native Regional Corporation 
Area, Native Hawaiian Homeland Area, or other tribal land as defined by 
the Secretary in guidance'' in the Final Rule.
Section 681.270 May a local program use eligibility for free or reduced 
price lunches under the National School Lunch Program as a substitute 
for the income eligibility criteria under title I of the Workforce 
Innovation and Opportunity Act?
    This section explains that WIOA sec. 3(36) defines a low-income 
individual to include an individual who receives (or is eligible to 
receive) a free or reduced price lunch under the Richard B. Russell 
National School Lunch Act.
    Comments: A number of commenters expressed support for the proposed 
language's acceptance of eligibility for free or reduced price lunch as 
a substitute for WIOA youth income eligibility requirements criteria.
    One commenter asked the Department whether an OSY with a sibling 
receiving free or reduced lunches would be considered eligible under 
the proposed regulations. Similarly, another commenter requested 
clarification from the Department regarding whether an OSY high school 
graduate could use their family's participation in the National School 
Lunch Program as fulfillment of their low-income requirements. Yet 
another commenter recommended that a youth who lives in a household 
where his or her family

[[Page 56169]]

member(s) receive or are eligible to receive free or reduced price 
lunch should automatically also be eligible for WIOA youth services.
    Department Response: The Department analyzed the requests to use 
family member's eligibility to receive free or reduced price lunch as a 
proxy allowing a youth not enrolled in school to automatically meet 
low-income eligibility criteria for WIOA youth services. The Department 
did not change the Final Rule because WIOA states ``an individual must 
receive or is eligible to receive a free or reduce-priced lunch'' and 
youth must be enrolled in school to be eligible for Richard B. Russell 
National School Lunch Act. Furthermore, low-income is not an 
eligibility requirement for significant portions of the OSY program.
    Comments: A few commenters requested clarification from the 
Department as to whether in a city or a town in which 100 percent of 
students are eligible for free or reduced lunches, any student who 
lives in the area would be considered low-income automatically and 
therefore, eligible for WIOA youth services, and only would need to 
prove his or her residency. Further, these commenters requested 
clarification from the Department regarding whether an individual who 
attends a school that qualifies for a Community Eligibility Provision 
(CEP) under the Healthy, Hunger-Free Kids Act of 2010 would be 
considered low-income for WIOA youth program eligibility purposes. 
Another commenter also discussed the requirements of the CEP and asked 
how a school district's participation in a CEP would affect the low-
income eligibility of youth for WIOA services.
    Department Response: The Healthy, Hunger-Free Kids Act of 2010 
(Pub. L. 111-296, December 13, 2010, 124 Stat. 3183) amends the Richard 
B. Russell National School Lunch Act which includes the CEP, but does 
not replace it. The Department found that many cities, towns, and 
schools that participate in the CEP have relatively low poverty rates 
as compared to the WIOA determined high poverty area. As a result of 
this research, the Department decided not to change the Final Rule to 
include the CEP.
Section 681.280 Is a youth with a disability eligible for youth 
services under the Workforce Innovation and Opportunity Act if his or 
her family income exceeds the income eligibility criteria?
    This section reiterates the WIOA provision that, for an ISY with a 
disability, income level for eligibility purposes is based on his/her 
own income rather than his/her family's income. For OSY with a 
disability, income is not an eligibility criterion.
    Comments: Two commenters expressed support for this provision, 
noting that it would eliminate barriers for individuals with 
disabilities for accessing necessary support services.
    Another commenter stated that there was an inconsistency between 
proposed Sec. Sec.  681.250 and 681.280. Specifically, the commenter 
said that Sec.  681.250 indicates that the low-income requirement would 
not apply to OSY with disabilities. However, Sec.  681.280 states that 
for an individual with a disability, the income level for eligibility 
purposes would be based on the person's individual income as opposed to 
his or her family's income. This commenter recommended that the 
regulatory text be rewritten to clarify that the low-income requirement 
for individuals with disabilities would be applicable only to ISY and 
not OSY.
    Department Response: The Department concurs that the proposed 
regulation did not factor in the OSY eligibility criteria. To address 
the commenter's concern, the final regulation includes the following 
line, ``Furthermore, only ISY with a disability must be low income. OSY 
with a disability are not required to be low income.''
Section 681.290 How does the Department define the ``basic skills 
deficient'' criterion in this part?
    This section reiterates the basic skills deficient criterion that 
is part of the eligibility criteria for both OSY and ISY, for purposes 
of title I of WIOA. The section also provides that local programs must 
use valid and reliable assessment instruments and provide reasonable 
accommodations to youth with disabilities in the assessment process in 
making this determination.
    Comments: A commenter recommended that the Department revise the 
phrase provided in Sec.  681.290(a)(2), ``(2) Are unable to compute or 
solve problems, or read, write, or speak English at a level necessary 
to function on the job, in the individual's family, or in society. 
(WIOA sec. 3(5)).''
    Department Response: The Department declines to revise this 
language because it comes directly from the statutory language of WIOA.
    Comments: A commenter recommended that the Department include 
language in Sec.  681.290(b), which governs the State WDBs' policies to 
determine if a youth is basic skills deficient, to require the use of 
age and/or developmentally appropriate criteria. Another commenter 
recommended that the Department clarify that local areas must state in 
the local plan how they will assess individuals, and that States should 
establish State policies for how to define basic skills deficient.
    Department Response: The Department addressed these comments in 
State planning guidance, TEGL No. 14-15 (``Workforce Innovation and 
Opportunity Act (WIOA) Requirements for Unified and Combined State 
Plan''), which can be found at http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm.
    Comments: One commenter requested clarification regarding the Sec.  
681.290(c) requirement that in assessing basic skills, local programs 
must use assessment instruments that are valid and appropriate for the 
target population. One commenter expressed its support for the explicit 
inclusion of ``valid and reliable assessment instruments'' and 
``reasonable accommodations'' for individuals with disabilities, saying 
that this language would create the opportunity for State and Local 
WDBs to put metrics-driven services and supports into place. This 
commenter recommended, however, that the Sec.  681.290 language be 
further modified to provide State and Local WDBs with guidance on how 
to connect youth with disabilities with the resources they need if they 
are deemed skills deficient. A number of commenters asked about the 
types of basic skills assessments that are allowable.
    Department Response: The Department will provide guidance or 
technical assistance on ways to help youth with disabilities access the 
resources they need.
    Comments: A commenter recommended that the Department revise Sec.  
681.290(c) to include assessment instruments that are valid and 
appropriate for the target population and must provide reasonable 
accommodation in the assessment process, if necessary, for people with 
disabilities.
    Department Response: The Department concluded that local programs 
need flexibility to use assessments they choose as long as they are 
valid and appropriate. Requiring assessments only approved by the 
Department of Education's National Reporting System would be overly 
burdensome for local youth programs. No change has been made to the 
regulatory text in response to the comment.
    Comments: A commenter suggested that the language of this section 
be amended to provide further guidance if

[[Page 56170]]

a youth with a disability is unable to demonstrate basic skills, and 
that language should be included that will guide State and Local WDBs 
as they work to meet the needs of youth who are basic skills deficient. 
The commenter suggested specific procedures should be put into place to 
connect skills deficient youth with disabilities with the training and 
resources they need in order to succeed.
    Department Response: The Department acknowledges the concerns about 
serving basic skills deficient youth, including those with 
disabilities, and will provide guidance and technical assistance to 
address these concerns. No change is made to the regulatory text in 
response to this comment.
    Comments: Another commenter suggested that local programs should be 
able to use the Individual Education Program (IEP) to determine 
individuals' basic skills, because it is a summary of their reading, 
writing, and math skills. Finally, a commenter recommended that the 
Department remove the basic skills deficient criteria for the time 
being, noting that all other program requirements are beginning in July 
2015.
    Department Response: Regarding the use of an IEP, the Department 
will issue further guidance describing the use of previously conducted 
assessments. In addition, the Department cannot remove the basic skills 
deficient criteria because the criteria are set forth in the statutory 
language of WIOA. No changes were made to the regulatory text in 
response to these comments.
Section 681.300 How does the Department define the ``requires 
additional assistance to enter or complete an educational program, or 
to secure and hold employment'' criterion in this part for OSY?
    The Department added this section in the Final Rule to be more 
clearly consistent with the ``requires additional assistance'' 
eligibility criteria in WIOA secs. 129(a)(1)(B)(iv)(VIII) (for OSY) and 
129(a)(1)(C)(iv)(VII) (for ISY). The criterion is slightly different 
for ISY and OSY, in that the OSY section contains the phrase ``to enter 
or complete an educational program'' while the ISY language states ``to 
complete an educational program.'' Therefore, the Final Rule includes 
two separate sections for the ISY and OSY ``requires additional 
assistance'' criteria. The new Sec.  681.300 is the OSY section, while 
proposed Sec.  681.300 is now Sec.  681.310, the ISY section. Proposed 
Sec.  681.310 has also been renumbered to Sec.  681.320.
Section 681.310 How does the Department define the ``requires 
additional assistance to complete an educational program, or to secure 
and hold employment'' criterion in this part for ISY?
    This section allows States and/or local areas to define the 
``requires additional assistance . . .'' criterion that is part of the 
ISY eligibility. It clarifies that if this criterion is not defined at 
the State level and a local area uses this criterion in its ISY 
eligibility, the local area must define this criterion in its local 
plan. The Department received comments on this section as discussed 
below.
    Comments: A number of commenters recommended that the Department 
provide additional guidance, such as including an acceptable list of 
possible ``additional assistance'' in order to set national standards 
for what ``additional assistance'' means. Many of these commenters 
expressed concern about the proposed language being overly broad, with 
the potential to expand services beyond the high-risk populations 
envisioned by WIOA. For this reason, these commenters recommended that 
the educational program that the individual needs should be geared to 
the achievement of basic skills at the secondary level and that 
``requiring additional assistance to secure or hold employment'' should 
mean that there are deficits in basic academic skills (not technical 
skills, or advanced academic skills) that are needed to secure 
employment or succeed on the job.
    Another commenter recommended that States and/or local areas should 
have an established definition for an ``individual requiring additional 
assistance to complete an education program or to secure or hold 
employment'' and include a student who is significantly over-aged and 
under-credited, (i.e., 2 or more years below grade level or off track 
from high school graduation). One commenter recommended that the 
Department require State and Local WDBs to establish policy using age 
and/or developmentally appropriate criteria to determine when a youth 
requires additional assistance to complete an educational program or to 
secure and hold employment.
    Department Response: The Department understands the need for more 
specific language to define the ``requires additional assistance'' 
criterion and plans, and further guidance on the need for more specific 
definitions at the State and local level will be issued. No change to 
the regulatory text, however, was made in response to these comments.
    Comments: A few commenters asked about the 5 percent limitation on 
ISY using the ``requires additional assistance'' provision.
    Department Response: It was an oversight that the Department did 
not include this new limitation in the NPRM. Therefore, the Final Rule 
includes Sec.  681.310(b) that describes the 5 percent ISY limitation 
on the use of the ``requires additional assistance'' criterion.
Section 681.320 Must youth participants enroll to participate in the 
youth program?
    This section clarifies that there is no self-service concept for 
the WIOA youth program and every individual receiving services under 
WIOA youth must meet ISY or OSY eligibility criteria and formally 
enroll in the program. It defines participation as an eligibility 
determination, the provision of an objective assessment, development of 
an individual service strategy, and participation in any 1 of the 14 
program elements.
    Comments: The Department received a number of comments, as 
discussed below, recommending the Department clarify the point of 
participation for a WIOA title I youth program participant.
    Department Response: The Department has added Sec.  681.320(b)(2) 
to clarify that the point of program participation does not begin until 
after the youth is determined eligible, the youth receives an objective 
assessment, and the youth participates in 1 of the 14 program elements. 
In addition, the Department made a minor language change in Sec.  
681.320(b) in order to be consistent with language in the performance 
section of the Final Rule.
    Comments: A number of commenters expressed their support for the 
NPRM's specification that there would be no self-service for WIOA youth 
and that every individual must enroll formally in the program. These 
commenters also stated that they support the proposed language's 
definition of enrollment as the collection of information.
    Several commenters expressed concern regarding the burden placed on 
individuals who have to demonstrate their eligibility through 
documentation. Some of these commenters requested that the Department 
clarify and make explicit that the ``collection of information'' 
associated with enrollment can be supported with self-attestation, in 
order to ensure upfront eligibility, especially for high-risk 
individuals. Although acknowledging the improvements in burden 
associated

[[Page 56171]]

with certification of income eligibility brought about by WIOA, many 
commenters suggested that requiring individuals who are at high risk to 
prove their status before they receive services that they rely on would 
be detrimental to those in need. These commenters suggested that the 
Department use the guidance for self-attestation that was included in 
the ``Advisory Training and Employment Guidance Letter No. 6-14 Program 
Year (PY) 2013/Fiscal Year (FY) 2014 Data Validation and Performance 
Requirements and Associated Timelines.'' Discussing how self-
attestation is defined in this document, these commenters recommended 
that the Department amend the proposed language to state that the 
collection of information that triggers enrollment could include self-
attestation, and that self-attestation is even preferable to other 
methods of information collection.
    Department Response: The Department does allow self-attestation for 
the collection of a number of data elements. The Department will 
provide further guidance on documentation requirements for data 
elements in the Department's forthcoming data validation guidance.
    Comments: Commenters also recommended that the Department modify 
the proposed regulations to state that an individual is not enrolled in 
WIOA title I programs with the collection of information, and that 
local areas are allowed to begin assessment activities and other 
efforts through the one-stop delivery system. These commenters also 
recommended the Department apply a consistent definition of point of 
enrollment across all WIOA titles and recommended that the point of 
enrollment should be activated with the individual's participation in a 
program activity, not just their involvement in initial assessment 
activities.
    A commenter recommended that the Department clarify that staff 
assisted activities such as assisting youth post-exit in transition, 
navigation, and support are encouraged and do not trigger enrollment 
for individuals in WIOA youth programs. Another commenter stated that 
the point at which the Department defines when an individual is 
enrolled is critical to data collection and validation. This commenter 
suggested that collecting an individual's data at the time of 
eligibility verification and at enrollment would be redundant and 
provide increased opportunity for inconsistent data reporting.
    Another commented that the time of enrollment needs to be 
clarified, as they were concerned that the proposed regulations as they 
stand would allow the process of taking a WIOA application and 
determining its eligibility to be categorized as a ``basic career 
service'', therefore, counting the individual as enrolled. This 
commenter recommended that the regulations be amended so that 
enrollment into WIOA title I services would be the first service 
provided, after eligibility has already been determined.
    Department Response: The Department has clarified in Sec.  
681.320(b) of this DOL WIOA Final Rule that the point of participation 
is after an eligibility determination, and added in Sec.  681.320(b) 
that the point of participation occurs after the provision of an 
objective assessment, development of an individual service strategy, 
and participation in any of the 14 WIOA youth program elements. In 
addition, the Department will ensure consistency in the point of 
participation across all WIOA titles through the performance section in 
20 CFR 677.150(a)(2) (see Joint WIOA Final Rule).
Other Eligibility Issues
    Comments: A commenter recommended that the Department explicitly 
clarify that youth who are eligible to work under Deferred Action for 
Childhood Arrivals (DACA) also would be eligible for WIOA programs.
    Department Response: The Department declines to address DACA in the 
WIOA Final Rule (due to pending court decisions). The Department issued 
guidance on DACA in TEGL No. 02-14 (``Eligibility of Deferred Action 
for Childhood Arrivals Participants for Workforce Investment Act and 
Wagner-Peyser Act Programs''), which can be found at https://wdr.doleta.gov/directives/attach/TEGL/TEGL_2-14.pdf.
    Comments: Two commenters noted that WIOA sec. 132 (b)(1)(B)(v)(I) 
defines an adult to mean an individual who is not less than age 22 and 
not more than age 72. The commenters identified that in other instances 
(title I sec. 3, title II), adults are defined as being 18 and not 22. 
These commenters requested further clarification from the Department as 
to whether this age difference was an oversight on the part of the 
Department.
    Department Response: WIOA sec. 132 discusses the allotment formula 
for States and outlying areas used each program year and refers to the 
adult age range used in the statutory formula to determine the amount 
of funds a State or outlying area receives in a given program year. The 
other references to WIOA titles I and II the commenters cite relate to 
eligibility age for specific services and is not a Department 
oversight. No changes have been made to regulatory text in response to 
these comments.
4. Subpart C--Youth Program Design, Elements, and Parameters
Section 681.400 What is the process used to select eligible youth 
service providers?
    This section clarifies that youth activities may be conducted by 
the local grant recipient and that when the Local WDB chooses to award 
grants or contracts to youth service providers, such awards must be 
made using a competitive procurement process in accordance with WIOA 
sec. 123.
    The Final Rule clarifies that the grant recipient/fiscal agent has 
the option to provide some or all of the youth workforce investment 
activities directly themselves rather than entering into a grant or 
contract to provide the activities. The competitive procurement 
provision discussed in WIOA sec. 123 is only applicable if the Local 
WDB chooses to award grants or contracts to youth service providers. 
The Department encourages Local WDBs to continue to award contracts to 
youth service providers when local areas have access to experienced and 
effective youth service providers. The revision also uses the 
terminology ``youth service providers'' consistently to refer to these 
providers. While this revision represents a significant change in that 
it provides Local WDBs with flexibility in determining which WIOA youth 
services to procure, the Department expects Local WDBs to continue to 
contract with youth service providers to provide the program elements 
which youth service providers are best positioned to offer. The intent 
of this flexibility is to allow for Local WDBs to directly provide the 
WIOA youth program elements that they can most efficiently and cost-
effectively provide, such as labor market and employment information 
and framework services including assessment, intake, supportive 
services and follow-up services. The Department received a number of 
comments on this section as discussed below. Based on these comments, 
the Department has made a significant revision to this section in the 
Final Rule.
    Comments: A number of commenters asked the Department to provide 
specific guidance as to which WIOA youth services must be competitively 
procured and when this regulation would take effect. One commenter 
requested additional clarification from the Department regarding the

[[Page 56172]]

competitive selection requirement, specifically inquiring as to what 
the framework required by local areas would be.
    In addition, since the proposed regulation stated at Sec.  
681.400(b) that competitive selection requirements do not apply to 
``the design framework services when these services are more 
appropriately provided by the grant recipient/fiscal agent,'' a couple 
of commenters asked the Department to clarify framework services. One 
of these commenters stated that framework services are described 
differently in the NPRM preamble discussion and the proposed regulatory 
text at Sec. Sec.  681.400(b) and 681.420(a). One commenter asked the 
Department for clarification as to whether a county within a local area 
that is not a fiscal agent could perform framework activities, 
suggesting that disallowing this would not be cost effective.
    Department Response: The Department determined a need for greater 
clarity about the specific youth services that must be competitively 
procured. In addition, the concept of framework services in the NPRM 
was overly complex. The Final Rule clarifies that the competitive 
procurement requirements in sec. 123 of WIOA apply only if the Local 
WDB chooses to award grants or contracts to youth service providers to 
provide some or all of the youth program elements. For example, a Local 
WDB could choose to procure competitively all youth program elements or 
it could choose to competitively procure a few of the youth program 
elements, and provide the remaining program elements themselves. This 
simplification in the Final Rule eliminates the need for the discussion 
of framework services in Sec.  681.400(b).
    Comments: With regard to proposed Sec.  681.400(a)(3), which would 
allow a Local WDB to sole source awards if it determines there is an 
insufficient number of eligible training providers of youth activities 
in the local area, a commenter asked the Department how a Local WDB 
would determine that there is an insufficient number of youth 
providers. Further, this commenter asked if a determination that a 
local area is ``rural''--for example, by using the Census Bureau, 
Office of Rural Health Policy, or Office of Management and Budget 
definition--alone provides justification for sole sourcing. Some 
commenters recommended that the Department expand the proposed Sec.  
681.400(a)(3) language to allow for the Local WDB to allow the grant 
recipient/fiscal agent to deliver the elements when there are no 
eligible training providers available, as this would be most useful in 
rural areas.
    Department Response: The Final Rule in Sec.  681.400(b)(4) does not 
address how to determine an insufficient number of eligible youth 
providers. Rather, the Local WDB should have a policy that defines what 
would constitute an insufficient number of eligible youth providers. 
Based on the changes made in the Final Rule, the grant recipient/fiscal 
agent will have the flexibility to deliver youth program elements as 
recommended by the commenter.
    Comments: A number of commenters recommended that the Department 
expand the Sec.  681.400 language to encourage Local WDBs to ensure 
that the competitive process does not discourage or limit co-enrollment 
of youth participants in other core or partner programs. One commenter 
recommended that the youth provider selection process should include 
suggested quality criteria for Local WDBs and/or States to use when 
selecting eligible training providers. This commenter also suggested 
that the Department provide in the regulation examples of public or 
private entities that have demonstrated effectiveness in providing 
regionally accredited secondary level educational programs providing 
entry-level workforce preparation and/or leading to recognized 
postsecondary education and training activities.
    Department Response: The Department agrees that it is important not 
to discourage co-enrollment and to incorporate quality criteria. The 
Department concluded that this type of language is more appropriate in 
guidance. The Department also agrees with the importance of 
competitively selecting high quality youth service providers, as 
appropriate, and will address this issue in future guidance.
    Comments: A commenter asked whether waivers for providing intake, 
assessment, development of ISS, case management, and follow-up services 
are still recognized under the regulation. Finally, one commenter 
observed that the term ``local program'' is used throughout subpart C 
without a clear definition, and recommended that the Department add a 
definition of ``local program'' to Sec.  681.400.
    Department Response: Because of the revisions to the Final Rule 
that provide additional flexibility in delivering youth program 
elements, waivers related to WIOA sec. 123 are no longer necessary. In 
addition, the Department declines to add a new definition of ``local 
program''; the term ``local program'' refers to a local workforce 
area's WIOA title I youth formula-funded program. No changes were made 
to the final regulation in response to these comments.
Section 681.410 Does the requirement that a State and local area expend 
at least 75 percent of youth funds to provide services to out-of-school 
youth apply to all youth funds?
    This section describes the new requirement under WIOA that States 
and local areas must expend a minimum of 75 percent of youth funds on 
OSY. This section also clarifies the guidelines by which a State that 
receives a minimum allotment under WIOA sec. 127(b)(1) or under WIOA 
sec. 132(b)(1) may request an exception to decrease the minimum 
expenditure percentage to not less than 50 percent.
    Comments: Numerous commenters expressed their support for the 
increase in mandatory minimum OSY expenditure from 30 to 75 percent, 
asserting that this change along with others would lead to improved 
outcomes for OSY. One commenter expressed its support for the proposed 
regulations, but further encouraged the Department to provide guidance 
as to how programs can transition to help the OSY population now that 
they are a priority. This commenter cautioned that without such 
guidance, providers with experience meeting Federal requirements and/or 
with expertise in hybridized ``earn and learn'' models could be 
excluded from the system. In addition to supporting the proposed 
regulations regarding the 75 percent funding requirement, one commenter 
expressed support for the Department's attempts to limit opportunities 
for waivers that would reduce this funding requirement. A few 
commenters expressed their support of the language that would allow 
organizations a transition period before they have to reach the 75 
percent OSY funding goal. One of these commenters suggested that 
allowing for this gradual transition would help public workforce 
systems to decrease their expenditures on ISY slowly. Another commenter 
was concerned about the 75 percent requirement because for its State 
and others with low-dropout rates, reaching the requirement would be 
unrealistic and would fail to serve many at-risk ISY. This commenter 
recommended that the requirement be reduced to 40 percent for the first 
year after implementation and increased to 60 percent at the third year 
and thereafter.
    Department Response: While the Department notes the commenters' 
concerns about the shift to spending more funds on OSY, the Department 
issued TEGL No. 23-14 (``WIOA Youth

[[Page 56173]]

Program Transition Guidance''), which can be found at http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm, on March 26, 
2015. This guidance discusses transitioning to the minimum 75 percent 
OSY expenditure requirement that allows a gradual transition in the 
first WIOA program year. The Department plans to issue additional 
guidance and technical assistance to help programs serve more OSY.
    Comments: A commenter expressed concern that transitioning to the 
75 percent OSY requirement would decrease performance outcomes 
throughout the youth services system because the OSY population is 
often difficult to retain contact with, especially after they have 
exited the program. Therefore, this commenter predicted that local 
areas would enroll a limited number of youth, except that those youth 
have a relatively high prospect for success, and devote significant 
resources to tracking and reporting on that limited population. This 
commenter requested confirmation that the Department would prefer that 
local areas forgo volume considerations and do everything possible for 
the few OSY that could meet these expectations.
    Department Response: The Department recognizes that OSY may require 
additional resources for services and expects local programs to provide 
the necessary resources to ensure the success of OSY. There is no 
specific expectation on the number of OSY programs must serve, only on 
the percentage of funds spent on OSY. States and local areas will have 
the opportunity to set performance targets based on the population they 
serve.
    Comments: Commenting that many ISY are at risk regardless of the 
fact that they are attending school, a commenter stated that the 
proposed regulations would not give enough support to areas who want to 
continue to help serve ISY. Further, this commenter was concerned that 
some ISY may end up dropping out in order to be eligible for OSY 
services and assistance and, therefore, suggested that local areas 
should be able to determine the needs of their own areas and serve 
those individuals as such.
    Department Response: The Department recognizes the concerns about 
serving fewer ISY. However, the focus in WIOA is on expending 
additional resources on OSY. Local WDBs do not have the authority under 
WIOA to determine ISY and OSY expenditure rates based on the needs of 
their own area. Local areas must spend a minimum of 75 percent of youth 
funds on OSY, with the exception that local area administrative 
expenditures are not a part of the 75 percent OSY minimum expenditure 
calculation.
    Comments: Describing the impact the 75 percent OSY minimum 
expenditure requirement would have on its summer transition program, 
one commenter opposed the OSY minimum expenditure requirement, stating 
that it would prevent 15 ISY who have been identified as high-risk from 
participating in its program due to a lack of funding for ISY.
    Department Response: The Department recognizes concerns regarding 
continuing to serve ISY and issued TEGL No. 23-14 (``WIOA Youth Program 
Transition Guidance'') on March 26, 2015, which can be found at http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm, which 
addresses transitioning ISY and ensures they can successfully complete 
the program and are not exited from the program prematurely.
    Comments: A number of commenters recommended that the Department 
provide additional detail about what is required in the analysis of ISY 
and OSY populations in a local area that would be required as part of 
the waiver process to reduce the OSY minimum expenditure percentage for 
States that receive the small State minimum allotment (proposed Sec.  
681.410(b)(1)).
    Department Response: The Department will provide guidance on what 
is required when submitting waivers to reduce the required OSY minimum 
expenditure rate for States that receive the small State minimum 
allotment.
Section 681.420 How must Local Workforce Development Boards design 
Workforce Innovation and Opportunity Act youth programs?
    This section describes the framework for the WIOA youth program 
design. This section also describes the requirement that Local WDBs 
must link to youth-serving agencies and adds local human services 
agencies to the list that WIA required.
Objective Assessment
    Comments: One commenter recommended that the Department clarify 
that the proposed Sec.  681.420(a)(1) requirement that the youth 
program design framework services must provide for an individual 
objective assessment does not require testing to determine an 
individual's Grade Level Equivalent or Educational Functioning Level 
unless needed to determine that the participant is basic skills 
deficient or to document a measurable skill gains for purposes of 
measuring performance. Another commenter recommended that the objective 
assessments and individual services planning process be completed using 
``strength-based'' approaches that focus on the strengths of the 
individuals instead of their faults.
    Department Response: The Department has incorporated language into 
Sec.  681.420(a)(1) to review youth strengths as part of the assessment 
process. It is also the intention of the Department to clarify the 
requirements around the youth program design framework in system 
guidance.
Individual Service Strategy
    Comments: A commenter recommended that a participant's ISS be 
developed with the individual's needs in mind and not on the time 
constraints or structure of the provider.
    Department Response: The Department has incorporated language into 
Sec.  681.420(a)(2) to develop the ISS based on the needs of the 
participant.
Career Pathways
    Comments: Several commenters recommended that the Department 
clarify that the Local WDB may require that youth services be aligned 
with specific career pathways identified by the Local WDB. Further, 
these commenters suggested that the regulations should clarify that the 
requirement under WIOA sec. 3(7)(F) that a career pathway must enable 
an individual to attain a secondary school diploma or its equivalent, 
and at least one recognized postsecondary credential, does not limit 
the ability of local areas to serve youth who have already attained a 
secondary school diploma or its equivalent.
    A number of commenters requested clarification from the Department 
about the activities that States and Local WDBs must carry out 
regarding career pathways, and whether they have to establish specific 
processes and policies concerning career pathways. Additionally, many 
of these commenters requested that the Department clarify whether Local 
WDBs must implement each element outlined in the WIOA definition and 
stated that WIOA does not indicate whether the identification of career 
pathways as part of the assessment and individual service strategy 
would create any additional requirements for local areas or youth 
service providers. Some of these commenters also recommended that the 
regulation clarify that the WIOA sec. 3(7)(C) requirement relating to 
counseling does not create an affirmative requirement for Local WDBs or 
youth service providers to provide counseling to every individual, but 
only to the extent that such counseling

[[Page 56174]]

would be consistent with the objective assessment and the ISS.
    One commenter agreed that Local WDBs should foster relationships 
with secondary and postsecondary education providers regarding the 
implementation of local career pathway strategies, stating that because 
of the shift in focus to OSY, Local WDBs should consult with experts 
that understand youth needs to design effective career pathway 
strategies.
    Department Response: The Department agrees that additional guidance 
is necessary to describe WIOA requirements for incorporating career 
pathways into the WIOA title I youth program, although the Department 
has determined that additional regulatory text on career pathways is 
not necessary. The Departments of Labor, Education, Health and Human 
Services in coordination with nine other Federal agencies plan to 
provide additional guidance and technical assistance on the 
implementation of career pathways in WIOA.
Follow-Up Services
    Comments: A couple of commenters expressed concern that proposed 
Sec.  681.420(a) listed follow-up services as part of the design 
framework services and proposed Sec.  681.460(a)(9) listed follow-up 
services as 1 of the 14 program elements because design framework 
services do not have to be procured, while program elements do. These 
commenters requested that the Department clarify that youth program 
operators have the flexibility to include follow-up services in the 
design framework or as a youth program element.
    Department Response: The Department clarified the procurement 
requirements for all program elements, including follow-up services, in 
Sec.  681.400.
Involvement of the Community
    Comments: One commenter requested that the Department clarify the 
term ``actively involved'' in the proposed Sec.  681.420(g) requirement 
that Local WDBs ensure ``that parents, youth participants, and other 
members of the community with experience relating to youth programs are 
actively involved in both the design and implementation of its youth 
programs.'' Another commenter stated that requiring those individuals 
be ``actively involved'' is overly prescriptive and not required in 
legislation. The commenter expressed concern that public meetings allow 
open access and it would be impossible to ensure engaged participation.
    Department Response: The Department agrees with this comment and 
has deleted the word ``actively'' from the Final Rule.
    Comments: Another commenter recommended that the Department amend 
Sec.  681.420 to better reflect the diverse range of stakeholders and 
perspectives of youth with disabilities. Specifically, this commenter 
recommended that the requirement that specific members of the community 
be involved with the establishment of program design should include 
youth with disabilities.
    Department Response: The Department has not added additional 
language based on this comment as Sec.  681.420(c)(6) already 
specifically names local disability-serving agencies.
Pay-for-Performance
    Comments: One commenter asked about the performance and reporting 
requirements of the pay-for-performance provision, specifically whether 
the Department will change how States report.
    Department Response: The Department plans to issue further guidance 
about the Pay-for-Performance contract strategies provision of WIOA and 
the requirements of subpart E of part 683.
Section 681.430 May youth participate in both the Workforce Innovation 
and Opportunity Act (WIOA) youth and adult programs concurrently, and 
how do local program operators track concurrent enrollment in the WIOA 
youth and adult programs?
    This section provides that youth may participate in both the WIOA 
youth program and the adult program at the same time if they are 
eligible for both and it is appropriate. The section also provides that 
youth who are eligible under both programs may enroll concurrently in 
WIOA title I and II programs.
    Comments: Several commenters expressed support for the proposed 
language that clarifies that youth may be co-enrolled in WIOA title I 
and II programs. However, many of these commenters also recommended 
that the Department strengthen the language to encourage Local WDBs to 
incorporate co-enrollment with other core programs as part of the 
overall youth program design. One of these commenters also stated that 
co-enrollment would create difficulties in terms of data collection and 
capacity. Specifically, this commenter said that to move successfully 
between systems without significant disruption, data collection, and 
storage must track the individual youth themselves, instead of just the 
programs they are in. This commenter suggested that additional funding 
and technical support may be necessary to assist States and local areas 
in developing comprehensive data systems.
    Some commenters also expressed their support of the proposed 
regulations' encouragement of co-enrollment, especially because of how 
it could extend more services to OSY. However, these commenters 
expressed concerns that potential disincentives for co-enrollment exist 
related to inconsistencies across funding streams in how enrollment, 
exit, and participation in activities are defined and how performance 
is measured in programs across the different titles.
    Department Response: The Department acknowledges the concerns 
regarding disincentives for co-enrollment due to data tracking issues 
and performance measure implications. However, the Department intends 
to provide additional guidance and technical assistance to support co-
enrollment across core programs. No changes were made to the regulatory 
text to reflect these comments.
    Comments: One commenter expressed its support for the proposed 
regulation's allowance of dual eligibility in WIOA title I and II 
programs, but recommended that the Department issue additional guidance 
to Local WDBs about how to coordinate their resources effectively for 
individuals who could co-enroll in both title I and title II services. 
Further, this commenter asked the Department for clarification as to 
whether co-enrolled individuals would need Individual Training Accounts 
(ITAs) and whether States should have to maintain documentation of 
providers who have expertise in services under both titles I and II. A 
few commenters expressed their support for the option of co-enrollment 
in WIOA title I and II programs, stating that this allowance would be 
particularly beneficial for youth under the Deferred Action for 
Childhood Arrivals policy who have not yet received their high school 
equivalency certificate because their participation in youth services 
under title I could further instill in them a greater educational work 
ethic. Further, these commenters recommended that the Department search 
for potential methods for how State and Local WDBs could recruit and 
ensure that they are providing services to eligible immigrants.
    Department Response: On November 17, 2015, the Department provided 
preliminary guidance regarding partnering between WIOA titles I, II,

[[Page 56175]]

and IV in TEGL No. 08-15 (``Second Title I WIOA Youth Program 
Transition Guidance''), which can be found at http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm.
    The Department will provide additional technical assistance 
regarding partnering across the WIOA programs on an on-going basis, 
including services to eligible immigrants. No changes were made to the 
regulatory text in response to these comments.
    Comments: Another commenter recommended tracking expenditures 
individually by each program.
    Department Response: The Department already does require tracking 
expenditures by each program, and no changes were made to the 
regulatory text in response to this comment.
Section 681.440 How does a local youth program determine if an 18 to 24 
year old is enrolled in the Workforce Innovation and Opportunity Act 
(WIOA) youth program or the WIOA adult program?
    Individuals aged 18 to 24 are eligible for the WIOA adult and youth 
programs. This section provides that local youth program needs to 
determine whether to enroll an 18 to 24 year old in the youth program 
or adult program based on the individual's career readiness as 
determined through an assessment of his or her occupational skills, 
prior work experience, employability, and participant needs.
    Comments: A commenter recommended that, given the intent of WIOA, 
individuals should be able to determine the programs in which they will 
participate. However, this commenter further recommended that the 
Department modify the proposed language to give guidance to States in 
terms of how to present materials on program choice to individuals and 
ensure that the materials presented would be understood by a wide 
variety of individuals, including those with disabilities.
    Another comment stated that determining in which program an 18 to 
24 year old should enroll would impose a burden on local areas to 
establish processes to ensure that services are provided to an 
individual in the appropriate program.
    A commenter suggested that, in cases of eligibility for co-
enrollment in WIOA title I and II activities, it would not be suitable 
for an 18 to 24 year-old youth to be enrolled in the adult program 
without first undergoing an assessment to determine whether the adult 
program would be appropriate for meeting his or her needs.
    Department Response: The Department does not intend to require 
local WDBs to establish specific processes to ensure that individuals 
are served in the appropriate program. Rather the Department wants to 
emphasize that youth may be served by either program depending on the 
young adult's individual needs, knowledge, skills, and interests. Local 
WDBs need a process in place to assist in determining the appropriate 
program for participants between the ages of 18 and 24.
    Based upon the comments received, the Department updated the Final 
Rule and removed the word ``objective'' from in front of assessment to 
indicate that a formal evaluation is not needed and the Department 
removed the reference to WIOA sec. 129(c)(1)(A).
Section 681.450 For how long must a local Workforce Innovation and 
Opportunity Act youth program serve a participant?
    The Department has continually provided guidance and direction that 
youth programs serve participants for the amount of time necessary to 
ensure they are successfully prepared to enter postsecondary education 
and/or unsubsidized employment. While there is no minimum or maximum 
time a youth can participate in the WIOA youth program, programs must 
link program participation to a participant's ISS and not the timing of 
youth service provider contracts or program years.
    Comments: Some commenters expressed their support for the proposed 
regulations' allowance to serve youth until their needs have been met, 
stating that this would alleviate stress on participants from having to 
deal with time constraints.
    A few of these commenters also stated, however, concerns about the 
use of the word ``must.'' These commenters recommended that the 
language be amended to say, ``Local youth programs must provide service 
to a youth participating in their individual service strategy in good 
faith for the amount of time necessary to ensure successful preparation 
to enter postsecondary education, registered apprenticeships, and/or 
unsubsidized employment.''
    In addition to allowing an individual to remain enrolled in WIOA 
youth services until he or she completes his or her plan of service, a 
commenter recommended that youth may remain enrolled in their services 
regardless of whether they are experiencing a period of inactivity in a 
program, as long as they are active in their career counseling 
services.
    Another commenter stated that the proposed regulations would not 
allow individuals who do not abide by the rules of their program to 
discontinue services and re-enroll in the program as long as they were 
within the age requirement. This commenter recommended that the 
Department revise this regulation to focus on the needs of individuals 
who must temporarily suspend their services for legitimate reasons.
    Department Response: The Department recognizes that at times youth 
face obstacles that make it hard for them to commit to a program, 
however the services that all youth receive should still align with 
their ISS. The program should review the ISS with the youth and 
determine if the program has the appropriate services available for the 
young adult. Additionally a youth may remain in the program for as long 
as he or she is receiving at least one program element, other than 
follow-up services. Therefore, because WIOA sec. 129(c)(2)(M) includes 
career counseling services, the scenario described above with a youth 
only participating in career counseling would be acceptable under the 
Final Rule. No change has been made in the regulatory text in response 
to these comments.
    Comments: Two commenters requested additional clarification from 
the Department about how they would measure and explicitly define 
``successful preparation to enter postsecondary education and/or 
unsubsidized employment.'' One of these commenters further recommended 
that they not measure successful preparation by an individual's actual 
entry into either postsecondary education or unsubsidized employment, 
stating that there may be outside, uncontrollable factors that are 
preventing them from engaging in those activities, other than their 
level of readiness.
    Department Response: The required reported outcomes for individuals 
entering postsecondary education and/or unsubsidized employment do not 
differ from the other WIOA youth program performance indicators. 
Additional information on required performance indicators is found in 
20 CFR part 677 (see Joint WIOA Final Rule).
Section 681.460 What services must local programs offer to youth 
participants?
    This section lists the 14 program elements, including 5 new youth 
program elements in WIOA sec. 129(c)(2) that were not included under 
WIA. These new elements are (1)

[[Page 56176]]

education offered concurrently with and in the same context as 
workforce preparation activities and training for a specific occupation 
or occupational cluster; (2) financial literacy education; (3) 
entrepreneurial skills training; (4) services that provide labor market 
and employment information about in-demand industry sectors or 
occupations available in the local area, such as career awareness, 
career counseling, and career exploration services; and (5) activities 
that help youth prepare for and transition to postsecondary education 
and training. In addition, WIOA revised some of the WIA program 
elements. For example, the element on tutoring, study skills training, 
and instruction leading to the completion of secondary school, 
including dropout prevention strategies, has been revised to provide 
that the dropout prevention (and recovery) strategies must be evidence-
based and to make clear that the completion of secondary school can be 
accomplished by attainment of a secondary school diploma or its 
recognized equivalent, including a certificate of attendance or similar 
document for individuals with disabilities.
    WIOA also combines the two WIA elements of summer youth employment 
programs and work experiences so that summer youth employment programs 
become one item in a list of work experiences and adds pre-
apprenticeship programs to the list of work experiences. Finally, WIOA 
expands the description of the occupational skill training element to 
provide for priority consideration for training programs that lead to 
recognized postsecondary credentials that are aligned with in-demand 
industry sectors or occupations if the programs meet WIOA's quality 
criteria. This change is consistent with WIOA's increased emphasis on 
credential attainment. The section clarifies that while local WIOA 
youth programs must make all 14 program elements available to WIOA 
youth participants, local programs have the discretion to determine 
which elements to provide to a participant based on the participant's 
assessment and ISS.
    The Department received many comments, which are discussed below, 
on provisions within Sec.  681.460.
    Comments: A commenter asked for clarification from the Department 
regarding the reasons for WIOA's increase in the number of required 
program elements that a local area must be able to provide. Another 
entity commented that not all of the 14 proposed program elements are 
available in every local area, citing mentorship programs as a primary 
example.
    Another commenter stated that local areas should be allowed to 
choose which of the 14 program elements to provide, reasoning that 
local areas will have the best insight into what is needed for the 
individuals in their particular area.
    Department Response: The Department understands that in some local 
areas it takes effort to identify quality providers for all program 
elements; however, WIOA explicitly requires these 14 elements for youth 
programs. While all 14 program elements must be available in a local 
area, every youth does not have to receive every element. For instance, 
only youth that have mentoring included on their ISS need to receive 
the program element.
    The Department acknowledges that in some areas mentoring is 
particularly challenging and has changed Sec.  681.490 to allow case 
managers to serve as adult mentors.
    Comments: Another commenter recommended that the Department clarify 
that youth programs may bring in multiple public/private partners and 
evidence-based programs that support the attainment of a secondary 
school diploma or its recognized equivalent, entry into postsecondary 
education, and career readiness for participants.
    Department Response: The Department agrees that partnering with 
other organizations to provide some program elements can be valuable 
and has added Sec.  681.460(c), that reads, ``When available, the 
Department encourages local programs to partner with existing local, 
State, or national entities that can provide program element(s) at no 
cost to the local youth program.''
    Comments: One commenter said that services offered to an individual 
must be in the area where the youth live because too often programs' 
inability to relieve transportation challenges has resulted in program 
non-completion. The commenter suggested that the Department include 
language regarding the need for State and Local WDBs to support 
investments in transportation services and program operations beyond 
non-traditional hours of operation.
    Department Response: The Department recognizes the need for program 
operation during non-traditional hours as well as the challenge 
transportation presents across the country. As described in Sec.  
681.570(b) supportive services may include transportation costs. The 
Department did not change the proposed regulation, though through 
technical assistance it will emphasize the possibility of using WIOA 
funds to cover transportation needs.
    Comments: Another commenter recommended that the Department clarify 
that providers must incorporate a number of items in their dropout 
recovery services (proposed Sec.  681.460(a)(2)), such as credit 
recovery opportunities leading to postsecondary education; flexible 
scheduling; various learning models; performance-based assessments; 
mentoring; and ``comprehensive'' support service.
    Department Response: The Department recognizes the value of dropout 
recovery services for youth and its success in reconnecting 
disconnected youth. Because many of the items suggested by the 
commenter are either WIOA program elements or allowable under other 
program activities, the Department decided not to change the regulatory 
text about alternative secondary school services. The Department plans 
to provide technical assistance on the program elements, including 
those that contain dropout recovery services.
    Comments: One commenter recommended that, in order to clarify that 
neither the Governor nor the State WDB should impose policies that 
require a sequence of services, the Department should revise proposed 
Sec.  681.460(a)(3) to clarify that ``academic and occupational 
education as a component of work experience'' may be provided on a 
concurrent or sequential basis based upon a participant's ISS, stating 
that local areas should have the flexibility to meet participants' 
individual needs.
    Department Response: The Department concurs that youth may receive 
academic and occupational education as a component of work experience 
on a concurrent or sequential basis based upon the ISS. The Department 
included new language in the Final Rule text of Sec.  681.600(b) that 
clarifies that the academic and occupational education of work 
experience may occur on a concurrent or sequential basis.
Section 681.470 Does the Department require local programs to use 
Workforce Innovation and Opportunity Act funds for each of the 14 
program elements?
    This section clarifies that local WIOA youth programs must make all 
14 program elements available to youth participants, but not all 
services must be funded with WIOA youth funds. Local programs may 
leverage partner resources to provide program elements that are 
available in the local area. If a local program does not fund an 
activity

[[Page 56177]]

with WIOA title I youth funds, the local area must have an agreement in 
place with the partner to offer the program element and ensure that the 
activity is connected and coordinated with the WIOA youth program if 
enrolled youth participate in the program element.
    Comments: A few commenters suggested the proposed language would 
require that local programs that are not using WIOA funds to fund an 
activity establish agreements with the partner with which they are 
engaging in the activity. These commenters stated that a referral 
should be sufficient in this case, adding that if services outside of 
WIOA funding streams are present in the community, an agreement would 
be unnecessary and is overly regulative.
    Department Response: While the Department does not require a local 
youth service provider to pay for all program elements, the Department 
does require the program elements provided to a youth to align with the 
goals the youth set forth in the ISS. Case managers must update the ISS 
on an on-going basis and document, among other items, the services 
provided and participant's progress, activities completed, benchmarks 
reached, and any other accomplishments. Case managers must document 
this information regardless of who provides the element. Therefore, the 
Department did not change the proposed regulation; the information 
needed for the ISS necessitates an agreement between the partner 
organization and the program.
    Comments: A couple of commenters asked for clarification regarding 
the proposed regulations' requirement for the creation of agreements 
between youth services providers and partner organizations outside of 
WIOA funding. Specifically, these commenters asked for clarification 
from the Department about what ``monitor'' means in this language, and 
when this requirement would be necessary.
    Department Response: The Department notes that the term ``monitor'' 
came from the NPRM preamble and was not a proposed requirement. It 
appeared in the following context, ``By closely connected and 
coordinated, the Department means that case managers must contact and 
monitor the provider of the non-WIOA-funded activity to ensure the 
activity is of high quality and beneficial to the youth participant.'' 
The case manager must check on the provider of the non-WIOA-funded 
activity and make sure the youth participant gets quality services that 
match the program, element requirements.
    Comments: A commenter recommended that the Department issue 
guidance on performance requirements and a reporting process for each 
of the required youth program elements to help local areas and States 
in the creation of their plans.
    Department Response: The Department is including guidance and 
specifics on the performance requirements and reporting through the ICR 
process, which was done for 20 CFR part 677 (see Joint WIOA Final 
Rule). The Department is providing additional information regarding the 
required reporting of data elements, including each of the 14 youth 
program elements through that process. More information is also 
available in the Joint WIOA Final Rule discussion of 20 CFR part 677.
Section 681.480 What is a pre-apprenticeship program?
    A pre-apprenticeship is a program or set of strategies designed to 
prepare individuals to enter and succeed in a registered apprenticeship 
program and has a documented partnership with at least one, if not 
more, registered apprenticeship program(s).
    Comments: A couple of commenters requested clarification regarding 
what constitutes a partnership for the purposes of this section, asking 
further whether it is direct entry into a partnership or whether a form 
of collaboration would be sufficient for these purposes. Other 
commenters sought clarification regarding pre-apprenticeship and 
performance indicators.
    Department Response: The Department further edited the pre-
apprenticeship regulation to provide a more detailed and consistent 
explanation of the components of pre-apprenticeship programs as 
described throughout this Final Rule. The type of required reported 
outcomes for individuals engaging in pre-apprenticeship programs do not 
differ from the other WIOA youth program performance indicators. 
Additional information on required performance indicators is found in 
20 CFR part 677 (see Joint WIOA Final Rule).
Section 681.490 What is adult mentoring?
    This section describes the adult mentoring program element. The 
Department received many comments on proposed Sec.  681.490 and made 
changes to the Final Rule as discussed below.
    Comments: A number of commenters recommended that the Department 
provide flexibility for States in how the mentoring programs are 
arranged and length of time participants receive mentoring. Some of 
these commenters reasoned that adult mentoring is difficult for small 
States to establish because mentoring services with which to partner 
are not widely available and because of limited funds. With regard to 
the language that would require the inclusion of a mentor other than 
the individual's case manager (proposed Sec.  681.490(a)(3)), a 
commenter suggested that a case manager should be suitable for 
consideration as an individual's mentor if he or she is providing the 
guidance and support that would be required of a mentor. This commenter 
explained that in rural areas, mentoring programs are rare and 
oversubscribed if they exist, so the WIOA case manager is, in fact, the 
chief adult mentor for the youth.
    In addition, several commenters did not like the proposed minimum 
12-month requirement for adult mentoring (proposed Sec.  
681.490(a)(1)), recommending that the length of mentoring should 
instead be evaluated and defined on a case-by-case basis and determined 
by the individual, his or her mentor, and his or her case manager. One 
commenter said that the timeframe for adult mentoring is better suited 
for local control to allow for direct assessment of participant needs. 
Another commenter stated that the language in this section should be no 
more prescriptive than the WIOA statute.
    Department Response: Under WIA, most local areas were able to 
secure qualified mentors, other than case managers, for youth 
participants. Nonetheless, the Department acknowledges that in a few 
areas of the country finding mentors may present a burden to a program. 
While the Department strongly prefers that case managers not serve as 
mentors, it changed the final regulation deleting proposed Sec.  
681.490(a)(3), ``include a mentor who is an adult other than the 
assigned youth case manager''. The Final Rule allows case managers to 
serve as mentors in areas where adult mentors are sparse. Because WIOA 
defines the length of time required for mentoring as not less than 12 
months, no changes were made in the regulatory text.
    Comments: Another commenter suggested that local areas study 
evidence-based models that they may implement when designing their 
mentorship programs. Suggesting that the purpose of adult mentoring 
should be clarified to indicate expected results of the mentor 
relationship and guide the types of activities and engagement that 
should result. A commenter

[[Page 56178]]

recommended that the Department revise Sec.  681.490 to clarify that 
adult mentoring should result in effectively engaging students in high-
quality, career relevant instructions and establishing clear 
connections between work-based learning and classroom experiences.
    Department Response: The Department supports the use of evidence-
based models. The Department anticipates that the expected outcomes of 
a mentoring relationship will connect to the goals set forth in the 
individual participant's ISS. Therefore, mentoring results will vary by 
participant.
    Citing their use of ``advocates'' in lieu of mentorship programs to 
engage with youth, one commenter recommended that the Department amend 
proposed Sec.  681.490 to include that mentorship services may include 
activities such as providing transportation or transportation 
assistance, aid in attaining work experience opportunities, court 
advocacy, foster care support, tutoring help, fostering of community 
relationships, and engagement with family.
    Department Response: The Department affirms activities such as 
providing transportation, aid in attaining work experience 
opportunities, court advocacy, foster care support, tutoring help, 
fostering of community relationships, and engagement with family care. 
However, other WIOA youth program elements cover several of these 
activities. While mentors may help participants attain their goals, the 
additional suggested activities above go beyond the basic WIOA adult 
mentoring requirements. No changes were made in the regulatory text in 
response these comments.
Section 681.500 What is financial literacy education?
    This section describes the financial literacy program element, new 
under WIOA. The Department received many comments on the new program 
element. Several of the comments described below resulted in changes to 
the Final Rule text.
    Comments: A few commenters expressed their support for the proposed 
regulations' description of the elements of financial literacy 
education. In particular, one expressed its support particularly for 
the inclusion of identity theft education.
    Some commenters stated that as the proposed language as written, it 
appears as though all of the elements listed are requirements that must 
be present within the financial literacy program element itself. These 
commenters recommended that the Sec.  681.500 introductory language be 
amended to State, ``The financial literacy education program element 
may include activities which. . . .'' Similarly, another commenter 
asked the Department to clarify that the list of activities for 
financial literacy education (proposed Sec.  681.500) and 
entrepreneurial skills training (proposed Sec.  681.560) are 
illustrative and that each individual topic is not required for every 
participant. Other commenters expressed their support for the proposed 
language's flexibility regarding the activities related to financial 
literacy education, and that the list included in the proposed 
regulations is not required, but provides guidance. Alternatively, one 
commenter recommended that the Department eliminate the requirements of 
proposed Sec.  681.500(g) and (h), stating that these proposed 
requirements are overly prescriptive and limit flexibility.
    Department Response: The Department understands the commenters' 
concern that providing all of the financial literacy sub-elements to 
every participant that receives this program element may be overly 
prescriptive. The Department anticipates each item will be available in 
locations implementing a robust financial literacy program. However, 
the Department did not intend for every youth to receive each sub-
element. Instead, every youth, based on his/her individual needs, would 
receive many of the items included in this regulation. The actual 
services delivered may vary by program participant. As a result, the 
Department accepts the proposed language change and replaced ``must'' 
with ``may'' in the Final Rule.
    Comments: One commenter recommended the addition of an element to 
the list in proposed Sec.  681.500 to assist individuals about the 
impact that employment has on their receipt of public benefits. This 
commenter reasoned that educating individuals of this impact may lessen 
the fear they may have of losing their Medicaid or other public 
benefits if they are competitively employed. Another commenter 
recommended that Sec.  681.500 should specifically state that for youth 
who are receiving disability Social Security benefits, their financial 
literacy education must include benefits planning and work incentives 
counseling from a qualified provider.
    Department Response: The Department concurs with the suggested 
addition and added Sec.  681.500(g), ``Support activities that address 
the particular financial literacy needs of youth with disabilities, 
including connecting them to benefits planning and work incentives 
counseling;'' to the Final Rule text.
    Comments: One commenter shared that this proposed program element 
requirement would place a burden on local areas related to identifying 
a financial literacy program that includes an identity theft component.
    Department Response: By changing ``must'' to ``may'' at the 
beginning of Sec.  681.500, the Department addresses this commenter's 
concern about finding a local entity that addresses identity theft.
    Comments: Several commenters provided suggestions on how to 
implement the element. In response to the Department's request for 
comments on how to achieve the goal of equipping workers with the 
knowledge and skills they need to achieve long-term financial 
stability, one commenter recommended that the Department survey 
programs that have been funded and implemented by companies and their 
foundations in the financial services sector. Another commenter 
responded that many banks have an effective financial literary 
curriculum and recommended that the Department foster partnerships with 
banks that would be willing to provide the curriculum for free to local 
organizations.
    Another commenter recommended that financial literacy education be 
implemented in an online or in-person classroom setting where 
retirement requirements, banking, debt, lease, and mortgage information 
are covered. This commenter also suggested that these programs must 
result in the issuance of certification of completion and should be 
developed by a recognized financial planning authority, but not an 
entity with investment products on the market.
    Department Response: The Department has found that a number of 
local and national entities want to help make this element relevant to 
youth and a success. Many financial literacy tools and curriculums are 
readily available for use and include formats that engage youth. The 
Department has begun to provide technical assistance on financial 
literacy element and has engaged with many Federal financial agencies 
about supporting the public workforce system in implementing this 
program element.
    Comments: Citing a 2014 Consumer Financial Protection Bureau report 
that described the components necessary for successful youth employment 
programs, one commenter recommended that the Department amend the 
language in this section from referring to ``financial literacy 
education'' to using the term ``financial capability services,'' 
reasoning that the latter term would align more closely with the WIOA

[[Page 56179]]

requirement because it focuses on knowledge, skills, and access. 
Further, this commenter recommended that the Department use the 
definition provided by the President's Council on Financial Capability 
to define financial capability services (``the capacity based on 
knowledge, skills and access, to manage financial resources 
effectively''). This commenter also recommended that the Department 
ensure it is connecting youth employment programs with resources that 
highlight best practices and financial institutions that could be key 
partners. Regarding the measuring of financial capability outcomes for 
youth programs, this commenter suggested that the Departments of Labor 
and Education provide youth programs with resources and guidance to 
ensure they are able to effectively track clients' progress and 
outcomes and that workforce organizations also may need additional 
tools and resources to improve the financial education services they 
offer. Given the varied outcomes associated with the Sec.  681.500 list 
of allowable financial literacy education activities, the commenter 
encouraged States and localities to collect outcome data as related to 
their provided service.
    Department Response: The Department decided that a name change from 
``financial literacy education'' to the term ``financial capability 
services'' will confuse youth programs and did not change the 
regulatory text. The Department continues to work with the Consumer 
Financial Protection Bureau to help local areas implement this new WIOA 
requirement with the goal of connecting youth employment programs with 
resources, best practices, and financial institutions that can become 
workforce partners. The Department captures information about youth 
participating in this program element as described in WIOA State Plan 
ICR and uses the same youth WIOA performance indicators discussed in 20 
CFR part 677 (see Joint WIOA Final Rule). The Departments note that the 
Governor also has the authority to identify, in their Unified or 
Combined State Plan, additional performance accountability indicators.
    Comments: A few commenters recommended that the Department grant 
local areas the role of determining the necessary elements for 
financial literacy education programs. Similarly, a commenter 
recommended that the Department grant States the jurisdiction to create 
their own policies regarding financial literacy education.
    Department Response: With the change in the final regulation from 
``must'' to ``may'' at Sec.  681.500, local areas may determine the 
necessary elements for financial literacy education programs. The 
Department analyzed the suggestion to give States the jurisdiction to 
create their own policies regarding financial literacy education and 
concluded that with the above regulation text change, it was not 
needed.
    Comments: Finally, a commenter requested clarification from the 
Department concerning the difference between personal financial 
literacy and entrepreneurial financial literacy. Further, this 
commenter suggested that youth would be best served by learning 
financial literacy through practice rather than pure instruction.
    Department Response: The Department concurs that a hands-on 
approach to financial literacy is best and entrepreneurial financial 
literacy is one way to provide a practical financial literacy 
application. The Department, along with other Federal partners, will 
provide further technical assistance around this element.
Section 681.510 What is comprehensive guidance and counseling?
    Comprehensive guidance and counseling provides individualized 
counseling to participants. This includes drug and alcohol abuse 
counseling, mental health counseling, and referral to partner programs, 
as appropriate. (WIOA sec. 129(c)(2)(J).) When referring participants 
to necessary counseling that cannot be provided by the local youth 
program or its service providers, the local youth program must 
coordinate with the organization it refers to in order to ensure 
continuity of service.
    Comments: Citing the activities that YouthBuild offers about 
counseling services, a commenter stated the importance of counseling 
and its beneficial impact on youth's success. Another commenter 
requested clarification from the Department as to the credentials and 
training that would be required for guidance counselors under the 
proposed regulations.
    Department Response: The Department acknowledges that accessing 
counseling services impacts the success of many youth who receive 
program services. The Department understands that counselors' education 
and experience will vary depending on the type of guidance and 
counseling offered and did not address it in the final regulation.
    Comments: Citing the proposed language that would require that 
local youth programs ``when referring participants to necessary 
counseling that cannot be provided by the local youth program or its 
service providers, the local youth program must coordinate with the 
organization it refers to in order to ensure continuity of service,'' a 
commenter said that coordination with multiple organizations would be 
unnecessary and that a referral should be sufficient in and of itself. 
Along the same line, a commenter asked for clarification concerning the 
requirement that youth service providers collaborate with the outside 
services they use for counseling in order to ensure the continuity of 
service for individuals. This commenter requested that the Department 
provide additional guidance for how service providers should interpret 
these requirements.
    Department Response: The Department views a referral as one part of 
the comprehensive guidance and counseling element; the local service 
provider must coordinate with the organization to which the referral 
was made in order to ensure youth receive comprehensive services. The 
Department plans to provide additional technical assistance on 
comprehensive guidance and counseling. No changes were made to the 
regulatory text in response to this comment.
    Comments: A commenter asked for guidance from the Department about 
whether comprehensive guidance and counseling encompasses academic 
counseling as is stated in Sec.  681.510, suggesting that it is not 
included in the language in Sec.  681.460.
    Department Response: The Department considered this input and 
agreed with the commenter that the proposed regulation duplicated 
counseling types found in other program elements. As a result, the 
Department removed ``career and academic counseling'' from the 
comprehensive guidance and counseling element.
Section 681.530 What are positive social and civic behaviors?
    While WIA included positive social behaviors as part of the 
description of leadership development opportunities, WIOA adds ``civic 
behaviors'' to the description of the leadership development program 
element. This section provides examples of positive social and civic 
behaviors.
    Comments: Citing the list of positive social and civic behaviors 
that YouthBuild programs are based on, a commenter expressed their 
support over the proposed list of behaviors and recommend that WIOA 
youth services programs incorporate their list into the proposed 
regulations. On the other hand, citing the language listing some of

[[Page 56180]]

the indicators of positive social and civic behaviors, a commenter 
stated that only paragraph (i), ``positive job attitudes and work 
skills,'' is measurable and relevant to the goal of workforce training. 
This commenter suggested that the other listed potential indicators of 
these behaviors are irrelevant, and that paragraphs (h) and (j) could 
be considered inappropriate.
    Department Response: Comprehensive in nature, the WIOA youth 
program provides a wide array of supports and services. The Department 
finds the sub-elements in positive social and civic behaviors relevant 
and connected to the workplace traits employers seek. It recognizes 
that the list is not all-inclusive and other personal attributes 
contribute to positive social and civic behavior. The Department did 
not add additional items to the final regulation. Noting the strong 
objection to proposed paragraphs (h) and (j), the Department did delete 
proposed paragraphs (h) (``Postponing parenting and responsible 
parenting, including child support education'') and (j) (``Keeping 
informed in community affairs and current events'') from the final 
regulation text.
    Comments: A commenter suggested that the behaviors in this section 
would be difficult to measure, which may result in the measurement 
through default indicators such as the individual didn't get arrested 
or isn't a youth parent.
    Department Response: The Department appreciates the commenters 
concerns about the difficulty of measuring positive social and civic 
behaviors. From the Department's perspective these behaviors contribute 
to characteristics that businesses seek in their employees. No change 
is made in the regulatory text in response to this comment.
Section 681.540 What is occupational skills training?
    This section provides a definition for the occupational skills 
training program element. WIOA sec. 129(c)(2)(D) further sharpens the 
focus on occupational skills training by requiring local areas to give 
priority consideration for training programs that lead to recognized 
postsecondary credentials that align with in-demand industries or 
occupations in the local area.
    Comments: Commenters expressed concern that the regulations in the 
section are too prescriptive, stating that the attainment of 
postsecondary credentials or other credential training would be 
inappropriate for some individuals. Further, this commenter suggested 
that as they are written, the proposed regulations would not allow for 
training that would be a step towards a postsecondary degree but does 
not in and of itself result in one. Similarly, a couple of commenters 
expressed their support for the proposed regulations' emphasis on 
occupational skills training, but stated their concern with the 
language that requires that all occupational skills training result in 
a postsecondary level education. The commenters suggested that 
requiring postsecondary education would not be appropriate for 
everyone, and recommended that instead, the regulations allow for 
individuals to result in one of the three options instead of all three. 
This commenter further recommended that the language, ``. . . result in 
the opportunity to obtain a recognized postsecondary credential, or a 
certificate of job readiness, or an industry credential,'' be added to 
the section.
    Department Response: The Department notes the concerns around 
occupational skills training needing to result in attainment of a 
recognized postsecondary credential. The Department has changed this 
language in the Final Rule to state that occupational skills training 
must lead to the attainment of a recognized postsecondary credential.
    Comments: One commenter recommended that the Department clarify 
that service providers should put into effect activities that include 
work experience to prepare for employment that leads to self-
sufficiency, a sequenced series of work-based learning opportunities, a 
college and career ready curriculum, dual enrollment, and supplemental 
instruction.
    This commenter also recommended that the implementation of these 
activities should result in collaboration between WIOA youth service 
providers, Local WDBs, and educational institutions.
    Department Response: The Department concluded that these 
recommendations are more appropriate for technical assistance; as such, 
no changes were made in the regulatory text in response to these 
comments. The Department will provide guidance and technical assistance 
on all program elements, including occupational skills training.
    Comments: A commenter recommended that the Department modify the 
proposed text to state, ``. . . and result in attainment of a 
recognized postsecondary credential, job readiness certificate, or 
industry credential,'' suggesting that this language would still 
encourage individuals to participate in experiences that will help them 
to gain certifications and credentials, but gives them flexibility they 
may need to demonstrate success, depending on their choice of field.
    Department Response: The Department modified Final Rule text, as 
discussed above, regarding the attainment of a recognized postsecondary 
credential. An ``industry credential'' is encompassed in the term 
``recognized postsecondary credential.'' A job readiness certificate 
relates to foundational work readiness skills and does not result from 
occupational skills training. Therefore, the Department did not 
incorporate language referring to a job readiness certificate in the 
regulatory text.
    Comments: Another commenter requested that the Department include 
entry-level career preparation training services that are taught or led 
by regionally accredited secondary-level education programs.
    Department Response: The Department determined that career 
preparation services are not a type of occupational skills training and 
did not make a change in the regulatory text in response to this 
comment.
Section 681.550 Are Individual Training Accounts permitted for youth 
participants?
    This section allows ITAs for OSY aged 16 to 24.
    The Department received a number of comments about ITAs that 
resulted in a final regulation change discussed below.
    Comments: A number of commenters expressed their support for the 
allowance of OSY aged 18-24 to use ITAs in the proposed regulations. 
Many commenters suggested that the allowance of these ITAs is important 
for youth aged 18-24, as they may be receiving services from multiple 
WIOA title funding streams. A few commenters expressed their support 
for the use of ITAs for both ISY and OSY. Further, stating that it 
would reduce the burden of duplicative administrative work, a few 
commenters recommended that the proposed regulations be amended to 
allow ITAs for youth aged 18-24.
    A commenter offered that ITAs be expanded to include OSY 16-24 
instead of 18-24. This commenter said that individuals who drop out of 
high school at 16 and have received their high school equivalency, are 
left dislocated until they reach the age of 18 and can then pursue an 
ITA, on-the-job training, or a career; therefore this commenter said 
that lowering the age limit to 16 would allow these youth to remain 
engaged.
    A commenter requested clarification from the Department regarding 
whether

[[Page 56181]]

or not OSY with ITAs would have to use the State permitted Eligible 
Training Provider List (ETPL) under these proposed regulations.
    Two commenters requested clarification from the Department 
regarding ITAs for OSY. A commenter stated that the proposed 
regulations indicate that only OSY would be allowed to use ITAs, but 
that the regulations also include occupational skills training as one 
of the 14 required youth program elements. This commenter asked the 
Department to explain what the difference would be in using an ITA or 
occupational skills services for an ISY who has graduated from high 
school and wants to pursue a postsecondary education. This commenter 
further requested guidance from the Department concerning how providers 
could provide occupational skills training service to all WIOA eligible 
youth, regardless of whether they are ISY or OSY.
    Stating that ITAs can help to close the gap between Federal 
contracting requirements and individuals with disabilities, a commenter 
recommended that this section be modified to encourage State and Local 
WDBs to connect Federal contracts with youth with disabilities and use 
ITAs for meeting employer requirements.
    Department Response: The Department analyzed the comments received 
and expanded the ITA language to allow all OSY, ages 16-24, access to 
ITAs. Upon reflection of the above comments, the Department concluded 
the final regulation change made policy and administrative sense by 
expanding training options, increasing program flexibility, enhancing 
customer choice, and reducing paperwork for all OSY. When using youth 
funds for ITAs, the Eligible Training Provider List (ETPL) must be 
used. Accessing the ETPL allows the program to avoid further 
procurement processes.
    The Department did not expand ITAs to ISY. However, ISY ages 18 or 
older may access ITAs through the adult program.
    Finally, the Department did not change the regulatory text to 
encourage State and Local WDBs to connect Federal contracts with youth 
with disabilities because the request is outside the scope of ITAs. The 
Department will provide further guidance on youth ITAs and related 
topics.
Section 681.560 What is entrepreneurial skills training and how is it 
taught?
    This section discusses entrepreneurial skills training, a new 
program element under WIOA. The Department received a number of 
comments on the proposed entrepreneurial skills training regulation 
which resulted in a minor word change in the final regulation as 
explained below.
    Comments: Two commenters expressed their support over the proposed 
examples of entrepreneurial skills training activity options. In 
contrast, a number of commenters stated that the Department should not 
be dogmatic in determining specific methods and processes for how 
entrepreneurial skills would be taught under the proposed regulations.
    Department Response: The Department did not intend to be limiting 
in the list of ways to develop entrepreneurial skills. To emphasize 
that this list is not all-inclusive, the Department added the word 
``may'' to the final regulation at Sec.  681.560(a).
    Comments: Several commenters provided thoughts on other skills to 
develop under this program element as discussed in the next several 
paragraphs.
    One commenter shared its support of the inclusion of 
entrepreneurial skills training, citing the programs it has created in 
its State and programs that engage with small business centers, 
suggesting that the Department should use such services and programs 
for teaching these skills. Another commenter recommended that the 
Department use Junior Achievement and other organizations in their 
entrepreneurial skills training services, and stated that the 
Department also should include presentations and training sessions from 
local entrepreneurs in their skills training programs.
    Similarly, a commenter expressed their support of the inclusion of 
entrepreneurial skills training in the proposed regulations. This 
commenter further cited: Experiences that provide individuals with the 
knowledge of how to start their own business, the creation of a 
business plan, education on applying for loans and grants for business 
operations, and experiences related to running a business day-to-day, 
as potential activities used to teach individuals entrepreneurial 
skills.
    A commenter recommended that healthy relationship skills classes be 
included in the entrepreneurial training program, stating that building 
strong and healthy relationships are a key component to being a 
successful entrepreneur.
    In addition, a commenter recommended that Local WDBs use 
experiential learning programs to teach individuals entrepreneurial 
skills, stating that using hands-on experiences is most effective for 
training individuals. Further, this commenter specifically recommended 
that entrepreneurial skills training include the following: Education 
assessment and pathway identification; leadership development 
activities; and soft skills training based on industry demand.
    A commenter expressed its support over the inclusion of these 
skills training, and recommended that it include the development of 
business plans and lessons on the various ways an entrepreneur can 
obtain start-up funding.
    Department Response: The Department acknowledges the many 
suggestions about how to local area may provide entrepreneurial skills 
training in a meaningful, relevant way to youth. The Department will 
provide technical assistance on this new element.
    Comments: A commenter recommended that the Department amend the 
proposed language so that ``enterprise development'' is removed as a 
skill that would be included in this entrepreneurial training, and be 
replaced with ``crowd-funding,'' sharing that crowd sourced funding 
would be a more viable option if a youth individual were trying to 
build a business as he or she would be unlikely to secure a loan.
    Department Response: While the Department did not change the 
regulatory text, the Department agrees with suggestion to include 
skills such as ``crowd-funding'' that may be more relevant for the 
youth population and will address them in future technical assistance.
    Comments: A commenter wondered about the reliability of wages for 
participants in these programs as well as how participants' wages would 
be tracked, and requested clarification from the Department regarding 
these issues.
    Department Response: The Department notes that the performance 
indicators for youth engaged in this program element remain the same as 
the youth performance indicators explained in the joint regulation at 
20 CFR part 677 (see Joint WIOA Final Rule).
    Comments: A commenter requested clarification from the Department 
about the definition of entrepreneurial skills training and what the 
requirements are around certification at the program's completion. 
Similarly, a commenter recommended that the skills and techniques 
involved with

[[Page 56182]]

entrepreneurial skills training should be in line with local 
postsecondary school curriculums and standards.
    Department Response: Postsecondary institutions and other training 
providers that develop entrepreneurial programs are best positioned to 
identify standards upon which certificates could be awarded. No changes 
were made in the regulatory text in response to this comment.
    Comments: Another commenter asked the Department if entrepreneurial 
skills training would only be provided to older youth.
    Department Response: Entrepreneurial skills training, similar to 
the other youth program elements, is available to youth regardless of 
age and must align with their ISS goals.
Section 681.570 What are supportive services for youth?
    This section lists examples of supportive services for youth. The 
Department received a few comments on proposed Sec. Sec.  681.570 and 
680.900, which discusses supportive services in the context of adult 
programs. The Department chose to align these regulations which 
resulted in the addition of ``Assistance with books, fees, school 
supplies, and other necessary items for students enrolled in 
postsecondary education classes''; and ``Payments and fees for 
employment and training-related applications, tests, and 
certifications,'' to the regulation at Sec.  681.570(k) through (l).
    Comments: One commenter recommended that the Department include 
groceries, on-site meals, hygiene products, clothing, and items for 
postsecondary education courses in the definition of supportive 
services. Another commenter recommended that transportation be provided 
to individuals in these programs, and that the transportation services 
available should include transportation to one-stop centers. This 
commenter stated that in some areas the one-stop center may be miles 
away from where the youth providers are located, and reaching these 
one-stop centers to receive necessary services may be difficult for 
disengaged or homeless youth. This commenter also recommended that food 
services (other than food banks and soup kitchens) and subsidized 
services for document attainment be provided as support services for 
youth.
    One commenter recommended that healthy relationship skills should 
be included in the workforce development training programs for 
disconnected youth, including supportive services. This commenter 
reasoned that relationship skills help participants build crucial 
interpersonal skills that are valued by employers and specifically 
mentioned skills including communications, problem solving, conflict 
resolution, reliability, and teamwork. The commenter also stated that 
learning healthy relationship skills can help participants prevent 
unplanned pregnancy and therefore avoid dropping out of school due to 
pregnancy. A commenter recommended that the Department align supportive 
services across the youth, adult, and dislocated worker programs. 
Another commenter strongly supported the inclusion of legal aid 
services in the Department's list of examples of supportive services in 
Sec.  680.900, noting that legal aid can uniquely address certain 
barriers to employment, including access to driver's licenses, 
expunging criminal records, and resolving issues with debt, credit, and 
housing.
    Department Response: The Department analyzed the suggested 
additions to supportive services and decided, as noted above, to add 
three new paragraphs (h), (k), and (l) to the Final Rule. The 
Department determined that some suggested items such as tutoring, 
apprenticeship programs, work-place interpersonal skills, work-related 
hygiene products and clothing attire, and addiction may be encompassed 
by other program elements. Assistance with transportation is allowable 
under supportive service. As discussed above, the Department has 
included legal aid services under the list of supportive services in 
Sec.  680.900 for the adult and dislocated worker programs; we made a 
corresponding change to the list of supportive services allowable for 
the youth program in Sec.  681.570 for the same reason as for the 
addition to Sec.  680.900 and to align the list of supportive services 
across programs. Groceries and on-site meals for program participants 
are beyond the scope of WIOA.
    Comments: Citing the language about supportive services in this 
section, a commenter requested clarification from the Department 
concerning whether needs related payments are allowed for youth aged 
18-24 in WIOA youth services.
    Department Response: Yes, the Department affirms that needs related 
payments are allowed for youth ages 18-24 enrolled in WIOA youth 
services.
Section 681.580 What are follow-up services for youth?
    This proposed section discusses the importance of follow-up 
services and lists examples of follow-up services for youth.
    The Department received a number of comments on this section as 
discussed below.
    Comments: A commenter expressed its support of the proposed 
regulations in this section and another commenter expressed support 
citing all of the benefits of follow-up services. Citing the benefits 
and purposes behind follow-up services, another commenter agreed that 
follow-up services can be extremely beneficial to youth and help to 
ensure that they focus on and accomplish their long-term goals. Another 
commenter expressed their support of the follow-up requirements, but 
recommended that the Department create and distribute guidance to 
States regarding how they should document an individual who is 
unresponsive under the proposed regulations.
    A couple of commenters expressed concern over the requirements for 
follow-up services, suggesting that often when youth no longer access 
services, they no longer communicate with their providers, regardless 
of the efforts of the case manager. Therefore, these commenters 
recommended that States' youth follow-up activities be evaluated on the 
quality of follow up services provided to engaged youth and not be 
viewed negatively when follow up does not happen. Further, these 
commenters recommended that States be allowed to establish policies 
that when a provider has exhausted all options in an attempt to engage 
a youth individual in follow-up services with no results, he or she may 
end follow-up activities. Likewise, one commenter recommended that in 
instances where the service provider attempts to reach the individual 
with no contact made for 90 days, he or she should be able to receive 
an exemption or waiver for needing to provide follow-up services for 
that individual.
    A number of commenters expressed concern with the proposed 
regulations, suggesting that the language concerning follow-up services 
should give more flexibility and account for those individuals who have 
moved and provided no contact information. These commenters recommended 
that in situations such as those stated above, follow-up contact 
attempts should end, and the attempts to make contact should be 
documented. One of these commenters also suggested that if multiple 
attempts at contact are made with no response, the provider should not 
be punished for being unable to contact the individual. Further, some 
of these commenters recommended that the regulations be modified to 
reduce the 12-month minimum to 6 months. Another commenter stated that 
follow-up services should allow for decreasing

[[Page 56183]]

concentration for follow-up contact with individuals after 6 months 
after end of enrollment in the program. Further, this commenter stated 
that text messaging and contact through social media should be 
considered contact for the purposed of follow-up services. Another 
commenter recommended the Department not be overly prescriptive with 
its follow-up services requirements.
    Department Response: The Department recognizes the concerns that 
some youth may not be responsive to attempted contacts for follow-up, 
and other youth may be difficult to locate making it impossible to 
provide follow-up services for such individuals. Based on the comments 
received, the Department has added language to the regulatory text to 
Sec.  681.580(c) clarifying that follow-up services must be provided to 
all participants for a minimum of 12 months unless the participant 
declines to receive follow-up services or the participant cannot be 
located or contacted. This alleviates the concern expressed by many 
commenters about youth who are not able to be located or who refuse 
follow-up. Local programs should have policies in place to establish 
when a participant cannot be located or contacted. The Department did 
not incorporate the recommendation to reduce follow-up to 6 months as 
WIOA sec. 129(c)(2)(I) requires follow-up services for not less than 12 
months. The Department will issue further guidance on follow-up 
services.
    Comments: One commenter recommended that the Department create 
guidance that would allow local areas to establish orientations for 
youth participants that would inform them of the follow-up services and 
recommended that the Department provide incentives for an individual's 
participation in follow-up services. Stating that WIOA does not list 
all of the youth services offerings as being available for follow-up 
services, one commenter recommended that all WIOA program services be 
available for any individual in their follow-up services. Another 
commenter recommended that follow-up services should begin while an 
individual is still enrolled in the program, suggesting that follow-up 
services include supportive and other services that could ensure a 
participant's success after the program. One commenter noted that the 
follow-up services listed in this section are significantly more 
intensive than under WIA and more closely resemble active programming 
and recommended guidance on managing the transition from active 
programming to follow-up services, particularly under the proposed 
definition of ``exit'' in 20 CFR 677.150 (see Joint WIOA Final Rule).
    Department Response: At Sec.  681.580(b), the Department clarified 
which specific program elements may be provided during follow-up. The 
Department plans to issue further guidance on follow-up services; it 
will clarify that follow-up services do not trigger re-enrollment in 
the WIOA youth program.
    Comments: Another commenter recommended that the follow-up services 
provided be concentrated on individuals gaining employment or 
postsecondary education. A couple of commenters also recommended that 
the Department clarify that incentive payments and supportive services 
would be allowed to be provided to youth during the period of follow-up 
services. Further, a commenter stated that in order to complete follow-
up services as they are currently written, youth providers would need 
to be given additional funding.
    Department Response: The Department clarifies in the regulatory 
text that supportive services are allowed to be provided during follow-
up. Incentive payments are covered in Sec.  681.640.
    Comments: One commenter recommended adding the following language 
to this section, ``Follow-up plans should be set by youth and their 
case manager allowing the youth to have an active voice in setting such 
plans. Follow-up plans for youth should be re-assessed and flexible and 
may include . . . ,'' saying that this language would encourage case 
managers to educate the youth they are responsible for as to the 
benefit of follow-up services and allow youth to become more engaged 
with his or her services. This commenter also recommended that youth be 
able to opt out of their follow-up services due to relocation without 
negatively impacting the performance scores of their provider.
    One commenter recommended that the language that states that 
follow-up services must be ``provided'' by youth programs should be 
amended to say that they must be ``offered.'' Finally, one commenter 
recommended that during the required 12-month follow-up period, 
multiple employees be allowed to administer follow-up services.
    Department Response: As discussed above, the Department has amended 
regulatory text to state that follow-up services must be offered to all 
participants and added language to address participant relocation.
Section 681.590 What is the work experience priority and how will local 
youth programs track the work experience priority?
    The section discusses the 20 percent minimum expenditure 
requirement on the work experience program element in WIOA sec. 
129(c)(4) and how local WIOA youth programs track program funds spent 
on work experiences and report such expenditures as part of the local 
WIOA youth financial reporting.
    The Department received a few comments on this section as discussed 
below.
    Comments: Multiple commenters expressed their support for this 
section. One commenter requested that the Department clarify in the 
proposed regulations that career pathways must lead to a postsecondary 
credential, and that the requirements for these credentials will be 
aligned with the current State college and workplace readiness 
standards in place for each specific State. Another commenter expressed 
their support for the proposed regulations' emphasis on work 
experiences; however, this commenter further recommended that the 
Department clarify in the regulations that youth service providers are 
strongly encouraged to ``coordinate work experiences with employers 
participating in industry or sector partnerships developed and 
implemented in the local area.''
    Department Response: The Department agrees that career pathways in 
coordination with employers are important. The Department will continue 
to emphasize employer engagement in career pathways in future guidance 
or technical assistance. Please see TEN 17-15, building upon its 
``Career Pathways Toolkit: A Guide for System Development'' (2015) 
found at https://wdr.doleta.gov/directives/attach/TEN/TEN_17-15_Attachment_Acc.pdf.
    Comments: A number of commenters expressed their concerns regarding 
whether the proposed 20 percent work experience expenditure requirement 
would include leveraged resources. These commenters stated the 
requirement would negatively impact the support they receive from non-
WIOA funding streams and the proposed language would require them to 
spend their WIOA funds first on work-based experience programs, which 
could be detrimental to their ability to attract private funds. Thus, 
the commenters recommended that the proposed regulations be amended to 
allow waivers that would allow Local WDBs to count non-WIOA funds 
towards the 20 percent work experience

[[Page 56184]]

expenditure requirement. Similarly, a few commenters recommended that 
the 20 percent work experience requirement be extended to include other 
funding sources, instead of relying only on WIOA funds to meet this 
requirement. Some of these commenters further stated that staff who are 
engaged in creating these strategies, as well as implementing them, 
should also be included in the minimum 20 percent expenditure 
requirement, while another commenters asked the Department to clarify 
if staffing or administrative costs count toward the expenditure 
requirement. Likewise, one commenter recommended that the academic 
component of the work experience requirements can be included in the 20 
percent expenditure requirement. Another commenter recommended that the 
proposed regulations be amended so that the minimum 20 percent work 
experience expenditure requirement also includes the administrative and 
recruitment costs spent in order to place an individual in his or her 
work experience. Conversely, a commenter suggested that staffing costs 
should not be an allowable expenditure in the minimum 20 percent work 
experience expenditure requirement; rather, funds should be focused on 
direct participant costs.
    Similarly, the Department received very few comments on Sec.  
681.610. One commenter noted that Sec.  681.610 clearly states to not 
include administration in this calculation which should be made 
consistent with Sec.  681.590 instead of in a separate section of the 
regulations. Another commenter recommended that the term ``incentives 
payments'' be added to this section in order to ensure consistency. 
Stating that in many cases local areas utilize funding from a variety 
of funding sources, a few commenters recommended that Local WDBs should 
be able to use these funds for the purpose of the costs included in 
work experiences such as wages for individuals and training, and that 
these funds should be included in the work experience minimum 
expenditure requirement.
    Department Response: The Department recognizes that it is important 
to clarify further the types of expenditures that count toward the work 
experience expenditure rate. The Department issued TEGL No. 08-15 
(``Second Title I WIOA Youth Program Transition Guidance'') in November 
2015, which can be downloaded at http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm. The TEGL discussed the types of costs 
that count toward the work experience expenditure requirement. The 
Department has added Sec.  681.590(b) that describes the types of 
expenditures that count toward the work experience minimum expenditure 
requirement and how to calculate the minimum expenditure requirement. 
Leveraged resources cannot count toward the expenditure requirement; 
WIOA sec. 129(c)(4) clearly states that the expenditure requirement is 
based on WIOA youth funds allocated to the local area. Because the 
Department has incorporated the language from proposed Sec.  681.610 
into Sec.  681.590, the Department deleted proposed Sec.  681.610 and 
has renumbered proposed Sec. Sec.  681.620 through 681.660 as 
Sec. Sec.  681.610 through 681.650.
    Comments: A commenter recommended that the Department allow a 
transition period for local areas to move funding to comply with the 
minimum 20 percent expenditure requirement. Another commenter expressed 
their support of the proposed emphasis on work experience, but 
recommended that the language be strengthened to emphasize the 
importance of connecting youth with disabilities to work experiences.
    Department Response: The Department did not provide for a 
transition period for the minimum expenditure requirement as part of 
its guidance. The Department agrees on the importance of connecting 
youth with disabilities to work experience opportunities and will 
emphasize it in future guidance or technical assistance.
Section 681.600 What are work experiences?
    The section defines the work experience program element and 
includes the four work experience categories listed in WIOA sec. 
129(c)(2)(C). The Department received a few comments on this section as 
discussed below.
    Comments: A commenter expressed its support for this section, 
especially due to its inclusion of on-the-job training eservices. 
Another commenter expressed its support for the proposed language in 
this section, especially that the inclusion of both academic work 
experience and occupation training are important for an individual's 
success. A commenter expressed its support of the inclusion of a 
variety of activities that could be included as work experience in the 
proposed regulations, and one commenter expressed its support over the 
allowance of on-the-job training as an appropriate work experience.
    A number of commenters requested clarification from the Department 
concerning the requirement that work experiences have to include 
academic and occupational education experiences, whether those 
education experiences can be provided by the individual's employer, and 
whether the education experience has to be provided in the individual's 
workplace. One of these commenters further recommended that these 
experiences be allowed to take place outside of the traditional 
workplace and could be provided by an educational provider other than 
the employer. A few commenters recommended that the language stating, 
``Work experience must include academic and occupational education'' be 
amended to state, ``work experiences must not deter from a 
participant's academic and occupational education goals. Ensuring all 
youth receive academic and occupational education is at the forefront 
of the goals of WIOA,'' suggesting that the current language's use of 
the words ``and'' and ``must'' may dissuade individuals from 
participating as they are at high risk and are concerned about feeding 
their families. A commenter requested clarification from the Department 
as to whom the occupational and academic training experiences must be 
provided by and recommended that the regulations allow for the employer 
to provide these training experiences. Further, this commenter 
recommended that if these training and educational experiences incur 
any costs, that they be included in the minimum 20 percent work 
experience expenditure requirement.
    Department Response: Based on comments requesting clarification on 
the academic and occupational education component of work experiences, 
the Department has added language to the Final Rule at Sec.  681.600(b) 
clarifying that the educational component may occur concurrently or 
sequentially with the work experience, and that the academic and 
occupational education may occur inside or outside the work site. The 
Department does not have any requirement about who provides the 
academic and occupational education, and such education may be provided 
by the employer. States and local areas have the flexibility to decide 
who provides the education. Because WIOA states this program element as 
``paid and unpaid work experiences that have as a component academic 
and occupational education,'' the Department does not have the 
flexibility to amend the regulatory text to the suggested ``work 
experiences must not deter from a participant's academic and 
occupational education.''
    Comments: A commenter recommended that the Department remove the 
following language from the

[[Page 56185]]

section, ``work experience may be paid or unpaid, as appropriate.'' The 
commenter further recommended that the Department should clarify that 
youth will be protected under the Fair Labor Standards Act and wage and 
hour laws.
    Department Response: WIOA sec. 129(c)(2)(C) states that work 
experiences may be paid or unpaid. The Final Rule contains language 
regarding the Fair Labor Standards Act at Sec.  680.180.
    Comments: One commenter recommended that the Department clarify 
skills needs and how to assess skill mismatches. This commenter 
recommended more updates to the O*NET system and State/local work on 
job vacancies, analysis of ``real time'' labor market information, 
better projections data, new/emerging occupations, and wage record 
research on use of occupational title enhancements.
    Department Response: The Department agrees with the importance of 
using labor market information to plan work experiences and will 
continue to encourage its use in future guidance and technical 
assistance.
Section 681.610 Does the Workforce Innovation and Opportunity Act 
require Local Workforce Development Boards to offer summer employment 
opportunities in the local youth program?
    This section discusses that while summer employment opportunities 
are an allowable activity and a type of work experience that counts 
toward the work experience priority, they are not a required program 
element as they previously were under WIA. Note that this provision was 
proposed as Sec.  681.620. However, as noted above, because the 
Department has incorporated the language from proposed Sec.  681.610 
into Sec.  681.590, the Department deleted proposed Sec.  681.610 and 
has renumbered proposed Sec. Sec.  681.620 through 681.660 as 
Sec. Sec.  681.610 through 681.650.
    The Department did not receive any comments on this section. No 
changes were made to the regulatory text.
Section 681.620 How are summer employment opportunities administered?
    This section discusses how summer employment opportunities are 
administered. Note that this provision was proposed as Sec.  681.630. 
However, as noted above, because the Department has incorporated the 
language from proposed Sec.  681.610 into Sec.  681.590, the Department 
deleted proposed Sec.  681.610 and has renumbered proposed Sec. Sec.  
681.620 through 681.660 as Sec. Sec.  681.610 through 681.650.
    The Department received only one comment on this section. The 
commenter stated that in rural areas it would be more cost effective 
for a case manager to arrange work experiences for youth than for the 
provider to arrange a work experience through the procurement process. 
This commenter asked for further clarification from the Department 
regarding whether or not a case manager would arrange a work experience 
during the school year.
    Department Response: As discussed in Sec.  681.400, the Final Rule 
clarifies that Local WDBs have the option of competitively procuring 
youth service providers or providing services directly. This additional 
flexibility will allow case managers to arrange work experiences 
directly. This section includes language changes to be consistent with 
the changes in Sec.  681.400, and to make it clearer that the 
requirements of Sec.  681.400 apply to the selection of youth service 
providers who administer the work experience program element in a local 
area.
Section 681.630 What does education offered concurrently with and in 
the same context as workforce preparation activities and training for a 
specific occupation or occupational cluster mean?
    This section describes the new program element at WIOA sec. 
129(c)(2)(E): ``education offered concurrently and in the same context 
as workforce preparation activities and training for a specific 
occupation or occupational cluster.'' The Department notes that this 
provision was proposed as Sec.  681.640. However, because the 
Department has incorporated the language from proposed Sec.  681.610 
into Sec.  681.590, the Department deleted proposed Sec.  681.610 and 
has renumbered proposed Sec. Sec.  681.620 through 681.660 as 
Sec. Sec.  681.610 through 681.650.
    The Department received a few comments on this section as discussed 
below.
    Comments: A few commenters expressed their support for the proposed 
language, particularly that the simultaneous offering of education 
service and workforce training can help individuals to gain skills at a 
much faster pace than if they were engaged in these activities 
separately. One commenter expressed its support with this proposed 
language and recommended that the Departments collaborate to ensure 
that the language in the WIOA title II regulation in 34 CFR 463.37 is 
aligned with the title I regulation in Sec.  681.630.
    One commenter requested clarification from the Department regarding 
the definitional language in this section. This commenter further 
stated that the definitions for this program element and the work 
experience program element need to be amended to provide more 
distinction between the two if they are meant to be separate.
    Another commenter recommended that the Department provide specific 
examples of ``a high-quality, integrated education and training model 
that requires integrated education and training to occur concurrently 
and contextually with workforce preparation activities and workforce 
training.'' This commenter further recommended a number of such 
examples. This commenter also suggested that the involvement of youth 
providers in these activities should help to create relationships 
between the providers and CBOs.
    A commenter suggested the Department include a statement that these 
educational programs include entry-level workforce preparation and/or 
preparation for recognized postsecondary education and training 
activities.
    Department Response: The Department plans to provide future 
guidance on all of the WIOA youth program elements, including the 
education program element defined in this section. The Department will 
incorporate in the guidance some examples of high-quality integrated 
education and training models and ensure consistency with the language 
in 34 CFR 463.37. While the Department did not incorporate any 
suggested additions to the regulatory text, it has made minor language 
changes to this section to make the section clearer.
Section 681.640 Are incentive payments to youth participants permitted?
    This section clarifies that incentives under the WIOA youth program 
are permitted. The Department has included the reference to the Uniform 
Guidance at 2 CFR part 200 to emphasize that while incentive payments 
are allowable under WIOA, the incentives must be in compliance with the 
requirements in 2 CFR part 200. For example, Federal funds may not be 
spent on entertainment costs. Therefore, incentives may not include 
entertainment, such as movie or sporting event tickets or gift cards to 
movie theaters or other venues whose sole purpose is entertainment. 
Additionally, there are requirements related to internal controls to 
safeguard

[[Page 56186]]

cash, which also apply to safeguarding of gift cards, which are 
essentially cash. As noted above, because the Department has 
incorporated the language from proposed Sec.  681.610 into Sec.  
681.590, the Department deleted proposed Sec.  681.610 and has 
renumbered proposed Sec. Sec.  681.620 through 681.660 as Sec. Sec.  
681.610 through 681.650.
    Comments: A couple of commenters expressed support for the 
allowance of incentive payments for youth, citing the effect they can 
have on low-income and homeless individuals in WIOA youth services 
programs as well as the positive effect incentive payments have on 
YouthBuild programs.
    One commenter requested clarification about whether incentive 
payments would be allowed for activities other than just training and 
work experiences, and for short-term youth programs. Further, this 
commenter recommended that the Department give local areas flexibility 
in the creation of their own policies for providing incentives to 
youth. Another commenter recommended that the Department allow 
incentive payments for youth engaging in the literacy and numeracy 
post-tests for Program Year 2015.
    A commenter expressed support of the inclusion of incentive 
programs and support services for individuals in the WIOA youth 
program, stating that the eligibility determination process is often 
difficult for youth as they sometimes struggle to obtain documentation, 
especially those who have experienced loss or abuse of their identity 
documentation in the past. Therefore, this commenter recommended 
providing incentives to youth for maintaining their documentation or 
attempting to obtain their documentation. Further, this commenter 
suggested that the Department should provide incentives to youth for 
providing word-of-mouth marketing to their peers about the WIOA youth 
services available, as incentives for referrals and recruitments could 
be very beneficial to the Department's efforts to reach youth.
    One commenter expressed concern with this section due to its 
allowance for incentive payments only under the circumstances of work 
experience and training activities. This commenter suggested that 
incentive payments should be granted for achievements such as 
employment placement and retention, or improvements marked by testing. 
This commenter recommended that the incentive payments should be 
granted in those circumstances and not on the basis of engaging in 
training activities and work experiences. Similarly, a couple of 
commenters expressed concern with the proposed regulation's allowance 
of incentives for activities only related to training and work 
experiences, and recommended that the language regarding incentive 
payments not be amended from its original form in WIA and suggesting 
that incentives are needed to reach and engage youth.
    Department Response: While the Department recognizes the importance 
of incentives as motivators for various activities such as recruitment, 
submitting eligibility documentation, and participation in the program, 
the Department concluded that incentives must be connected to 
recognition of achievement of milestones in the program tied to work 
experience or training. Such incentives for achievement could include 
improvements marked by testing or other successful outcomes. While WIOA 
funds cannot be used for incentives for recruitment and eligibility 
documentation, local areas may leverage private funds for such 
incentives.
    Comments: Another commenter recommended that the Department amend 
the proposed regulations to allow for incentive payment for ISY who 
graduate from a regular high school, suggesting the current language is 
inconsistent in its provision of incentives to students who receive 
their high school equivalency or GED certificates, but not to those who 
receive a traditional high school diploma. Further, this commenter 
recommended allowing for the provision of incentive payment for youth 
who participate or complete leadership activities, suggesting that not 
offering incentives for leadership activities will infringe upon the 
provider's ability to engage youth.
    Department Response: There is no specific language in the 
regulatory text limiting incentive payments to students who receive 
their high school equivalency. Incentive payments may be provided to 
both ISY and OSY as long as they comply with the regulations stated in 
this section.
    Comments: One commenter recommended that the Department amend the 
language at the start of this section in order to make it more 
encouraging. Specifically, this commenter recommended that the section 
read, ``Incentive programs are crucial to keeping homeless and 
disconnected youth engaged in programs and should be provided to youth 
participants for recognition.''
    Department Response: The Department agrees that incentives can be a 
critical tool to keep youth participants engaged in the program. 
However, no changes were made to the regulatory text in response to 
this comment.
    Comments: Another commenter recommended that a definition of 
incentive payments should be added to this section to retain 
consistency throughout the proposed regulations.
    Department Response: The Department concluded that the existing 
regulatory text adequately defines incentive payments. No further 
definition is necessary in the Final Rule. The Department did make 
minor edits to the first paragraph of the regulatory text to clarify 
this section.
Section 681.650 How can parents, youth, and other members of the 
community get involved in the design and implementation of local youth 
programs?
    This section discusses the requirement in WIOA sec. 129(c)(3)(C) 
for the involvement of parents, participants, and community members in 
the design and implementation of the WIOA youth program and provides 
examples of the type of involvement that would be beneficial. The 
Department also has included in this proposed section the requirement 
in WIOA sec. 129(c)(8) that Local WDBs also must make opportunities 
available to successful participants to volunteer to help other 
participants as mentors or tutors, or in other activities. The 
Department notes that this provision was proposed as Sec.  681.660. 
However, as noted above, because the Department has incorporated the 
language from proposed Sec.  681.610 into Sec.  681.590, the Department 
deleted proposed Sec.  681.610 and has renumbered proposed Sec. Sec.  
681.620 through 681.660 as Sec. Sec.  681.610 through 681.650.
    Comments: The Department received a few comments on the proposed 
regulation. One commenter suggested that the language in this section 
be strengthened to show the importance of including individuals with 
disabilities in the design and implementation of these programs, 
stating that their involvement is vital.
    One commenter suggested that making opportunities available to 
youth peer volunteers be removed, and be replaced with language that 
would make the service an option for Local WDBs to choose to make, 
suggesting that the supervision and background investigation needed for 
volunteers to provide services to youth would be potentially too costly 
for WDBs and therefore shouldn't be a requirement. Another commenter 
requested clarification from the Department

[[Page 56187]]

concerning the extent to which the population and community of an area 
must be involved in the creation of these programs and services and the 
type of involvement that is required of them, suggesting that requiring 
the community to be involved is contradictory to the intent of WIOA, 
which abolished the requirement of youth councils.
    Department Response: No changes were made in the regulatory text in 
response to these comments. The Department values the input of 
individuals with disabilities. Nothing in the proposed regulation 
precludes them from getting involved in the design and implementation 
of a local youth program. The populations identified in the regulation 
(parents, youth, and other members of the community) come directly from 
WIOA sec. 129(c)(3)(C), which clearly states the intent to have them 
involved in the design and implementation of the programs. The 
Department understands that this might seem to contradict the law's 
approach to youth councils; however, this requirement does not have the 
time commitment and obligatory structures that were required of WIA's 
youth councils. The Department will provide additional guidance and 
technical assistance on involvement in youth program design and 
implementation.
5. Subpart D--One-Stop Center Services to Youth
Section 681.700 What is the connection between the youth program and 
the one-stop delivery system?
    This section describes the WIOA youth program's required role in 
the one-stop delivery system, and includes examples of the connections 
between the youth program and the one-stop delivery system.
    Comments: Several commenters expressed their support for these 
provisions and their focus on collaboration across programs and the 
requirement of WIOA youth programs to serve as a one-stop partner. A 
number of commenters expressed their support for the regulations' 
encouragement of partnerships between WIOA youth programs and one-stop 
centers, suggesting that under WIA the one-stop delivery system was not 
encouraging of youth engagement. These commenters further recommended 
that the Department encourage training of one-stop operator staff for 
effectively serving youth. Similarly, one commenter suggested that this 
proposed language would require either equipping and training staff at 
one-stop centers with information on serving youth, or colocation of 
WIOA youth service providers at one-stop centers.
    Department Response: The Department does encourage training of one-
stop operator staff and added language to the Final Rule at Sec.  
681.700(c) encouraging one-stop center staff be trained to build their 
capacity in serving youth.
Section 681.710 Do Local Workforce Development Boards have the 
flexibility to offer services to area youth who are not eligible under 
the youth program through the one-stop centers?
    This section clarifies that Local WDBs may provide services to 
youth through one-stop centers even if the youth are not eligible for 
the WIOA youth program.
    The Department received a few comments on this section as discussed 
below.
    Comments: One commenter expressed their support of the proposed 
regulation's requirement that one-stop centers provide services for 
individuals who are ineligible for WIOA youth programs, suggesting that 
providing these services would allow for youth to receive services they 
need while still working to obtain documentation that would make them 
eligible for WIOA youth services.
    A few commenters requested clarification regarding whether WIOA 
youth program funding would be allowed to support these services at 
one-stop centers without enrollment and whether Local WDBs would 
provide youth services if they are ineligible for WIOA title I youth 
services, and if so, which program would be funded through the 
provision of those services. These commenters further recommended that 
the Department give States the authority to use WIOA funding for the 
purposes of supporting workforce market information and career 
awareness education to ISY, as is indicated in this section under the 
proposed regulations. Similarly, one commenter requested clarification 
from the Department about whether WIOA youth funds could be used to 
provide support for services if the support is for materials, general 
information, or relationships with local businesses. This commenter 
further recommended that the Department allow States to use WIOA youth 
funds to support general labor market information to promote career 
awareness for ISY, reasoning that providing this information would help 
to prepare these ISY for their transition out of school and into their 
career and/or postsecondary school.
    Department Response: While providing labor market information and 
career awareness are allowable uses of WIOA youth funds, WIOA youth 
funds may be used to provide services only to eligible youth enrolled 
in the WIOA youth program. As described in this section, one-stop 
centers may provide basic labor exchange services such as the ones 
suggested under the Wagner-Peyser Act to any youth.
    Comments: Suggesting that often times individuals who are not 
eligible for WIOA youth services fall within the eligibility of WIOA 
adult services, a number of commenters recommended that Local WDBs be 
required to ensure that youth aged 18-24 have access to one-stop center 
services and are not simply referred to WIOA youth services instead.
    Department Response: The Department agrees that youth aged 18-24 
should have access to one-stop center services. The Department has 
concluded that this recommendation does not necessitate any changes to 
the Final Rule language and instead, will incorporate this 
recommendation in future guidance or technical assistance. The Final 
Rule adopts the provision as proposed.

F. Part 682--Statewide Activities Under Title I of the Workforce 
Innovation and Opportunity Act

1. Introduction
    WIOA provides a reservation of funds from the adult, dislocated 
worker and youth programs to be undertaken by States, for statewide 
activities. States have both required and allowable activities to be 
undertaken on a statewide basis for adults, dislocated workers and 
youth. These funds support States to innovate, continually improve 
their comprehensive workforce programs, oversee a public workforce 
system that meets the needs of job seekers, workers and employers, and 
contribute to building a body of evidence to improve the effectiveness 
of services under WIOA. WIOA designates the percentage of funds that 
may be devoted to these activities from annual allotments to the 
States--up to 15 percent must be reserved from youth, adult, and 
dislocated worker funding streams, and up to an additional 25 percent 
of dislocated worker funds must be reserved for statewide rapid 
response activities. The up to 15 percent funds from the 3 funding 
streams may be expended on employment and training activities without 
regard to the source of the funding. For example, funds reserved from 
the adult funding stream may be used to carry out statewide youth 
activities and vice versa.

[[Page 56188]]

2. Subpart A--General Description
    This subpart describes what is encompassed by the term ``statewide 
employment and training activities.'' It explains that States have both 
required and allowable activities to be undertaken on a statewide basis 
for adults, dislocated workers and youth. States have significant 
flexibility in the development of policies and strategies for the use 
of their statewide funds.
Section 682.110 How are statewide employment and training activities 
funded?
    The Governor has authority to use up to 15 percent of the adult, 
dislocated worker, and youth funds allocated to the State for statewide 
activities. The regulation provides that the adult, dislocated worker 
and youth 15 percent funds may be combined for use on required or 
allowed statewide activities regardless of the funding source. These 
activities are funded in the same manner as they were under WIA.
    Comments: Several commenters expressed concern regarding the 
appropriation-based restriction of 10 percent availability for the 
required and allowable statewide activities. These commenters 
recommended that funding be increased to a level that covers the costs 
of the required activities and, at a minimum, that statewide funds be 
fully funded at the 15 percent level. In addition, the commenters 
recommended that the Department provide a waiver process for States on 
required activities if the full appropriation is not made available. 
Several of these commenters also suggested that the required State 
activities would necessitate resources in excess of Federal funding, 
and the program therefore could be considered an unfunded mandate. 
Lastly, one commenter expressed confusion about whether subrecipients 
may incur costs for administrative functions, as set forth in Sec.  
683.215, with statewide activities funds.
    Department Response: The allowable percentage of funding for 
statewide activities is governed by the authorizations and 
appropriations established by Congress, not by the Department. 
Furthermore, the regulation contains no unfunded mandates as defined in 
2 U.S.C. 658(b). Waivers are covered at Sec. Sec.  679.600 through 
679.620, for waivers to States or local areas in a State, and at 
Sec. Sec.  684.900 through 684.920, for waivers relating to Indian and 
Native American programs. Waivers are considered on an individual basis 
and granted as appropriate, with such conditions as the Department may 
require. Subrecipients may incur costs for administrative functions 
consistent with the administrative cost limitation provisions at 
Sec. Sec.  683.205 and 683.215. No changes have been made to the 
regulatory text as a result of these comments.
3. Subpart B--Required and Allowable Statewide Employment and Training 
Activities
    This subpart first discusses required statewide activities. WIOA 
continues the activities that were required under WIA, but adds several 
additional required activities, such as assistance to State entities 
and agencies described in the State Plan, alignment of data systems, 
regional planning, and implementation of industry or sector 
partnerships. Required statewide activities under WIA and continued 
under WIOA include: Dissemination of information regarding outreach to 
businesses, dissemination of information on the performance and cost of 
attendance for programs offered by ETPs, and conducting evaluations.
    This subpart also discusses allowable statewide activities. The 
Department provides States with a significant amount of flexibility in 
how these funds may be used for statewide activities. States can test 
and develop promising strategies. The regulation at Sec.  682.210 is 
not designed to be an exhaustive list, but more illustrative of the 
types of allowable statewide activities that may be provided with these 
funds.
Section 682.200 What are required statewide employment and training 
activities?
    Comments: One commenter asked for a definition of ``non-traditional 
training'' services and for the statutory basis for the requirement 
that the ETPL include providers of nontraditional training services. 
This commenter further stated that Sec.  682.200(b)(5) would require 
collection and dissemination of cost of attendance information for 
youth and for on-the-job and other training programs that is exempted 
from the ETP requirements (WIOA sec. 122(h)), and asked what the 
statutory authorization was for this requirement. Finally, this 
commenter asserted that there was a conflict over proposed requirements 
for these WIOA sec. 122(h) programs/data between proposed Sec. Sec.  
682.200 and 680.340.
    Department Response: Nontraditional training is defined as training 
activities leading to employment in occupations or fields of work in 
which individuals of one gender comprise less than 25 percent of the 
individuals so employed. The statutory basis for this definition is 
found in the definition of nontraditional employment at WIOA sec. 
3(37). The statutory requirement for disseminating information 
regarding the State list of eligible training providers of training 
services (including those providing non-traditional training services) 
is found at WIOA sec. 134(a)(2)(B)(v)(I). The Department has revised 
Sec.  682.200(b)(5) for consistency with Sec. Sec.  680.490 and 
680.530, which specify the reporting requirements for certain providers 
of training services, such as providers of OJT.
    Comments: The commenter stated that there might be a conflict 
between proposed Sec. Sec.  682.200 and 680.350 and referred to the 
title of Sec.  680.350 as ``What is meant by `provision of additional 
assistance' in the Workforce Innovation and Opportunity Act?''
    Department Response: There was no section numbered Sec.  680.350 in 
the NPRM, and there is no conflict between the requirements of 
Sec. Sec.  682.200 and 682.350. However, the commenter may have been 
referring to the requirement of Sec.  680.340, specifically paragraph 
(b), which states that the Local WDBs must make available to customers 
the State list of eligible training providers required in WIOA sec. 
122(e), including local area information on work based training 
providers under WIOA sec. 122(h). This could be read to conflict with 
Sec.  682.200(b), which includes disseminating the list of ETPs and 
information identifying other eligible training providers of training 
as a required statewide activity. There are two sections of WIOA that 
cover the dissemination of the list of ETPs, secs. 134(a)(2)(B)(v) and 
134(c)(3)(F)(ii). The first requires the State to disseminate the list. 
The latter requires that Local WDBs make the list available through the 
one-stop centers. Operationally, States are tasked with maintaining the 
list and disseminating it to the Local WDBs. The task of the Local WDBs 
is to make sure that this information is readily available through the 
one-stop delivery system. No changes have been made to the regulatory 
text as a result of these comments.
    Comments: Two commenters also questioned the proposed Sec.  
682.200(b)(2) requirement to disseminate information identifying 
eligible training providers of work-based training, reasoning that 
disclosing information about employers could negatively impact the 
working relationships that case managers and business specialists have 
developed. Further, these commenters stated that if the Governor does 
not require collection of performance information from these training 
providers, it is not necessary to provide information about such 
providers to the public. A separate

[[Page 56189]]

commenter expressed concern that the performance reporting requirements 
could result in disclosure of personally-identifiable information.
    Department Response: WIOA sec. 122(h) exempts providers of on-the-
job training and other employer-based training from the requirements at 
WIOA sec. 122(a)-(f). However, the identity of employers that access 
WIOA funds for employer-based training, as well as any performance 
information required by the State under WIOA sec. 122(h)(2), may not be 
kept from the public and is disclosable. This statutory disclosure 
requirement under WIOA sec. 122(h)(2), which applies to recipients of 
funds to provide training services, promotes full transparency, reduces 
instances of conflict of interest, and ensures compliance with the 
sunshine provisions of WIOA. Performance report made available to the 
pubic requirements do not include any information that could be 
considered personally identifiable. There are no names, addresses, 
dates of birth or Social Security numbers. WIOA sec. 122(d)(4) 
prohibits disclosure of personally identifiable information without 
prior written consent of the parent or student. All other comments and 
responses involving eligible training providers are found at subpart D, 
Sec. Sec.  680.400 through 680.530. No changes have been made to the 
regulatory text as a result of these comments.
    Comments: A commenter recommended that Sec.  682.200(b) specify 
that information about physical and programmatic accessibility for 
individuals with disabilities (proposed Sec.  682.200(b)(7)) be made 
available in accessible formats.
    Department Response: The requirement to make this information 
available in accessible formats is already required under the Americans 
with Disabilities Act and other provisions of WIOA. Therefore, no 
changes were made as a result of this comment.
    Comments: Regarding proposed Sec.  682.200(d), commenters asserted 
that conducting evaluations is not the best use of limited State funds 
and recommended that it be an allowable statewide activity or reserved 
for the Federal government.
    Department Response: WIOA provides that evaluation is a required 
activity. Evaluation as a statewide activity is further discussed under 
Sec.  682.220. The Department notes that there was a small edit to 
Sec.  682.200(d) moving the statutory reference to the end of the 
regulatory text. However, no changes have been made to the regulatory 
text as a result of this comment.
    Comments: One commenter recommended that the Department require 
that the one-stop delivery system receive technical assistance to help 
women entering apprenticeship and pre-apprenticeship programs, and 
recommended that Sec.  682.200(f) be expanded to require technical 
assistance delivery to all front line and managerial staff at one-stop 
centers and to provide information on the economic benefits of 
nontraditional careers to one-stop participants.
    Department Response: The Department has determined that there are 
sufficient references and requirements throughout WIOA and this Rule 
that provide an improved linkage to apprenticeship and pre-
apprenticeship programs and that this specific requirement is not 
needed. Furthermore, Sec.  682.210(e) already allows for the 
implementation of programs to increase the number of individuals 
training for and placed in nontraditional employment. No changes have 
been made to the regulatory text as a result of these comments.
    Comments: A commenter recommended that Sec.  682.200(f) 
specifically include individuals with disabilities in its statement of 
the requirement that States assist in local staff training to provide 
opportunities for individuals with barriers to employment. Also with 
regard to Sec.  682.200(f), this commenter recommended that States 
should examine Federal contractors doing business in their States, as 
doing so is particularly important for job seekers with disabilities 
because of the regulations implementing sec. 503 of the Rehabilitation 
Act of 1973, as amended, at 41 CFR part 60-741.
    Department Response: Individuals with disabilities are a target 
population of WIOA. The Department has determined that the reference to 
barriers to employment sufficiently includes individuals with 
disabilities based on the statutory definition contained in WIOA sec. 
3(24)(D). With regard to States examining Federal contractors doing 
business in their area, they must follow the regulations governing the 
Rehabilitation Act of 1973, as amended. No changes have been made to 
the regulatory text as a result of these comments.
    Comments: Regarding proposed Sec.  682.200(g), several commenters 
recommended that the Department clarify how States are required to 
``assist'' local areas. One commenter requested clarification of what 
it means to assist local areas in regional planning and service 
delivery, and whether this includes financial assistance.
    Department Response: States must ``assist'' local areas through a 
variety of methods. This will include the provision of technical 
assistance, compliance assistance, strategic planning initiatives, or 
other activities designed to improve or enhance the workforce 
development system at the local level. The Department declines to 
define explicitly ``assist'' further. Doing so might limit the types of 
technical assistance and other efforts that a State may seek to 
provide. With regard to the provision of financial assistance, yes, an 
allowable use of statewide activities funds under Sec.  682.200 could 
include financial assistance related to regional planning efforts.
    Comments: Regarding proposed Sec.  682.200(h), a commenter 
recommended that the Departments issue additional guidance on 
implementation of the industry or sector partnerships that are a 
required activity at the State and local levels. This commenter also 
expressed concerns that the NPRMs provided little guidance on how 
States and local areas can meet their statutory requirements with 
respect to industry or sector partnerships. This commenter predicted 
that limited instruction may lead to confusion and delayed 
implementation among stakeholders. A separate commenter recommended an 
emphasis on the needs of and opportunities for immigrant and Limited 
English Proficient workers and business owners.
    Department Response: The Department is committed to the successful 
implementation of industry and sector partnerships throughout the 
nation's workforce development system. To accomplish this, significant 
technical assistance activities will occur in this area. The Department 
has strategically chosen not to further define the requirements around 
industry and sector partnerships in regulations as effective models and 
solutions are likely will evolve over time. Instead, the Department's 
efforts will be focused on the collection and dissemination of 
promising practices from States and local areas that have already 
developed successful models. The Department has determined that rather 
than a lack of instruction leading to confusion or delay, a lack of a 
more rigid definition will provide for the highest level of innovation 
possible. Additional guidance may be issued on this topic in the 
future. In addition, the Department will support various technical 
assistance efforts focusing on industry and sector partnerships based 
on successful models from around the

[[Page 56190]]

nation. Furthermore, there is no need to place additional emphasis on 
immigrant and Limited English Proficient populations since these 
individuals would generally be included in the definition of those with 
barriers to employment, whose needs are already emphasized throughout 
WIOA. No changes have been made to the regulatory text as a result of 
these comments.
    Comments: A commenter recommended that Sec.  682.200(k) clarify 
that providing ``additional assistance'' to local areas with a high 
concentration of eligible youth may include creation of a central 
coordinating body or use of a ``qualified intermediary'' defined as an 
entity with a demonstrated expertise in building partnerships. The 
commenter stated that qualified intermediaries serve an important role 
by streamlining services and filling gaps in support and services. 
Further, this commenter recommended that the Department clarify that 
``additional assistance'' includes supporting development of credit 
transfers and articulation agreements between local education agencies 
(LEAs) and institutions of higher education within the State. The 
commenter reasoned that these programs bridge the connection between 
academics and career preparation, as well as between secondary and 
postsecondary school education.
    Department Response: WIOA allows States to engage in any of the 
activities described by the commenter, as the provision of additional 
assistance under Sec.  682.200(k). The regulation requires States to 
assist local areas with high concentrations of eligible youth. The 
assistance needed is likely to vary from local to local. This 
assistance might be provided in the areas of program design, 
partnering, resource sharing, and other areas. Providing a definitive 
list of assistance or specific examples might be limiting. Instead, the 
Department will continue its focus on technical assistance and regular 
guidance in the area of youth services. No changes have been made to 
the regulatory text as a result of these comments.
    Comments: One commenter requested that the Department develop a 
common intake at the Federal level that covers all required partners 
and test it for customer satisfaction. Similarly, another commenter 
asked if States would be developing and disseminating common intake 
procedures and related items, including registration processes, across 
core and partner programs.
    Department Response: Given the variety of State and local workforce 
development systems, a single, Federally mandated common intake process 
is not feasible. However, the Department remains committed to working 
with the Federal partners to limit the duplication of effort among and 
between core and partner programs relative to service design and 
eligibility requirements. The States are best positioned to develop 
common intake procedures through the State WDB. No changes have been 
made to the regulatory text as a result of these comments.
Section 682.210 What are allowable statewide employment and training 
activities?
    In addition to the required statewide activities, States are 
provided with significant flexibility to innovate within the public 
workforce system with various allowable statewide employment and 
training activities. These allowable activities are vital to ensuring a 
high quality public workforce system, and can be used to ensure 
continuous improvement throughout the system. This regulation is not 
designed to be an exhaustive list, but more illustrative of the types 
of allowable statewide activities that may be provided with these 
funds. The Department has made a clarifying edit at the beginning of 
Sec.  682.210.
    Comments: A commenter expressed support for proposed Sec.  
682.210(c) because it emphasizes the State's role in developing and 
implementing strategies for serving individuals with barriers to 
employment and encourages States to partner with other agencies to 
coordinate services among one-stop partners. This commenter asserted 
that Governors have a vital role in coordinating different funding 
sources for training to enable effective service delivery. Another 
commenter supported the flexibility in Sec.  682.210 for the types of 
statewide activities that States can implement using the Governor's 
Reserve. However, this commenter recommended that the Department amend 
this section or provide additional guidance to encourage States to 
consider programs that will help align core WIOA title I programs with 
one another and with title II programs (e.g., career pathway programs 
and technology access programs). A separate commenter also expressed 
support for the Departments to issue guidance on the alignment of WIOA 
title I and title II services directed to immigrant and Limited English 
Proficiency individuals, and additionally in support of formal guidance 
affirming that all individuals with work authorization, including 
immigrant youth with Deferred Action for Childhood Arrivals (DACA) 
status, are eligible to participate in title I programs.
    Department Response: The Department agrees that the Governors have 
a vital role in coordinating the different funding sources for training 
available in their State. Furthermore, the Department has concluded 
that this role extends well beyond WIOA and should include the 
coordination of all funding sources (Federal, State, foundations, etc.) 
available within the State. Additional guidance will be issued by the 
Department, outside of the regulations, to help Governors strengthen 
alignment of all programs contained under WIOA and all those related to 
workforce development. Based on the planning requirements at the State, 
regional and local level already contained in this regulation, the 
Department has determined that a change to this section is not 
warranted. Nothing in this statute or regulations prohibits States from 
acting independently to align the programs covered under WIOA or 
outside of it. WIOA and the implementing regulations provide only the 
minimum of what States must do to be compliant. WIOA and regulations 
should be seen as a starting point for further alignment of the 
workforce development, economic development, and educational systems 
within a State. With regard to youth with DACA status, the Department 
will consider issuing guidance as necessary. No changes have been made 
to the regulatory text as a result of these comments.
    Comments: A commenter recommended that Sec.  682.210 specify how 
activities can target individuals with disabilities wherever possible 
(e.g., in paragraphs (c), (k), (m), and (n)(2)). Further, this 
commenter recommended that the Final Rule specifically identify State 
programs relating to intellectual and developmental disabilities, 
Statewide Independent Living Councils, and centers for independent 
living so that they are not overlooked in program coordination. In 
regard to developing strategies to serve individuals with barriers to 
employment as permitted by proposed Sec.  682.210(c), this commenter 
detailed several core areas for States to focus their partnership 
building efforts, including supporting businesses in their efforts to 
employ individuals with disabilities, building capacity of front line 
staff to implement evidence-based practices in serving employees with 
disabilities and the employers who hire them, and preparing youth with 
disabilities for careers that use their full potential.
    Department Response: The Department agrees that coordination

[[Page 56191]]

between and among the organizations listed by the commenter and the 
State and local workforce development systems are essential to 
improving services to individuals with disabilities. However, the 
Department has concluded that there is no need to list these 
organizations specifically in the regulatory text, and that each State 
and local area is uniquely positioned to determine which of these 
organizations and programs are included in their planning processes and 
service delivery models. However, the Department notes that WIOA sec. 
3(24) defines ``individual with a barrier to employment'' to include 
``individuals with disabilities,'' and reminds the public that the 
emphasis throughout WIOA and this regulation on including, and 
tailoring services to meet the needs of, individuals with barriers to 
employment encompasses an emphasis on including, and tailoring services 
to meet the needs of, individuals with disabilities and other barriers 
to employment. By extension: the regulatory text at Sec.  682.210(c), 
(k), and (m) should be understood to include programs carried out by 
local areas for individuals with disabilities. The Department also 
agrees that WIOA requires training for front-line staff and the 
identification and dissemination of promising practices on all areas of 
workforce development, including the provision of services to 
individuals with disabilities, including youth. [WIOA secs. 
107(d)(11)(B), 108(b)(6)(C), and 134(a)(2)(B)(i)(IV).] No changes have 
been made to the regulatory text as a result of these comments.
    Comments: Regarding the NPRM preamble discussion of Sec.  
682.210(d) and (e), a commenter requested that the Department clarify 
the term ``real-time labor market analysis,'' commenting that real-time 
LMI is a commonly used term that often refers to current data but that 
the term has a lot of associations that are not well-defined in terms 
of data items, levels, and area of detail.
    Department Response: Traditional labor market information (LMI) is 
based on data gathered through Federal and State surveys and 
administrative data. These surveys typically utilize rigorous sampling 
criteria and careful sampling frames. Traditional LMI provides 
significant insight into labor market trends and indicators, but the 
process of gathering the data is time-consuming and results in 
unavoidable lag-time for publication. Real-time labor market analysis, 
also referred to as real-time LMI, utilizes online job postings that 
are aggregated daily. Given the ever-increasing use of technology in 
the LMI field, the Department has determined not to define the term 
``real-time labor market analysis.'' The Department has supported 
previous evaluations and research products on real-time labor market 
analysis all of which are available online through the Web site of the 
Employment and Training Administration at www.doleta.gov and through 
the Workforce GPS platform at www.workforcegps.org. No changes have 
been made to the regulatory text as a result of these comments.
    Comments: Two commenters supported including NFJP grantees among 
entities with access to Governors' 15 percent set-aside funds for 
statewide activities.
    Department Response: NFJP grantees are awarded funds through 
various grant programs. Furthermore, there is no restriction on 
additional partnerships that States can make with NFJP grantees under 
the statewide activities section. The Department has concluded that a 
special reference to NFJP grantees is not warranted and no changes have 
been made as a result of these comments.
    Comments: A commenter suggested that statewide activities funds 
should be accessible to a labor/management training fund of which the 
employer is a contributing member, and that apprenticeships should be 
an approved expense for incumbent worker training.
    Department Response: The regulation does not restrict the States 
from engaging in the activities described by the commenter related to 
labor/management training funds and apprenticeship. The types of 
programs and partnerships that a State chooses to enter into are best 
left to the individual State WDBs to meet the specific workforce needs 
in their State. No changes have been made to the regulatory text as a 
result of these comments.
    Comments: A commenter recommended that Governors be authorized to 
approve automatically public higher education schools as eligible 
training providers under WIOA, in a similar manner to the authority for 
automatic approval of apprenticeship programs. The commenter further 
urged that such approval should cover all programs of study and that 
the school not be subject to initial or subsequent designation.
    Department Response: WIOA does not provide the authority for this 
type of automatic designation, so no changes have been made as a result 
of this comment.
Section 682.220 What are States' responsibilities in regard to 
evaluations?
    Comments: The Department received a number of comments on the 
proposed regulations in Sec.  682.220, concerning State 
responsibilities on evaluations under WIOA sec. 116(e) and the required 
use of State set-aside funds under WIOA sec. 129(b)(1)(A) and sec. 
134(a)(2)(B)(vi) to conduct evaluations. Several commenters were 
supportive of provisions in this section, with one commenter expressing 
optimism about the possibility of States conducting longer-term impact 
studies of Vocational Rehabilitation. Another commenter supported the 
development of evaluations ``to explore innovations surrounding 
integrated systems, coordinated services, career pathways, and multiple 
forms of engagement with businesses.'' However, many comments were 
critical of the requirements that States conduct evaluations using the 
State set-aside funds and provide data for Federal evaluations.
    Regarding States' conducting their own evaluations, commenters 
cited a lack of sufficient funds from the Governors' set-aside as well 
as a lack of staff capacity. One commenter stated that the requirement 
``ignores the funding reality'' and, along with other commenters, 
emphasized the many competing requirements for which set-aside funds 
must be used--a problem noted to be particularly acute in States with a 
small amount of set-aside funds. The commenters also noted that many 
States lack staff with requisite knowledge and skills to conduct an 
evaluation and cannot afford to use consultants. Three commenters noted 
that, with the exception of evaluations conducted and published by a 
few States, there is no ``established broad-based record of State 
knowledge of research principles sufficient to effectively manage an 
evaluation agenda under WIOA.'' To remedy this situation, commenters 
suggested that States receive dedicated funding and Federal support to 
build their evaluation infrastructure and that the Department waive or 
suspend the requirement to conduct evaluations until States have 
sufficient funding and skills, and that the Department should assume 
primary responsibility for conducting evaluations. Another commenter 
suggested that conducting evaluations should be an allowable not a 
required statewide activity.
    Department Response: The Department acknowledges that States must 
balance many priorities in their use of the set-aside, including 
multiple required activities. The lack of sufficient funds (in the set-
aside or from a dedicated funding stream of some kind) to conduct 
evaluations, as well as lack of staff capacity or, in some cases, lack 
of available or reliable data, will

[[Page 56192]]

constrain many States' ability to conduct evaluations. However, WIOA 
sec. 129(b)(1)(A) and sec. 134(a)(2)(B)(vi) require States to use funds 
reserved by the Governor for statewide activities to conduct 
evaluations. Further, the Department has determined that State-
conducted evaluations have the potential to be of great practical value 
to States, including informing service delivery strategies, improving 
performance, and meeting other requirements under WIOA. For example, 
evaluation could be used to assist State WDBs in systematically 
identify promising or proven practices, as required under Sec.  
679.130(e), or for analyzing data on the quality, effectiveness, and/or 
assist the State to prepare its strategic planning process under 20 CFR 
676.105 (see Joint WIOA Final Rule). It could further be used for 
exploring, with other State agencies, how well integration and 
coordination of services and data systems is proceeding. Therefore, the 
regulations retain the requirement that States conduct evaluations.
    Given the problems identified by commenters, the Department sees 
the development of States' capacity to conduct evaluation projects as a 
long-range and iterative process, which the Department intends to aid 
through various forms of technical assistance and guidance. An initial, 
primary goal is to enhance capacity by building knowledge among State 
staff regarding various methodologies, approaches for enlisting 
expertise, and the potential role of evaluations and research in 
meeting State goals and priorities. Further, the regulations at Sec.  
682.220(e) and (f) identify areas for State discretion in the 
methodology, duration and funding of evaluations, all of which may 
assist States to target their investment in a manner appropriate to the 
funding available to the State. The paragraphs describe flexibilities 
that States may use to leverage other funding, and to conduct such 
evaluation over multiple program years.
    Despite flexibilities as to the types of evaluation, methodologies, 
phases, duration, and funding sources, some States may still be unable 
to fulfill the requirement to conduct evaluations and seek a waiver. 
Such a waiver request, like others submitted to the Department in 
regard to statutory provisions of WIOA, will be reviewed on a case-by-
case basis, and will be subject to any appropriate conditions and 
limitations of the Secretary's waiver authority and procedures found at 
WIOA sec. 189(i)(3), and consistent with Sec. Sec.  679.610 and 
679.620. No changes have been made to the regulatory text as a result 
of these comments.
    Comments: Several commenters objected to annual submission of 
evaluation reports, which they felt too excessive, given the 
requirements for annual submission of performance reports. One 
commenter suggested that States should instead make available to the 
public and to State and Local WDBs evaluation and research reports 
prepared by Federal evaluators with State-specific comments, in line 
with suggestions that evaluation be primarily a responsibility for the 
Federal government.
    Department Response: While WIOA sec. 116(e)(3) requires the State 
to annually prepare, submit, and make available to the public reports 
containing the results of evaluations conducted using State set-aside 
funds, the Department recognizes that evaluations may be lengthy and 
not end neatly within a program year. For this reason, the regulation 
has been revised to clarify that the reports are to be prepared, 
submitted to State and Local WDBs, and made available to the public 
when results become available. The revision to the regulation at Sec.  
682.220(c) is described in more detail below. Also, since States retain 
the responsibility to disseminate reports on State-conducted 
evaluation, the Department declines to adopt the suggestion that States 
only distribute Federal evaluations with State comments.
    Comments: Several commenters were critical of the regulation to 
implement the requirements in sec. 116(e) that States cooperate to the 
extent practicable in evaluations conducted by the Departments of Labor 
and Education (under WIOA secs. 169 and 242 and relevant sections of 
the Rehabilitation Act of 1973) by providing data, responding to 
surveys, allowing timely site visits, and informing the Secretary in 
writing if such cooperation was not practicable. A few commenters 
asserted that quantitative data was already available because the data 
elements and narrative reports provided to the Department and the other 
Federal agencies should provide an ample source of statistical data for 
evaluators without interrupting individual States with data requests. 
The commenters indicated that States' responsibilities regarding 
evaluations and research are only ``to allow on-site observation and in 
limited circumstances provide supplemental qualitative data.'' Another 
commenter felt that the regulations were ``adversarial'' and would 
result in minimum levels of cooperation from States. The commenter 
stated that the regulation did not define the term ``to the extent 
practicable,'' but noted that in the UI regulation, it is defined as 
non-interference ``with the administration of State UC law.'' The 
commenter also stated that the Department's ``intrusion into State 
evaluation activities is by its very nature `interference' with non-UI 
State agency functions, since it is carried out pursuant to 
``adversarial rules'' and for this reason, needed to be withdrawn.
    Department Response: The Department notes that the regulation at 
Sec.  682.220(d) implements a statutory requirement under WIOA sec. 
116(e)(4) requiring State cooperation, to the extent practicable, in 
Federal evaluations. WIOA sec. 116(e)(4) specifically identifies such 
cooperation as including the provision of data and survey responses, 
and allowing site visits in a timely manner. As noted in the preamble 
to the NPRM, this requirement in WIOA sec. 116(e)(4) recognizes the 
vital role of States in providing various forms of quantitative and 
qualitative data and information for Federal evaluations that are not 
available at the Federal level. In order to conduct evaluations, 
individuals need to be tracked over time periods that do not align well 
with quarterly performance reporting. Depending on the research 
questions an evaluation is addressing, data on the same individuals or 
cohorts of individuals may be needed for timeframes within the same 
quarter or across multiple quarters, neither of which is feasible to 
track or match within the performance reporting structure of WIOA. High 
quality evaluations also involve the collection of data on control or 
comparison groups of individuals, so supplemental data may be needed to 
account for this. Frequently, individual level earnings information is 
critical for evaluations. Data, survey responses, and site visit 
information are often needed to understand, for example, participant 
characteristics, services, systems, labor market outcomes, the role of 
decision-makers, implementation issues, and the quality of the customer 
experience. In response to the commenters' suggestions, the Department 
notes that States may, in response to data requests for a Department of 
Labor or a Department of Education evaluation, identify other data 
already provided to the Federal government and of possible use in the 
evaluation, and the Departments will work with the State to determine 
if the other data are suitable. However, no change to the regulatory 
text has been made in response to the comments.
    Further, the Department disagrees with the characterization of 
these

[[Page 56193]]

regulations, which implement a statutory requirement by requiring 
cooperation to the extent practicable, as adversarial or as 
interference. The Department also declines to further define ``to the 
extent practicable'' in the regulation. Rather, if a State determines 
that timely cooperation in data provision is not practicable, the State 
may proceed according to Sec.  682.220(d)(3) and identify in writing 
the reasons it is not practicable, and cooperate with the Department to 
develop a plan or strategy to mitigate or overcome the problems 
preventing timely provision of data, survey responses and site visits, 
as statutorily required. The requirement at Sec.  682.220(d)(3) was 
intended to afford a relatively easy method for communicating with the 
Department and allowing for an amicable resolution of any problems. No 
changes have been made to the regulatory text as a result of these 
comments.
    Comments: Several comments were received regarding promoting 
specific evaluation and research projects to be conducted at the State 
level under sec. 116(e) or at the Federal level under sec. 169 (which 
sets forth the Department's role in evaluation and research and 
authorizes a wide array of studies). One commenter recommended that the 
regulations require States to focus evaluations on services to 
individuals with disabilities under WIOA title I and that customer 
feedback be developed from this population be developed to determine if 
programs are truly responding to their needs.
    Department Response: The Department notes that while these proposed 
specific evaluation and research projects are permissible and 
desirable, WIOA sec. 116(e) allows States to determine the content of 
any evaluation. The Department will not reduce the States' flexibility 
by requiring particular evaluation or research projects. No changes 
have been made to the regulatory text as a result of these comments.
    While the Department did not promulgate regulations for WIOA sec. 
169, the Department is addressing comments relating to Departmental 
evaluation and other research activity, since it is similar to the 
evaluation functions required of States under WIOA sec. 116(e). There 
are no changes to the regulatory text as a result of these comments. 
The comments and the Department's response are as follows.
    Comments: Several commenters expressed support for the requirement 
under WIOA sec. 169(b)(4)(I) that the Department conduct a multi-State 
project to develop capacity for, implement, and build upon career 
advancement models and practices for low-wage health care providers and 
providers of early education and child care.
    Department Response: The Department notes that it has conducted and 
is currently engaged in research and evaluation projects related to 
career pathways programs in health care and child care occupations. 
Separately, the Department notes that developing and implementing 
career pathways is a function of State WDBs and Local WDBs under WIOA 
sec. 101(d)(3)(B) and sec. 107(d)(5)and has been promoted by ETA in 
guidance and various forms of technical assistance to the public 
workforce system.
    Comments: Another commenter suggested that the regulations state 
that the Department undertake research into women's representation in 
nontraditional jobs covering and the means by which barriers to women's 
employment in these occupations can be removed. The commenter also 
suggested that guidance eventually be issued on the content of such 
studies and offered example of topics that could be covered in them, 
such one-stop capacity, training, and policies in regard to 
nontraditional careers for women.
    Department Response: The Department notes that it is currently 
conducting a research project, under prior legislative authority, on 
employment in nontraditional occupations in order to identify, and 
evaluate evidence-based strategies to increase opportunities for 
traditionally under-represented groups.
    For the convenience of the reader in understanding the totality of 
the regulation at Sec.  682.220 and the changes made in the section, 
each part is discussed sequentially below. The revisions entailed 
reorganizing portions of the section to clarify the requirements and 
flexibilities for States, all in response to comments and to ensure 
conformity with statute.
    In particular, the revisions reflect the distinction between the 
requirement that States conduct evaluations of title I core program 
activities (as per WIOA secs. 129(b)(1)(A) and 134(a)(2)(B)(vi)) and 
the permissible ability of States to conduct research and demonstration 
projects as an allowable statewide activity under WIOA secs. 
129(b)(2)(A) and 134(a)(3)(A)(ix) Accordingly, the title of this 
section has been revised as ``What are States' responsibilities in 
regard to evaluations?,'' with the concluding phrase ``and research'' 
removed. Likewise, the phrases ``evaluations and research projects'' 
and ``evaluations and other research'' have been consistently revised 
throughout this section to refer only to ``evaluations.'' These 
revisions ensure that the requirements of Sec.  682.220, including the 
coordination and reporting requirements, apply only to evaluations 
conducted as a required statewide activity. It should be noted that 
these the provisions of Sec.  682.220 do not apply to research and 
demonstration projects conducted as an allowable statewide activity.
    The Department made a number of revisions to the regulatory text to 
clearly identify certain options that States may, but are not required 
to, use in fulfilling the statutory requirement to conduct evaluations 
as a statewide activity. Some of these options were identified in the 
NPRM, while others have been developed in response to comments 
received. In order to distinguish between regulatory requirements and 
regulatory flexibilities, this section has been reorganized so that 
these options are now stated in revised Sec.  682.220(e) and in the new 
Sec.  682.220(f).
Section 682.220(a)
    Section 682.220(a) describes the requirement under WIOA sec. 
134(a)(2)(B)(vi) for States to use funds reserved by the Governor for 
statewide activities to conduct evaluations of activities under the 
WIOA title I core programs, according to the provisions of sec. 116(e). 
The paragraph has been revised to state that the purpose of evaluations 
is ``to promote continuous improvement, research and test innovative 
services and strategies, and achieve high levels of performance and 
outcomes.'' The first and third purposes--promoting continuous 
improvement, and achieving high levels of performance and outcomes--
reflect the statutory requirement of WIOA sec. 116(e)(1). The second 
purpose, as proposed by the Department in the NPRM, was to test 
innovative services and strategies. It has been revised to reflect the 
reality that rigorous tests of such services and strategies often are 
preceded or accompanied by related forms of research. This section has 
also been renumbered from Sec.  682.220(a)(1) to Sec.  682.220(a).
    The paragraph proposed as Sec.  682.220(a)(2) has been deleted. 
This paragraph was deleted to avoid any confusion about research and 
demonstration projects conducted as an allowable statewide activity, to 
which the provisions of Sec.  682.220 do not apply. Also, Sec.  
682.220(a)(3), regarding the use of funds other than the Governor's 
Reserve, has been revised and relocated to a new Sec.  682.220(f), as 
discussed below.

[[Page 56194]]

Section 682.220(b)
    The regulations under Sec.  682.220(b) describe a number of 
requirements for evaluation under the State Set-aside. The language at 
Sec.  682.220(b) was revised from that in the NPRM to remove the 
reference to ``research projects'' and thus to clarify that the 
requirements are statutorily required only for evaluations. In 
addition, the Department made a technical revision to replace the 
reference to evaluations ``funded in whole or in part with WIOA title I 
funds'' with a reference to evaluations ``conducted under paragraph 
(a).'' The language was revised to clarify that the requirements in 
paragraph (b) apply to evaluations conducted pursuant to paragraph (a).
    Paragraph (b)(1) of this section implements the statutory 
requirement for States to coordinate and design evaluations in 
conjunction with State and Local WDBs and with other agencies 
responsible for core programs, as set forth in WIOA sec. 116(e)(2). 
Paragraph (b)(2) implements the requirement for States to include, 
where appropriate, analysis of customer feedback and outcome and 
process measures in the statewide workforce development system, as set 
forth in WIOA sec. 116(e)(2). Where the Department requires specific 
information related to these requirements, it will do so through the 
ICR process. Paragraph (b)(3) implements the requirement for States, in 
conducting evaluations, to use designs that employ the most rigorous 
analytical and statistical measures such as the use of control groups, 
as set forth in WIOA sec. 116(e)(2). The regulation clarifies that 
these approaches should be used when appropriate and feasible, thus 
indicating they are not intended as a ``one-size-fits-all'' checklist 
of requirements for every evaluation project. Paragraph (b)(4) 
implements the statutory requirement set forth in WIOA sec. 116(e)(1) 
for States, to the extent feasible, to coordinate the State's 
evaluations with those provided by the Secretary of Labor and the 
Secretary of Education under the particular statutes as cited. These 
paragraphs are adopted as proposed.
Section 682.220(c)
    Section 682.220(c) implements the statutory requirement for States 
to annually prepare, submit, and make available reports containing the 
results of the evaluations the States conduct, as set forth in WIOA 
sec. 116(e)(3). The Department has made two revisions to this section. 
First, as noted above, in response to comments received, the 
Departments has clarified that States must prepare, submit to the State 
and Local WDBs, and disseminate to the public results from these 
evaluations ``as available.'' The Department recognizes that when 
evaluations are conducted over multiple program years, as permitted in 
revised paragraph (e)(3), results may not be available in every program 
year. Evaluation reports must be made publically available during the 
program year the final report is finalized. In light of the options 
States have in terms of the components and time needed for evaluations 
as clarified in Sec.  682.220(e)(3), evaluations may extend into 
multiple program years. Second, the Department has revised this section 
to remove any reference to ``other research'' to avoid any confusion 
with research as an allowable statewide activity, for which the 
reporting requirements are not statutorily required under WIOA. 
However, the Department, in recognition of the benefits of 
disseminating research, strongly encourages States to make publicly 
available the reports emanating from such other research that States 
conduct.
Section 682.220(d)
    Section 682.220(d) implements the statutory requirement for States 
to cooperate, to the extent practicable, in evaluations and related 
research projects conducted by the Secretaries of Labor and Education. 
The Department has made minor revisions, for the sake of clarity, to 
three aspects of this section. First, the Department has removed the 
reference to the ``agents'' of the ``Secretaries of Labor and 
Education'' because a reference to the Secretaries always implicitly 
includes their agents, such as sub-agencies, contractors, or grantees. 
Second, the Department has replaced the reference to ``sec. 116(e)(4) 
of WIOA'' with a reference to the ``laws cited in paragraph (b)(4) of 
this section.'' This revision is non-substantive as the laws cited in 
paragraph (b)(4) of this section are those noted under sec. 116(e)(4) 
of WIOA, intended to simplify the language of the regulation.
    Paragraph (d)(1) of this section describes the particular data, 
information, and assistance that States must timely provide in 
cooperation with evaluations and related research projects conducted by 
the Secretary of Labor and Secretary of Education. Paragraph (d)(2) 
describes the requirement for the States to encourage cooperation in 
data provision by one-stop partners at the local level. Paragraph 
(d)(3) describes the requirement for the Governor to provide written 
notification to the Secretary if it is not practicable for the State to 
timely provide the data described in paragraph (d)(1).
    No comments were received regarding these paragraphs. However, 
paragraph (d)(2) has been revised to correct an erroneous reference to 
paragraph (f)(1)(a)-(c) to the appropriate citation to paragraphs 
(d)(1)(i)-(iv). These paragraphs are adopted as proposed, with the 
described revision.
Section 682.220(e)
    Section 682.220(e) has been revised to identify allowable 
flexibilities in the types of studies, phases, and time frames that are 
available to States in fulfilling their obligation to conduct 
evaluations, all in response to the concerns expressed in the comments 
about this requirement.
    Paragraph (e)(1) of Sec.  682.220 clarifies that under WIOA sec. 
116(e)(1) States, while required to use set-aside funds to evaluate 
activities under title I core programs, are permitted to conduct 
evaluations that jointly examine activities under title I and those 
under other core programs, so long as such evaluations are developed 
and designed in coordination with the relevant State agencies 
responsible for core programs under Sec.  682.220(b)(1). Examples of 
evaluations of activities under multiple core programs include studies 
of referral processes, systems integration, or infrastructure cost 
sharing among the core programs.
    Paragraph (e)(2) provides a new flexibility to permit States to 
conduct evaluations similar to those authorized for, or conducted by, 
the Departments of Labor and Education under the laws cited in Sec.  
682.220(b)(4), and cites as examples ``process and outcome studies, 
pilot and demonstration projects that have an evaluative component, 
analyses of programmatic data, impact and benefit-cost analyses, and 
use of rigorous designs to test the efficacy of various 
interventions.''
    Paragraph (e)(3) was added to clarify flexibilities for States to 
conduct evaluations over multiple program years, involving multiple 
phases ``such as a literature or evidence review, feasibility study, 
planning, research, coordination, design, data collection, and 
analysis, and report preparation, clearance, and dissemination.'' As 
noted above, the Department has added these flexibilities for States 
since, based on its own experiences in conducting evaluations, which 
have often entailed many such components and extended over multiple 
years.

[[Page 56195]]

Section 682.220(f)
    Section 682.220(f) describes allowable flexibilities for the States 
in funding evaluations in the use of funds from sources other than the 
State set-aside. Section 682.220(f)(1) permits States to use funds from 
any WIOA title I through IV core program to conduct evaluations, as 
determined through the coordinative processes associated with paragraph 
(b)(1). This paragraph was, for the sake of clarity, relocated from 
Sec.  682.220(a)(3) of the NPRM. Further, consistent with the decisions 
discussed above, the reference to ``other research'' was removed. The 
Department also revised the paragraph to clarify that States may use 
funds from any WIOA title I through IV core program (per WIOA sec. 
116(e)(1)); the NPRM had referred to only title II through IV core 
programs. This revision clarifies that, while States must conduct 
evaluations using State set-aside funds under WIOA secs. 129(b)(1)(A) 
and 134(a)(2)(B)(vi)), they may additionally use available funds from 
other core programs for such evaluations. This flexibility may be of 
particular interest to States planning evaluations that jointly study 
WIOA title I core program and other core program activities (a 
flexibility identified in Sec.  682.220(e)(1) above).
    Section 682.220(f)(2) permits States to use or combine funds, 
consistent with Federal and State law, regulation and guidance, from 
other public or private sources, to conduct evaluations relating to 
activities under the WIOA title I through IV core programs. Such 
projects may include those funded by the Department of Labor and other 
Federal agencies, among other sources. This section was initially 
located at Sec.  682.220(e) of the NPRM. In response to concerns 
expressed by commenters, the Department has revised this section 
slightly by adding language to clarify that these additional public or 
private funding sources can include Department of Labor or other 
Federal agencies' grants, cooperative agreements and contracts. The 
Department has also revised this section, consistent with the decisions 
discussed above, to remove the reference to ``research, and other 
demonstration projects.''
4. Subpart C--Rapid Response Activities
Introduction
    This subpart discusses the important role that rapid response plays 
in providing customer-focused services to both dislocated workers and 
employers, ensuring immediate access to affected workers to help them 
quickly re-enter the workforce. The regulations reflect the lessons 
learned from the innovations by, and best practices of, various rapid 
response programs around the country in planning for and meeting the 
challenges posed by events precipitating substantial increases in the 
number of unemployed individuals in States, regions, and local areas. 
The regulations provide a comprehensive framework for operating 
successful rapid response programs in a way that promotes innovation 
and maintains flexibility to enable States to manage successfully 
economic transitions.
    The Department is making a technical correction to Sec.  
682.300(a). Proposed Sec.  682.300(a) made reference to rapid response 
being discussed in Sec. Sec.  682.310 through 682.370. The reference to 
Sec.  682.310 is corrected to reflect Sec.  682.300. This technical 
correction makes it clear that the regulatory text in Sec.  682.300 
also is intended to be included in the description of rapid response.
    The remaining analysis that follows provides the Department's 
response to public comments received on the proposed part 682 
regulations. If a section is not addressed in the discussion below, it 
is because the public comments submitted in response to the NPRM did 
not substantively address that specific section and no changes have 
been made to the regulatory text. Further, the Department received a 
number of comments on this part that were outside the scope of the 
regulation and the Department offers no response. Lastly, the 
Department has made a number of non-substantive changes to correct 
grammatical and typographical errors to improve the readability and 
conform the document stylistically that are not discussed in the 
analysis below.
Section 682.300 What is rapid response, and what is its purpose?
    Section 682.300 describes rapid response, which promotes economic 
development and vitality and delivers critically important solutions to 
workers and businesses in transition.
    Comments: The Department received comments on other areas of part 
682, subpart C, relating directly to rapid response, (e.g., comments 
received on Sec.  682.330(i) regarding Trade Adjustment Assistance 
(TAA) and a comment regarding Worker Adjustment and Retraining 
Notification (WARN), both discussed later in this preamble). The nature 
of some of these comments led the Department to conclude that 
clarifying information is needed regarding the circumstances under 
which rapid response must be delivered as well as the term ``mass 
layoff.''
    Department Response: In order to provide this clarification, the 
Department made the following revisions to Sec.  682.300 and other 
sections of subpart C: (1) The Department made a correction to the 
regulatory text in several places by adding the word ``mass'' to the 
text in Sec. Sec.  682.330(j) and 682.350 to align the regulatory text 
with the statutory language in WIOA sec. 134(a)(2)(A)(i)(II), which 
refers to ``mass layoffs,'' whereas the proposed regulatory text only 
referred to ``layoffs''; (2) The Department has added new sections to 
the regulatory text to clarify the circumstances under which rapid 
response must be delivered (Sec.  682.302) and to reflect the 
definition of the term ``mass layoff'' for purposes of rapid response 
(Sec.  682.305); and (3) The text at Sec.  682.300(a)(1) has been 
revised to include a reference to new section, Sec.  682.302. As a 
result of the addition of Sec.  682.302, paragraphs (i) and (ii) of 
Sec.  682.300(a)(1) were deleted and incorporated into Sec.  682.302, 
since these items are more relevant to that section. The Department 
also notes that the text that was previously at Sec.  682.300(a)(1)(i) 
and incorporated into Sec.  682.302 at Sec.  682.302(a) has been 
revised. Where the previous text referred to ``announcement of a 
closure or a layoff,'' the new text refers to ``announcement or 
notification of a permanent closure, regardless of the number of 
workers affected.'' The Department has determined that these revisions 
more clearly relay its intent that Rapid Response services are required 
to be delivered in the case of a permanent closure and irrespective of 
whether information about the layoff is received via an announcement or 
other notification method. The revision also makes it clear that there 
is no numerical threshold for delivering rapid response in these 
instances. Rapid Response is required, regardless of the number of 
workers affected by the closure. Additional information regarding the 
circumstances under which rapid response must be delivered, are further 
explained in the preamble discussion in Sec.  682.302 below.
Section 682.302 Under what circumstances must rapid response services 
be delivered?
    This section explains the circumstances that trigger the delivery 
of rapid response.
    As previously noted in the preamble discussion on Sec.  682.300, 
the Department received comments that led the Department to add Sec.  
682.302 in order to clarify the circumstances under which rapid 
response must be delivered. Rapid Response must be provided when one or

[[Page 56196]]

more of the following circumstances occur:
    (a) Announcement or notification of a permanent closure:
    An announcement or notification of a permanent closure of a 
facility, store, enterprise, or plant, regardless of the number of 
workers affected;
    (b) Announcement or notification of a mass layoff as defined in 
Sec.  682.305 and discussed in that section of this preamble;
    (c) A mass job dislocation resulting from a disaster:
    Any natural or other disaster event, as defined by state or local 
emergency management policies, that results in job loss for a number of 
workers sufficient to meet a state's definition for mass layoff (see 
the discussion under number 4 below), or causing 50 or more workers to 
become dislocated. The Department encourages States to consider 
appropriate roles and responsibilities for rapid response activities 
following a natural or other disaster event and establish these roles 
and responsibilities as part of any emergency management plans that are 
developed;
    (d) The filing of a TAA petition:
    This is required in accordance with the requirement in sec. 
221(a)(2)(A) of the Trade Act, which requires that the Governor ensure 
that rapid response services are delivered to all workers who are 
covered by the petition for TAA. Additionally, please see the 
discussion below in response to comments on Sec.  682.330(i).
    Although the regulatory text now reflects the circumstances that 
require delivery of Rapid Response and the Final Rule preamble 
clarifies the circumstances under which rapid response must be 
provided, the Department is not suggesting that these are the only 
instances for which States and local workforce areas may provide rapid 
response. Instead, the Department strongly encourages States or their 
designated entities to deliver rapid response services to as many 
workers and companies as possible and to adopt policies that maximize 
the opportunities for rapid response services to be provided in a 
manner that best supports the businesses and workers in their 
communities.
Section 682.305 How does the Department define the term ``mass layoff'' 
for the purposes of rapid response?
    This section explains the definition of the term ``mass layoff'' 
for the purposes of rapid response.
    As previously noted in the preamble discussion on Sec.  682.300, 
the Department received comments that led the Department to define the 
term ``mass layoff'' for purposes of Rapid Response.
    A mass layoff will have occurred for the purposes of rapid response 
when at least one of the following conditions have been met:
     A mass layoff, as defined by the State; however, under no 
circumstances may a State's definition of mass layoff exceed a minimum 
threshold of 50 workers. For example, in its definition, the State 
cannot set the minimum threshold of laid off workers at 75, but it can 
be set to as few as 1. The definition may be based upon factors such as 
the size of the company that is impacted, the percentage of workers 
impacted by a layoff, the income level of the employees, and other 
relevant factors;
     Where a State has not defined a minimum threshold for mass 
layoff, any layoff affecting 50 or more workers; or,
     Upon receipt of a WARN Act notice (see discussion in Sec.  
682.320 below in response to a comment on this subpart), regardless of 
the number of workers affected by the layoff announced.
    Additionally, the Department notes that the definition of ``mass 
layoff'' discussed in this subpart and included in the new regulatory 
text at Sec.  682.305, differs from the definition used in part 687, 
National Dislocated Worker Grants, which also refers to the term ``mass 
layoff.'' For Rapid Response, the Department allows States more 
flexibility in defining mass layoffs. Rapid Response services encompass 
strategies and activities that States can provide to assist workers 
affected by layoffs and closures as described at Sec.  682.300 
(including information about available employment and training 
programs), and the Department encourages States to do so, regardless of 
the number of workers affected. In contrast, the DWG program is aimed 
at significant events that cannot reasonably be expected to be 
accommodated within the ongoing operations of the formula-funded 
dislocated worker program. Accordingly, for the purposes of the DWG 
program, the Department separately defines ``mass layoff'' as those 
affecting 50 or more workers from one employer in the same area. 
Additional details can be found in part 687.
Section 682.310 Who is responsible for carrying out rapid response 
activities?
    Section 682.310 clarifies that the State or an entity designated by 
the State is responsible for carrying out rapid response activities.
    The Department would like to clarify the intent in Sec.  
682.310(a). The regulatory text indicates that rapid response must be 
carried out by the State or by another entity designated by the State. 
The State or entity designated by the State must coordinate, 
communicate, and work with Local WDBs, CEOs, and other stakeholders as 
appropriate. The Department included ``other stakeholders'' because it 
has determined that the intent of the law is to ensure coordination 
with all relevant parties so rapid response services can be delivered 
effectively. Paragraph (b) of Sec.  682.310 reinforces the requirement 
that regardless of whether a State designates a non-State entity or 
entities to carry out rapid response, the State must establish and 
maintain a rapid response unit to oversee this program.
Section 682.320 What is layoff aversion, and what are appropriate 
layoff aversion strategies and activities?
    This section describes a comprehensive approach to layoff aversion, 
designed to prevent or minimize the duration of unemployment.
    Comments: The Department received a few comments requesting some 
additional changes be made to the text of the NPRM.
    One commenter requested an addition to Sec.  682.320(b)(2) to 
insert language that States should work with both business and labor 
organizations in those instances where a collective bargaining 
agreement is in place and consult with unions in cases where no such 
agreement exists. The commenter also requested that language on 
partnering or contracting with labor organizations be added to Sec.  
682.320(b)(7). Lastly, the commenter recommended an additional 
provision that included language about working with labor 
organizations.
    Department Response: Paragraph (b)(2) includes the following as an 
allowable layoff aversion activity: ``ongoing engagement, partnership, 
and relationship-building activities with businesses in the community, 
in order to create an environment for successful layoff aversion 
efforts and to enable the provision of assistance to dislocated workers 
in obtaining reemployment as soon as possible.'' Developing strong 
relationships with businesses is critical in layoff aversion, and the 
Department has concluded the proposed regulatory text best supports the 
intent of this paragraph by maintaining its sole focus on the business 
partnership, since businesses are often the most critical players in 
helping avert layoffs. However, developing relationships with unions is 
important as well, and language to this effect can be found at Sec.  
682.330(h) which requires that States

[[Page 56197]]

develop partnerships with a variety of organizations, including unions, 
as appropriate, in order to exchange information among these partners 
so that rapid response is provided as early as possible. Information 
relating to the customization of layoff aversion activities is 
specifically highlighted in the regulation requiring these 
partnerships. No changes were made to the regulatory text in response 
to these comments.
    Comments: One commenter suggested that allowable layoff aversion 
activities be organized into ``core'' and ``complementary'' activities. 
Core activities would be those that the commenter considers to be 
``true business disruption turn-around services,'' and complementary 
would be those ``that are important, but would not avert closure . . . 
in an emergency business disruption.''
    Department Response: The Department concluded that making 
distinctions between types of layoff aversion activities does not 
meaningfully impact the ability of States or local workforce areas to 
conduct layoff aversion activities, and operators of rapid response 
programs are best suited to determine how they organize or manage their 
layoff aversion activities in accordance with the requirements. As a 
result, the Department has determined that the proposed regulatory text 
permits State and local rapid response operators the flexibility to 
meet these requirements based on the specific needs of the companies 
and workers being served and the particular characteristics of each 
event. The categories suggested by the commenter imply that some 
activities listed are more important than others. The Department has 
concluded that any allowable activities that are designed to prevent or 
minimize the duration of unemployment are equally important and 
valuable, and encourages State and local rapid response teams to 
develop strategies that maximize the ability to deploy the appropriate 
layoff aversion solutions for the challenges they face. No changes were 
made to the regulatory text in response to this comment.
    Comments: A few commenters requested that the Department add 
language to Sec.  682.320 that requires States to describe their layoff 
aversion strategies in their Combined State Plan or Unified State Plan.
    Department Response: The Department does not agree that this 
language should be added to the regulatory text. Instead, the joint 
planning guidelines issued by the Secretaries of Labor and Education in 
March 2016 in TEGL No. 14-15, provides the overall content requirements 
for the WIOA Unified or Combined State Plans. The guidance is in TEGL 
No. 14-15, released March 2016, entitled ``Workforce Innovation and 
Opportunity Act (WIOA) Requirements for Unified and Combined State 
Plans'' and may be found at http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm. No changes were made to the regulatory 
text in response to these comments.
    Comments: One commenter requested that language regarding the WARN 
Act be included in Sec.  682.320 or Sec.  682.330 since WARN 
notification is an ``automatic trigger'' to conduct rapid response.
    Department Response: The Department agrees that the receipt of a 
WARN notice is a trigger for rapid response as indicated previously and 
is clarifying that the issuance of a WARN notification, regardless of 
the number of workers affected by the layoff announced, generates the 
requirement to deliver rapid response. WARN Act notice is required 
generally for plant closures and mass layoffs as defined in the WARN 
Act or under State laws expanding the scope of notice requirements, 
and, thus, a WARN layoff meets the Department's general requirements 
for mass layoffs and this is reflected in Sec.  682.305. Because WARN 
notification is covered in this section, no change is being made to the 
text at Sec.  682.320 or Sec.  682.330 to include WARN notice language.
    In Sec.  682.320(b)(4), incumbent worker training is identified as 
one of the allowable layoff aversion activities. Although no comments 
were received with regard to this text, the Department has determined 
that a correction to the regulatory text at Sec.  682.320(b)(4) to 
insert the word ``funding'' is needed in order to align the regulatory 
text with another section of the regulations (Sec.  680.800(b)) and to 
clarify that the Department intended rapid response funds to be used to 
pay for this training to help ensure workers have the skills needed to 
conduct the work of the employer and that businesses are able to build 
a skilled workforce commensurate to their needs. An additional 
correction is made to the regulatory text to make it clear that any 
incumbent worker training program conducted with rapid response funding 
must be tied to a broader layoff aversion strategy or must be intended 
for the purpose of preventing workers from losing their jobs. Incumbent 
worker training is a critical layoff aversion approach and our intent 
is to allow rapid response funds to pay for these activities in order 
to help ensure that rapid response meets its primary goal, which is to 
prevent or minimize the duration of unemployment.
    In order to demonstrate that the funds are being used as part of a 
layoff aversion strategy or activity, States must develop policies and 
procedures with respect to the use of rapid response funds for 
incumbent worker training, including the circumstances under which 
using rapid response funds for incumbent worker training would be 
applicable. As with all incumbent worker training funds, however, the 
use of rapid response resources to provide incumbent worker training as 
part of layoff aversion must be above and beyond the normal training 
offered by businesses to their employees. Rapid response resources must 
not supplant private funds in these situations.
Section 682.330 What rapid response activities are required?
    This section describes the required rapid response activities.
    Comments: One commenter requested that the introductory sentence in 
the regulatory text at Sec.  682.330 be changed from ``Rapid response 
activities must include'' to ``Rapid response services that must be 
made available include.'' The commenter explained that the reason for 
this request is due to the fact that the State cannot be compelled to 
deliver services if businesses refuse them.
    Department Response: The Department understands that businesses 
might not always be open to participating in the rapid response 
process; however, the proposed regulatory text reflects a requirement 
that was also in effect under WIA and shows the significant 
responsibility that States have to ensure that rapid response staff 
establish relationships and develop the skills needed to be able to 
work with businesses that will enable successful delivery of rapid 
response services. No changes in regulatory text were made in response 
to these comments. However, the Department recognizes that businesses 
are under no obligation to allow or help ensure the smooth delivery of 
rapid response services, and this can present a significant challenge 
for rapid response staff. Therefore, the Department determined that 
States which make all reasonable efforts to deliver services to 
affected workers, will be determined to have met the requirements of 
this section. However, the Department considers reasonable efforts to 
include more than just cursory attempts. For example, if a business 
refuses to allow services to be delivered on site or during business 
hours, rapid response teams

[[Page 56198]]

should make every effort to ensure worker access to rapid response 
services at off-site locations and during convenient hours. As 
previously noted, the requirement that Rapid Response services include 
services to businesses existed under WIA and during the administration 
of that law the Department never found a State who had made all 
reasonable efforts to deliver services to be out of compliance.
    Comments: One commenter remarked that the language at Sec.  
682.330(i) gives the impression that rapid response must be provided in 
parallel to Trade Adjustment Assistance (TAA), and this is often not 
the sequence. The commenter stated that these services are usually 
decoupled and that rapid response may occur prior to TAA application.
    Department Response: The provision at Sec.  682.330(i) is 
consistent with the requirement in the Trade Act and is included in 
this regulation to help ensure that this requirement is met. The 
regulatory text requires that, as appropriate, rapid response services 
be provided to trade-impacted workers for whom petitions have been 
filed. Rapid response operators, of course, may assist in coordinating 
with State TAA staff, local one-stop staff, employers, workers, or 
unions in filing a petition for TAA on behalf of a worker group 
negatively impacted by foreign trade. Thus, a delay between petition 
filing and petition certification will occur, and as petitions may be 
filed up to 1 year after a worker separation, there may be delays 
between a worker separation, a petition filing, and the petition 
certification. The regulatory text is not meant to imply that rapid 
response services may only be provided once the Trade petition has been 
filed. Like other workers impacted by layoffs, rapid response services 
may be provided upon notification of layoffs consistent with State or 
local procedure. A worker may receive rapid response services prior to 
the TAA petition filing and re-delivery of rapid response services may 
or may not be appropriate, depending on the individual circumstances or 
timing of the events. Additionally, the content of information provided 
to the worker group through rapid response may change due to the 
circumstances or timing of the event, or additional information, such 
as a TAA Orientation, may occur after petition certification. No 
changes were made to the regulatory text in response to this comment.
    Comments: The Department received several comments on the provision 
at Sec.  682.330(g)(3) regarding the tracking of information related to 
rapid response activities. The commenters expressed that it is 
difficult to track rapid response activities and funds separately.
    One commenter opined that this level of detail should not be 
included as a requirement.
    Department Response: The Department expects that its programs must 
be evidence-based, whenever possible, and rapid response is no 
different. Capturing and tracking performance and outcome data and 
information is critical for continuous improvement, for identifying 
promising practices, and for reporting, and this tracking is required 
to be done for rapid response activities, as appropriate. No changes 
were made to the regulatory text in response to this comment.
    Comments: Another commenter gave an example of the difficulty 
involved in tracking rapid response activities. The example provided 
was visiting with the employer to present affected workers with 
services. The commenter noted that unless there is a way to track the 
employees' participation, it would be difficult to determine the 
outcomes of that activity.
    Department Response: The Department does not specify what 
programmatic data and information States must capture and track; States 
are best suited to determine what they capture and track based upon the 
specific circumstances in each State. But, States are required to 
report to ETA some programmatic information (in accordance with Sec.  
682.360, further explained in the preamble) and report expenditure 
information, through the ETA 9130 form. Both of these requirements 
remain consistent from requirements under WIA. However, given the 
nature of some rapid response activities, the Department agrees that 
tracking outcome and performance data for all rapid response activities 
might prove difficult in some instances and the Department will 
provide, as necessary, guidance or technical assistance to support 
States with this requirement. No changes were made to the regulatory 
text in response to this comment.
    Regarding the requirement at Sec.  682.330(j) to provide additional 
assistance to local areas, although no comments were received about 
this text, the Department wishes to clarify the connection between WIOA 
and the regulatory text. WIOA refers to events ``that precipitate 
substantial increases in the number of unemployed individuals'' as the 
trigger for potential additional assistance. In the regulatory text, 
the Department has interpreted this to mean that additional assistance 
may be provided ``when such events exceed the capacity of the local 
area to respond with existing resources'' to address situations such as 
significant increases in unemployment that have resulted in, or have 
the potential to cause, a significant impact on the local area's 
resources. Therefore, additional assistance also may be used to support 
responses to major dislocation events, to provide layoff aversion 
efforts, and other allowable activities when these activities exceed 
the capacity of a local area's formula resources.
    Finally, the Department is making several corrections to the 
regulatory text that includes an edit to Sec.  682.330(e), to delete 
the reference to WIOA secs. 101(38) and 134(a)(2)(A). Because the 
paragraph is specifically referencing national dislocated worker 
grants, it now cites only to the part governing those grants, to be 
more clear. Also, an edit to Sec.  682.330(h) was made by inserting the 
word ``and'' between Sec.  682.330(h)(1) and (2) to reflect that both 
are expected benefits of developing and maintaining partnerships 
described at Sec.  682.330(h).
Section 682.360 What rapid response, layoff aversion, or other 
information will States be required to report to the Employment and 
Training Administration?
    Section 682.360 requires the reporting of rapid response 
information on the WIOA individual record.
    Comments: The Department received several comments on the issue of 
reporting. One commenter requested that States and locals be given the 
opportunity to respond to proposed data collection requirements before 
they are enacted.
    Department Response: The Department solicited feedback on proposed 
data collection requirements through the ICR process governed by the 
Paperwork Reduction Act (see 80 FR 43474 (July 22, 2015) and 80 FR 
52798 (Sept. 1, 2015)) to ensure that those impacted by collection 
requirements would have an opportunity to comment on them. Should 
additional performance data reporting elements be required for rapid 
response, the Department will work with States and local areas to 
ensure that reporting burdens are minimized while still meeting program 
reporting goals. Any additional reporting requirements would be subject 
to public comment through the ICR process. No changes were made to the 
regulatory text in response to this comment.
    Comments: Another commenter requested that the services required to 
be captured match the WIASRD.
    Department Response: Much of what was collected and reported under 
WIA

[[Page 56199]]

will continue under WIOA. States will be required to collect and report 
in accordance with sec. 116 of WIOA and 20 CFR part 677 (see Joint WIOA 
Final Rule). In order to provide clarity on the performance data 
reporting expectations for rapid response, the Department has revised 
the text at Sec.  682.360. The former text required States to report 
the receipt of rapid response services of individuals enrolled as 
dislocated workers on the WIOA individual record,'' whereas the text in 
the Final Rule clarifies that States are required to report the receipt 
of rapid response services for those individuals who have an existing 
WIOA individual record or for whom a WIOA individual record is created 
under programs that report through this mechanism. The new text also 
clarifies the population to be reported by revising the text from 
``individuals enrolled as dislocated workers on the WIOA individual 
record'' to ``individuals served under programs reporting through the 
WIOA individual record.'' These changes account for and align with the 
performance definitions for participant and reportable individual 
located at 20 CFR 677.150(a) and (b), provide consistency with the 
language on the reports, and also place a parameter to more clearly 
align with those programs that are required to fulfill reporting 
requirements under 20 CFR part 677 (see Joint WIOA Final Rule). The 
Department notes that Sec.  682.360 does not independently require the 
creation of a WIOA individual record for individuals on account of 
their receipt of rapid response, layoff aversion, or other services 
under subpart C of this part; rather, Sec.  682.360 requires that where 
a WIOA individual record exists for an individual served under programs 
reporting through the WIOA individual record, States must also report 
information regarding the receipt of services under subpart C. The 
Department has also added paragraph (b) to Sec.  682.360, which relays 
that States are required to comply with these reporting requirements, 
as explained in the Department's guidance. The DOL Performance ICR 
contains further specifications regarding the collection and reporting 
of receipt of services under subpart C of this part.
    Comments: A few commenters noted that there are difficulties 
involved with reporting rapid response activities through the WIOA 
individual record because rapid response services are not necessarily 
individualized. The commenters stated that the rapid response services 
are primarily employer and worksite based and that this information is 
collected retroactively at best and not likely to produce an accurate 
report.
    Department Response: While the Department understands the 
challenges of using the individual record to report data on rapid 
response activities, which are often group-based rather than 
individualized, there are various methods by which rapid response 
operators may identify and report on individuals who receive rapid 
response services. The Department will provide States with technical 
assistance on this topic as needed. Additionally, the Department 
recognizes the challenges associated with retroactive collection of 
information from employers or worksites on rapid response activities 
and services; the importance of valid and reliable collection is an 
area that was established as a priority under WIA and continues to be 
under WIOA. The Department will continue to work across programs to 
identify best practices and effective means of collecting data and 
ensuring valid, accurate, and reliable reporting. No changes were made 
to the regulatory text in response to these comments.
Section 682.370 What are the statewide activities for which rapid 
response funds remaining unobligated after the first program year for 
which the funds were allotted may be used by the State?
    Section 682.370 describes the statewide activities for which rapid 
response funds that are unobligated after the first program year for 
which the funds were allotted may be used.
    Comments: The Department received a few questions from a commenter 
regarding this section. The commenter asked whether the term 
``unspent'' (used in Sec.  682.370 of the NPRM) means unobligated or 
unexpended.
    Department Response: The Department agrees that using the term 
unspent was confusing and, as a result, has changed the regulatory text 
to use the term ``unobligated'' to reflect the provision in WIOA at 
sec. 134(a)(2)(A)(ii) in order to avoid confusion. The regulatory text 
was further changed to more closely align with the statutory text, 
providing a clearer explanation that the Governor may use these 
unobligated funds to carry out statewide activities as described in 
both Sec. Sec.  682.200 and 682.210. For consistency with the WIOA 
provision, the section header has also been changed and now reads 
``What are the statewide activities for which rapid response funds 
remaining unobligated after the first program year for which the funds 
were allotted may be used by the State?''
    Comments: The commenter also requested to know whether the 
provision at Sec.  682.370 required governors to use unobligated rapid 
response funds for statewide activities, and whether statewide 
activities are only for ``15 percent funds.''
    Department Response: To address the first question, the use of 
unobligated funds by the Governor for statewide activities is allowed, 
but is not a requirement. The Governor is not required to use the 
unobligated rapid response funds to carry out statewide activities, but 
has the option of doing so. In response to the commenter's second 
comment, the Final Rule text clarifies that the statewide activities 
for which the funds may be used include the required statewide 
activities described at Sec.  682.200 and the allowable statewide 
activities described at Sec.  682.210, which are often referred to 
informally as the 15 percent funds.

G. Part 683--Administrative Provisions Under Title I of the Workforce 
Innovation and Opportunity Act

    This part establishes the administrative provisions for the 
programs authorized under title I of WIOA. Some of the provisions are 
also applicable to grants provided under the Wagner-Peyser Act, as 
indicated in specific sections of this part. The remaining Wagner-
Peyser Act administrative rules are located in 20 CFR part 658. The 
Department notes that administrative provisions for Job Corps (subtitle 
C of title I of WIOA) contracts are addressed separately in 20 CFR part 
686. The analysis that follows provides the Department's response to 
public comments received on the proposed regulations for Administrative 
Provisions Under Title I of WIOA. If a section is not addressed in the 
discussion below, it is because the public comments submitted in 
response to the NPRM did not substantively address that specific 
section and no changes have been made to the regulatory text. Further, 
the Department received a number of comments on this part that were 
outside the scope of the regulation and the Department offers no 
response. The Department has made a number of non-substantive changes 
to correct grammatical and typographical errors to improve the 
readability and conform the document stylistically that are not 
discussed in the analysis below. Lastly, the terms ``performance 
measure'' and ``performance accountability measure'' have been replaced 
throughout with ``performance indicator'' and references to the

[[Page 56200]]

implementing regulations for WIOA sec. 188 at 29 CFR part 37 have been 
updated to refer to 29 CFR part 38 per the Department's recent 
nondiscrimination rulemaking.
1. Subpart A--Funding and Closeout
Section 683.100 When do Workforce Innovation and Opportunity Act grant 
funds become available for obligation?
    Section 683.100 describes the statutory requirements for the 
Department's release of formula funds under title I of WIOA and the 
Wagner-Peyser Act.
    Comments: A commenter requested clarification on whether there is 
consideration for agencies that are not one-stop operators to operate 
after June 30, 2016, because their agency received ``WIA'' (Workforce 
Investment Act) funds from the State and were informed that they can no 
longer perform direct services.
    Department Response: It is unclear from the comment to what 
agencies and what services the commenter is referring. Because the 
Department is unable to determine the meaning of the comment, the 
Department has adopted the provision as proposed. However, for 
additional information that may be useful, the commenter should see 
WIOA sec. 107(d)(10), which provides the local Workforce Development 
Boards' (WDBs) responsibilities in selecting operators and providers. 
WIOA sec. 107(d)(10) is further discussed in 20 CFR part 679. 
Additionally, WIOA sec. 122 details requirements for identifying 
eligible training providers. This section is further addressed in 20 
CFR part 680. Finally, the Department provided guidance and 
instructions on the transition of participants, funds, performance 
reports, grants, and subrecipient contracts under title I of the 
Workforce Investment Act of 1998 and under the Wagner-Peyser Act to 
WIOA. This guidance can be found at TEGL No. 38-14 (``Operational 
Guidance to Support the Orderly Transition of Workforce Investment Act 
Participants, Funds, and Subrecipient Contracts to the Workforce 
Innovation and Opportunity Act'') issued on June 8, 2015; 
www.doleta.gov/WIOA/.
    The Department also received comments concerning the required 
obligation rate of WIOA funds and the reallotment process. The 
Department addresses these comments in Sec.  683.135.
    No changes were made to regulatory text in response to these 
comments.
Section 683.105 What award document authorizes the expenditure of funds 
under title I of the Workforce Innovation and Opportunity Act and the 
Wagner-Peyser Act?
    This section recognizes the use of the three funding instruments 
that conform with the Uniform Guidance: Grant agreements, cooperative 
agreements, and contracts.
    Comments: A few commenters requested the Department provide 
clarification to paragraph (e)(3) of this part regarding the length of 
time allowed for each award for research, studies, or multi-State 
projects under WIOA sec. 169.
    Department Response: The Department added additional language in 
(e)(3) to clarify the timeline and application of competitive 
reevaluation. Awards made under WIOA sec. 169 that do not fall under 
the exceptions at paragraph (e)(3)(ii) or (iii) will require a 
competitive reevaluation after a 3 year period. This practice is 
generally consistent with the practices at other major Federal 
grantmaking agencies. Through this competitive reevaluation, the 
Department will ensure that the awardee would be competitive should the 
award be recompeted. The actual details of the competitive reevaluation 
process may vary by award. However, competitive reevaluations generally 
will consist of an examination of whether the awardee is meeting its 
performance goals and financial reporting obligations. The Department 
will not require competitive reevaluation for the types of awards 
described in paragraphs (e)(3)(ii) and (iii) because pursuant to the 
provisions of WIOA sec. 169(b)(6)(A), awards that meet these 
requirements do not need to be competitively evaluated when initially 
awarded. However, the regulation includes criteria that must be met for 
these types of awards to avoid the competitive reevaluation 
requirement. The Department notes that there will be a transition 
period while the Department puts in place the processes and procedures 
for competitive reevaluation described in this Final Rule.
    Additionally, the Department clarified where the language in Sec.  
683.105 applies to grants, contracts, and cooperative agreements.
    Comments: A commenter requested the Department provide 
clarification on whether local areas can utilize only funding to serve 
customers in their jurisdictions or if the State can set policy to 
allow a broader use of funds.
    Department Response: WIOA does not prohibit or require local 
residency for an individual to receive services from a local area. 
Instead, whether a local area can serve individuals living outside 
their local area boundaries depends on State law and policy. Because 
the comment does not request a change to the language, no changes were 
made in the regulatory text.
    Aside from the changes discussed above, the Final Rule adopts the 
remainder of the section as proposed with a technical edit to Sec.  
683.105(e)(4) to correct language that was inadvertently retained from 
the WIA regulations and make this regulation more reflective of the 
statutory language at sec. 169(b)(6)(D) of WIOA, and additional 
technical edits for clarity to Sec.  683.105(f).
Section 683.110 What is the period of performance of Workforce 
Innovation and Opportunity Act title I and Wagner-Peyser Act funds?
    This section describes the period of performance for different 
types of WIOA title I and Wagner-Peyser Act grant awards.
    Comments: The Department received several comments requesting 
clarification concerning Sec.  683.110. One commenter requested 
clarification regarding the period of time in which funds are available 
to carry out a Pay-for-Performance contract strategy.
    Department Response: As provided in WIOA sec. 189(g)(2)(D) and 
discussed in Sec.  683.530, funds used for a WIOA Pay-for-Performance 
contract strategy are available until expended. Because WIOA sec. 
189(g)(2)(D) and Sec.  683.530 provide the period of availability for 
funds used for WIOA Pay-for-Performance contract strategies, no changes 
were made in the regulatory text. The Department expects to provide 
future guidance on carrying out WIOA Pay-for-Performance contract 
strategies.
    Comments: Several commenters discussed the applicability of Sec.  
683.110 to the National Farmworker Jobs Program (NFJP) grant 
recipients. Specifically the commenters recommended that the Department 
be consistent across programs when considering modifications to allow 
carryover of funding and not add restrictions for National Farmworker 
Jobs Program (NFJP) grant recipients. One commenter recommended that 
NFJP grant recipients have the same performance standard stringency as 
others and be offered in Sec.  683.110(e) the carryover provisions that 
approximate available expenditure allowances by States in Sec.  
683.110(b), and that NFJP have the same flexibility as the Governor to 
adjust on-the-job training

[[Page 56201]]

(OJT) employer reimbursement levels from 50 to 75 percent.
    Department Response: The Department addresses the issues concerning 
the NFJP program in the preamble discussion in part 685.
    Comments: The Department also received comments concerning the 
applicability of Sec.  683.110 for title II programs and State Adult 
Education and Family Literacy Act (AEFLA) agencies.
    Department Response: The provisions found in Sec.  683.110 are 
applicable to funds authorized under title I of WIOA and the Wagner-
Peyser Act. The Department refers the commenters to the Department of 
Education's regulations for Programs and Activities Authorized by the 
Adult Education and Family Literacy Act at 34 CFR parts 462 and 463.for 
additional information regarding AAFLA and title II programs. Because 
Sec.  683.110 only applies to WIOA title I and Wagner-Peyser Act funds, 
this DOL WIOA Final Rule adopts the provision as proposed.
    The Department received no comments on the remaining provisions of 
Sec.  683.110, and the Final Rule adopts the section as proposed with 
technical corrections. The Department has corrected the reference in 
Sec.  683.110(c)(1)(ii) so that it refers to the provision governing 
the availability of funds used for WIOA Pay-for-Performance contract 
strategies, and it clarifies that this provision is referring 
specifically to WIOA Pay-for-Performance contract strategies, as 
defined in sec. 3 of WIOA and in subpart E of this part. The Department 
notes that the term ``used'' in Sec.  683.110(c)(1)(ii) refers to the 
reservation and use of funds mentioned in WIOA secs. 129(c)(1)(D) and 
134(d)(1)(A)(ii). Additionally, the Department has corrected Sec.  
683.110(f) so that it refers to award documents instead of terms and 
conditions of award.
Section 683.120 How are Workforce Innovation and Opportunity Act title 
I formula funds allocated to local areas?
    This section describes the timeframe and formula factors a Governor 
must employ when allocating fund to local areas under secs.128 and 133. 
It also specifies the steps a Governor must take when issuing 
allocations, including consulting with Local WDBs and elected official 
prior to issuing the allocation.
    Comments: The Department received a comment in support of this 
section. The Department also received several comments concerning the 
applicability of Sec.  683.120 to title II programs and State AEFLA 
agencies.
    Department Response: The provisions found in Sec.  683.120 are 
applicable to funds authorized under title I of WIOA and the Wagner-
Peyser Act. The Department refers the commenters to 34 CFR parts 462 
and 463 for additional information regarding AEFLA and title II 
programs. Because Sec.  683.120 does not apply to title II and AEFLA 
agencies, the Final Rule adopts the provision as proposed, with a 
technical amendment to Sec.  683.120(a) to correct list format and an 
additional technical amendment to Sec.  683.120(b) clarifying the 
application of WIOA secs. 129(b) and 134(a).
Section 683.125 What minimum funding provisions apply to Workforce 
Innovation and Opportunity Act adult, dislocated worker, and youth 
allocations?
    This section addresses the minimum funding thresholds for States 
funded under title I, subtitle B of WIOA.
    Comments: The Department received several comments regarding Sec.  
683.125. A few comments raised concerns about the application of a 
fiscal year basis versus a program year basis for the minimum funding 
provisions. Another comment raised a concern on the application of the 
minimum funding thresholds in local areas that have been impacted by 
geographical boundary changes.
    Two commenters stated that Sec.  683.125(a) should take effect Oct. 
1, 2015, for fiscal year (FY) 2016. These commenters stated that the 
proposed regulations are silent on whether Sec.  683.125(a) refers to 
program year (PY) or FY, but that the Department through TEGL No. 29-14 
(``Workforce Innovation and Opportunity Act (WIOA) Adult, Dislocated 
Worker and Youth Activities Program Allotments for Program Year (PY) 
2015; Final PY 2015 Allotments for the Wagner-Peyser Act Employment 
Service (ES) Program Allotments; and Workforce Information Grants to 
States Allotments for PY 2015'') has specified that this section refers 
to PY 2016.
    Department Response: The Department's fiscal year monies are 
distributed to grant recipients on a program year basis, as described 
in Sec. Sec.  683.100 and 683.125. The youth and adult minimum funding 
provisions existed under WIA. The minimum funding provisions under the 
WIOA statute go into effect when the FY 2016 funds become available on 
July 1, 2016, consistent with TEGL No. 29-14 (see http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm). However, 
the Department agrees that the language proposed for Sec.  683.125 was 
confusing and has made changes to clarify the relationship between the 
fiscal year appropriations and the program year availability in 
relation to the minimum funding provisions.
    Comments: A commenter also recommended that local areas that change 
boundaries should still be eligible for the minimum percentage 
provisions for the adult, dislocated worker, and youth programs.
    Department Response: The Department agrees that this was a gap in 
the language of the proposed regulation and has added Sec.  683.125(c) 
to address this issue. States may use WIOA minimum funding procedures 
even where the geographical boundaries of some or all local areas are 
different from the previous allocation. For example, this can be done 
for the PY 2016 WIOA allotment by (1) taking the amount allocated to 
WIOA local areas; (2) calculating the amount each local area would have 
received using the PY 2015 and PY 2015 WIA allocations (WIA proxy 
amounts); and (3) calculating 90 percent of the average WIA proxy 
amounts for each local area. Under either the permitted WIA hold 
harmless or the WIOA minimum funding (hold harmless) provision, the 
amount needed to provide the increased allocation(s) to the affected 
local areas is to be obtained by ratably reducing the allocations to 
the other local areas.
Section 683.130 Does a Local Workforce Development Board have the 
authority to transfer funds between the adult employment and training 
activities allocation and the dislocated worker employment and training 
activities allocation?
    This section provides flexibility to local WDBs to provide services 
in the areas of greatest need by allowing fund transfers of up to 100 
percent of a program year allocation between the local adult and the 
local dislocated worker allocations.
    Comments: The Department received several comments regarding Sec.  
683.130. Some commenters were concerned with the Governor's approval of 
the transfer request and whether the Governor would complete the 
request timely or would unreasonably deny a request.
    Department Response: The Department agrees that additional language 
ensuring that requests are timely and reasonably evaluated would be 
beneficial. Consequently, the Department has adopted new regulatory 
text for Sec.  683.130 to address the comments regarding the grounds or 
criteria a Governor must consider when approving or denying a request 
for transfer. The modified text requires the Governor to establish 
written policy that

[[Page 56202]]

provides the criteria the Governor will utilize for approving a request 
to transfer adult or dislocated worker employment and training activity 
funds.
    Comments: Another commenter expressed concern that the flexibility 
in Sec.  683.130 could lead to local areas transferring 100 percent of 
funding away from title I adult programs and could result in drastic 
reduction in services to those who need them most. This commenter 
recommended a waiver requirement as a prerequisite to gaining funding 
transfer flexibility between adult and dislocated worker programs.
    Department Response: The Department considered the comments and 
determined that a transfer of 100 percent of funds out of one program 
to another may drastically reduce services to that program. This 
recommendation is inconsistent with the statutory language for two 
reasons. First, sec. 133(b)(4) of WIOA explicitly states that 100 
percent of the allocated adult and dislocated funds can be transferred. 
Second, WIOA states that the Governor is responsible for approving 
transfers between the adult and dislocated worker funds, which makes an 
additional waiver requirement inappropriate. With the exception of the 
previous paragraph, the regulatory text is unchanged.
    Comments: Other commenters expressed concern regarding the 
performance of local areas and sought clarification whether performance 
indicator targets would be rescinded if 100 percent of funds were 
transferred from one program to the other.
    Department Response: As addressed in 20 CFR part 677 Performance 
Accountability (see Joint WIOA Final Rule), the negotiated levels of 
performance for the primary indicators remain in effect and a local 
area must consider how it will meet adjusted levels of performance for 
the primary indicators before requesting such transfer. If the local 
area transfers 100 percent of a certain type of funding, it would still 
be responsible for meeting the adjusted levels of performance for any 
participants that it is required to serve. The Department also 
reiterates that when funds are transferred from one program to another, 
the transferred funds adopt the identity of the new fund source and are 
bound by all of the requirements of that source. The concerns of this 
commenter are addressed in part 680. No change was made in the 
regulatory text for part 683 in response to these comments.
Section 683.135 What reallotment procedures does the Secretary use?
    This section implements secs. 127(c) and 132(c) of WIOA, and 
explains the Department's process for recapture and reallotment of 
formula funds awarded to the States under title I.
    Comments: The Department received several comments requesting 
general clarification regarding the Department's procedure for 
recapturing and realloting WIOA funds. Additionally, the Department 
also received comments asking whether rapid response funds are 
considered obligated and whether the amounts allocated to the local 
areas must be reported as obligated on the ETA 9130 form.
    Department Response: Upon reviewing the proposed language, the 
Department concluded that the proposed language was ambiguous because 
it (1) implied that certain interagency transfers and amounts allocated 
by the States to the local areas under secs. 128(b) and 133(b) of WIOA 
were not obligations under 2 CFR 200.71; and (2) inaccurately stated 
that certain obligations needed to be reported on the DOL financial 
form. Consequently, the Department has revised the language at Sec.  
683.135(c).
    The Department has simplified the language at Sec.  683.135(c) so 
that it simply states that the ``term `obligation' is defined at 2 CFR 
200.71.'' This change was made because comments revealed that the 
specific inclusion of the items in paragraphs (c)(1) and (2) of the 
NPRM led readers to question why other obligations were not included in 
this list. This change is meant to clarify that everything that 
qualifies as an obligation under 2 CFR 200.71, including rapid response 
obligations under sec. 133(a)(2) of WIOA and the transfers and 
allocations referenced in paragraphs (c)(1) and (2) of the proposed 
regulation, should be counted for the purposes of the reallotment 
calculation in Sec.  683.135(a).
    In addition to simplifying Sec.  683.135(c), the Department added 
Sec.  683.135(d), which states that obligations must be reported on 
Department financial forms unless otherwise noted in guidance. 
Evaluation of the proposed language done in response to questions about 
whether amounts allocated to local areas must be included on the ETA 
9130 form revealed that not all obligations for the purposes of 
reallotment calculation in Sec.  683.135(a) need to be reported on the 
9130 form. The Department has clarified the regulation so that it says 
all obligations must be reported on Department financial forms unless 
subsequent guidance from the Department includes instructions to the 
contrary.
Section 683.140 What reallocation procedures must the Governors use?
    This section describes procedures for reallocating youth, adult, 
and dislocated worker funds among local areas in the State, in 
accordance with secs. 128(c) and 133(c) of WIOA.
    Comments: The Department received a comment requesting 
clarification on who makes the funding reallocation decision and what 
is the maximum time frame for decision-making.
    Department Response: WIOA secs. 128(c) and 133(c) provides that the 
Governor, after consultation with the State WDB, may reallocate to 
eligible local areas youth, adult, and dislocated worker funds. Section 
683.140(a) mirrors the statutory language and provides that the 
Governor may reallocate local funds after consulting with the State 
WDB. Because WIOA identifies the reallocation decision-maker as the 
Governor, no change was made in the regulatory text in response to this 
comment.
    Section 683.140(b) and (c) provide that the reallocation 
determination occurs for the prior program year after an evaluation of 
all local areas' obligation rates has occurred. However, there is no 
required timeframe for a Governor to make a decision as the regulation 
maintains the Governor's flexibility and responsibility to make 
reallocation decisions regarding the WIOA grant funds. No change was 
made to the regulatory text.
Section 683.145 What merit review and risk assessment does the 
Department conduct for Federal financial assistance awards made under 
Workforce Innovation and Opportunity Act title I, subtitle D?
    This section includes requirements mandated by the Uniform 
Guidance.
    Comments: The Department received several comments requesting a 
clarification of ``merit review.''
    Department Response: Section 683.145(a) includes the requirements 
mandated by the Uniform Guidance at 2 CFR 200.204 that the Department 
utilize a merit review process when awarding competitive awards. Title 
2 CFR 200.204 states that the process for merit review will be 
described in the funding opportunity announcement. The Department has 
determined that because the process necessary for ensuring a fair merit 
review may vary by competition, additional description of ``merit 
review'' is not appropriate for this regulation. No change was made to

[[Page 56203]]

the regulatory text in response to these comments.
Section 683.150 What closeout requirements apply to grants funded with 
Workforce Innovation and Opportunity Act title I and Wagner-Peyser Act 
funds?
    This section addresses closeout, which is an important component to 
complete the grant lifecycle. This section paraphrases the Uniform 
Administrative requirement sections on closeout and post-closeout 
adjustments (2 CFR 200.343 through 200.344).
    Comments: The Department received a comment requesting 
clarification of the period of time that the Federal government can 
disallow costs and for which the grant recipient remains liable for a 
Federal debt after grant closeout.
    Department Response: Because WIOA of limitations for collection of 
a Federal debt depends on many variables not appropriate to regulate, 
no changes were made to the regulatory text in response to this 
comment.
2. Subpart B--Administrative Rules, Costs, and Limitations
Section 683.200 What general fiscal and administrative rules apply to 
the use of Workforce Innovation and Opportunity Act title I and Wagner-
Peyser Act funds?
    This section describes the application of Uniform Guidance and the 
corresponding exceptions authorized by the Department at 2 CFR part 
2900 for all grant recipients and sub recipients, including for-profit 
organizations and foreign entities.
    Comments: One commenter requested that an appeal process should be 
required when the State (pass-through entity) implements requirements 
outside the Federal guidelines in 2 CFR part 200.
    Department Response: The Department has decided not to require an 
appeals process when pass-through entities implement requirements 
outside the Federal guidelines in the Uniform Guidance at 2 CFR part 
200. This is consistent with 2 CFR part 200, which provides necessary 
flexibility to States by extending special considerations when 
administering grant funds. The Department determined that requiring an 
appeals process when a pass-through entity implements requirements not 
included in 2 CFR part 200 would be unduly burdensome and counter to 
the effective administration of the grants. The commenter should note 
that Sec.  683.600 offers protections for subrecipients if a 
requirement imposed by a pass-through entity violates the requirements 
of title I of WIOA. Consequently, because the Department has determined 
that the proposed appeals process would not support the effective 
administration of the grants and adequate protections are already in 
place, no change was made in the regulatory text.
    Comments: One commenter requested an explanation of the addition 
method in Sec.  683.200(c)(6).
    Department Response: The Department has determined that the 
description in Sec.  683.200(c)(6) and reference to 2 CFR 200.307 
adequately describes the addition method for the purposes of the 
regulation and that any additional description of the method would be 
better suited to guidance and technical assistance. No change was made 
to the regulatory text in response to comments.
    Comments: One commenter requested clarification on how a State 
should determine compliance with the Buy American provisions. The same 
commenter also asked whether State oversight and monitoring 
responsibilities under Sec.  683.200 include programmatic monitoring of 
local areas or simply financial monitoring and oversight, and if the 
latter, where programmatic monitoring expenses should be charged. 
Several commenters asked for clarification regarding the applicability 
of the section to title II funds, specifically to the requirement to 
use the addition method and the Buy American Act.
    Department Response: Upon reviewing the commenter's request, the 
Department determined that the proposed language about ``American-made 
equipment and products'' was confusing. Consequently, the Department 
replaced this language with a reference to the relevant section of the 
Buy American Act. Additionally, the Department directs the commenter to 
Sec.  683.410 of this part which addresses the issue concerning the 
classification of costs as either programmatic or administrative for 
purposes of WIOA. Section 683.200 describes the application of the 
Uniform Guidance and the corresponding exceptions authorized by the 
Department at 2 CFR part 2900 for all title I WIOA and Wagner-Peyser 
Act grant recipients and subrecipients, including for-profit 
organizations and foreign entities. The Department also directs the 
commenter to Sec.  683.215(b)(2), which provides that monitoring and 
oversight activities related to administrative functions are defined as 
administrative. Because these issues are addressed elsewhere, no change 
was made to the regulatory text in response to this comment.
    The Buy-American requirements apply to funds made available under 
title I, title II, or under the Wagner-Peyser Act. However, Sec.  
683.200(f) only applies to funds authorized under title I of WIOA and 
the Wagner-Peyser Act; no change was made in the regulatory text in 
response to this comment.
Section 683.205 What administrative cost limitations apply to Workforce 
Innovation and Opportunity Act title I grants?
    This section specifies the statutory administrative cost 
limitations of title I grant funds.
    Comments: The Department received a comment requesting 
clarification on whether it is allowable to combine the 10 percent 
administrative cost limitation in Sec.  683.205 for all three WIOA 
programs into one pool as long as the administrative costs for all 
three combined do not exceed the pooled amount.
    Department Response: Section 683.205(a)(2) mirrors the language in 
WIOA secs. 128(b)(4) and 134(a)(3) and provides flexibility to States 
and local areas by allowing administrative funds from the three WIOA 
formula funding streams awarded under title I, subtitle B of WIOA to be 
pooled and used together for administrative costs for any of the three 
programs at the State and locals' discretion. The statutory and 
regulatory language clearly state that local areas may pool funds for 
administrative costs. No changes were made to regulatory text in 
response to this comment.
Section 683.215 What Workforce Innovation and Opportunity Act title I 
functions and activities constitute the costs of administration subject 
to the administrative cost limitation?
    This section defines the functions and activities that constitute 
administration in accordance with sec. 3(1) of WIOA, and therefore are 
subject to the administrative cost limitations discussed in Sec.  
683.205.
    Comments: In issuing the NPRM, the Department requested comments on 
whether the Department should issue the proposed administrative costs 
list as a regulation or as a general description or guidance, whether 
the list should be stable or subject to periodic review, and whether 
indirect costs should be programmatic or administrative.
    The Department received numerous and varied responses regarding its 
solicitation. The majority of the comments received concerned whether 
the regulation should use a static list to define administrative costs 
or whether the regulation should include a more flexible definition, 
with a majority of

[[Page 56204]]

the comments stating a preference to maintain a static list to define 
administrative costs.
    Department Response: The Department reviewed and analyzed the 
comments received and decided to maintain a list of administrative 
functions in a defined, succinct list instead of adopting a more 
flexible definition because it agreed with commenters that it ensures 
consistency and clarity in the treatment of the expenditures for WIOA 
title I grant funded activities. No change was made in the regulatory 
text in response these comments.
    Comments: Additionally, commenters also responded to the inquiry as 
to whether the Department should treat indirect costs as administrative 
or programmatic costs with many commenters suggesting that costs should 
be charged to administration or program depending on activity and 
function.
    Department Response: After reviewing the comments, the Department 
concluded that charging of direct and indirect costs as administrative 
or programmatic depending on the function is consistent with statute. 
This results in an accurate classification of costs and is consistent 
with the Uniform Guidance at 2 CFR part 200. Consequently, indirect 
costs will be charged as administrative or program costs depending on 
activity and function. The proposed language was consistent with this 
conclusion. No changes were made to the regulatory text in response to 
these comments.
    Comments: Several commenters suggested that the language in Sec.  
683.215(a) was an expansion from WIA and should not apply to one-stop 
operators.
    Department Response: Section 683.215(a) provides that 
administrative costs are those expenditures incurred by State and Local 
Development WDBs, Regions, direct grant recipients, local grant 
subrecipients, local fiscal agents, and one-stop operators for the 
overall management of the WIOA system and are listed among the 
functions enumerated in the list in Sec.  683.215(b). This definition 
is substantially the same as it was in WIA. The entities listed in 
Sec.  683.215(a) are the same entities, with the exception of Regions, 
that are explicitly included in the definition of administrative costs 
in sec. 3(1) of WIOA. WIOA clearly requires the inclusion of one-stop 
operators, no change was made in the regulatory text in response to 
these comments.
    Comments: Commenters suggested deleting certain language in Sec.  
683.215(b)(4) related to which travel costs should be considered 
administrative costs. Commenters suggested that the Department delete 
the language referring to overall management of the WIOA system as it 
was vague and potentially required certain program costs to be counted 
as administrative costs.
    Department Response: Section 683.125(b)(4) defined administrative 
travel costs as travel costs ``incurred for official business in 
carrying out administrative activities or the overall management of the 
WIOA system.'' The Department reviewed the section and determined that 
it agreed with the commenters. Consequently, the Department modified 
the language in Sec.  683.215(b)(4). Two changes have also been made to 
Sec.  683.215(c) from the proposed language.
    Comments: The Department received a comment requesting a change to 
Sec.  683.215(c)(2) so that grant recipients are not required to track 
personnel expenditures based on documented distributions of actual time 
worked or other equitable cost allocation methods because the language 
is inconsistent with the Uniform Guidance in 2 CFR part 200.
    Department Response: The Department agreed with the commenter and 
removed the language from the Final Rule.
    Comments: The Department received several comments concerning Sec.  
683.215(c)(4), asking for clarification as to which subgrantees are 
responsible for tracking administrative costs and are subject to 
administrative cost limitations; specifically, some commenters were 
inquiring about the treatment of local grant subrecipients.
    Department Response: The Department determined that the proposed 
language was ambiguous about how costs incurred for the functions and 
activities of local grant subrecipients, as identified in Sec.  
683.215(a), should be categorized. Consequently, the Department 
modified Sec.  683.215(c)(4) and added language to clarify how the 
administrative costs of subrecipients listed in Sec.  683.215(a) should 
be categorized. The added language states that costs of contractors and 
subrecipients that meet the requirements of (c)(4), other than 
subrecipients listed in (a), are program costs. The addition of the 
language in the Final Rule will ensure that the intent of WIOA for the 
entities responsible for the management of the public workforce system 
to track their administrative expenses is clear. The change also 
reflects that incidental administrative costs incurred by a contractor 
or subgrantee whose intended purpose is to provide identifiable program 
services do not have to be identified, broken out from other costs 
incurred under the contract or subaward, and tracked against the 
administrative cost limitation. Finally, this change does not alter the 
requirement provided in Sec.  683.215(c)(1) that costs incurred under 
contracts whose intended purpose is administrative must be charged to 
the administrative cost category.
    Comments: The Department received a request to clarify the 
guidelines on infrastructure funding. The Department also received 
several comments concerning the applicability of Sec.  683.215 to title 
II programs and State AEFLA agencies.
    Department Response: The Department notes that infrastructure 
funding is discussed in 20 CFR part 678 (see Joint WIOA Final Rule). 
Because another part governs infrastructure funding, no change was made 
to the regulatory text. The provisions found in Sec.  683.215 are 
applicable to funds authorized under title I of WIOA. The Department 
refers the commenters to 34 CFR part 462 and 463 for additional 
information regarding AEFLA and title II programs. No changes were made 
to the regulatory text in response to this comment.
Section 683.220 What are the internal control requirements for 
recipients and subrecipients of Workforce Innovation and Opportunity 
Act title I and Wagner-Peyser Act funds?
    This section describes the internal controls that recipients and 
subrecipients must install and have in place when expending WIOA and 
Wagner-Peyser Act funds, and is based on 2 CFR 200.303.
    Comments: The Department received comments requesting clarification 
with regard to the internal control requirements of Sec.  683.220. One 
commenter requested a clear definition of the personally identifiable 
information (PII) and sensitive information, including documentation 
allowed for financial and program data and participant-specific 
verification. Another commenter requested clarification of the ``tools 
and assistance'' for improving internal control structure under Sec.  
683.220.
    Department Response: The Department determined that additional 
guidance on the definition of PII and available tools and assistance 
are not appropriate regulatory text because of the detail that would be 
required and the flexibility that is necessary for these definitions. 
The Department previously issued guidance on handling Personally

[[Page 56205]]

Identifiable Information (PII) which is found in TEGL No. 39-11 
(``Guidance on the Handling and Protection of Personally Identifiable 
Information (PII)''), issued on June 28, 2012 (see http://wdr.doleta.gov/directives/attach/TEGL/TEGL_39_11.pdf).
    The Department will provide additional guidance on this issue. No 
change was made to the regulatory text.
Section 683.230 Are there special rules that apply to veterans when 
income is a factor in eligibility determinations?
    This section addresses the laws governing the determination of 
eligibility for veterans and their spouses for WIOA funded services 
with income qualification requirements.
    Comments: Two commenters expressed concern about simply referring 
questions to the Veterans' Employment and Training Service (VETS) 
without further guidance and recommended that the Department explicitly 
state the procedures and exceptions in regulations. These commenters 
also recommended specific training for one-stop operators and one-stop 
staff.
    Department Response: The Department agrees with the commenters that 
language clarifying procedures and exceptions would be more appropriate 
to the regulation than the language referring questions to VETS. 
Consequently, the Department has struck the language referring 
questions regarding the applicability of 38 U.S.C. 4213 to VETS. In its 
place, the Department added language that states that a veteran must 
still meet each program's eligibility criteria to receive services 
under the respective employment and training program. This same 
language also appears in part 680 (Adult and Dislocated Worker 
Activities Under Title I of the WIOA). Changing the language in part 
683 compliments what is provided in the regulations for the adult and 
dislocated worker section and ensures that both sections are congruent 
with regard to the Military Pay Disregard for Eligibility 
Determination. The added language also clarifies that a veteran must 
meet all eligibility criteria to receive services. Finally, although 
the Department deleted the language referring questions about the 
applicability of 38 U.S.C. 4213 to VETS from the text of the 
regulation, the Department encourages interested parties to reach out 
to VETS if they have any questions about 38 U.S.C. 4213.
    The Department does not agree with the necessity of adding 
eligibility and income procedures to the regulation because their 
detailed and technical nature is better suited for guidance developed 
with the Assistant Secretary for VETS. The Department will consider the 
request future for training. No change to the regulatory text was made 
in response to these comments.
Section 683.235 May Workforce Innovation and Opportunity Act title I 
funds be spent for construction?
    This section is based on the requirements in the Uniform Guidance 
at 2 CFR 200.439(b)(3), and states that WIOA title I funds must not be 
spent on construction, purchase of facilities or buildings, or other 
capital expenditures for improvements to land or buildings except with 
prior approval of the Secretary.
    Comments: A few commenters requested the Department add language to 
this section to clarify the allowability of WIOA funds for 
construction.
    Department Response: Section 683.235 is written to allow the 
Secretary to approve the use of title I WIOA funds in the circumstances 
provided for in WIOA, including, disaster relief projects under WIOA 
sec. 170(d), YouthBuild programs under WIOA sec. 171(c)(2)(A)(i), grant 
recipients' responsibilities in meeting obligations to provide physical 
and programmatic accessibility, reasonable accommodations, and the 
provision of repairs, renovations, alterations, and capital 
improvements of property, as well as for other projects that the 
Secretary determines necessary to carry out WIOA, as described by under 
sec. 189(c) of WIOA.
    The Department intended to provide the Secretary with the 
flexibility authorized under WIOA to use funds for construction in any 
situation where it might be necessary and has determined that it would 
not be prudent to limit this flexibility by imposing any requirements 
or exclusive lists of use of funds. No change is made in the regulatory 
text in response to these comments.
    Comments: One commenter suggested that the Department amend this 
section to impose a requirement that WIOA funding only be allowed if 
the recipient confirms that all contractors and subcontractors that 
support a registered apprenticeship program meet the on-the-job 
training contract requirements of Sec.  680.700, and are deemed 
``responsible contractors'' under E.O. 13673 and the related Federal 
Acquisition Regulations (FAR).
    Department Response: The Department will provide additional 
guidance on using funds for construction. Because the Department 
concludes that the detailed nature of the suggested addition is better 
suited to guidance and technical assistance, no change was made to the 
regulatory text.
Section 683.240 What are the instructions for using real property with 
Federal equity?
    This section provides rules on State Employment Security Act (SESA) 
properties, Reed Act-funded properties, and JTPA-funded properties.
    Comments: The Department received two comments requesting the 
Department to give priority to UI and WP when transferring or disposing 
of real property with Federal equity.
    Department Response: The Department does not agree with the 
commenters' suggestion to establish priority upon transfer or 
disposition as this would undermine the language in sec. 192(a) of WIOA 
that allows for the portion of real property that is attributable to 
the Federal equity to be used to carry out UI, WP, or WIOA activities. 
The use of the buildings, including the proceeds related to their 
disposition or transfer, is intended to maximize available resources 
and provide flexibilities to UI, WP and WIOA programs. However, the 
Department recognizes that the proposed regulation language did not 
include guidance as to how proceeds from the disposition of property 
with a Reed Act equity should be treated. Consequently, the Final Rule 
contains language that clarifies that when there is a disposition of 
Reed Act property, that Reed Act equity must be returned to the State's 
account in the Unemployment Trust Fund.
Section 683.245 Are employment generating activities, or similar 
activities, allowable under title I of the Workforce Innovation and 
Opportunity Act?
    This section implements sec. 181(e) of WIOA, which restricts the 
use of WIOA funds for employment generating activities except where the 
activities are directly related to training for eligible individuals.
    Comments: Several commenters requested that the Department define 
``employment generating activities'' to guide relationships with 
economic development partners that also assist with business outreach 
and services.
    Department Response: Section 683.245 identifies several examples of 
employer outreach and job development activities that are considered 
``directly related to training for eligible individuals,'' including 
employer outreach and job development activities and therefore, are not 
prohibited employment generating activities. The list is an 
illustrative, but not an

[[Page 56206]]

exhaustive list of examples because the Department does not want to be 
overly prescriptive, limiting the discretion of grant recipients in 
making decisions about what is ``directly related to training for 
eligible individuals'' in their areas. The Department has determined 
that additional definition of ``employment generating activities'' is 
not necessary. However, the Department will provide future guidance or 
technical assistance on this subject.
    Comments: Additionally, commenters also recommended that the 
Department clarify that business services are an allowable activity for 
WDBs and are chargeable to the program cost category.
    Department Response: It is unclear as to what business services 
activities the commenters are referring. However, the Department has 
determined that WIOA and regulations provide sufficient guidance about 
which activities are allowable and whether those activities qualify as 
program costs. In addition to the guidance found in this section, WIOA 
sec. 107(d)(4) provides that local WDBs shall conduct business 
engagement and lead efforts to engage with a diverse range of 
employers. The employer engagement activities are further defined in 
Sec.  679.370(e). Furthermore, the determination of whether an activity 
is administrative or programmatic for purposes of WIOA is discussed in 
Sec.  683.215. Because WIOA and regulation already provide sufficient 
clarity, no change was made in the regulatory text.
Section 683.250 What other activities are prohibited under title I of 
the Workforce Innovation and Opportunity Act?
    This section describes other activities that are expressly 
prohibited in title I of WIOA, including foreign travel paid for by 
WIOA formula funds (sec. 181(e) of WIOA), payment of wages of incumbent 
workers participating in economic development activities (sec. 181(b) 
of WIOA), contracts with persons falsely labeling products as made in 
America (sec. 502(c) of WIOA) and others.
    Comments: The Department received comments requesting the 
Department clearly define prohibited economic development activities in 
Sec.  683.250.
    Department Response: The language in Sec.  683.250 mirrors the 
language in WIOA sec. 181(b)(1) in prohibiting WIOA funds from being 
used for the wages of incumbent employees during their participation in 
economic development activities provided through a statewide workforce 
development system. The Department determined that additional 
clarification, because of its technical and detailed nature, is not 
appropriate for the regulatory text. However, the Department will 
provide additional guidance on this subject.
    No changes were made to the regulatory text in response to these 
comments.
Section 683.260 What prohibitions apply to the use of Workforce 
Innovation and Opportunity Act title I funds to encourage business 
relocation?
    This section describes the prohibitions on the use of WIOA title I 
funds to encourage business relocation, including specific timeframes 
when entities can begin working with such businesses. This section also 
describes the States' obligation to develop procedures to implement 
these rules.
    Comments: The Department received a comment recommending that the 
Department add language to Sec.  683.260(b) to indicate that a State's 
pre-award review criteria must be explained in their Unified or 
Combined State Plan, which is available for review by all stakeholders.
    Department Response: Section 683.260(b) requires States to complete 
a pre-award review to verify that WIOA funds are not used to encourage 
or induce a business to relocate from another area if the relocation 
results in any employee losing his or her job at the original location. 
Section 683.260(b) permits States to develop the criteria for the pre-
review but also requires, in Sec.  683.260(b)(1), that certain elements 
must be included.
    The Department has determined that it is not necessary to require 
that the pre-award criteria be explained in the State's unified or 
combined State plan because Sec.  683.260 already requires the State to 
create a standardized procedure. The Department will provide additional 
guidance and technical assistance on this matter. No change was made to 
the regulatory text.
    Comments: The Department also received a comment requesting 
clarification regarding whether a company that relocates one of its 
offices to another State is eligible for WIOA funds to train workers 
that are relocating, as long as funds are used to upgrade skills and 
not to induce relocation or displace workers, or if this prohibited 
under Sec.  683.260.
    Department Response: The Department has determined that it is not 
appropriate to address such a detailed and fact-specific scenario in 
regulatory text. However, the Department will provide additional 
guidance on this concern. No change was made in the regulatory text in 
response to this comment.
Section 683.275 What wage and labor standards apply to participants in 
activities under title I of the Workforce Innovation and Opportunity 
Act?
    This section describes the wage and labor standards that apply to 
WIOA title I participants, including the requirements under the Federal 
Fair Labor Standards Act (FLSA) and State and local minimum wage laws.
    Comments: Comments requested that the Department define and 
distinguish which types of work-based learning, including 
apprenticeship and pre-apprenticeship, are subject to the wage and 
labor standards in Sec.  683.275.
    Department Response: Section 683.275(a) states that it is 
applicable to individuals in the work-based learning opportunities who 
are determined to be employed in activities under title I of WIOA. The 
FLSA, as amended, 29 U.S.C. 201, et seq., applies in determining 
whether participants are employees who are covered by the FLSA's 
minimum wage and overtime provisions. The Department plans to provide 
detailed guidance on when participants must be considered employees 
protected under the FLSA. Consequently, the Department has determined 
that it would not be appropriate to contain additional clarification on 
this point in the text of the regulation.
    Section 683.275(c) applies to work-based learning and employment 
under title I of WIOA. As described above, whether a particular job 
triggers these requirements and protections is a fact-specific enquiry. 
The Department has determined it would not be appropriate to analyze 
the application of this provision to the two types of jobs submitted by 
the commenter. Such analysis is better suited for guidance and 
technical assistance.
    Section 683.275(d) applies to all allowances, earnings, and 
payments to individuals participating in programs under title I of 
WIOA. Because the application of this provision does not depend on the 
types of jobs involved, the Department has determined that this 
provision does not need additional clarification. Consequently, for the 
reasons described above, the Department adopts the provision as 
proposed.
    The commenter should note that the Department previously issued 
guidance on the application of the FLSA to work-based training 
programs. In addition, the Department will provide additional guidance 
on this section.
    No changes were made to the regulatory text in response to these 
comments.

[[Page 56207]]

Section 683.280 What health and safety standards apply to the working 
conditions of participants in activities under title I of the Workforce 
Innovation and Opportunity Act?
    This section explains what health and safety standards and workers 
compensation laws apply to WIOA title I participants.
    Comments: The Department received a comment requesting a change in 
the regulatory text of Sec.  683.280 to specify that the health and 
safety protections in the regulation are also applicable to student 
workers.
    Department Response: Section 683.280 mirrors the language in WIOA 
sec. 181(b)(4). WIOA and this regulation provide that the health and 
safety standards established under Federal and State law otherwise 
applicable to working conditions of employees are equally applicable to 
working conditions of participants engaged in programs and activities 
under title I of WIOA.
    WIOA utilizes the word ``participant'' throughout the statute and 
specifically in sec. 181(b)(4). The term ``participant'' encompasses 
the student workers referred to by the commenter and the students are 
covered by health and safety laws to the extent that those laws cover 
students. Because whether students are covered by the protections at 
sec. 181(b)(4) and Sec.  683.280 depends the applicable Federal and 
State laws and regulations and cannot be succinctly summarized, the 
Department has determined to retain the use of ``participant'' in this 
section. No changes were made to the regulatory text in response to 
this comment.
Section 683.285 What are a recipient's obligations to ensure 
nondiscrimination and equal opportunity, and what are a recipient's 
obligations with respect to religious activities?
    This section describes the nondiscrimination, equal opportunity, 
and religious activities requirements that, as defined in WIAO sec. 188 
and at 29 CFR part 38, must adhere to when using WIOA title I funds.
    Comments: The Department received a comment in support for this 
provision as well as two comments requesting the Department to provide 
boilerplate language as technical assistance for the required provision 
under Sec.  683.285 because it is useful to the States.
    Department Response: The Department intends to provide additional 
guidance and ongoing technical assistance. Additionally, the Department 
is not modifying the non-discrimination provisions in the section 
because this subject is covered in much greater detail in the WIOA sec. 
188 nondiscrimination regulations at 29 CFR part 38. Finally, the grant 
agreements issued by the Department, as described in Sec.  683.105, 
describe the terms and conditions applicable to the award of title I 
WIOA funds and Wagner-Peyser funds, including the non-discrimination 
provisions of Sec.  683.285. No changes were made to the regulatory 
text in response to these comments.
    WIOA sec. 188(a)(5) refers to immigrants authorized by the Attorney 
General to work in the United States. Pursuant to the Homeland Security 
Act of 2002, Pub. L. 107-296, that authority has been transferred to 
the Department of Homeland Security. Section 1517 of the Homeland 
Security Act (codified at 6 U.S.C. 557) provides that reference in any 
other Federal law to any function transferred by the Homeland Security 
Act ``and exercised on or after the effective date of the Act'' shall 
refer to the official to whom that function is transferred. 
Consequently, the Final Rule contains a reference to the Secretary of 
Homeland Security.
Section 683.295 Is earning of profit allowed under the Workforce 
Innovation and Opportunity Act?
    This section addresses earning profit under WIOA.
    Comments: The Department received a comment requesting confirmation 
that WIOA allows profit for a one-stop operator.
    Department Response: The Department has outlined in Sec.  
683.295(a)(2) a requirement for grants and other Federal financial 
assistance awarded under secs. 121(d), 122(a), and 134(b) of WIOA, 
which allows awardees of Federal financial assistance, such as one-stop 
operators, service providers, or ETPs, to earn profit. The pass through 
entity must follow 2 CFR 200.323 to ensure that the entities' charges 
are reasonable and fair. No changes were made to the regulatory text in 
response to this comment.
3. Subpart C--Reporting Requirements
683.300 What are the reporting requirements for programs funded under 
the Workforce Innovation and Opportunity Act?
    Section 683.300 specifies the reporting requirements for programs 
funded under WIOA and the deadlines for such reports.
    Comments: The Department received comments regarding what data 
standards and performance indicators the Department should require and 
how to define and assess the data standards and performance indicators.
    Department Response: Section 683.300 does not detail the program 
performance elements that a grant recipient should report to the 
Department; these elements are discussed in 20 CFR part 677 (see Joint 
WIOA Final Rule). The Department will also provide additional guidance 
on this section and 20 CFR part 677. No changes were made to the 
regulatory text in response to these comments.
    Comments: The Department received several comments on Sec.  683.300 
concerning the amount of data collection required under WIOA and the 
value of the data collected. The commenters suggested that agencies 
instead share the information they already have and also periodically 
review the reported data to ensure its value to the program and 
eliminate any unnecessary reporting of data.
    Department Response: The Department's goal is to promote the 
government's initiative to manage information as an asset to increase 
operational efficiencies, reduce costs, improve services, support 
mission needs, safeguard personal information, and increase public 
access. The Department intends to use data collected from the 
financial, performance, and annual reports to empower our public 
workforce system while providing transparency and accountability to our 
stakeholders. The Department is not seeking to burden the public 
workforce system by the data collection. While the Department 
implements its reporting requirements, it will work to ensure that the 
reporting is not unnecessarily duplicative while still ensuring that 
the interest described above is protected. However, the Department has 
determined that additional detail on reporting requirement 
implementation is not appropriate for regulation. Consequently, the 
Final Rule adopts the provision as proposed.
    Comments: A comment was received that requested that the Department 
explicitly clarify that reporting requirements may be waived for 
libraries when developing lists of ETPs during the first year of WIOA 
implementation.
    Department Response: WIOA sec. 122 details requirements for 
identifying eligible training providers. This section is further 
addressed in 20 CFR part 680. The Department did not receive any other 
comments on this section. The Final Rule adopts the provision as 
proposed with a technical amendment made to Sec.  683.300(a), because 
it is unnecessary to clarify that the Department's reporting 
requirements would be consistent with governing

[[Page 56208]]

statutes, and a technical amendment to Sec.  683.300(e)(2) and the 
addition of Sec.  683.300(h), so as to more clearly reflect the 
requirements in 2 CFR part 200.
4. Subpart D--Oversight and Resolution of Findings
Section 683.410 What are the oversight roles and responsibilities of 
recipients and subrecipients of Federal financial assistance awarded 
under title I of the Workforce Innovation and Opportunity Act and the 
Wagner-Peyser Act?
    This section defines the roles and areas in which oversight must be 
conducted by the recipients and subrecipients, including ensuring 
compliance with relevant rules and developing a monitoring system.
    Comments: The Department received several comments in support of 
this section and explicitly in support of the Department's requirements 
for recipients and subrecipients to comply with the EEO requirements of 
WIOA as well as the Assistive Technology Act of 1998. A comment was 
received recommending that the Department be notified to work with 
their State Assistive Technology Act Program (ATAP) with regard to 
physical and programmatic accessibility issues.
    Department Response: It is unclear from the comment what 
notification to the Department the commenter is requesting. No changes 
were made to the regulatory text in response to the comments regarding 
ATAP. However, the Department will consider State ATAPs as potential 
resources while implementing this section.
    Comments: A comment received requested clarification on what kind 
of grant monitoring is proposed under Sec.  683.410 and whether 
recipients and subrecipients will have access to clear monitoring and 
oversight standards.
    Department Response: Section 683.410(a) requires that each 
recipient and subrecipient of title I WIOA funds and Wagner-Peyser Act 
funds conduct regular oversight and monitoring of its WIOA and Wagner-
Peyser Act funded programs to ensure compliance with the stated 
requirements of title I of WIOA, the Wagner-Peyser Act, the Uniform 
Guidance at 2 CFR part 200, and the Department exceptions to the 
Uniform Administrative Requirements at 2 CFR part 2900. Section 
683.410(b) further requires that Governors are responsible for 
developing a State monitoring system that meets the requirements set 
forth in Sec.  683.410(b)(2).
    The Department is providing grant recipients the flexibility with 
designing the monitoring process and procedures to meet the 
requirements of Sec.  683.410 and does not want to limit this 
flexibility by imposing a specific monitoring process. However, the 
Department will continue to provide technical assistance and guidance 
on this subject.
    No changes were made to the regulatory text in response to these 
comments. Additionally, the Department would like to note that although 
Sec.  683.410(b)(2)(iii) requires States to have a monitoring system 
that enables Governors to determine if subrecipients and contractors 
have demonstrated substantial compliance with Wagner-Peyser Act 
requirements, violations of Wagner-Peyser Act requirements will be 
handled pursuant to the authority and processes in the Wagner-Peyser 
Act, as amended, and the implementing regulations at 20 CFR part 658.
5. Subpart E--Pay-for-Performance Contract Strategies
Section 683.500 What is a Workforce Innovation and Opportunity Act Pay-
for-Performance contract strategy?
    This section describes the components of a WIOA Pay-for-Performance 
contract strategy and describes WIOA Pay-for-Performance contract as a 
specific type of performance-based contract.
    Comments: The Department received several comments regarding Sec.  
683.500. Several comments requested clarification as to what was 
required for a WIOA Pay-for-Performance contract strategy. Some of the 
comments received inquired as to the meaning of ``independently'' 
validating in Sec.  683.500(a)(3) and requested clarification and 
guidance as to the Department's intended definition of independent. 
Additionally, commenters questioned the affordability of conducting the 
feasibility study given the 10 percent funding limitation. Finally, 
commenters asked the Department to allow local areas to use existing 
studies instead of commissioning new studies. Many of the comments 
received concerned the feasibility study requirements. Some comments 
requested the elimination of the feasibility study; some comments 
questioned its affordability; some comments requested the Department 
prescribe what is contained in the feasibility study, and other 
comments requested that the Department allow local areas to use 
existing studies instead of commissioning new studies.
    Department Response: The Department decided against prescribing a 
definition of independent validation in order to retain flexibility. 
The WIOA Pay-for-Performance contract strategy is one of several 
innovative strategies WIOA adopts to place a higher emphasis on 
performance outcomes and provider accountability, drive better results, 
and incorporate rigorous evaluation and evidence-based practice into 
the delivery of workforce services. The WIOA Pay-for-Performance 
contract strategy can benefit local areas, job seekers, and business 
customers when used to support interventions that either have a high 
probability of success based on prior evidence or that have potential 
as a promising innovation; have measurable outcomes supported with 
authoritative data and strong evaluation methodologies; and are 
overseen by experienced managers that have flexibility to adjust their 
approach. As authorized by WIOA, the Department intends to provide 
local areas with the flexibility needed to implement a WIOA Pay-for-
Performance contract strategy that meets the needs and challenges in 
each local area. The Department will provide additional guidance on 
this subject to address the scope and minimum requirements of 
independent validation.
    WIOA sec. 3 provides that the WIOA Pay-for-Performance contract 
strategy is a procurement strategy for funds allocated to local areas 
for the provision of adult, dislocated worker, or youth training 
services. WIOA limits the amount of local allocations available for 
WIOA Pay-for-Performance contract strategies to 10 percent of the local 
area's allocation available under secs. 128(b) and 133(b)(2)-(3) of 
WIOA. WIOA sec. 189(g)(2)(D) specifies that funds used for WIOA Pay-
for-Performance contract strategies shall remain available until 
expended.
    The NPRM defined the WIOA Pay-for-Performance contract strategy as 
having four distinct characteristics, including in Sec.  683.500(a)(2) 
a feasibility study to determine whether the proposed intervention is 
suitable for a WIOA Pay-for-Performance contract strategy. The 
Department required the feasibility study because it determined that, 
prior to beginning a WIOA Pay-for-Performance contract strategy, a 
local area needs to conduct an analysis to determine whether a WIOA 
Pay-for-Performance contract strategy is the right approach. Upon 
reviewing the comments, the Department retains its conclusion that the 
feasibility study is necessary. Consequently, the regulatory text 
retains the feasibility study requirement.
    In analyzing the comments received and reviewing the proposed 
language, the Department concluded that the

[[Page 56209]]

definition of a WIOA Pay-for-Performance contract strategy and the 
requirement of a feasibility study as part of the strategy could 
potentially limit the availability of this innovative strategy because 
local areas would not have enough funds available under the 10 percent 
limit to do both the feasibility study and the rest of the WIOA Pay-
for-Performance contract strategy.
    To address this issue, the Department modified that language in 
Sec.  683.500(a) and removed the feasibility study requirement from the 
WIOA Pay-for-Performance contract strategy definition. However, because 
the Department has determined that a feasibility study is necessary, 
the Department added a new paragraph (b) in Sec.  683.500 that requires 
a local area to conduct a feasibility study prior to implementing a 
WIOA Pay-for-Performance contract strategy. Because the feasibility 
study is not included in the definition of ``WIOA Pay-for-Performance 
contract strategy'' in the Final Rule, the feasibility study is not 
subject to the 10 percent limitation.
    In addition, the Department decided against prescribing what should 
be included in a feasibility study in order to retain flexibility. The 
Department intends to provide local areas with flexibility authorized 
under WIOA needed to implement a WIOA Pay-for-Performance contract 
strategy that meets the needs and challenges in each local area. The 
Department does not want to limit this flexibility by imposing any 
other requirements or exclusive definitions for WIOA Pay-for-
Performance contract strategies. However, the Department will provide 
additional guidance on this subject to address the scope and minimum 
requirements of the feasibility study.
    The Department decided against prescribing whether local areas can 
use existing studies for the reasons described in the previous 
paragraph.
    Comments: Other commenters recommended adding a phrase to proposed 
Sec.  683.500(b) to indicate that a WIOA Pay-for-Performance contract 
strategy must include a prohibition against a short-term training 
activity and placement into low-wage job strategy for harder to serve 
participants.
    Department Response: The Department decided against prescribing 
prohibitions or outcomes for locals who employ the use of a WIOA Pay-
for-Performance contract strategy in order to retain the local areas' 
flexibility authorized under WIOA. However, the Department will provide 
additional guidance on this subject.
    Comments: Commenters also asked for clarification on whether NFJP 
providers or WIOA title II providers are included in WIOA Pay-for-
Performance contracting strategy.
    Department Response: WIOA sec. 3(47) is clear that WIOA Pay-for-
Performance contract strategies only include strategies for the 
provision of training services under WIOA secs. 134(c)(3) and 
129(c)(2). Neither the NFJP program nor title II are located at sec. 
134(c)(3) or 129(c)(2). Because WIOA is clear that NFJP and title II 
providers are not included in the definition of a WIOA Pay-for-
Performance strategy, the Final Rule adopts the provision as proposed. 
However, as described in the NPRM, a WIOA Pay-for-Performance 
contracting strategy is only one specific type of a performance-based 
contract strategy. Neither WIOA nor the Final Rule is meant to 
foreclose NFJP providers, title II providers, or any other providers 
from pursuing performance-based contracts or strategies as they are 
generally understood, and they are encouraged to do so. The strategies 
are considered WIOA Pay-for-Performance contract strategies only if 
they fit within the strict requirements of WIOA sec. 3(47) and this 
subpart.
    No changes were made to the regulatory text in response to these 
comments.
Section 683.510 What is a Workforce Innovation and Opportunity Act Pay-
for-Performance contract?
    This section defines the requirements associated with a WIOA Pay-
for-Performance contract, which would be awarded under a WIOA Pay-for-
Performance contract strategy.
    Comments: The Department received numerous comments regarding Sec.  
683.510 and what is an allowable WIOA Pay-for-Performance contract.
    Several comments either equated the WIOA Pay-for-Performance 
contract strategies in WIOA to a Pay for Success financing strategy 
(sometimes referred to as social impact bonds) or inquired as to the 
allowability of a Pay for Success financing model in WIOA, specifically 
the allowability of social impact bonds. Other comments recommended 
that the Department specify in greater detail the WIOA Pay-for-
Performance contract requirements and that the Department issue 
requirements for applications.
    Department Response: Pay for Success financing models are an 
available WIOA Pay-for-Performance contract type under Sec.  683.510 as 
long as the requirements of Sec.  683.500 are met; the Department will 
issue future guidance. The Department intends to provide local areas 
with flexibility authorized under WIOA needed to implement a WIOA Pay-
for-Performance contract strategy that meets the needs and challenges 
in each local area. The Department does not want to limit this 
flexibility by imposing any other requirements or exclusive definitions 
for WIOA Pay-for-Performance contracts and contract strategies. 
However, the Department will provide additional guidance on this 
subject. Because Sec.  683.510 does not prohibit the use of a Pay for 
Success model and the Department wants to maintain flexibility, the 
Department has determined that no additions to the proposed text are 
necessary. No changes were made to the regulatory text.
    Comments: A few commenters requested that the Department eliminate 
the requirement that organizations be eligible service providers to 
qualify for WIOA Pay-for-Performance contract funding.
    Department Response: WIOA sec. 3(47) limits the WIOA Pay-for-
Performance contractors to those organizations that are eligible under 
WIOA secs. 122 or 123. Because this requirement is part of WIOA, the 
Department cannot eliminate it. No changes to the regulatory text were 
made in response to these comments.
    Comments: One comment requested clarification on what providers are 
eligible service providers and whether YouthBuild could form a 
consortium in an area to provide the services.
    Department Response: The requirements for Eligible Training 
providers are discussed in 20 CFR part 680. Because another part 
governs eligible training providers, the Final Rule adopts the 
provision as proposed.
    Comments: Another comment sought clarification on whether for-
profits and not-for-profits are treated the same under this section.
    Department Response: Section 683.510(f) provides that local 
entities may enter into WIOA Pay-for-Performance contracts with 
training providers that are eligible under WIOA secs. 122 or 123. 
Because WIOA secs. 122 and 123 state, and Sec.  683.295 further 
clarifies, that for-profit agencies are eligible to be an eligible 
training provider, the Department has determined that these provisions 
do not need additional clarification regarding the treatment of for-
profits and non-for-profits agencies. No changes were made in the 
regulatory text in response to this comment.
    Comments: One commenter requested clarification on whether the 
Sec.  683.510(e) requirement that the primary indicators of performance 
in sec. 116(b)(2)(A) of

[[Page 56210]]

WIOA be used for performance outcomes means that these primary 
indicators of performance are the only indicators that may be utilized.
    Department Response: Section 583.510(e) mirrors the language the 
WIOA sec. 3(47) which states that the performance elements that must be 
included in any WIOA Pay-for-Performance contract are the primary 
indicators of performance described in WIOA sec. 116(b)(2)(A). As WIOA 
requires the elements at sec. 116(b)(2)(A), they are mandatory for all 
WIOA Pay-for-Performance contracts. The Department will provide 
additional guidance on whether additional performance outcomes can be 
used in determining the amount to be paid a service provider under a 
WIOA Pay-for-Performance contract.
    Comments: Another comment stated that WIOA Pay-for-Performance 
contracts should give priority to innovative interventions that aim to 
help hard-to-serve participant populations find jobs and careers that 
lead to family-sustaining wages.
    Department Response: The Department intends to provide local areas 
with flexibility authorized under WIOA that is necessary for the 
implementation of a WIOA Pay-for-Performance contract strategy that 
meets the needs and challenges in each local area. For that reason, the 
Department has decided against adding the proposed priority to the 
regulation. The Department does not want to limit this flexibility by 
imposing any other requirements or exclusive definitions for WIOA Pay-
for-Performance contracts. However, the Department will provide 
additional guidance on this subject.
    Comments: A commenter recommended replacing ``must'' in Sec.  
683.510(d) with ``may only'' because the use of WIOA Pay-for-
Performance contracts for adult training services or youth activities 
is optional under WIOA.
    Department Response: The Department is maintaining the language as 
proposed because although the WIOA Pay-for-Performance contracts 
strategy is optional under WIOA, if it is implemented, it must be used 
to provide the services as described in Sec.  683.510(d).
    Comments: Commenters urged the Department to clarify the use of the 
bonus payments as described in Sec.  683.510(h).
    Department Response: The Department has determined that the 
inclusion of incentive payments in this provision confused the 
Department's description of bonuses. Consequently, the Department has 
removed references to incentive payments from this provision. Because 
the Department has determined that any additional clarification would 
result in an amount of detail not appropriate to this regulation, the 
Final Rule adopts the remainder of paragraph (h) as proposed.
    Comments: Another comment suggested that requiring independent 
validations from an independent evaluator without providing adequate 
funding would force local areas to cut services. This commenter 
recommended that the Department contract for nationwide local area 
evaluation and rotate areas every year that are evaluated.
    Department Response: As discussed in the preamble to Sec.  683.500, 
the parameters of independent validation will be addressed in future 
guidance. However, the local areas will have flexibility in entering 
into strategies to validate independently the outcomes achieved under 
the WIOA Pay-for-Performance contracts, which should allow local areas 
to manage the cost of this external validation while maximizing the 
benefits Pay-for-Performance can yield. Independent validation must 
meet the statutory requirement of ensuring the performance outcomes 
were achieved, thus ensuring the integrity of the payments. No changes 
were made to the regulatory text in response to this comment.
Section 683.520 What funds can be used for Workforce Innovation and 
Opportunity Act Pay-for-Performance contract strategies?
    This section restates the WIOA requirements that funds allocated 
under secs. 133(b)(2) and (3) of WIOA can be used for WIOA Pay-for-
Performance contract strategies providing adult and dislocated worker 
training, and funds allocated under sec. 128(b) of WIOA can be used for 
WIOA Pay-for-Performance contract strategies providing youth 
activities.
    Comments: The Department received several comments requesting 
clarification regarding Sec.  683.520.
    One commenter requested clarification concerning the WIOA Pay-for-
Performance contract strategy limits and performance-based contracting. 
This same commenter requested clarification of on what expenses are 
included in the 10 percent limit for WIOA Pay-for-Performance contract 
strategies.
    Department Response: Ten percent of the local adult, dislocated, 
and youth funds allocated under WIOA secs. 128(b) and 133(b)(2)-(3) are 
available for WIOA Pay-for-Performance contract strategies, as 
described in Sec.  683.520. However, these caps only are applicable to 
WIOA Pay-for-Performance contract strategies, as discussed in this 
subpart, and do not impact a local area utilizing performance-based 
contracting. Under WIA, many Workforce Investment Boards (Workforce 
Development Boards (WDBs) under WIOA) utilized elements of performance-
based contracts with training providers. These contracts incorporated 
performance outcomes that contractors were required to meet to obtain 
payment. However, these contracts did not contain required elements of 
a WIOA Pay-for-Performance contract strategy articulated in this 
subpart.
    Performance-based contracts are still an available option for local 
areas and there is no limit on the use of funds for typical 
performance-based contracts, as defined in the Federal Acquisition 
Regulations (FAR). Contracts that are not executed under the WIOA Pay-
For-Performance contracting authority may continue to include 
performance incentives, either positive or negative or both, in 
compliance with the Federal Acquisition Regulations. However, funds 
used for performance-based contracts that do not qualify as Pay-For-
Performance contracts do not remain available until expended under WIOA 
sec. 189(g)(2)(D). The Department does encourage local areas to refocus 
these traditional performance-based contracts to place an emphasis on 
the contractor achieving outcomes like participants obtaining and 
retaining good jobs, rather than outputs like the number of people 
served.
    The Department has determined additional clarification on what is 
included in the 10 percent limit is not necessary because the 
regulation already contains this information. The 10 percent limit 
applies to WIOA Pay-for-Performance contract strategies, a term that is 
defined in Sec.  683.500(a). Because the regulation already describes 
what expenses are included in the 10 percent limit, the Final Rule 
adopts the provision as proposed.
    Comments: Another commenter requested clarification as to whether 
Individual Training Accounts (ITA) are viewed as typical performance-
based contracts and, thus, there is no limit on use of funds for them 
under Sec.  683.520.
    Department Response: ITAs are defined in Sec.  680.300 and are 
payment agreements established on behalf of an individual participant 
with a training provider for the provision of training services. ITAs 
are not contracts entered into by a local area for the provision of 
services to multiple people for the

[[Page 56211]]

provision of all of the performance outcomes in sec. 116(b)(2)(A) of 
WIOA; therefore they do not meet the requirements of this subpart.
    Comments: A commenter requested clarification on whether the 10 
percent limitation in Sec.  683.520 references allotment of funds at 
the local level.
    Department Response: The Final Rule makes changes to Sec.  
683.520(b) to replace the word ``expended'' with ``reserved and used,'' 
to be more consistent with WIOA secs. 129(c)(1)(D) and 
134(d)(1)(A)(iii). Section 683.520(b) provides that no more than 10 
percent of the total local adult and dislocated worker allocations can 
be reserved and used on the implementation of WIOA Pay-for-Performance 
contract strategies for adult training services described in sec. 
134(c)(3) of WIOA. Section 683.520(b) further provides that no more 
than 10 percent of the local youth allocation can be reserved and used 
on the implementation of WIOA Pay-for-Performance contract strategies 
for youth training services and other activities described in sec. 
129(c)(2) of WIOA. Sections 129(c)(1)(D) and 134(d)(1)(A)(iii) of WIOA 
make clear that this limitation applies to funds allocated to the local 
areas. Therefore, the regulation as proposed is clear that the 10 
percent limits apply to allocations at the local level. The Final Rule 
adopts the remainder of Sec.  683.520(b) as proposed, with technical 
corrections to better align it with secs. 129(c)(1)(D) and 
134(d)(1)(A)(iii) of WIOA. The Department will issue guidance to 
explain these new practices in Sec.  683.520.
Section 683.530 How long are funds used for Workforce Innovation and 
Opportunity Act Pay-for-Performance contract strategies available?
    This section discusses how long funds used for WIOA Pay-for-
Performance contract strategies are available.
    Comments: The Department received several comments requesting that 
the Department clarify the length of time funds are available for Pay-
for-Performance contract strategies.
    Department Response: WIOA sec. 189(g)(2)(D) specifies that funds 
used for WIOA Pay-for-Performance contract strategies are available 
until expended. This is meant to allow local areas to structure 
contracts that include time-intensive service delivery strategies and/
or to structure payments based on outcomes that may take longer to 
achieve, measure, and validate than the typical 2-year funding 
availability of local area funds. Funds that are obligated but not 
expended due to a contractor not achieving the levels of performance 
specified in a WIOA Pay-for-Performance contract may be reallocated for 
further activities related to WIOA Pay-for-Performance contract 
strategies only. The Department will issue guidance to explain these 
new practices. WIOA and regulation sufficiently describe the length of 
time funds are available for WIOA Pay-for-Performance contract 
strategies. No changes were made to the regulatory text in response to 
these comments.
Section 683.540 What is the State's role in assisting local areas in 
using Workforce Innovation and Opportunity Act Pay-for-Performance 
contract strategies?
    This section describes both allowable and required State activities 
related to WIOA Pay-for-Performance contract strategies.
    Comments: Commenters requested clarification if WIOA Pay-for-
Performance contracts would need to be reported under a new line item 
on the Summary of Expenditures Report, or if this is tracked during the 
procurement process.
    Department Response: This information is being issued under 
separate Paperwork Reduction Act ICRs. Additionally, the Department 
expects to put performance and implementation requirements in place in 
the future and will issue guidance to explain these new practices. 
Because the Department is still analyzing how to implement the 
reporting requirements, no changes were made to the regulatory text.
    Comments: Another commenter urged the Department to align the 
regulations at Sec.  683.540 with WIOA and Congressional intent in 
order to make clear that the Governor's statewide reserve is an 
acceptable funding source for Pay-for-Performance core end-payments--
which the commenter defines as the success payments at the end of a 
Pay-for-Success contract.
    Department Response: This comment raises two potential issues: (1) 
the use of Governor's Reserve funds to pay for State performance-based 
contract strategies that do not fit within the strict requirements of 
WIOA ``Pay-for-Performance contract strategies'' as defined in WIOA 
sec. 3(47) and this subpart and (2) the use of Governor's Reserve funds 
to support WIOA Pay-for-Performance contract strategies.
    This part of the regulation does not limit the ability of the State 
to use the statewide reserve funds to carry out various kinds of 
performance-based contracts, as defined in the Federal Acquisition 
Regulations (FAR). Rather, this part of the regulation addresses how 
Governor's reserve funds may be used to support WIOA Pay-for-
Performance contract strategies, a term defined in sec. 3(47) of WIOA 
and Sec.  683.500. State and local funds may be used to support 
performance-based contracting, including projects that involve ``core-
end payments'' so long as these funds are used consistently with any 
restrictions and requirements that might govern those funding sources. 
However, grantees should note that unlike the 10 percent of local funds 
identified in WIOA secs. 129(c)(1)(D) and 134(d)(1)(A)(iii) as being 
available for WIOA Pay-for-Performance contract strategies, funds used 
for other types of performance-based contracting do not have the 
potential extended period of availability identified in WIOA sec. 
189(g)(2)(D) as applying to the 10 percent of funds described in WIOA 
secs. 129(c)(1)(D) and 134(d)(1)(A)(iii).
    In response to the issue of the use of Governor's Reserve funds to 
support WIOA Pay-for-Performance contract strategies, the Department 
has added a paragraph (a)(3) to clarify that the items listed in Sec.  
683.540(a) are not an exhaustive list of ways in which Governor's 
Reserve funds can be used to support WIOA Pay-for-Performance contract 
strategies. As the addition explains, Governor's Reserve funds can be 
used for other activities supporting WIOA Pay-for-Performance contract 
strategies if those uses otherwise comply with limitations that govern 
the use of those funds.
    For example, as provided in Sec.  683.540(a), Governors may provide 
technical assistance to local areas, including assistance with 
structuring WIOA Pay-for-Performance contract strategies, performance 
data collection, meeting performance data entry requirements, and 
identifying levels of performance. This technical assistance can help 
local areas move forward in using this contract strategy. Additionally, 
the State may either conduct evaluations of such strategies and/or 
provide technical assistance to locals regarding the importance of 
evaluation of WIOA Pay-for-Performance contract strategies. The State 
and local areas may conduct their own evaluations of the WIOA Pay-for-
Performance contracts, or procure an independent evaluator.
    Governor's Reserve funds used to support Pay-for-Performance 
contract strategies, like Governor's Reserve funds used for other types 
of performance-based contracting, do not have the potential extended 
period of availability identified in WIOA sec. 189(g)(2)(D). The 
Department will issue additional guidance on how these funds may be 
used to support WIOA Pay-for-

[[Page 56212]]

Performance contract strategies, including utilizing the Governor's 
Reserve for ``core-end payments,'' in compliance with the law. No other 
changes were made to the regulatory text in response to these comments.
6. Subpart F--Grievance Procedures, Complaints, and State Appeals 
Processes
Section 683.600 What local area, State, and direct recipient grievance 
procedures must be established?
    This section requires local areas, States, outlying areas, and 
direct grant recipients of WIOA title I funds to establish and maintain 
a procedure for grievances and complaints, including appeals as 
appropriate, and describes what the procedure must include, as required 
by WIOA sec. 181(c)(1).
    Comments: The Department received a comment in support of the 
regulation as proposed and another comment requesting clarification 
whether Local WDBs or CEOs are considered ``other interested parties 
affected'' by the recipient's WIOA programs under Sec.  683.600.
    Department Response: Local WDBs and CEOs are among the parties that 
qualify as ``other interested parties.'' The Department has determined 
that no additional changes to the regulatory text are necessary to 
clarify that the broad term ``other interested parties'' includes Local 
WDBs and CEOs. No changes were made to the regulatory text in response 
to this comment.
7. Subpart G--Sanctions, Corrective Actions, and Waiver of Liability
Section 683.700 When can the Secretary impose sanctions and corrective 
actions on recipients and subrecipients of title I Workforce Innovation 
and Opportunity Act funds?
    This section describes the procedures and circumstances under which 
the Department will impose sanctions or take corrective actions, as 
described in WIOA sec. 184(b) and (e), against States, local areas, and 
grant recipients and subrecipients.
    Comments: The Department received several comments on Sec.  683.700 
that cited a reference to the ``amount that would be reserved by the 
Governor'' and stated that this is currently the Governor's 5 percent 
set-aside, then asked for clarification of what portion of funds are 
subject to the 5 percent reduction and if this amount is affected by 
failure to meet performance standards under Vocational Rehabilitation. 
The commenters also requested clarification as to which programs the 5 
percent reduction affected.
    Department Response: Section 683.700 clarifies that the procedures 
described at 20 CFR part 677 will be used to impose a sanction or 
corrective action for a violation of WIOA sec. 116 (see Joint WIOA 
Final Rule). The cited language in the comment is not in Sec.  683.700 
and appears to reference sanctions for a violation of WIOA sec. 116 and 
the procedures established in 20 CFR part 677. The preamble to 20 CFR 
part 677 addresses issues concerning performance and any applicable 
sanctions related to WIOA sec. 116. Because these comments do not 
appear to relate to this section, no changes were made to the 
regulatory text in response to these comments.
Section 683.710 Who is responsible for funds provided under title I and 
the Wagner-Peyser Act?
    This section identifies the recipient as the responsible party for 
title I and Wagner-Peyser Act funds.
    Comments: The Department received a comment requesting 
clarification as to Sec.  683.710's application to planning regions. 
Specifically, the commenter requested clarification as to what 
protections exist if one service area in a region has a corrective 
action plan in place.
    Department Response: Section 683.710(a) provides that the recipient 
of funds is responsible for all funds under its grant award. Section 
683.710(b) further provides that where a planning region includes two 
separate units of local government, the chief elected official (CEO) of 
each unit of local government is the responsible party and that the 
individual jurisdictional liability must be established in a written 
agreement between the CEOs. The regulation as proposed clearly states 
that the potential liability of any unit of general local government in 
a planning region is dependent on what the CEOs agree to in the written 
agreement required under Sec.  683.710(b)(2). No changes were made to 
the regulatory text in response to these comments.
Section 683.720 What actions are required to address the failure of a 
local area to comply with the applicable uniform administrative 
provisions?
    This section requires the Governor to take corrective action and 
impose sanctions on a local area if it fails to comply with the 
requirements described in this section.
    Comments: The Department received a comment requesting a change to 
Sec.  683.720(a)(2) to add language that prior to imposing sanctions, 
the Governor should find a substantial violation and that the local 
area has failed to take corrective action. The commenter suggested that 
the additional language would align to Sec.  683.720(a)(2) with WIOA 
sec. 184(b)(1).
    Department Response: The Department analyzed the comment as well as 
all of the language in WIOA sec. 184 and determined that Sec.  
683.720(a)(2) is consistent with WIOA sec. 184. WIOA sec. 184(a)(5) 
provides that if a Governor determines that a local area is not in 
compliance with the uniform administrative requirements, the Governor 
must require corrective action to secure prompt compliance with the 
requirements and impose the sanctions found at WIOA sec. 184(b). WIOA 
sec. 184(a)(5) requires corrective action regardless of whether the 
violation of the Uniform Administrative Requirements is substantial. In 
contrast, WIOA sec. 184(b) only requires action by the Governor for 
violations of title I of WIOA if those violations are substantial. WIOA 
clearly requires corrective action for violations of the Uniform 
Administrative Requirements even if those violations are not 
substantial. No changes were made to the regulatory text in response to 
this comment.
    Comments: The Department received a comment requesting a change in 
Sec.  683.720(c)(1) to add language stating that if the Secretary finds 
that a Governor has failed to meet the requirements in Sec.  
683.720(c)(1), then the Secretary must take the action required in 
Sec.  683.700(b) consistent with procedures established in Sec.  
683.440.
    Department Response: The Department determined that adding the 
language in Sec.  683.720(c)(1) is not necessary as Sec.  683.700 
adequately outlines the necessary actions the Secretary should take if 
a Governor fails to take actions against a local area and includes the 
requirement that the Grant Officer use the procedures outlined in Sec.  
683.440 (except in certain circumstances not applicable to violations 
of WIOA sec. 184(a)). No changes were made to the regulatory text in 
response to this comment.
Section 683.730 When can the Secretary waive the imposition of 
sanctions?
    This section permits a recipient to request a waiver of liability, 
and describes the factors the Grant Officer will consider when 
determining whether to grant the request.
    Comments: The Department received comments regarding Sec.  683.730. 
The comments requested the Department fix a clerical error in Sec.  
683.730(b)(1) by

[[Page 56213]]

removing the word ``is'' after the word ``waiver'' to better clarify 
the meaning of the provision.
    Department Response: The Department agrees about the need to make a 
non-substantive textual edit to Sec.  683.730(b)(1) and has made the 
suggested change.
    The Department received no comments on the remaining provisions in 
Sec.  683.730, and has adopted each as proposed.

H. Part 684--Indian and Native American Programs Under Title I of the 
Workforce Innovation and Opportunity Act

1. Introduction
    This part of the Final Rule governs the Indian and Native American 
Programs authorized under sec. 166 of WIOA. This Final Rule section-by-
section discussion details the Department's responses to public 
comments on the proposed part 684 regulations. The analysis that 
follows provides the Department's response to public comments received 
on proposed part 684 regulations. If a section is not addressed below, 
it is because the public comments submitted did not substantively 
address that specific section and no changes have been made to the 
regulatory text. Further, the Department received a number of comments 
on this part that were outside of the scope of the regulation and the 
Department offers no response. Lastly, the Department has made a number 
on non-substantive changes to correct grammatical and typographical 
errors to improve the readability and conform the document 
stylistically that are not discussed in the analysis below.
    In this part, one conforming edit was made throughout to replace 
the term, ``performance measures'' with the term ``performance 
indicators.''
2. Subpart A--Purposes and Policies
Section 684.110 How must Indian and Native American programs be 
administered?
    Comments: Multiple commenters recommended that Sec.  684.110 
include language that would require the Department to utilize staff 
with a particular competence in Federal policies that have tribal 
implications and address the government-to-government relationship 
between the United States and Indian tribes.
    Department Response: The Department agrees with the commenter that 
it is in the best interest of the INA program to utilize employees that 
have a particular competence in INA employment and training programs. 
The Department makes every effort to ensure staff are fully competent 
in the relevant field to administer all of the Department's programs, 
including the INA program authorized by sec. 166 of WIOA. As part of 
this effort, the Department actively recruits experienced and 
knowledgeable staff, including through recruitment of individuals 
eligible for Indian hiring preference for positions within the Division 
of Indian and Native American Programs. This effort also targets those 
who have experience in working with Indian tribes and communities in 
the development and administration of INA employment and training 
programs.
    The Department seeks to hire competent individuals for all of its 
programs and has determined that it is not appropriate to include a 
competency requirement in regulation for just the INA program. No 
changes to the regulatory text were made in response to these comments.
Section 684.120 What obligation does the Department have to consult 
with the Indian and Native American program grantee community in 
developing rules, regulations, and standards of accountability for 
Indian and Native American programs?
    Comments: A commenter expressed concern about whether the WIOA 
primary indicators of performance had been developed with input from 
the INA communities and the Native American Employment and Training 
Council (NAETC) and whether the new WIOA indicators removed the 
requirement of consultation. This commenter further stated that the 
NAETC has been working to develop realistic performance goals and 
suggested that INA programs should not be evaluated on national 
standards that cannot be attained in Native communities.
    Department Response: Per secs. 166(h) and 166(i)(2) of WIOA and 
Sec. Sec.  684.120, 684.460, 684.620, and 684.940, the Department is 
required to consult with NAETC and INA communities. The Department 
conducted town hall meetings, tribal consultations, and listening 
sessions with the NAETC and INA communities and will continue to ensure 
that INA programs and the NAETC be consulted. No changes to the 
regulatory text were made in response to this comment.
    Comments: The comment also references the requirement that INA 
program grantees report on the primary indicators of performance 
described in sec. 116(b)(2)(A) of WIOA.
    Department Response: As described in sec. 116(b)(2)(A) of WIOA, the 
performance indicators are mandated by WIOA. The Department does not 
have the authority to change the statutorily required performance 
indicators in WIOA. However, it fully intends to continue meaningful 
discussions and consultation with the NAETC as well as with INA program 
grantees and other stakeholders in the implementation of the 
indicators, including the establishment of targets and levels of 
performance for each indicator as well as the potential for waivers.
Section 684.130 What definitions apply to terms used in this part?
    Comments: Regarding the ``high-poverty area'' definition's 
reference to the American Community Survey (ACS) 5-year data, one 
commenter said that this is misstated because the Department has not 
initiated using the ACS 5-year data as it has not replaced the Census 
2000 tab with more recent required data.
    Another commenter stated that ACS raises questions about the 
reliability of data for the Indian population, asserting that State 
Data Centers and Census Information Centers nationwide express concerns 
for the high margin of error in small populations and small geographic 
areas. Stating that changes were made in 2011 to improve the data and 
that the full effect of these improvements will not be known until 
2017, this commenter urged the Department to allow tribes to use their 
own census statistics in the interim until reliable data are available.
    Multiple commenters also proposed a different definition of ``high-
poverty area'' that uses specific terms as defined by the U.S. Census 
Bureau: ``a Census tract, a set of contiguous Census tracts, an 
American Indian Reservation, Oklahoma Tribal Statistical Area (as 
defined by the US Census Bureau), Alaska Native Village or Alaska 
Native Regional Corporation Area, Native Hawaiian Homeland Area or 
country.'' In addition, these commenters recommended that in the Native 
American supplemental youth services program, the definition of ``high-
poverty area'' should relate specifically to poverty rates for the 
Native American population as that is the target population for this 
program.
    Department Response: As of the date of these Final Rules, the 
Department is using special tabulations from the Census Bureau for the 
INA funding formulas described at Sec. Sec.  684.270(b) and 684.440(a). 
As stated by the commenter, these special tabulations are based on 2000 
decennial census data and have not been updated with ACS 5-year data; 
however, the special tabulations for the

[[Page 56214]]

formula are a different calculation than the one for determining high-
poverty. The calculation for determining high-poverty can be obtained 
by INA program grantees using ACS 5-year data from the Census Bureau's 
Web site.
    Comments: A commenter raised concerns regarding the use of ACS 5-
year data in determining the poverty rate for a given census tract.
    Department Response: The Department recognizes there will be 
margins of error inherent to the ACS 5-year data and that the margin of 
error is likely to be greater for census tracts with smaller sub-
populations, such as Native Americans living in rural and remote 
reservation areas. The ACS 5-year data are administered by the U.S. 
Census Bureau and is subject to a uniform methodology for collecting 
population and poverty data for all census tracts throughout the United 
States. Conversely, allowing tribes to use their own census statistics 
does not provide for such uniformity, as the method that one tribe uses 
to count individuals could be different than how another tribe counts 
individuals. Because the methodology for counting individuals must be 
the same across all of the United States to ensure fairness, and 
because the U.S. Census Bureau is the only source that can provide such 
uniformity, the Final Rule continues to reference ACS 5-year data.
    Regarding the remainder of the definition of ``high-poverty area,'' 
the Department agrees with the commenter and has adopted more precise 
U.S. Census Bureau language. The Department also has added language 
that permits the Secretary to identify other areas that an applicant 
can use to calculate the poverty rate, which allows flexibility in case 
the areas change for which ACS5-Year data are available.
    The Department also agrees that INA program grantees should be able 
to look to the poverty rate of INA individuals when determining if an 
area is ``high-poverty.'' The Department recognizes that it is possible 
for the overall poverty rate in a census tract to be below the 25 
percent poverty threshold for the general population while the poverty 
rate among the INA sub-population in that same census tract is greater 
than 25 percent. Consequently, the Department added language to the 
definition of high-poverty area permitting INA program grantees to 
claim ``high-poverty'' status for a particular area if the poverty rate 
of the INA population is at least 25 percent; however, the Department 
has retained language that allows an area to be considered high-poverty 
where 25 percent or more of the general population is in poverty. The 
Final Rule retains this language in order to allow INA program grantees 
the flexibility of selecting the methodology that is more advantageous 
for its participants. Therefore, grantees may calculate the poverty 
rate using the following two methodologies: (1) The number of low-
income individuals in a census tract divided by the total number of 
individuals in the same census tract; or (2) the number of low-income 
INA individuals in a census tract divided by the total number INA 
individuals in the same census tract.
    While no comments were received on this section about the 30 
percent threshold used in determining high poverty, the Department 
received many comments about the 30 percent threshold in a similar 
section of the regulation (Sec.  681.260). As a result of the numerous 
comments on Sec.  681.260 and the analysis of the comments, the 
Department determined that a poverty rate of at least 30 percent was 
too high, and the Final Rule requires a poverty rate of at least 25 
percent. Consequently, the Department has changed the percentage 
requirement for this section to be consistent with Sec.  681.260.
    The Department also made clarifying edits to Sec.  684.130 to the 
meaning of and Indian-Controlled Organization.
3. Subpart B--Service Delivery Systems Applicable to Section 166 
Programs
Section 684.200 What are the requirements to apply for a Workforce 
Innovation and Opportunity Act grant?
    Comments: A commenter requested that the Department eliminate or 
lower the $100,000 threshold in proposed Sec.  684.200(a)(2). This 
commenter stated that the proposed threshold would eliminate 36 small, 
long-time grantees and would leave many rural people unserved on their 
reservations. The commenter also questioned the reasoning behind 
allowing tribes participating in the consolidation program under Public 
Law 102-447 to receive funding under sec. 166 for less than $100,000 
but greater than $20,000 but not afford a similar exception for INA 
program grantees that are not participating in Public Law 102-447 but 
receive funds from multiple sources.
    Department Response: The Department has determined that grants of 
less than $100,000 are not sufficient to operate an employment and 
training grant effectively. The Department has made an exception for 
certain incumbent grantees whose funding was less than $100,000, 
because the Department recognizes that many of these entities are well-
established in the community and have been operating an employment and 
training program for many years. Because incumbent grantees can 
continue to operate grants even if those grants are for less than 
$100,000, the Department has determined that implementation of this 
provision as proposed would not eliminate the 36 incumbent grantees to 
which the commenter refers.
    As for allowing tribes that participate in the Public Law 102-477 
program to have a lower funding threshold than grants administered 
through the Department, the Department reached this decision because 
Public Law 102-477 allows for Federal employment and training related 
funds to be consolidated into one grant. This consolidation results in 
administrative savings that make smaller grant amounts administratively 
manageable. Therefore, while the WIOA portion of the consolidated grant 
can be as low as $20,000, all Federal resources combined under the plan 
must total at least $100,000. Because the Department has determined 
that Sec.  684.200(a)(2) would not eliminate the 36 incumbent grantees 
and because tribes participating in Public Law 102-477 also have the 
same $100,000 Federal funding threshold under a consolidated grant, no 
changes have been made to regulatory text except for re-numbering and 
non-substantive edits to paragraphs (c), (d), and (g) for clarity.
Section 684.220 What is the process for applying for a Workforce 
Innovation and Opportunity Act grant?
    Comments: As part of a Council resolution submitted as a public 
comment, the NAETC wrote ``the NAETC agrees and recommends that 4 year 
eligibility of American Indian, Alaska Native and Native Hawaiian 
grantees may be designated for such periods, except as the Secretary 
may choose to waive competition for select grantees who have performed 
satisfactorily.''
    Department Response: The NAETC's resolution suggests that the 
Secretary may choose to waive competition for select INA program 
grantees that have performed satisfactorily. Although that authority 
existed under sec. 166(c)(2) of WIA, WIOA removed that provision. 
Accordingly, sec. 166(c) requires a grant competition to be held every 
4 years for all grantee service areas, and Sec.  684.220 is consistent 
with sec. 166(c) of WIOA. No changes to the regulatory text were made 
in response to this comment.

[[Page 56215]]

4. Subpart C--Services to Customers
Section 684.310 What are Indian and Native American program grantee 
allowable activities?
    Comments: A commenter indicated that the allowable activities 
reference to 20 CFR 678.430 could not be found.
    Department Response: The Department has determined that the 
reference to 20 CFR 678.430 was correct. Proposed regulations for WIOA 
were issued in two separate NPRMs in the Federal Register. One NPRM 
includes proposed rules for Department of Labor programs only; this 
NPRM included regulations for the INA program. The other NPRM provides 
proposed joint rules for the Department of Education and the Department 
of Labor. Language referenced at 20 CFR 678.430 was published in the 
Joint WIOA NPRM (80 FR 20574, Apr. 16, 2015). No changes to the 
regulatory text were made in response to this comment.
Section 684.350 What will the Department do to strengthen the capacity 
of Indian and Native American program grantees to deliver effective 
services?
    Comments: A commenter requested that the Department expand on the 
language that the Department will provide technical assistance and 
training (TAT) to ``assist INA program grantees to improve program 
performance and improve the quality of services to the target 
population(s), as resources permit.'' Specifically, this commenter 
asked for clarification regarding available resources to provide such 
TAT and asked how the ``quality of services'' would be defined--
specifically and culturally appropriate--within Indian country.
    Department Response: The Department has decided to retain the 
regulatory text as proposed to preserve flexibility if additional 
resources become available. The Department notes that the regulatory 
text identifies two resources that can be used for TAT: (1) Funds 
reserved under Sec.  684.270(e) and (2) unawarded funds under Sec.  
684.260.
    Comments: The commenter also asked about the definition of 
``quality of services.''
    Department Response: Quality services can take many forms such as 
high quality career and guidance counseling, helping individuals with 
job search and job placement assistance, mentoring, financial support 
for quality training and education, and providing the necessary 
supportive services to help individuals overcome barriers, etc. The 
Department notes that grantees are required to describe the quality of 
services that will meet their customers' needs in their 4-year 
strategic plan and provides guidance on the content of that plan. The 
Department then monitors grantees to ensure they are providing the 
quality services reflected in their plan, provides rigorous technical 
assistance to improve quality in the course of these reviews and 
ongoing, and disseminates best practices that exemplify quality 
services.
5. Subpart D--Supplemental Youth Services
Section 684.410 What entities are eligible to receive supplemental 
youth services funding?
    Comments: Multiple commenters opposed the exclusion of Federally 
recognized tribes that do not have a land base, commenting that this 
limitation fails to recognize the unique history of California Indians 
and would adversely impact the Federally recognized tribal communities 
that do not yet have land in trust but have been eligible for funding 
and have received services under prior workforce legislation. 
Explaining some of the land history of California tribes, a commenter 
suggested that Federally recognized tribes without a land base in 
California should not be prevented from receiving funding or offering 
supplemental youth services to their members and asserted that the 
exclusion of the California tribal communities within the service area 
would have discriminatory effects on Federally recognized tribes 
without a land base in California.
    Department Response: Upon review of the comments, the Department 
has included new language similar to the regulatory language that was 
in effect under WIA. The Department notes that, currently, recipients 
of youth funding are limited to entities with a land base per the 
formula that The Department has established with the input of the NAETC 
pursuant to the requirements of Sec.  684.440. The youth funding 
formula is based on demographic data from the U.S. Census Bureau using 
the geographic boundaries of American Indian reservations, Oklahoma 
Tribal Statistical Areas (OTSAs), Alaska Native Village Statistical 
Areas (ANVSAs), Alaska Native Regional Corporations (ANRCs), and the 
State of Hawaii. During the conversion process from the 1990 census to 
the to the 2000 census under WIA, the Department consulted with the 
NAETC's census workgroup on the youth funding formula. The 2000 census 
workgroup made no recommendations to change this methodology. 
Therefore, the methodology of awarding youth grants continues to be 
based on American Indian reservations, OTSAs, ANVSAs, ANRCs, and the 
State of Hawaii. Finally, INA program grantees should note that even if 
they are not required to have land base to receive youth supplemental 
funds, sec. 166(d)(2)(A)(ii) still limits participants in INA youth 
programs to ``youth on or near Indian reservations and in Oklahoma, 
Alaska, or Hawaii.''
Section 684.430 What individuals are eligible to receive supplemental 
youth services?
    Comments: A commenter supported the increase in age from 21 to 24 
and asked whether additional funding will be considered to best serve 
this population that has been defined by the Department as most in need 
and having barriers to employment.
    Department Response: Program funding is ultimately determined by 
Congress through annual funding appropriations for Federal employment 
and training programs. Consequently, there is not necessarily a 
relationship between an increase in the number of individuals eligible 
for a program and an increase in funding. No changes to the regulatory 
text were made in response to this comment.
Section 684.460 What performance indicators are applicable to the 
supplemental youth services program?
    Comments: Several commenters expressed concerns with the 
performance accountability indicators applicable to the Native American 
supplemental youth services program. These concerns fall into three 
categories: (1) Concerns about the feasibility of implementing the 
performance indicators given the limited amount of funding available 
for the youth supplemental program, (2) concerns about the 
applicability of the youth performance indicators given that most 
tribes use INA youth funds operate a summer employment program only, 
and (3) specific concerns about regulation language. Several commenters 
suggested that the Department retain the WIA performance measures or 
waive the WIOA performance indicators.
    Multiple commenters raised concerns about expense and feasibility 
of data collection for the performance indicators, particularly that 
the current performance reporting system used by INA program grantees 
(Bear Tracks) is not adequate for the proposed performance requirements 
and would be costly to upgrade. Specifically, a commenter asserted that 
the total update cost may exceed $1 million,

[[Page 56216]]

stating that the current Microsoft Access platform does not allow the 
Department to obtain real-time data across the INA grant community 
because it is not Web-based. This commenter also asserted that training 
would be necessary for INA program grantees on a nationwide basis on 
the new performance reporting system.
    Multiple commenters stated that, given the disparity in funding 
between the INA youth grants and the State grants, it is not reasonable 
or practical to require the same level of service and effort in 
collecting performance data given the small median size of grants. A 
commenter stated that the INA youth program currently does not have the 
ability to do wage matching through the Wage Record Interchange System 
(WRIS). This commenter expressed concern regarding the burden on INA 
program staff over following up with participants to determine the 
``unsubsidized employment'' aspect of certain performance indicators.
    A commenter expressed concern that maintaining current regression 
models for the INA program grantees that factor in local economic 
conditions is an additional cost that must be considered.
    A commenter said that such programs are not conducive to meeting 
several of the State performance indicators, stating that most INA 
program grantees only operate summer employment programs for high 
school-aged youth,. Because the INA program is not a core program, a 
commenter suggested that the ``effectiveness in serving employers'' 
performance indicator should not apply to INA programs, citing WIOA 
sec. 116(b)(2)(A)(iv).
    A commenter proposed that the Department allow the INA program to 
modify the definitions for the indicators to better fit a summer 
employment program that primarily serves high school-aged youth that 
return to high school in the fall and that the regulations or ETA 
policy clarify that the indicators cannot be used to determine INA 
program grantee performance. This commenter suggested that while the 
Department develops performance indicators for the INA youth programs 
in consultation with the INA program grantee community and the NAETC, 
the Department should establish a waiver process under which INA 
program grantees would continue to use the current Tribal Supplemental 
Youth Services performance indicators and goals under WIA as part of 
the 4-year strategic plan.
    Commenter concerns about other specific regulation language 
included: Multiple commenters asked for more specificity on what is 
considered an ``education or training'' activity and whether high 
school is considered an ``education'' activity. Another commenter 
expressed opposition to proposed Sec.  684.460(b), which would require 
the Secretary, in consultation with the NAETC, to develop additional 
performance indicators (in addition to the primary indicators of 
performance). A commenter encouraged the expansion of the median 
earnings performance measure in Sec.  684.460(a) to include 
consideration of a participant's economic self-sufficiency level or 
economic security level in addition to median earnings. Another 
commenter stated that the reference in Sec.  684.620(a)(6) to WIOA sec. 
116(b)(2)(A)(iv) is incorrect. Instead, the reference should be to sec. 
116(b)(2)(A)(i)(VI).
    Department Response: The Department held two tribal and grantee 
consultations on WIOA in which stakeholders raised concerns with the 
youth performance indicators similar to the concerns expressed in these 
comments. The Department recognizes that there are significant 
challenges in implementing the youth performance indicators at sec. 
116(b)(2)(A)(ii) of WIOA. While the Department cannot change statutory 
requirements such as performance indicators, consideration has been 
given to how youth performance indicators can be implemented in a way 
that is realistic and feasible for INA program grantees while also 
maintaining the requirements in WIOA.
    Because WIOA requires the use of the performance indicators at WIOA 
sec. 116(b)(2)(A) for the recipients of funds under WIOA sec. 166, 
including the youth performance indicators at 116(b)(2)(A)(ii), no 
changes have been made to the regulatory text in response to these 
comments.. However, the Department notes that recipients of youth funds 
under sec. 166 of WIOA may request a waiver of the youth indicators of 
performance pursuant to waiver procedures that will be established 
under sec. 166(i)(3) of WIOA. The waiver procedures established 
pursuant to sec. 166(i)(3) of WIOA generally will be consistent with, 
but not identical to, the waiver requirements under sec. 189(i)(3)(B) 
of WIOA. The Department will consult with the NAETC before developing 
guidance on the waiver process. The Department anticipates that this 
guidance will include youth performance indicators that may be 
substituted for the performance indicators identified at WIOA sec. 
116(b)(2)(A). Finally, the Department also envisions that waivers to 
the youth performance indicators will be requested at the beginning of 
a 4-year grant award cycle, in the 4-year strategic plan and will waive 
youth performance indicators for the duration of the 4-year grant cycle 
plan. Through this process, the Department anticipates that recipients 
of youth INA funding can establish performance indicators that address 
both the grantees' feasibility and applicability concerns.
    Comments: Commenters' requested more specificity on what is 
considered an ``education or training'' activity and whether high 
school is considered an ``education'' activity.
    Department Response: The Department will provide clarification on 
this and other performance-related terms in guidance. Finally, the 
Department also will work with the NAETC to update the INA programs' 
current MIS system or develop a new MIS system to collect the data 
necessary (including wage records) to report on the outcomes of the INA 
youth indicators, (as well as the outcomes of INA adult performance 
indicators).
    Comments: Commenters expressed concerns about establishing a 
statistical regression model.
    Departments Response: The Department acknowledges the commenters 
concerns about the cost of maintaining a statistical regression model. 
The cost of developing a statistical adjustment model is the 
responsibility of the Department and the Department continues to seek 
ways to develop accurate and fair statistical adjustment models that 
are cost effective and maintainable. As the Department continues to 
implement WIOA and refine the application of the model for sec. 166 
grantees the Department will provide additional information.
    As for the concern about the applicability of the performance 
indicator regarding effectiveness of serving employers under Sec.  
684.460(a)(6), the Department has determined that WIOA sec. 166(h) 
requires the use of all performance indicators under WIOA sec. 
116(b)(2)(A), including the indicator on effectiveness in serving 
employers at sec. 116(b)(2)(A)(i)(VI). That WIOA sec. 116(b)(2)(A)(iv) 
references the core programs does not limit the applicability of the 
indicator on the effectiveness in serving employers to the core 
programs. Because WIOA clearly requires the application of the 
indicator on effectiveness of serving employers for recipients of funds 
under sec. 166, no changes have been made to the regulatory text.

[[Page 56217]]

    Regarding the incorrect reference in Sec.  684.620(a)(6), the 
Department has examined the reference to sec. 116(b)(2)(A)(iv) in Sec.  
684.460(a)(6) and has determined that the reference is correct.
    Concerning the opposition to Sec.  684.460(b), which requires the 
development of performance indicators that are in addition to the 
primary indicators of performance, this is a statutory requirement and 
cannot be altered here.. However, as part of a waiver request, the 
Department envisions that these additional indicators which will be 
developed in consultation with the NAETC, may be used in lieu of the 
primary indicators of performance specified at Sec. Sec.  
684.460(a)(1)-(6) and 684.620(a)(1)-(6). Please see further discussion 
of the adult performance indicators in the preamble corresponding to 
Sec.  684.620.
    Comments: A commenter encouraged the Department to expand the 
median earnings performance indicator at Sec.  684.460(a)(3), to 
include a participant's economic self-sufficiency level or economic 
security level.
    Department Response: The Department determined that there is not an 
accurate way of converting a self-sufficiency/economic security level 
into an average earnings amount. No changes have been made to 
regulatory text in response to these comments.
6. Subpart F--Accountability for Services and Expenditures
Section 684.620 What performance indicators are in place for the Indian 
and Native American program?
    Comments: The comments on the performance indicators in Sec.  
684.620 raise many of the same issues as the comments on the youth 
performance indicators in Sec.  684.460. For example, many commenters 
expressed concerns about the cost of implementing the performance 
indicators and suggested that the Department should develop performance 
indicators with the help of INA program grantees. Additionally, 
commenters noted challenges with the proposed use of reporting 
following the State reporting mechanisms and urged the Department to 
negotiate with and assist INA program grantees in developing a 
culturally amenable system of reporting that does not impede grantees 
ability to prioritize services to participants.
    Another commenter expressed concerns that the proposed performance 
indicators would require a significant re-design (or replacement) of 
the current performance reporting system used by INA program grantees 
(Bear Tracks).
    A commenter noted that more than one-third of the WIOA sec. 166 INA 
program grantees are allocated less than $100,000. The commenter 
expressed concerns that WIOA increases the reporting burden for WIOA 
sec. 166 programs by using a more complex set of indicators and 
expressed concern for the statistical regression model.
    A commenter suggested that INA programs should have their own 
performance indicators that they help to develop and another commenter 
suggested that a waiver provision for performance is necessary.
    Additionally, a commenter suggested that the Department may have 
violated E.O. 13175's requirements to consult with tribal officials in 
the development of Federal policy that has tribal implications. This 
commenter reasoned that the WIOA-mandated primary indicators of 
performance removes the step of consultation with WIOA sec. 166 INA 
programs and the NAETC to develop performance indicators in accordance 
with the purpose and intent of WIOA sec. 166.
    A commenter also expressed concern that WIOA could be construed to 
require greater reporting requirement of INA program grantees than 
States and municipalities. This commenter requested that the 
regulations clarify that tribes and tribal organizations do not have 
any greater reporting requirements than States or local governments.
    Finally, a commenter suggested that Sec.  684.620(a)(6) contains an 
incorrect reference.
    Department Response: The Department continues to seek an 
appropriate balance of being accountable for Federal funds through 
tracking and reporting outcomes while not over-burdening the recipients 
of Federal funds with undue reporting costs and other administrative 
requirements. Maintaining such a balance between performance 
accountability and burden will be important to WIOA implemented.
    The performance indicators at Sec.  684.620 implement six 
statutorily required performance indicators and also require the 
Department (in consultation with the NAETC) to develop an additional 
set of performance indicators and standards that are applicable to the 
INA program. To the extent that a commenter requested that the 
Department clarifies in the regulations that sec. 166 recipients do not 
have reporting requirements in addition to those of recipients of State 
adult, youth and dislocated worker funds, the Department notes that 
such a clarification would be contrary to the statutory language of 
WIOA. Section 166(h)(1)(A) of WIOA requires that a set of performance 
indicators be developed ``in addition'' to the performance indicators 
described in sec. 116(b)(2)(A). Therefore, WIOA requires that INA 
program grantees be subject to additional performance indicators.
    However, to the extent that commenters are asking for the 
Department to waive performance indicators for the INA adult program, 
the Department recognizes that there are challenges in applying the 
indicators to the INA program. As discussed in the preamble to Sec.  
684.460, the Department is considering a waiver policy for the youth 
program for these indicators pursuant to the waiver process at Sec.  
684.910. The Department recognizes that WIOA provides broad waiver 
authority for the INA program; however, WIOA sought to hold programs 
accountable for performance by requiring common performance indicators 
to compare across programs. Any waivers for the adult program will be 
considered on a case-by-case basis to account for the needs and 
circumstances of individual grantees.
    The Department also recognizes that updates will need to be made to 
the information collection and reporting software known as Bear Tracks 
and understands that an investment may need to be made in the software 
to move it from a Microsoft Access platform to a web-based platform. 
Training also will need to be provided to grantees on the new 
performance indicators and the new updates to the software. In 
addition, baseline data will need to be established before target 
levels for performance can be established. The Department is providing 
technical assistance and guidance to support grantees in transitioning 
to the new performance indicators under WIOA.
    Additionally, as noted in the response to Sec.  684.620, the 
Department has taken the commenters concerns about establishing a 
statistical regression model under consideration. As the Department 
continues to implement WIOA and refine the application of the model for 
sec. 166 grantees, the Department will provide additional information.
    Additionally, a commenter proposed that Sec.  684.620(a)(6) 
contains an incorrect reference. The Department has reviewed the 
provision and determined that the reference is correct.
    The Department also will ensure compliance with the requirements of 
the Privacy Act. Because the Department is already bound by the 
requirements of the Privacy Act, the Department has

[[Page 56218]]

determined that it is not necessary to add language to the regulation 
confirming this requirement. No changes to the regulatory text were 
made in response to these comments.
    As for the comments on E.O. 13175, the Department notes that E.O. 
13175 requires each Federal agency to have an accountable process to 
ensure meaningful and timely input by tribal officials in the 
development of regulatory policies that have tribal implications. The 
primary indicators of performance are required by WIOA and are not the 
result of a policy or regulation implemented by the Department. 
Therefore, the Department did not violate E.O. 13175 or the 
consultation requirement at sec. 166(i)(2). Please see the DOL WIOA 
NPRM preamble and the introductory text at the beginning of the 
preambles for the Joint and DOL WIOA Final Rules for additional 
discussion of the steps taken to fulfill the Department's consultation 
requirements. In its implementation of the primary indicators of 
performance, the Department will continue to comply with the 
requirements of E.O. 13175 by ensuring input by tribal officials and 
the NAETC, which represents Indian tribes, tribal organizations, Alaska 
Native entities, Indian-controlled organizations serving Indians, and 
Native Hawaiian organizations.
7. Subpart I--Miscellaneous Program Provisions
Section 684.910 What information is required in a waiver request?
    No public comments were received for this section; however, the 
Department has made changes to this regulation in response to comments 
on Sec. Sec.  684.460 and 684.620 to clarify that the requirements for 
submitting a waiver under sec. 166(i)(3) are not identical to the 
waiver requirements under sec. 189(i)(3)(B) of WIOA. Instead, they 
generally follow the requirements under sec. 189(i)(3)(B). The 
Department will address this issue further in overall guidance on the 
4-year strategic plan.
Section 684.950 Does the Workforce Innovation and Opportunity Act 
provide any additional assistance to unique populations in Alaska and 
Hawaii?
    Comments: A commenter urged the Department to issue Requests for 
Proposal (RFPs) as soon as possible to implement WIOA sec. 166(k), 
which authorizes additional funding for competitive grants ``to 
entities with demonstrated experience and expertise in developing and 
implementing programs for the unique populations who reside in Alaska 
and Hawaii . . . to improve job training and workforce investment 
activities for such unique populations.'' As part of this competitive 
RFP process, this commenter urged the Department to prioritize the 
expertise and cultural sensitivity of tribes, tribal organizations, and 
Native Hawaiian-serving organizations, particularly any WIOA sec. 166 
grantees. The commenter asserted that such a preference priority would 
ensure that the entities with the greatest experience and success in 
addressing employment and training issues in Alaska Native and Hawaiian 
populations would drive the programs.
    Department Response: The Department plans to issue a Funding 
Opportunity Announcement (FOA) in PY 2016 (beginning July 1, 2016) to 
award grant funding to entities in accordance with WIOA sec. 166(k). 
The Department will consider establishing a priority under advisement 
when creating the FOA.

I. Part 685--National Farmworker Jobs Programs Under Title I of the 
Workforce Innovation and Opportunity Act

1. Introduction
    The purpose of part 685 is to implement WIOA sec. 167, which 
authorizes migrant and seasonal farmworker (MSFW) programs. MSFW 
programs include career services and training, housing assistance, 
youth services, and related assistance to eligible MSFWs. In drafting 
these regulations, the Department consulted with States and MSFW groups 
during stakeholder consultation sessions conducted in August and 
September 2014, as required by WIOA sec. 167(f).
    The Department received numerous comments on part 685. Many 
commenters supported the Department's focus on serving MSFW youth and 
the broad definition of ``dependents,'' who can be served through the 
program. General concerns raised regarding part 685 included how the 
Department treats the NFJP operationally and administratively compared 
to other WIOA programs, and the need for additional emphasis on co-
enrollment opportunities for NFJP participants with other WIOA 
authorized programs, including the dislocated worker program.
    Based on the comments received, the Department made the following 
significant changes to part 685 as proposed:
     The Final Rule permits an NFJP grantee some flexibility to 
increase the OJT reimbursement rate up to 75 percent of the wage rate 
of a participant, provided that such reimbursement rates are consistent 
with the rates set by the Governor in the State or Local WDB(s) in the 
Local Area(s) which the grantee operates in accordance with WIOA sec. 
134(c)(3)(H)(i);
     The Final Rule revises Sec.  685.360(d) to clarify that 
NFJP-funded permanent housing development activities that benefit 
eligible MSFWs do not require individual eligibility determinations;
     The Final Rule clarifies in Sec.  685.360 that development 
of on-farm housing located on property owned and operated by an 
agricultural employer is an allowable activity; and
     In response to commenters' concerns regarding the negative 
impact that would result on performance indicator calculations by 
including individuals who receive only certain minimal ``related 
assistance'' services which do not require a significant investment of 
staff time and resources, the Department has added language to Sec.  
685.400 that puts the NFJP program in alignment with other WIOA 
authorized programs regarding performance accountability.
    The analyses that follows provides the Department's response to 
public comments received on the proposed INA program regulations. If a 
section is not addressed in the discussion below, it is because the 
public comments submitted in response to the NPRM did not substantively 
address that specific section and no changes have been made to the 
regulatory text. Further, the Department received a number of comments 
on this part that were outside the scope of the regulation and the 
Department offers no response. Lastly, the Department has made a number 
of non-substantive changes to correct grammatical and typographical 
errors to improve the readability and conform the document 
stylistically that are not discussed in the analysis below.
2. General Comments on NFJP
    The Department received a number of comments on NFJP addressing the 
following issues: Administration of the NFJP, co-enrollment of 
participants, portable eligibility and a national records system, 
uniform program branding, treatment of NFJP as compared to other WIOA 
programs, and one-stop infrastructure payments.
Administration of the NFJP
    Several commenters expressed concerns regarding the administration 
of the NFJP. One NFJP grantee commented on the lack of consistency it 
has experienced when interacting with

[[Page 56219]]

Federal representatives from different regions and said there is often 
a disconnect in regulatory interpretation among these representatives. 
To address this confusion, the commenter suggested that multi-regional 
grantees should be assigned only one Federal Project Officer based on 
the grantee's primary location. Multiple commenters stated that the 
Department should not allow grant officers to place additional 
administrative or operational restrictions on NFJP grantees.
    The Department has not revised part 685 in response to these 
comments. The Department is committed to ensuring that grantees are 
treated consistently across regions. The Department's national office 
coordinates with all Employment and Training Administration (ETA) 
regional offices to identify program issues and technical assistance 
needs, and coordinates guidance with Federal Project Officers (FPO) on 
a regular and ongoing basis. A regulatory fix is not required to ensure 
uniformity.
Co-Enrollment
    Comments: Several commenters requested the Department emphasize the 
importance of co-enrollment opportunities across programs. One 
commenter remarked that they would like co-enrolled farmworkers to 
receive training and cost support from other Department programs for 
which they are eligible, in addition to NFJP. Another commenter said 
that one-stop centers should increase co-enrollment opportunities for 
NFJP-enrolled farmworkers, and asserted that grantees often are not 
able to provide these opportunities and resources. Similarly, a few 
commenters suggested that one-stop centers should provide services to 
unemployed farmworkers instead of automatically referring them to NFJP 
services, and urged adult, youth, and dislocated workers programs to 
open their services to farmworkers.
    Department Response: The Department strongly encourages service 
delivery alignment across the one-stop delivery system and other 
workforce partner programs to ensure that services are tailored to meet 
each individual's needs. As described further in 20 CFR part 678 (see 
Joint WIOA Final Rule), to better align service delivery and 
coordination between the one-stop delivery system and other workforce 
partner programs, the Department encourages NFJP grantees and other 
title I programs to develop specific language in the memoranda of 
understanding (MOUs) with Local Workforce Development Boards (also 
referred to as Local WDBs) and other partners addressing co-enrollment. 
The MOU may describe how co-enrollments will be accomplished to meet 
the needs of participants best, address operational issues such as 
eligibility determination and documentation, co-case management, 
specific services provided by each partner, and coordinated fiscal and 
performance tracking. Additionally, 20 CFR 678.500 (see Joint WIOA 
Final Rule) provides a detailed description of what must be included in 
the required MOU between the Local WDBs and required one-stop partners. 
No change has been to the regulatory text here in response to these 
comments.
Portable Eligibility and a National Records System
    Comments: Two commenters stated that if NFJP grantees had a 
unified, Department-supported data collection system, not only would it 
be easier to help farmworkers qualify for service, but it also would 
establish a more unified national presence for the NFJP and ensure 
continuity of services and eligibility across regions. One commenter 
remarked that issues of confidentiality and privacy should be 
considered during the creation of a common eligibility system.
    Department Response: The Department agrees that an integrated 
performance reporting system would assist farmworkers to qualify for 
service, and facilitate co-enrollment and assessment of WIOA 
performance across States and programs. Section 116(d)(1) of WIOA 
requires the Departments to provide a performance reporting template 
and the Departments will seek public comment on the reporting templates 
through the Paperwork Reduction Act (PRA) process. Aligning reports and 
performance definitions will create a performance accountability system 
that is easier to understand and assess the effectiveness of all 
service providers in achieving positive outcomes for individuals served 
across WIOA programs.
    The regulations also established an integrated, individual record 
system.
    Comments: Elaborating on continuity of services and emphasizing the 
inherent migratory nature of farmwork, some commenters urged the 
Department to establish a clear mechanism that ensures that grantees' 
performance will not be negatively affected when farmworkers leave or 
transfer to another grantee or State, and a few commenters stated that 
farmworkers, especially migratory farmworkers, should be allowed to 
transfer services easily if they move to a new State. Some commenters 
suggested creating a uniform branding so that farmworkers can locate 
services in different States more easily.
    Department Response: The Department acknowledges that providing a 
continuity of program services to migrant farmworker populations moving 
from State to State may be challenging, and tracking participants and 
reporting on grantee performance indicator outcomes may be difficult in 
cases where an NFJP participant has moved to another State.
    The Department is continually looking to improve performance 
reporting policies and systems, and is interested in additional 
feedback on assistance the Department can provide for establishing 
mechanisms to track the eligible MSFWs they serve in the NFJP and 
reporting program outcomes.
Uniform Program Branding
    Commenters suggested creating a uniform branding so that 
farmworkers can locate services in different States more easily.
    Department Response: The term NFJP provides nationwide uniformity 
across employment and training grants and housing grants while 
providing flexibility for grantees to tailor their outreach efforts to 
the unique needs of the farmworker communities they serve. The use of 
one-stop center brand for one-stop centers nationwide will also help 
farmworkers find services. The Department encourages grantees in one 
State or service area to consider establishing memoranda of 
understanding (MOUs) with partner grantees in other States or service 
areas, or a joint MOU with multiple grantees, to ensure continuity of 
program services to participants, and support outcome tracking as 
participants move from State to State.
Treatment of NFJP as Compared to Other WIOA Programs
    Comments: Many commenters expressed concern that farmworkers are 
considered a niche population and, thus, do not have the same access to 
the public workforce system as do other workers, and further commented 
that there should not be more restrictions on MSFWs or the NFJP system 
than there are on the main workforce development system. Discussing 
equalization of treatment of NFJP with other WIOA programs, some 
commenters expressed concern that the Department allows carryover funds 
for grantees of adult, youth, and dislocated workers but not for NFJP 
grantees, and one commenter suggested that the Department allow line 
item budget variance with no more restrictions than those placed on the 
mainline public workforce system. Two

[[Page 56220]]

commenters remarked that because the NFJP grant period is 4 years under 
WIOA, the Department should stop treating NFJP grants as one-time 
discretionary grants. And finally, one commenter, commenting on 
proposed Sec.  685.430 (grantee program plan modifications) stated that 
NFJP grantees should be allowed to spend out the grant over the entire 
period of performance, using oldest funds first, just as States are 
permitted to do in proposed Sec.  683.110 (period of performance of 
WIOA title I and Wagner-Peyser Act funds.)
    Department Response: The NFJP is authorized under sec. 167 of WIOA, 
and is not included as a core formula program as defined in WIOA sec. 
3(12). Therefore, the NFJP does not have the all of the same 
requirements, obligations, and flexibilities as States or core 
programs. As described in Sec.  683.110(e) ``funds awarded by the 
Department under WIOA sec. 167 are available for expenditure for the 
period identified in the grant award document, which will not exceed 4 
years,'' which is consistent with other National Programs authorized 
under WIOA title I, subtitle D. NFJP grantees currently have the 
ability to use carry over funds through the current grant cycle which 
ends June 30, 2016, and the Department will continue to establish 
guidelines for the use of carry-over funds through the grant award 
documents as described in Sec.  683.110(e).
    Comments: Some commenters mentioned the 1974 Judge Richey Court 
Order when discussing their arguments for providing farmworkers with 
equal access to system services. Multiple commenters urged the 
Department to allow farmworkers to be eligible for the dislocated 
worker program, and some of those commenters stated that the dislocated 
worker program should not be considered an exclusively ``mainline'' 
resource. Commenters remarked that many farmworkers are unlikely to 
return to agricultural work because of inconsistent employment, 
seasonal layoff, and low income, and commented that these conditions 
should make farmworkers eligible for dislocated worker services.
    Department Response: The Department is committed to ensuring that 
farmworkers have equal access to the public workforce system via the 
State Monitor Advocate System established in the 1974 Judge Richey 
Court Order. Farmworkers qualify to receive career services as a 
dislocated worker in adult and dislocated worker program if they meet 
the definition of ``dislocated worker'' at WIOA sec. 3(15). However, as 
described in Sec.  680.130, Governors and Local WDBs have discretion to 
establish policies and procedures for one-stop operators to use in 
determining an individual's eligibility as a dislocated worker, 
consistent with the definition at WIOA sec. 3(15), and this flexibility 
may result in interstate differences in who may qualify for dislocated 
worker services. No changes have been made to regulatory text in 
response to these comments.
    Comments: Several commenters opposed NFJP grantees' lack of access 
to Unemployment Insurance (UI) records. Commenters stated that allowing 
NFJP grantees to access UI records as other programs do would decrease 
the amount of time and resources that staff expends to find the 
necessary wage record information.
    Department Response: Part 603 (confidentiality and disclosure of 
State Unemployment Compensation (UC) information) of the Final Rule 
permits State agencies to disclose confidential UC information, 
including UI wage information, to ``public officials,'' defined at 
Sec.  603.2(d) (UC program definitions), under limited circumstances. 
These limitations are in place to ensure that confidential UC 
information including personally identifiable information, such as 
Social Security numbers, are appropriately safeguarded. Any NFJP 
grantees that are included in the Sec.  603.2(d) definition of public 
official may request UI wage information from State agencies. NFJP 
grantees who are not included in the definition of public official have 
indirect access to UI wage records through a common reporting 
information system (CRIS) administered by the Department. The 
Department anticipates providing extensive guidance on part 603 
throughout the implementation of WIOA.
One-Stop Infrastructure Payments
    Comments: Multiple commenters urged the elimination of the one-stop 
delivery system proposed infrastructure payments described in 20 CFR 
678.700 (one-stop infrastructure costs) (see Joint WIOA Final Rule), 
and some remarked that the NFJP should be exempt from this requirement 
because NFJP grantees often operate in satellite locations in rural 
areas where the communities face transportation barriers. Several 
commenters stated that, if deemed necessary, infrastructure payments 
should be no greater than the value received by NFJP programs, and some 
commenters suggested that in-kind contributions should be an acceptable 
payment option towards infrastructure costs. One commenter suggested 
that NFJP grantees should continue to be required partners on State and 
Local WDBs if the NFJP is required to contribute to the one-stop 
infrastructure costs.
    Department Response: As described in WIOA sec. 121(b)(1)(B), NFJP 
grantees are a required one-stop partner, and as such, must contribute 
to the infrastructure funding of one-stop operations in the local 
workforce areas in which they operate. The Department does not require 
that NFJP grantees be in every affiliate one-stop center (described in 
20 CFR 678.310 (what is an affiliated site and what must be provided 
there) of this Final Rule); however, all one-stop partners must provide 
access to their programs and activities through the comprehensive one-
stops described in 20 CFR 678.305 (one-stop centers and what they must 
provide), as defined in 20 CFR 678.305(d), and therefore should be 
contributing their proportionate share to the one-stop infrastructure 
costs based on the relative benefit received by the program in these 
centers (see Joint WIOA Final Rule). Regarding the suggestion that in-
kind contributions be an acceptable payment option towards 
infrastructure costs; 20 CFR 678.700 (one-stop infrastructure costs) 
describes infrastructure costs, shared costs, and in-kind 
contributions, and includes the non-personnel costs necessary for the 
general operation of the one-stop center. In-kind contributions may be 
used to cover additional costs relating to the operation of the one-
stop delivery system as described in 20 CFR 678.760 (funding of one-
stop partner's shared costs). Regarding the suggestion that NFJP 
grantees should continue to be required partners on State and Local 
WDBs if the NFJP is required to contribute to the one-stop 
infrastructure costs, under WIOA sec. 101(b) and sec. 107(b), NFJP 
grantees are no longer required members of State or Local WDBs, and the 
Department does not have the authority to require their membership. No 
changes have been made to the regulatory text here in response to these 
comments.
3. Subpart A--Purposes and Definitions
    This subpart describes the general purpose and definitions relevant 
to MSFW programs authorized under WIOA sec. 167, the role of the 
Department in providing technical assistance and training to grantees, 
and the regulations applicable to grantees.
Section 685.110 What definitions apply to this program?
    Proposed Sec.  685.110 provided definitions of terms relevant to 
the

[[Page 56221]]

implementation and operation of workforce investment activities 
authorized for MSFWs and their dependents under WIOA.
    The Department received comments on several definitions in this 
section and these comments are discussed below. All other definitions 
in Sec.  685.110 did not receive substantive comments; therefore, they 
are not discussed below.
    The definition of family included in Sec.  685.110 did not receive 
any comments: However, it is important to note that this definition is 
specific to this part. The term is included for the sole purpose of 
reporting NFJP housing assistance grantee indicators of performance as 
described in Sec.  685.400 (indicators of performance for the NFJP), 
and differs from the definition of family found at Sec.  675.300 
(applicable definitions for WIOA title I regulations). The definition 
of family found at Sec.  675.300 applies to the regulations in 20 CFR 
parts 675 through 688. For example, if an NFJP grantee is using 
``family income'' to determine if an MSFW qualifies as ``low income'' 
as defined in WIOA sec. 3(36), the definition of family at found at 
Sec.  675.300 should be utilized.
    Additionally, the Department added the term ``supportive services'' 
as defined by WIOA sec. 3(59) to the list of defined terms provided in 
Sec.  685.110 to clarify how the term is used in the preamble to part 
685 and specifically in Sec. Sec.  685.330, 685.420, 685.440, and 
685.510.
Eligibility Determination Period
    Comments: Proposed Sec.  685.110 defined eligibility determination 
period as ``any consecutive 12-month period within the 24-month period 
immediately preceding the date of application for the MSFW program by 
the applicant MSFW.'' The definition was adopted from the first clause 
of WIOA sec. 167(i)(3)(A)(i), which defines ``eligible seasonal 
farmworker.''
    Numerous commenters suggested that the definition of eligibility 
determination period should include an exception to the consecutive 12-
month period in situations when a farmworker has been hospitalized or 
incarcerated during the 24-month period preceding the date of the 
application. In those cases in which a farmworker has been hospitalized 
or incarcerated during the most recent 24-month period, one commenter 
recommended that the Department extend the qualifying 24-month period 
to include the balance of the time the farmworker was unable to work.
    Department Response: ``Eligibility determination period'' is 
defined by statute as any consecutive 12-month period within the 24-
month period immediately preceding the date of application for the MSFW 
program by the applicant MSFW. The definition was adopted from the 
first clause of WIOA sec. 167(i)(3)(A)(i), which defines ``eligible 
seasonal farmworker.''
Eligible Seasonal Farmworker
    Comments: Proposed Sec.  685.110 defined Eligible Seasonal 
Farmworker as a low-income individual who for 12 consecutive months out 
of the 24 months prior to application for the program involved, has 
been primarily employed in agricultural or fish farming labor that is 
characterized by chronic unemployment or underemployment; and faces 
multiple barriers to economic self-sufficiency; and dependents of the 
seasonal farmworker as described in WIOA sec. 167(i)(3).
    One commenter asked the Department to provide a definition of 
chronic unemployment/underemployment as that term is used in the 
definition of ``eligible seasonal farmworker.'' This commenter also 
requested clarification as to whether the condition of chronic 
unemployment/underemployment applies to the individual or to an 
industry.
    Department Response: These terms as used in WIOA sec. 
167(i)(3)(A)(i) refers to the nature of the agricultural or fish 
farming labor force as a whole and whether it experiences either 
chronic unemployment or underemployment. In the past, the Department 
has issued additional guidance explaining NFJP participant eligibility 
and will continue to issue such guidance under WIOA.
Emergency Assistance
    Comments: Proposed Sec.  685.110 defined Emergency Assistance as a 
form of ``related assistance'' and means assistance that addresses the 
immediate needs of eligible MSFWs and their dependents, provided by 
grantees. An applicant's self-certification is accepted as sufficient 
documentation of eligibility.
    One commenter, while agreeing with the acceptance of self-
certification, suggested that the Department reinforce self-
certification rather than increase documentation standards when 
developing any TEGL on data validation.
    Department Response: The Department will address WIOA data 
validation requirements in future guidance. Additionally, the 
Department clarified the definition for ``Emergency Assistance'' by 
adding language that mirrors the statute and the definition for 
``Related Assistance.''
National Farmworker Jobs Program (NFJP)
    Comments: Some commenters suggested that the program's name be 
changed to the ``National Farmworker Opportunity Program'' so that the 
program's name is consistent with the Workforce Innovation and 
Opportunity Act, and to acknowledge the NFJP program's origins via the 
Economic Opportunity Act of 1964.
    Department Response: The term NFJP was initially developed in 1999 
by the Secretary's MSFW Advisory Committee to distinguish the NFJP from 
the other workforce investment grants and activities funded under WIA 
sec. 167, such as the farmworker housing assistance grants; however, 
since that time the NFJP has come to be the accepted term for both 
employment and training grants and housing grants. Rebranding the 
program in the initial years of WIOA could create confusion for the 
MSFW populations the program serves who have come to know the program 
as the NFJP. No changes have been made to the regulatory text in 
response to these comments.
Section 685.140 What Workforce Innovation and Opportunity Act (WIOA) 
regulations apply to the programs authorized under WIOA?
    The Department did not receive any comments on this section; 
however, because the list of applicable regulations is not meant to be 
exhaustive, and to avoid any inference otherwise, the Department 
revised Sec.  685.140 in the Final Rule to make clear that the list is 
not all-encompassing.
4. Subpart B--The Service Delivery System for the National Farmworker 
Jobs Program
    This subpart describes the service delivery system for the MSFW 
programs authorized by WIOA sec. 167 including who is eligible to 
receive grants and the role of the NFJP in the one-stop delivery 
system. Termination of grantee designation is explained. This subpart 
also discusses the appropriation of WIOA sec. 167 funds and establishes 
that a percentage of the total funds appropriated each year for WIOA 
sec. 167 activities will be used for housing assistance grants.
Section 685.200 Who is eligible to receive a National Farmworker Jobs 
Program grant?
    Proposed Sec.  685.200 set forth the three characteristics required 
of an entity in order to be eligible to receive NFJP grants. Paragraph 
(a) stated that an eligible entity must have an understanding of the 
problems of

[[Page 56222]]

eligible MSFWs. Paragraph (b) required eligible entities to have a 
familiarity with the agricultural industries and the labor market needs 
of the proposed service area. Paragraph (c) stated that an eligible 
entity must have the ability to demonstrate a capacity to administer 
and deliver effectively a diversified program of workforce investment 
activities, including youth workforce investment activities, and 
related assistance for eligible MSFWs.
    Comments: The Department received numerous comments regarding the 
eligibility requirement set forth in proposed paragraph (c) of this 
section. In particular, these commenters recommended that this 
requirement should take into account the relative youth farmworker 
population in each State.
    Department Response: The Department agrees that the relative youth 
MSFW population in each State should be accounted for when considering 
an applicant's ability to demonstrate a capacity to administer and 
deliver effectively a diversified program of workforce investment 
activities. This issue is more appropriately addressed through the NFJP 
funding allocation formula. Currently funds for NFJP career services 
and training grantees are dispersed based on the funding formula the 
Department published in the Federal Register on May 19, 1999. Job 
Training and Partnership Act: Migrant and Seasonal Farmworker Programs; 
Final Allocation Formula, 64 FR 27390. The Department intends to revise 
this funding formula through a public comment process and plans to 
address this and other issues.
Section 685.210 How does an eligible entity become a grantee?
    Proposed Sec.  685.210 described the process by which an entity may 
become a grantee under this part and explained that an applicant whose 
application for funding has been denied in whole or in part may request 
an administrative review per Sec.  683.800 of this title.
    Comments: The Department received one comment suggesting that this 
section include measures of accountability for purposes of selecting a 
grantee.
    Department Response: Measures of accountability for purposes of 
selecting a grantee will be described in the Funding Opportunity 
Announcement (FOA) for NFJP grantees following the process described in 
this section. No changes have been made to the regulatory text in 
response to this comment.
Section 685.220 What is the role of the grantee in the one-stop 
delivery system?
    Proposed Sec.  685.220 described the role of the grantee in the 
one-stop delivery system and provided that in those Local WDBs where 
the grantee operates the NFJP, as described in its grant agreement, the 
grantee is a required one-stop partner, and is subject to the 
provisions relating to such partners described in 20 CFR part 678 
(description of the one-stop delivery system under title I of the 
Workforce Innovation and Opportunity Act) of this title (see Joint WIOA 
Final Rule). Consistent with those provisions, the grantee and Local 
Workforce Development Board must develop and enter into an MOU which 
meets the requirements of 20 CFR 678.500 of this title (regarding what 
must be included in the Memorandum of Understanding) and sets forth 
their respective responsibilities for providing access to the full 
range of NFJP services through the one-stop delivery system to eligible 
MSFWs (see Joint WIOA Final Rule).
    Comments: The Department received several comments concerning this 
section. Some commenters acknowledged the importance of establishing 
roles and responsibilities through MOUs and urged the Department to 
provide additional guidance on the specific requirements of an MOU 
between the NFJP grantees and key partners, such as the Local WDB or 
State Monitor Advocates (SMAs). One of these commenters reasoned that 
because Local WDBs do not always understand or fully appreciate the 
needs of the farmworker population, they do not aggressively ensure 
that community and partner agencies provide meaningful services, 
suggesting that the creation and implementation of MOUs would help.
    Department Response: Title 20 CFR part 678, subpart C (Memorandum 
of Understanding for the One-Stop Delivery System), provides 
information regarding the required MOU(s) that must be established 
between Local WDBs and required one-stop partners (see Joint WIOA Final 
Rule). Title 20 CFR 678.500 describes what must be included in the MOU 
executed between the Local WDB and the one-stop partners relating to 
the operation of the one-stop delivery system in the Local Area, and 20 
CFR 678.510 describes the collaborative and good-faith approach Local 
WDBs and partners are expected to use to negotiate MOUs, including 
fully and repeatedly engaging partners, transparently sharing 
information, and maintaining a shared focus on the needs of the 
customer. The Department intends to issue additional guidance regarding 
the development of MOUs between Local WDBs and required one-stop 
partners as well as between NFJP grantees and State Monitor Advocates.
    Comments: Regarding the NFJP grantee serving as a required one-stop 
partner, two commenters stated that the decision to colocate services 
can be beneficial but grantees need to consider the financial viability 
of colocation. If it is more beneficial to locate NFJP programs outside 
of a one-stop center, these commenters maintained that grantees should 
be given the flexibility to do so, and that grantees can still develop 
a close partnership with the one-stop delivery system without 
necessarily being colocated. Another commenter remarked that 
traditionally there has been a cost increase associated with operating 
NFJP services in conjunction with a one-stop delivery system, leaving 
less funding available for training programs and participant services.
    Department Response: Title 20 CFR 678.305 (see Joint WIOA Final 
Rule) provides a description of the services that must be provided in a 
one-stop center, including access to partner programs and activities 
carried out by required one-stop partners. One-stop partner program 
services may be provided through the one-stop center either by: (1) 
Having partner program staff physically present at the one-stop center 
to provide information to customers about the programs, services, and 
activities available through partner programs; or (2) providing direct 
linkage through technology to program staff who can provide meaningful 
information or services. NFJP grantees, in collaboration with Local 
WDBs, must determine on a case-by-case basis, whether colocation, or 
another form of direct linkage, is the most effective approach in the 
local workforce area in which they operate. A description of what the 
Department means by direct linkage is found at 20 CFR 678.305(d)(3) 
(see Joint WIOA Final Rule).
Section 685.230 Can a grantee's designation be terminated?
    Proposed Sec.  685.230 explained that a grantee may be terminated 
for cause by the Department in emergency circumstances when such action 
is necessary to protect the integrity of Federal funds or ensure the 
proper operation of the program, or by the Department's Grant Officer, 
if the recipient materially fails to comply with the terms and 
conditions of the award.
    Comments: The Department received one comment requesting that the 
Department define the ``emergency

[[Page 56223]]

circumstances'' under which the Department may terminate a NFJP 
grantee's designation for cause in proposed Sec.  685.230.
    Department Response: The term emergency circumstances may cover a 
variety of contingencies that are too broad to include specifically in 
a definition; no changes have been made to regulatory text in response 
to this comment. When emergency circumstances arise in which the 
Department deems it necessary to protect the integrity of Federal funds 
or to ensure the proper operation of the program, the Department would 
undertake further investigation and thoroughly document the 
circumstance before termination for cause would be considered. Under 
WIOA sec. 184(e), any grantee so terminated would be provided with 
written notice and an opportunity for a hearing within 30 days after 
the termination.
Section 685.240 How does the Department use funds appropriated under 
the Workforce Innovation and Opportunity Act for the National 
Farmworker Jobs Program?
    Proposed Sec.  685.240 established that in accordance with WIOA 
sec. 167(h), of the funds appropriated each year for MSFW programs, at 
least 99 percent must be allocated to service areas, based on the 
distribution of the eligible MSFW population determined under a formula 
established by the Secretary. This provision further provided that a 
percentage of funds allocated for State service areas would be set 
aside for housing grants and that up to 1 percent of the appropriated 
funds would be used for discretionary purposes, such as technical 
assistance to eligible entities and other activities prescribed by the 
Secretary.
    Comments: One commenter asked if there would be a minimum amount or 
a designated percent of funds allocated for housing grants.
    Department Response: The annual percentage of housing grant funds 
is determined through the Federal budgeting process and final funding 
for housing grants is determined by the Fiscal Year Appropriations Act, 
and may vary from year to year. In the two program years prior to the 
release of this Final Rule the total percent of funds allocated to 
housing grants was approximately 6.74 percent of the total annual NFJP 
funding. This percentage may change from year to year based on the 
needs of the program and the annual budget enacted by Congress; 
therefore, the Department has not established a minimum amount or 
designated percentage of funds allocated for housing grants in the 
regulatory text.
    Comments: One commenter also stated the Department should recognize 
that grantees were not specifically authorized to serve eligible 
farmworker youth, and no resources were provided to do so.
    Department Response: Grantees are authorized to serve eligible 
farmworker youth. WIOA sec. 167(d) specifically states that funds made 
available through WIOA secs. 167 and 127(a)(1) must be used for 
workforce investment activities (including youth workforce investment 
activities) and related assistance for eligible MSFWs and eligible 
farmworker youth are therefore included.
5. Subpart C--The National Farmworker Jobs Program Services to Eligible 
Migrant and Seasonal Farmworkers
    This subpart describes the responsibilities of grantees, and 
workforce investment activities available to eligible MSFWs, including 
career services and training, housing assistance, youth services, and 
related assistance.
Section 685.340 What career services may grantees provide to eligible 
migrant and seasonal farmworkers?
    Proposed Sec.  685.340 established in paragraph (a) that eligible 
MSFWs must be provided the career services described in WIOA secs. 
167(d) and 134(c)(2), and 20 CFR part 680. Proposed paragraph (b) 
stated that the grantees must provide other career services identified 
in the grantee's approved program plan. The Department also included 
language in paragraph (c) to clarify that while career services must be 
made available through the one-stop delivery system, grantees also may 
provide these types of services through other sources outside the one-
stop delivery system. Examples include non-profit organizations or 
educational institutions. Finally, paragraph (d) required that the 
delivery of career services to eligible MSFWs by the grantee and 
through the one-stop delivery system must be discussed in the required 
MOU between the Local Workforce Development Board and the grantee.
    Comments: A number of commenters recommended that the Department 
delete proposed paragraph (c). Commenters noted that NFJP grantees, as 
required one-stop partners, are required to provide services through 
the one-stop delivery system as described in statute, regulation, and 
required MOUs and therefore, this particular provision is not 
necessary.
    Department Response: The Department is revising Sec.  685.340 in 
response to these comments. The Department agrees that proposed 
paragraph (c) of this section is not required in the context of 
describing what career services grantees may provide to eligible MSFWs. 
Accordingly, the paragraph has been struck from Sec.  685.340 and the 
remaining paragraph has been re-lettered from (d) to (c). A full 
description of the roles and responsibilities of NFJP grantees, as 
required one-stop partners, is found at 20 CFR 678.420 (see Joint WIOA 
Final Rule).
    In addition, the Department has revised the title of this section 
and paragraphs (a) and (b) of Sec.  685.340 in the Final Rule by 
replacing the term ``must'' with ``may'' to make the titles in 
Sec. Sec.  685.340 through 685.380 consistent, and to clarify that the 
Department does not require NFJP grantees to make all the services 
described in this section available to participants. Rather, the 4-year 
program plan described in Sec.  685.420 must indicate the specific 
career services that will be made available to all participants and 
provided based on the individual needs of each participant.
Section 685.350 What training services may grantees provide to eligible 
migrant and seasonal farmworkers?
    Proposed Sec.  685.350 identified the training services that 
grantees provide to eligible MSFWs. Paragraph (a) established that the 
training activities provided by grantees are those in WIOA secs. 167(d) 
and 134(c)(3)(D), and 20 CFR part 680 (Adult and Dislocated Worker 
Activities Under Title I of WIOA). These activities include, but are 
not limited to, occupational-skills training and OJT. The Department 
also emphasized that eligible MSFWs are not required to receive career 
services prior to receiving training services, as described in WIOA 
sec. 134(c)(3)(iii). This section also reinforced the intent of WIOA 
and stated in paragraph (b) that training services be directly linked 
to an in-demand industry sector or occupation in the service area, or 
in another area to which an eligible MSFW receiving such services is 
willing to relocate, consistent with WIOA sec. 134(c)(3)(G)(iii). The 
Department also established in paragraph (c) that training activities 
must encourage the attainment of recognized postsecondary credentials 
as defined in Sec.  685.110 (which refers to WIOA sec. 3(52)), when 
appropriate for an eligible MSFW. This requirement is in alignment with 
WIOA secs. 116(b)(2)(A)(i)(IV) and 116(b)(2)(A)(ii)(III), which include 
``the

[[Page 56224]]

percentage of program participants who obtain a recognized 
postsecondary credential, or a secondary school diploma,'' as a primary 
indicator of performance for both the adult and youth programs.
    Comments: Numerous commenters remarked that training services 
should be linked with careers that are ``in-demand,'' but suggested 
that the regulation provide for the flexibility to consider customer 
needs, choices, and circumstances, so that individuals may be placed in 
careers that will help them gain economic stability, even if the career 
is not defined as ``in-demand.'' Several commenters also noted that the 
requirement in proposed Sec.  685.350(b) that training services ``must 
be directly linked to an in-demand industry sector or occupation in the 
service area'' may be unintentionally limiting.
    Department Response: This section reinforces the intent of WIOA 
that training services be directly linked to an in-demand industry 
sector or occupation in the service area, or in another area to which 
an eligible MSFW receiving such services is willing to relocate, 
consistent with WIOA sec. 134(c)(3)(G)(iii). WIOA sec. 3(23) broadly 
defines ``in-demand industry sector'' and maintains flexibility.
    NFJP grantees may determine that a sector or occupation is in-
demand in the context of where the grantee operates its NFJP program, 
and this may be at the State, regional or local service area level. 
Additionally, activities designed to assist eligible MSFWs establish a 
work history, demonstrate success in the workplace, and develop the 
skills that lead to entry into and retention in unsubsidized employment 
do not need to be in an in-demand industry sector or occupation in the 
service area where the NFJP operates. Examples of these types of 
activities may include, but are not limited to, career services such as 
internships and work experiences and transitional jobs as defined in 
WIOA sec. 134(d)(5) which provide time-limited work experiences that 
are subsidized and are in the public, private, or nonprofit sectors.
    Comments: One commenter also suggested that emerging careers should 
be considered when determining training options for NFJP participants.
    Department Response: The Department agrees that emerging careers 
should be taken into consideration when establishing participant 
training options consistent with the Sec.  685.350. The Department 
encourages training in emerging sectors when the sector or occupation 
is in-demand in the service area, or in another area to which an 
eligible MSFW receiving such services is willing to relocate.
    Comments: A number of commenters asserted that NFJP grantees should 
have the flexibility to provide up to a 75 percent reimbursement rate 
to employers for on-the-job training (OJT) as Governors and Local 
Workforce Development Boards do under WIOA sec. 134(c)(3)(H)) . A few 
commenters stated that many programs work with competitive employers 
who will favor the workforce programs that provide them the greatest 
benefit. As explained by one commenter, because NFJP is not always 
operated by a State or Local WDB, NFJP grantees who are not a State 
agency or Local WDB need this flexibility to use the same reimbursement 
rate that Governors and Local Workforce Development Boards use in the 
Local Area(s) in which they operate, otherwise they will be unable to 
compete for OJT placements in high-demand fields within the same 
communities.
    Department Response: The Department is revising Sec.  685.350 in 
response to these comments. The Department continues to encourage 
grantees to use work-based learning as an effective service strategy to 
assist job seekers in entering and advancing along a career pathway, 
including OJT and registered apprenticeship, among others. Under WIOA, 
grantees may always reimburse employers for the extraordinary costs of 
training by up to 50 percent of the wage rate of the participant for 
OJT (WIOA sec. 3(44)). The Department maintains that grantees must be 
working in collaboration, rather than competition, with the State and 
Local Workforce Development Boards when meeting the needs of 
participants, but acknowledges that the flexibility offered Governors 
and Local Workforce Boards (WIOA sec. 134(c)(3)(H)) to account for 
factors such as the characteristics of the participants; the size of 
the employer; the quality of employer-provided training and advancement 
opportunities; and other factors, may encourage the participation of 
employers who may otherwise be deterred from working with MSFW 
populations. To address commenters' concerns regarding the OJT employer 
reimbursement rate the Department adds paragraphs Sec.  685.350(a)(1) 
and (2), which provide NFJP grantees the flexibility to increase the 
OJT reimbursement rate up to 75 percent of the wage rate of a 
participant under certain conditions, provided that such reimbursement 
is being provided consistent with the reimbursement rates used under 
WIOA sec. 134(c)(3)(H)(i) (use of funds for employment and training 
activities) for the Local Area(s) in which the grantee operates its 
program.
    In addition, the Department has revised the title of this section 
and Sec.  685.350(a) in the Final Rule by replacing the term ``must'' 
with ``may'' to make the titles in Sec. Sec.  685.340 through 685.380 
consistent, and to clarify that the Department does not require NFJP 
grantees to make all the services described in this section available 
to participants. Rather, the 4-year program plan described in Sec.  
685.420 must indicate the specific training services that will be made 
available to all participants and provided based on the individual 
needs of each participant.
Section 685.360 What housing services may grantees provide to eligible 
migrant and seasonal farmworkers?
    Proposed Sec.  685.360 required in paragraph (a) that housing 
grantees must provide housing services to eligible MSFWs and in 
paragraph (b) that career services and training grantees may provide 
housing services to eligible MSFWs as described in their program plan. 
The proposed section established in paragraph (c) the definitions of 
permanent housing and temporary housing services that are available to 
eligible MSFWs and provided examples of each type of housing services 
in paragraphs (d) for permanent housing and (e) for temporary housing. 
In paragraph (f), the proposed section stated that housing services may 
be provided only when the services are required to meet the needs of 
eligible MSFWs to occupy a unit of housing for reasons related to 
seeking employment, retaining employment, or engaging in training.
    Comments: Several commenters remarked that permanent housing 
requirements should differ from temporary housing requirements because 
of the timing of the services delivered. These commenters stated that 
many of the eligible housing services for permanent housing take place 
before an MSFW is identified for occupancy and therefore if Department 
funds are not used to support the on-going management of the project, 
there is no way for the NFJP grantee to ensure that only NFJP-eligible 
MSFWs would benefit from the eventual housing services. In addition, 
commenters noted that other funding sources complement NFJP resources, 
including United States Department of Agriculture (USDA) 514/516 Farm 
Labor Housing funds. Because providers of these funds have slightly 
different eligibility criteria for farmworker tenants, the commenters 
warned that it would be difficult to

[[Page 56225]]

ensure that all MSFWs on a property are NFJP-eligible. Accordingly, 
these commenters recommended revising the language in proposed Sec.  
685.360 to accommodate these realities and allow for more flexibility 
with regard to eligibility for permanent housing services, by stating, 
for instance, that permanent housing units developed with NFJP funds be 
available to low-income MSFWs per the eligibility criteria of the 
primary provider(s) of capital funding, rather than limiting primary 
housing services to eligible MSFWs exclusively. These commenters also 
suggested adding language to limit emergency housing assistance 
payments or vouchers (both temporary housing services) to eligible 
MSFWs only, and to make permanent housing units developed with NFJP 
funds available to low-income MSFWs per the eligibility criteria of the 
primary provider(s) of capital funding.
    Department Response: The Department is revising Sec.  685.360 in 
response to these comments. The Department acknowledges the difficulty 
of supporting permanent farmworker housing development and renovation 
projects and ensuring that eligible MSFWs receive the benefits of these 
projects after they are completed. These projects may occur over 
multiple years and include funding from a variety of Federal and non-
Federal sources such as USDA and United States Department of Housing 
and Urban Development (HUD). To address commenters concerns and 
recognize the distinction between permanent and temporary housing 
services the Department has revised the text set forth in proposed 
Sec.  685.360(d) to read: ``Permanent housing developed with NFJP funds 
must be promoted and made widely available to eligible MSFWs, but 
occupancy is not restricted to eligible MSFWs. Temporary housing 
services must be provided only to eligible MSFWs.'' As a result of this 
revision, the following sentence has been added to Sec.  685.400(c): 
``Additionally, grantees providing permanent housing development 
activities will use the total number of individuals served and the 
total number of families served as indicators of performance'' to 
capture permanent housing development outcomes. The Department also 
provided operating guidance for NFJP Grantees, including a 
clarification on housing assistance services, through TEGL No. 35-14 
(``Operating Guidance for National Farmworker Jobs Program (NFJP) 
Employment and Training and Housing Grantees''), dated June 13, 2016, 
and will provide additional technical assistance and guidance as 
needed.
    Comments: Additionally, some commenters suggested that the 
definition of housing assistance should account for the different types 
of assistance available and the times at which the services are 
provided. These commenters said that either the word eligible should be 
removed from the definition or the differences between the two primary 
types of housing assistance under Sec.  685.360 should be clarified. 
The commenters offered two definitions of housing assistance: ``Housing 
assistance means housing-related services provided to MSFWs'' or 
``Housing assistance means emergency housing assistance payments or 
vouchers provided to meet the needs of eligible MSFWs and/or 
development of permanent housing units available to low-income MSFWs.''
    Department Response: The Department is revising Sec.  685.110 in 
response to these comments. The Department has updated the definition 
of housing assistance found in Sec.  685.110 as follows: ``Housing 
assistance means housing services which contribute to safe and sanitary 
temporary and permanent housing constructed, supplied, or maintained 
with NFJP funding.''
    Comments: Two commenters expressed concern that some areas may not 
have local non-profit organizations willing to operate on-farm housing, 
which may prevent the development or improvement of critically needed 
on-farm housing in areas where there are no local non-profit 
organizations willing to serve in this capacity. The specific paragraph 
referred to by two commenters is Sec.  685.360(e) of the NPRM, which 
describes allowable temporary housing services. The commenters suggest 
that grantees should be permitted to use program funds to provide 
matching grants for on-farm housing improvement or development to be 
owned by the farm operator and suggest criteria for providing grants 
for on-farm housing improvement or development to be owned by the farm 
operator including a requirement that the farm operator provide at 
least 51 percent of project funds and that housing must pass 
inspections for 3 to 5 years and continue to be occupied by 
farmworkers.
    Department Response: The Department is revising Sec.  685.360 in 
response to these comments. The section provides examples rather than 
an exhaustive list of allowable housing activities. The example of 
temporary housing services provided at proposed Sec.  685.360(e) 
(``off-farm housing operated independently of employer interest or on-
farm housing operated by a nonprofit'') does not preclude a grantee 
from providing funds to agricultural employers for on-farm housing 
improvement or developments owned by an agricultural employer. To 
clarify that grantees may provide funding for on-farm housing 
improvement or development owned by the agricultural employer, the 
language (now found at Sec.  685.360(c)(2)(i)) has been revised to 
indicate that temporary housing may include on-farm housing located on 
property owned by an agricultural employer and operated by an entity 
such as an agricultural employer or a nonprofit organization. 
Furthermore, to clarify that the list of examples is not meant to be 
exhaustive, the following additional language has been added to the end 
of paragraph 685.360(c)(2)(i): ``and other housing types that provide 
short-term, seasonal, or temporary housing opportunities in temporary 
structures.'' Paragraph (i) to Sec.  685.360(c)(1) has been revised to 
indicate that permanent housing services may include dormitory, modular 
structures, manufactured housing, or mobile units placed on permanent 
foundations and supplied with appropriate utilities, and other 
infrastructures that provide short-term, seasonal housing opportunities 
in permanent structures. This list includes the types of housing that 
would likely be made available through on-farm housing improvements or 
development and that would benefit eligible MSFWs. The Department has 
determined that it is not necessary to formalize criteria in the Final 
Rule restricting when grantees may provide funds to agricultural 
employers for on-farm housing improvement or developments owned by the 
employer and will provide additional guidance and technical assistance. 
The Department has revised Sec.  685.360 ``What housing services may 
grantees provide to eligible migrant and seasonal farmworkers?'' by 
removing ``tents and yurts'' to be consistent with the Federal housing 
standards established in 20 CFR part 654 and 29 CFR 1910.10.
    Additionally, the Department has added paragraph (e) to clarify 
that except as provided in (f), NFJP funds used for housing assistance 
must ensure the provision of safe and sanitary, temporary and permanent 
housing that meets the Federal housing standards at 20 CFR part 654 
(ETA housing for farmworkers) or 29 CFR 1910.10 (OSHA housing 
standards); and paragraph (f) which clarifies that when NFJP grantees 
provide temporary housing assistance

[[Page 56226]]

that allows the participant to select the housing, including vouchers 
and cash payments for rent, lease, and utilities, NFJP grantees are not 
required to ensure that such housing meets the Federal housing 
standards at 20 CFR part 654 or 29 CFR 1910.10.
Section 685.370 What services may grantees provide to eligible migrant 
and seasonal farmworkers youth participants aged 14-24?
    Proposed Sec.  685.370 outlined the services grantees may provide 
to eligible MSFW youth. In paragraph (a), the proposed regulation 
described the services that grantees may provide to eligible MSFW youth 
participants aged 14-24 based on an evaluation and assessment of their 
needs. These services include the career and training services 
described in Sec. Sec.  685.340 through 685.350; youth workforce 
investment activities specified in WIOA sec. 129; life skills 
activities that encourage development of self and interpersonal skills; 
and community service projects. Paragraph (b) provided that other 
activities that conform to the use of funds for youth activities 
described in 20 CFR part 681 (youth activities under title I of WIOA) 
may also be provided to eligible MSFW youth. Finally, in paragraph (c) 
the proposed regulation stated that grantees may provide these services 
to any eligible MSFW youth, regardless of the participant's eligibility 
for WIOA title I youth activities as described in WIOA sec. 129(a).
    Comments: Some commenters expressed overall support for serving 
farmworker youth, and remarked that a lesson learned from the 
previously funded NFJP youth program was to focus on early 
intervention. One commenter requested clarification on which service 
components may be provided to adults versus youth participants in light 
of the provisions in proposed Sec.  681.430 (concurrent youth 
participation in the WIOA youth and adult programs and how local 
program operators will track concurrent enrollment) and Sec.  681.590 
(how local WIOA youth programs will track the work experience 
priority), and on how financial and performance reporting should be 
tracked, in particular when a participant is enrolled in both youth and 
adult services. This commenter noted that youth services are not 
currently considered in NFJP reporting. Additionally, the commenter 
urged the Department to allow service areas to tailor their short-term 
service options to meet the needs of local migrant youth.
    Department Response: A description of services that can be provided 
to adult NFJP participants is found in Sec. Sec.  685.340 through 
685.360 of the Final Rule. Youth services that can be provided through 
the NFJP are described in this section, and all services provided to 
adult NFJP participants, may also be provided to eligible MSFW youth. 
Sections 681.430 and 681.590 regarding certain WIOA youth formula 
requirements are not applicable to NFJP grantees. The NFJP is a 
National Program authorized under sec. 167 of WIOA and grantees may 
enroll participants as either a MSFW adult or a MSFW youth participant 
as described in Sec.  685.320, but not in both categories. Regarding 
financial reporting, NFJP grantees that provide employment and training 
services (career services, training, youth services, and related 
assistance) administer a single grant award for each State they serve, 
and all expenses associated with the grant are tracked and reported 
together. As noted by a commenter, current NFJP reporting systems do 
not consider youth elements; the Department will be updating reporting 
systems to track youth measures as required in statutory language.
    Comments: One commenter suggested that funds be specifically 
allocated to farmworker youth services, instead of requiring providers 
to compete for funds that are already limited.
    Department Response: The Department does not have the statutory 
authority to allocate specific NFJP youth funds except as described in 
Sec.  685.500 of the Final Rule.
Section 685.390 When may eligible migrant and seasonal farmworkers 
receive related assistance?
    Proposed Sec.  685.390 established that eligible MSFWs may receive 
related assistance services when the need for the related assistance is 
identified and documented by the grantee. A statement by the eligible 
MSFW may be included as documentation.
    Comments: One commenter asked the Department to clarify whether 
States would have the authority to determine the process for 
identifying an MSFWs need for related assistance. This commenter also 
asked the Department to clarify whether MSFWs must be co-enrolled to 
receive related assistance.
    Department Response: Under WIOA sec. 167(a), every 4 years NFJP 
grantees are procured through a competitive process to carry out NFJP 
activities and are responsible for determining when eligible MSFWs may 
receive related assistance services. If a State agency responds to an 
NFJP FOA and is selected as a grantee, they would be able to determine 
the process to identify related assistance needs. With regard to the 
comment addressing co-enrollment, farmworkers do not need to be co-
enrolled with other programs to receive related assistance services, 
but must be eligible to receive NFJP services as described in Sec.  
685.320.
6. Subpart D--Performance Accountability, Planning, and Waiver 
Provisions
    This subpart describes indicators of performance for grantees, 
required planning documents, and the information required in program 
plans required under WIOA sec. 167. The subpart also explains waiver 
provisions and clarifies how grant costs are classified under WIOA sec. 
167.
Section 685.400 What are the indicators of performance that apply to 
the National Farmworker Jobs Program?
    Proposed Sec.  685.400 described the indicators of performance that 
apply to grantees. Paragraph (a) stated that grantees providing career 
services and training are to use the indicators of performance common 
to the adult and youth programs, described in WIOA sec. 116(b)(2)(A), 
as required by WIOA sec. 167(c)(2)(C). In paragraph (b), the proposed 
regulation explained that for grantees providing career services and 
training, the Department will reach agreement on the levels of 
performance for each of the primary indicators of performance described 
in WIOA sec. 116(b)(2)(A), taking into account economic conditions, 
characteristics of the individuals served, and other appropriate 
factors, and using, to the extent practicable, the statistical 
adjustment model under WIOA sec. 116(b)(3)(A)(viii). The levels agreed 
to will be the levels of performance incorporated in the program plan, 
as required in WIOA sec. 167(c)(3). As for grantees providing housing 
services only, proposed paragraph (c) required that such grantees are 
to use the total number of eligible MSFWs served and the total number 
of eligible MSFW families served as indicators of performance. In 
proposed paragraph (d) the regulation advised that the Department may 
develop additional performance indicators with appropriate levels of 
performance for evaluating programs that serve eligible MSFWs and which 
reflect the State service area economy, local demographics of eligible 
MSFWs, and other appropriate factors. Finally, proposed paragraph (e) 
permitted grantees to develop additional performance indicators and 
include them in the program plan or in periodic performance reports.
    Comments: Some commenters raised concerns that enrollment and co-

[[Page 56227]]

enrollment of disadvantaged farmworkers could be jeopardized by 
performance standards, performance contracts, recognized credentials, 
and Ability-to-Benefit regulations because of partners' concerns that 
their performance indicators would decrease when farmworkers 
participate. These commenters stated that the models used to determine 
expected performance for WIOA title I programs (adult, youth, and 
dislocated workers) should be adjusted to consider the barriers MSFWs 
face, and that the NFJP in each service area should be subject to these 
adjusted performance standards.
    Department Response: Establishing viable performance standards are 
crucial to program and fiscal accountability, evaluation of program 
effectiveness, and continuous quality improvement. The Department will 
negotiate performance goals for NFJP grantees providing career services 
and training based on several factors, including previous performance, 
economic conditions, characteristics of the individuals served, and 
other appropriate factors that are supported with data, as described in 
Sec.  685.400(b).
    Comments: A few commenters suggested that NFJP negotiated 
performance standards should not be more stringent than those 
established for the Local Areas in which the NFJP is operated.
    Department Response: State title I formula programs differ from 
those of the NFJP program in the diversity of job seekers served, the 
types of services offered, and the number of individuals served 
annually; therefore, the Department does not support the suggestion 
that NFJP grantees should have the same performance levels as those of 
the local areas in which they operate. The Department will provide 
additional information on the WIOA performance accountability system 
and primary indicators of performance for NFJP grantees.
    Comments: Some commenters expressed concern about the inclusion of 
credential attainment in the new performance indicators for NFJP, as 
rural areas often lack credentialing programs. These commenters warned 
that, as written, the credential attainment indicator may deter service 
providers from targeting the rural MSFW population. Another commenter 
urged the Department to encourage but not require the attainment of 
credentials.
    Department Response: WIOA sec. 167(c)(2)(C) requires that the NFJP 
utilize the primary indicators of performance described in WIOA sec. 
116(b)(2)(A), including postsecondary credential attainment and high 
school completion, therefore the Department cannot waive this measure 
for NFJP grantees. Some commenters warned that, as written, the 
postsecondary credential attainment indicator may deter service 
providers from targeting rural MSFW populations. However, as specified 
in Sec.  685.350(c), NFJP training activities must encourage the 
attainment of recognized postsecondary credentials as defined in Sec.  
685.110 when appropriate for an eligible MSFW, but it is not required 
that all training provided to NFJP participants lead to a postsecondary 
credential. Therefore lack of credentialing programs in a given service 
area should not be a deterrent to providing needed training to eligible 
MSFWs.
    Comments: Many commenters noted that WIOA authorizes related 
assistance services for eligible MSFWs. One commenter added that 
related assistance provides support for farmworkers allowing them to 
stabilize and find agricultural work as they move within the harvest 
season, but rarely results in more than short term seasonal placements. 
Many commenters expressed concerns that including individuals who only 
receive related assistance services in performance indicator 
calculations would undermine the ability of grantees to provide these 
needed authorized services, and would contribute to negative results 
from the performance indicator evaluation system.
    Department Response: The Department is revising paragraph (b) of 
Sec.  685.400 in response to these comments. The Department 
acknowledges that related assistance is an important component of 
workforce services that assist eligible MSFWs retain or stabilize their 
agricultural employment. The term ``related assistance'' encompasses a 
range of services and activities, which require varying levels of 
involvement by NFJP grantees and their staff. In particular, Sec.  
685.110 defines ``emergency assistance'' as a form of related 
assistance that addresses the immediate needs of eligible MSFWs and 
their dependents, provided by grantees. Emergency assistance may 
include the provision of necessary items, like garments of clothing. 
While providing clothing to a farmworker in need provides a significant 
benefit to the farmworker, it does not require a significant investment 
of grantees' resources. Therefore, the Department has determined that 
including individuals who receive emergency assistance or other short-
term related assistance that does not involve a more extended 
intervention, in the performance calculations would not necessarily 
measure the success of a grantee in providing WIOA services to eligible 
MSFWs. For example, the Department does not consider pesticide and 
worker safety training to be the kind of related assistance that 
requires the individual to be included in the performance metrics. The 
Department may request information regarding the number of individuals 
who received types of related assistance that are not included in the 
performance indicators.
    In order to clarify how individuals who only receive short term 
related assistance, such as emergency assistance, will be tracked and 
included in performance under WIOA, the Department has added the 
following language to Sec.  685.400(b) clarifying that eligible MSFWs 
who receive any career services, youth services, training, or certain 
related assistance are considered participants as defined in 20 CFR 
677.150 of this chapter and must be included in performance 
calculations for the indicators of performance described in WIOA sec. 
116(b)(2)(A); and additionally, that eligible MSFWs who receive only 
those services identified in 20 CFR 677.150(a)(3)(ii) or (iii) of this 
chapter are not included in performance calculations for the indicators 
of performance. The Department uses the term ``certain related 
assistance'' to indicate that individuals that received forms of 
related assistance that require a more significant involvement by the 
grantees' staff, may be included in the performance metrics. In 
particular, as set forth in Sec.  685.380, the related assistance 
includes those activities identified in WIOA sec. 167(d), which include 
school dropout prevention and recovery activities, self-employment and 
related business or micro-enterprise development or education, and 
customized occupational career and technical education. To the extent 
such forms of related assistance require a more significant involvement 
by the grantees' staff, and are forms of related assistance related to 
education, training, career, or employment outcomes, these forms of 
related assistance will be included in performance calculations for the 
indicators of performance. The Department provides specific directions 
regarding the forms of related assistance to be included in performance 
indicators through guidance. Including all NFJP participants who 
receive career services, youth services, training, or certain related 
assistance that involves a significant investment of a grantee's staff 
time in performance calculations also allows the Department to evaluate

[[Page 56228]]

fully the effectiveness of the services provided to farmworkers through 
the NFJP. Finally, in order to align this provision with 20 CFR 
677.150(a)'s definition of participant, the Department notes that Sec.  
685.400(b) excludes individuals who only receive the services 
identified in 20 CFR 677.150(a)(3)(ii) (accessing the self-service 
system) or (iii) (information services or activities) (see Joint WIOA 
Final Rule). The Department does not agree with the assertion that the 
inclusion of eligible MSFWs who receive related assistance that 
involves more than a minimal amount of staff assistance in performance 
calculations for the indicators of performance would undermine the 
ability of grantees to provide these services, but rather, that NFJP 
grantees will now be evaluated for the related assistance they provide 
that is appropriately measured by the performance indicators.
Section 685.460 Are there regulatory and/or statutory waiver provisions 
that apply to the Workforce Innovation and Opportunity Act?
    Proposed Sec.  685.460 described the regulatory and/or statutory 
waiver provisions that apply to NFJP Programs, WIOA sec. 167. Paragraph 
(a) stated that the statutory waiver provision at WIOA sec. 189(i) and 
discussed in Sec.  679.600 (the general statutory and regulatory waiver 
authority in WIOA) does not apply to WIOA sec. 167. Paragraph (b) 
established that grantees may request a waiver of any regulatory 
provisions only when such regulatory provisions are (1) not required by 
WIOA; (2) not related to wage and labor standards, non-displacement 
protection, worker rights, participation and protection of workers and 
participants, and eligibility of participants, grievance procedures, 
judicial review, nondiscrimination, allocation of funds, procedures for 
review and approval of plans; and (3) not related to the basic purposes 
of WIOA, described in 20 CFR 675.100.
    Comments: Several commenters expressed support for the continuation 
of a supposed selective service waiver process for male farmworkers who 
were unaware of the Selective Service registration requirement. One of 
these commenters reasoned that it can take up to 30 days to receive a 
response from Selective Service, which is a challenge for farmworkers 
who must regularly travel during short intervals to support themselves 
and their family. Another commenter stated that as a consequence of 
MSFW males not registering for Selective Service, many are denied 
services that are needed to assist them on their way to other 
employment. A different commenter suggested that the Department 
automatically waive male farmworkers who are past the age of military 
participation, especially if they were not born or educated in the 
United States.
    Department Response: The Department cannot waive this WIOA 
statutory requirement. WIOA sec. 189(h) requires that each individual 
participating in any program or activity established under title I of 
WIOA, or receiving any assistance or benefit under title I of WIOA, has 
not violated sec. 3 of the Military Selective Service Act (50 U.S.C. 
App. 453) by not presenting and submitting to registration. Allowing a 
selective service waiver would be inconsistent with WIOA sec. 189(h).
7. Subpart E--Supplemental Youth Workforce Investment Activity Funding 
Under Workforce Innovation and Opportunity Act Sec. 127(a)(1)
    This subpart describes the purpose of supplemental youth workforce 
investment activity funding that may become available under WIOA sec. 
127(a)(1). Included is a description of how the funds may become 
available, and what requirements apply to grants funded by WIOA sec. 
127(a)(1).
Section 685.500 What is supplemental youth workforce investment 
activity funding?
    Proposed Sec.  685.500 described that if Congress appropriates more 
than $925 million for WIOA youth workforce investment activities in a 
fiscal year, 4 percent of the excess amount must be used to provide 
workforce investment activities for eligible MSFW youth under NFJP 
Programs, WIOA sec. 167.
    Comments: One commenter asked the Department to clarify whether or 
not there are requirements or restrictions if the State is providing 
over 4 percent.
    Department Response: The Department is revising Sec.  685.500 in 
response to this comment. There are no requirements or restrictions to 
States if Congress appropriates more than $925 million for WIOA youth 
workforce investment activities in a fiscal year. This section of the 
Final Rule describes that if this funding threshold is met in any 
fiscal year under WIOA, the Department must make 4 percent of the 
excess amount available exclusively for workforce investment activities 
for eligible MSFW youth under WIOA sec. 167. To accomplish this, as 
described in Sec.  685.520 (the application process for obtaining a 
grant funded by the WIOA), the Department will issue separate FOAs for 
grants funded by WIOA sec. 127(a)(1). The selection of grantees will be 
made in accordance with the procedures described in Sec.  685.210, 
except that the Department reserves the right to provide priority to 
applicants that are WIOA sec. 167 grantees. The term ``by the 
Department'' has been added to Sec.  685.500 to clarify that if 
Congress appropriates more than $925 million for WIOA youth workforce 
investment activities in a fiscal year, 4 percent of the excess amount 
must be used by the Department to provide workforce investment 
activities for eligible MSFW youth under WIOA sec. 167.

J. Part 686--The Job Corps Under Title I of the Workforce Innovation 
and Opportunity Act

1. Introduction
    This part establishes regulations for the Job Corps program, 
authorized in title I, subtitle C of WIOA. The regulations address the 
scope and purpose of the Job Corps program and provide requirements 
relating to site selection, protection, and maintenance of Job Corps 
facilities; funding and selection of center operators and service 
providers; recruitment, eligibility, screening, selection and 
assignment, and enrollment of Job Corps students; Job Corps program 
activities and center operations; student support; career transition 
services and graduate services; community connections; and 
administrative and management requirements. The regulations incorporate 
the requirements of title I, subtitle C of WIOA and describe how the 
Job Corps program is operated in order to deliver relevant academic and 
career technical training (CTT) that leads to meaningful employment or 
postsecondary education. The regulations also serve to explain clearly 
the requirements necessitated by the unique residential environment of 
a Job Corps center. The major changes from the existing regulations 
reflect WIOA's effort to enhance the Job Corps program, provide access 
to high quality training and education, create incentives for strong 
contractor performance, and promote accountability and transparency.
    The analysis that follows provides the Department's response to 
public comments received on the proposed Job Corps regulations. If a 
section is not addressed in the discussion below, it is because the 
public comments submitted in response to the NPRM did not address that 
specific section and the Department made no changes to the regulatory 
text. Further, the Department received a number of comments on this 
part which were outside the scope of the

[[Page 56229]]

regulation and therefore the Department offers no response. Lastly, the 
Department has made a number of non-substantive changes to correct 
grammatical and typographical errors to improve the readability and 
conform the document stylistically that are not all discussed in the 
analysis below.
2. Subpart A--Scope and Purpose
    This subpart contains regulatory provisions that describe the Job 
Corps program, its purpose, the role of its Director, and applicable 
definitions. All references in this part to the Secretary issuing 
guidelines, procedures or standards means that they will be issued by 
the National Job Corps Director. This subpart also describes the Policy 
and Requirements Handbook (PRH), which provides the operating policies 
and procedures governing day-to-day activities of the Job Corps 
program. The subpart describes the scope and purpose of the program, 
along with the responsibilities of its National Director. It promotes 
accountability and transparency by making readers aware of exactly what 
the Job Corps program plans to achieve and the procedures for doing so, 
as well as the role its leadership plays in its operation.
    The analysis that follows provides the Department's response to 
public comments received on the proposed Job Corps regulations. If a 
section is not addressed in the discussion below, it is because the 
public comments submitted in response to the NPRM did not address that 
specific section and no changes were made to the regulatory text.
Section 686.110 What is the Job Corps program?
    This section generally describes the Job Corps program as 
administered by the Department.
    Comments: One commenter noted that formally teaching healthy 
relationship skills would satisfy the intensive social education 
described in the NPRM preamble discussion of proposed Sec.  686.110.
    Department Response: The Department acknowledges the importance of 
teaching healthy relationship skills to Job Corps' students and notes 
that such skills are currently provided in the Job Corps program. 
Section 686.110, as drafted, reflects the increased focus in sec. 141 
of WIOA on connecting young people to the labor force by providing them 
with intensive social, academic, career and technical education, and 
service-learning opportunities. No changes to regulatory text were made 
in response to this comment.
Section 686.120 What definitions apply to this part?
    This section explains the definitions applicable to this Final 
Rule. The Department received comments on several of the definitions.
    Comments: One commenter expressed support that the definition of an 
``individual with a disability'' aligns with the definition in sec. 3 
of the Americans with Disabilities Act (ADA) because it provides ease 
of use for the WIOA programs and recommended that it be maintained and 
applied throughout WIOA.
    Several commenters remarked that ``participant'' is appropriately 
defined as graduates, enrollees, and former enrollees who have 
completed the Career Preparation Period (CPP) or who have been on 
center for 60 days. These commenters also stated that Job Corps is 
likely to modify the requirements of the CPP to be more flexible as 
part of its modernization of the PRH and expressed concerns about 
creating incentives to extend CPP in order to prevent certain students 
from being included in the performance pools.
    Department Response: The definition of participant not only 
includes graduates and those enrollees and former enrollees who have 
completed the CPP, but also those who have remained in the program for 
60 days or more, regardless of whether they have completed their CPP. 
Thus there is little incentive to extend the CPP simply for the 
purposes of trying to manipulate participant counts. No change to 
regulatory text was made in response to these comments.
    The same commenters noted that there is no mention of Zero 
Tolerance (ZT) Level 1 separations and whether these students will 
continue to be defined as participants or former enrollees following 
their mandatory dismissal from the program. These commenters stated 
that all ZT Level 1 separations, regardless of length of stay, should 
be excluded from the definition of participant because it is critical 
for Job Corps to maintain a safe environment for its students and 
staff. The commenters explained that counting Level 1 ZT separators as 
participants for performance measurement counterintuitively penalizes 
centers and the program for taking actions that are necessary and 
mandated by WIOA to ensure the safety of students and holds Job Corps 
to a different standard than other training programs, making it 
difficult to compare Job Corps' performance fairly to that of other 
programs.
    Department Response: WIOA's performance accountability system was 
designed so that WIOA programs would be held accountable to the same 
primary indicators of performance. In order to implement Congress' 
intent, the term ``participant,'' as it applies to the Job Corps 
program, is designed to align with the definition of participant in 20 
CFR 677.150 (see Joint WIOA Final Rule), ensuring that the performance 
of the Job Corps program could be accurately compared with the 
performance of the other title I programs. The Department acknowledges 
the commenters' concern regarding not penalizing Job Corps centers for 
maintaining safe environments and enforcing the program's zero 
tolerance policy. However, compliance with and enforcement of the zero 
tolerance policy is required as part of the operation of a Job Corps 
center by every Job Corps' operator. Any positive or negative effect 
the zero tolerance policy may have on the performance of a center under 
the primary indicators of performance does not change the requirement. 
In 20 CFR part 677 (see Joint WIOA Final Rule) and this part, the 
intent of the definition of participant is to capture all individuals 
that are engaged in, and receiving services from, the relevant program, 
regardless of when, and under what circumstances, they exit from the 
program. Adopting the commenters' proposal would eliminate the 
conformance in the definitions of participant in both parts. Any 
exclusion from the definition of participant in regard to Job Corps for 
the purpose of calculating performance under the metrics described in 
Sec.  686.1010 is provided in the annual performance guidance described 
in Sec.  686.1000, and will be consistent with any applicable policies 
and guidance issued by the Employment and Training Administration. 
Accordingly, no change was made to the regulatory text in response to 
these comments.
    Comments: One commenter noted that knives of any length should be 
prohibited, not just those with blades longer than 2 inches as defined 
in ``unauthorized goods,'' noting that knives of any blade length are 
dangerous.
    Department Response: The Department concurs with this commenter and 
has revised the definition of ``unauthorized goods'' in the regulatory 
text at Sec.  686.120 to include all knives.
Section 686.130 What is the role of the Job Corps Director?
    Comments: Several commenters noted that Job Corps' authorities are 
currently

[[Page 56230]]

split among three offices (the Office of Job Corps, the Office of 
Contracts Management, and the Office of Financial Administration), 
which has effectively separated procurement, contracting, and budget 
authority from the Job Corps Director, despite the fact that guidelines 
and standards related to these authorities provide that they are the 
responsibility of the Job Corps Director. The commenters proposed that 
the Department clarify the regulation to state that the Job Corps 
Director retains the authority to set guidelines and standards related 
to secs. 147 and 159(a) of WIOA. One additional commenter echoed this 
proposal, noting that it would help Job Corps realize program 
management efficiencies.
    Department Response: The Department has concluded that the 
delegation of functions in regard to the Job Corps is more 
appropriately addressed in administrative orders as is done with other 
Department of Labor functions and therefore Sec.  686.130 is being 
deleted from the regulation.
3. Subpart B--Site Selection and Protection and Maintenance of 
Facilities
    This subpart describes how sites for Job Corps centers are 
selected, the handling of capital improvements and new construction on 
Job Corps centers, and responsibilities for facility protection and 
maintenance. The Secretary must approve the location and size of all 
Job Corps centers, and establish procedures for requesting, approving, 
and initiating capital improvement and new construction on Job Corps 
centers, which serves to strengthen and enhance the program as a whole. 
The requirements in this subpart are not significantly different from 
the corresponding requirements in the WIA Job Corps regulations at 20 
CFR part 686, subpart B, and no comments were received on this subpart
4. Subpart C--Funding and Selection of Center Operators and Service 
Providers
    This subpart implements new requirements of WIOA with regard to the 
operators of high-performing centers, the length of contractual 
agreements to operate Job Corps centers, and how entities are selected 
to receive funding to operate Job Corps centers and to provide 
outreach, admissions, and career transition support services. In 
addition to adding to the list of considerations currently used in 
selecting Job Corps center operators and service providers, WIOA 
emphasizes competition to increase the performance and quality of the 
Job Corps program. WIOA also provides that an entity, in its role as 
incumbent operator of a center deemed to be high performing, may 
compete in any competitive selection process carried out for an award 
to operate that center, even in cases where the selection of the 
operator is set aside for small businesses as required by the Federal 
Acquisition Regulation. This serves to ensure continued access to high 
quality training and education for Job Corps students. WIOA also 
provides that a center operations contract cannot exceed 2 years, with 
three 1-year options to renew. This codifies current Job Corps 
practice. Furthermore, WIOA precludes the Secretary from exercising an 
option to renew a center operations contract for an additional 1-year 
period if certain criteria are not met, with limited exceptions. All of 
these new and expanded provisions follow WIOA's theme of enhancing the 
Job Corps program and providing access to high quality training and 
education by ensuring Job Corps centers are staffed with high quality 
service providers.
Section 686.300 What entities are eligible to receive funds to operate 
centers and provide training and operational support services?
    Comments: A commenter recommended that the regulations clarify that 
an ``entity'' eligible to become a contractor must be a corporation, 
LLC, or other similar corporate structure, not just an individual. The 
commenter also suggested that the business as a whole, not just the 
individuals or principals of the entity, should have the requested 
experience.
    Department Response: WIOA clearly identifies the entities eligible 
to operate or provide services to a Job Corps center. To further limit 
those entities would be inconsistent with WIOA sec. 147(a)(1)(A). 
Accordingly, no change was made to the regulatory text in response to 
these comments.
Section 686.310 How are entities selected to receive funding to operate 
centers?
    This section describes how entities are selected to receive funding 
to operate Job Corps centers. WIOA contains new provisions intended to 
strengthen the Job Corps contracting process by requiring specific 
criteria that emphasize quality, performance, and accountability to be 
addressed as part of the selection process for center operators. The 
Department invited comment on how to best embed this focus.
    Comments: One commenter was concerned that the proposed framework 
for developing RFPs will result in conflicts of interest, stating that 
a workforce council that was established by the incumbent contractor 
should not have a say in the development of an RFP. The commenter 
stated that the regulations should clarify the topics on which the 
Local WDB and Governor may be consulted since either or both may have a 
relationship with the incumbent operator or other bidding contractors 
that could influence their responses.
    Department Response: The selection process for operators and 
service providers, and the roles of the Local WDB and the Governor in 
that process, are clearly laid out in WIOA sec. 147(a)(2)(A). Limiting 
the topics on which the Local WDB or Governor may be consulted is 
inconsistent with this section of WIOA. Note that while WIOA does 
require consultations with various parties, the final content of the 
solicitation is at the discretion of the Department. No changes were 
made to the regulatory text in response to this comment.
    Comments: One commenter stated that robust application of the 
selection criteria is particularly important in the context of small-
business set-asides under the Federal Acquisition Regulation (FAR). The 
comment stated that the Department frequently applies the FAR's small 
business set-aside provision in a way that circumvents statutory 
selection criteria by setting aside a Job Corps contract whenever there 
are two or more small businesses expected to apply, without regard to 
the qualifications of those businesses. The commenter stated this has 
led to a significant decline in the quality of some centers, 
particularly where highly qualified and successful operators have been 
displaced by substantially less-qualified small businesses. The 
commenter recommended that the Department clearly specify in the 
regulations that contracting officers must apply the statutory 
selection criteria at each step of the contracting process, including 
when determining whether to engage in small business set-asides, to 
ensure that only fully qualified entities are selected to operate Job 
Corps Centers. Further, the commenter suggested that the regulations 
emphasize that contracting officers must exercise their discretion 
under the FAR to cancel set-asides wherever doing so would be in the 
best interest of the program and its users and provide protection to 
incumbent operators at centers that routinely place in the top 10-15 
centers.
    However, another commenter said that, as required by the FAR, the 
Department should operate within the law to promote participation by 
small

[[Page 56231]]

businesses in the Job Corps contracting arena. The commenter stated 
that it is incumbent upon the Department to apply the requirements of 
the FAR as they relate to sources sought and small business set asides 
in order to avoid creating monopolies that limit competition and result 
in cost inefficiencies and lower quality and performance.
    Department Response: The selection factors it considers in the 
sources sought process are a matter of program administration and are 
not statutorily required. The Department will include the statutory 
selection criteria in the sources sought process as it deems them to be 
applicable. In conducting its procurement actions, the Department 
complies with all applicable statutes and regulations, including the 
Competition in Contracting Act, the Small Business Act, and the FAR. 
This legal framework limits the Department's ability to provide any 
exception to these processes beyond what is provided in WIOA. The 
Department cannot do what is proposed and no changes were made to the 
regulatory text.
    Comments: Several commenters noted that the RFP process must be 
timely; transparent, with the evaluation process clearly articulated; 
objective; and focused on proven past performance in delivering student 
outcomes to measurably differentiate between entities. Another stated 
that the best way to embed a focus on quality, performance, and 
accountability in the selection process is to ensure that the 
procurement process is under the full control of the National Office of 
Job Corps, and that past performance be based upon Job Corps-specific 
student outcomes. The commenter also suggested that procurement 
proposals be evaluated by Job Corps' staff with technical knowledge of 
the Job Corps program.
    Multiple commenters suggested making all stakeholders involved in 
the procurement process, including procurement staff and decision-
makers, accountable for student outcomes. These commenters noted that 
for the procurement process to be mission-focused, all procurement 
personnel must know and understand the Job Corps mission and its 
indicators of success.
    Department Response: The majority of the comments that were 
submitted relate to the agency's internal organizational structure and 
personnel policies and actions, which the Department declines to 
address in this regulation. Further, the Department will consider past 
performance during the procurement process consistent with WIOA sec. 
147(a).
    Comments: Some commenters specifically expressed concerns that the 
proposed regulations will allow bidders with inadequate experience in 
achieving high student outcomes to apply to operate Job Corps 
facilities. Other commenters recommended that the entire procurement, 
evaluation, and award process be overhauled so the primary criterion 
for evaluation in a procurement process focus on the past effectiveness 
of the offeror. These commenters recommended the use of adjectival 
ratings (e.g., excellent, very good, good) in each section of the 
proposal, with a rubric to define the adjectives.
    Department Response: In order to ensure flexibility in the 
operation of the Job Corps program, no changes will be made to the 
language in this part. Furthermore, the Department makes Job Corps 
award decisions based on the established criteria stated in the 
solicitation, many of which are statutory or decided on a best value 
basis. The best value approach allows the Department to consider the 
stated evaluation factors, which include various elements, such as 
technical approach, past performance and proposed price.
    Comments: Multiple commenters stated that the questions asked in 
the RFPs often have no direct relevance to the Job Corps center for 
which the solicitation is being conducted. They also recommended that 
the Department include language in the RFPs specifying how the combined 
records of a prime contractor and their subcontractors will be weighed 
and considered. One commenter noted that the Department should not only 
better define the applicable selection criteria, but it also should 
provide clear guidance concerning the points during the selection 
process that the criteria should be applied. This would create a more 
transparent framework and allow would-be center operators to understand 
the process better. In addition, the commenter believed the public 
could hold contracting officers accountable for their operator choices.
    Department Response: In order to ensure flexibility in the 
operation of the Job Corps program, no changes will be made to the 
language in this part. The Department issues guidance regarding the 
procurement process through the Job Corps' PRH and other guidance 
issued by the Secretary.
    Comments: One commenter noted that offerors should have 
demonstrated experience and partnerships with State and local workforce 
boards, one-stop centers, employer organizations and labor 
organizations.
    Department Response: The Department notes that Sec.  686.310(c)(3) 
requires proposals to address the degree to which the offeror 
demonstrates these relationships.
    Comments: Commenters also addressed the criteria in proposed Sec.  
686.310(c)(4) requiring that an offeror's past performance relating to 
operating or providing activities to a Job Corps center, including 
information included in any reports developed by the Department of 
Labor's Office of the Inspector General (OIG), be considered during the 
evaluation process. Two commenters recommended that if a center is 
randomly selected as part of an audit and the audit reveals a systemic 
issue that impacts all centers regardless of operator, the offeror 
should not be viewed unfavorably during the procurement process. 
Another commenter suggested that the Department use multiple past 
performance indicators based on student outcomes beyond information 
about an offeror in Department of Labor Office of Inspector General 
(OIG) reports. The commenter recommended that past performance 
incorporate a contractor's past Job Corps performance as measured by 
the Outcome Measurement System; the Department's automated Contractor 
Past Effectiveness Report; the proposed annual Operator Performance 
Assessment; and the Contractor Performance Assessment Reports 
(developed for each Job Corps contract).
    Department Response: The requirement at Sec.  686.310(c)(4) is a 
statutory requirement at sec. 147(a)(2)(B)(i)(IV) of WIOA that 
describes the use of OIG reports on the offeror's demonstrated 
effectiveness and cannot be changed. Further, the Department's use of 
non-statutory criteria in the selection process is policy related and 
no changes were made to this regulatory text.
    Comments: In response to proposed Sec.  686.310(c)(5) and the 
Department's request for comments on how to assess potential offerors' 
past records in assisting at-risk youth to connect to the workforce, 
multiple commenters proposed that Job Corps use the Automated Past 
Effectiveness score issued to each contractor based on the Outcome 
Measurement System (OMS) report card. The commenters suggested that 
this assessment method ensured a consistent and understandable approach 
for evaluating an offeror's record in assisting at-risk youth, and 
recommended that this system, or a similar system, be implemented to

[[Page 56232]]

ensure consistency and fairness. They also suggested that the 
Department include language specifying how the combined records of a 
prime contractor and its subcontractor(s) will be weighed and 
considered with respect to this provision.
    Several commenters recommended that to assess and differentiate 
past performance in assisting at-risk youth to connect to the 
workforce, the Department should conduct a review of both the interim 
and final contract performance assessment reports (CPARs) of an entity, 
if available, or other comparable information. One commenter also 
recommended that technical assistance in the area of connecting at-risk 
youth to the workforce be required.
    One commenter noted that the nature of the Job Corps program 
necessitates specialized experience that only can be obtained through 
experience in operating Job Corps or similar centers.
    Another commenter stated that the Department should require and 
evaluate at least 3 years of third-party validated outcomes related to 
Job Corps' primary indicators of performance. The commenter noted that 
3 years is suggested because 3 years of performance is used in this 
section of WIOA to evaluate and define high-performance among 
operators.
    A commenter recommended that the regulations call for entities to 
provide reports from objective sources to demonstrate performance 
results. The commenter stated that data collected solely by the offeror 
that cannot be independently verified should never be accepted as 
evidence of performance ability. For offerors with previous Job Corps 
experience, the commenter recommended that sources including the OMS, 
OBS, Student Satisfaction Survey, and Management Performance Outcome 
(MPO) be used to demonstrate performance results; for those offerors 
with no direct Job Corps experience, documentation from the funder, 
Common Measures outcomes, or third-party reports of the entity's 
previous success in meeting its contractual obligations and achieving 
results should be submitted to support the entity's ability to operate 
the center.
    Department Response: The Department continues to explore the most 
effective and reliable sources of information in assessing 
effectiveness and past performance in the operator selection process 
This requires flexibility to meet the changing needs of the Job Corps 
program and no changes have been made to the regulatory text. The 
criteria for effectiveness and past performance will be included in 
each solicitation.
    Comments: In response to the Department's request for additional 
selection factors, multiple commenters noted that to ensure that 
potential Job Corps center operators are high-quality providers with 
documented outcomes and proven performance, the qualification 
requirements should be further refined and offered various additional 
selection factors to include in the solicitation.
    Department Response: Consistent with applicable procurement 
statutes and regulations the Department does not want to unduly 
restrict competition, and needs to maintain the flexibility to adjust 
its requirements for the changing needs of the Job Corps program and 
for each center when necessary to do so. No changes have been made to 
regulatory text in response to these comments.
    Comments: Several commenters noted that the delivery of quality 
services to students is dependent on hiring and maintaining qualified 
staff, and recommended that the procurement process include an 
evaluation that compares the costs proposed by an offeror to those 
identified in a market analysis.
    Department Response: The procurement process already includes an 
evaluation of these factors. In order to ensure flexibility in the 
operation of the Job Corps program, no changes will be made to the 
language in this part.
Section 686.320 What if a current center operator is deemed to be an 
operator of a high-performing center?
    This section describes the criteria that an incumbent operator must 
meet in order to be considered the operator of a high performing 
center. If an entity is deemed to be the operator of a high-performing 
center, the entity is permitted to compete in any competitive selection 
process carried out for an award to operate that center, including 
those set aside for small businesses as required by the FAR.
    Comments: One commenter recommended that the language of Sec.  
686.320(a) be amended so that it cannot be interpreted as allowing a 
high-performing incumbent operator to bid on an 8(a) set-aside 
procurement even if it is not in the Small Business Administration's 
(SBA's) 8(a) business development program. The commenter specifically 
recommended that the Department change the wording in Sec.  686.320(a) 
from ``. . . that operator will be allowed to compete in any 
competitive selection process carried out for an award to operate that 
center'' to ``. . . that operator will be allowed to compete in full 
and open competitions, as well as procurements that are set aside for 
small business.'' The commenter also recommended that the Department 
clarify that when a large business is awarded a contract set aside for 
small businesses, it cannot count toward the procuring agency's small 
business contracting goals.
    Department Response: Section 147(b)(1) permits a high-performing 
incumbent operator to compete in any competitive procurement process 
for the operation of that center. This includes competitive 
procurements set aside for participants in the SBA's 8(a) business 
development program. Making the change suggested by the commenter would 
be inconsistent with the statutory requirement. As written, WIOA allows 
a high performing incumbent operator to bid on a competitive 8(a) set-
aside procurement regardless of whether it is part of the SBA's 8(a) 
business development program. The Department has also determined it is 
not necessary to clarify the language regarding large businesses 
receiving a contract set aside for small business.
    Comments: One commenter stated that the standard for high 
performing centers in proposed Sec.  686.320(b) is currently 
unattainable, while several other commenters asserted that no center 
currently meets the standard. One commenter stated that the language is 
confusing and recommended that it be simplified, adding that high 
performing centers be those in the top 30 percent ``overall'' on the 
OMS report at the time of procurement solicitation. Another commenter 
stated that the criteria for determining a high-performing contractor 
must be clear and use objective performance criteria.
    Department Response: The high performing criteria are established 
by statute; therefore, to be considered a high performing center under 
this section, an incumbent operator must meet the standards identified. 
No changes have been made to the regulatory text in response to these 
comments.
    Comments: Several commenters stated that not all centers have a 
career transition services (CTS) contract attached to the center; as 
such, these centers do not have complete control over their short- and 
long-term placement outcomes. These commenters recommended that the 
Department ascertain whether it is possible through statistical methods 
to isolate the impact of operators on the primary indicators of 
performance from those of their CTS contractor.
    Department Response: The Department acknowledges that not

[[Page 56233]]

every center has a CTS contract attached to it, nor does WIOA require 
that the CTS contracts be included as part of the center operations 
contract. Sec. 159(c)(1) of WIOA and Sec.  686.1050 of these 
regulations require the Department to establish expected levels of 
performance for each center and the method for calculating those levels 
via annual guidance issued by the Department. The Department has 
concluded that to maintain the necessary flexibility in the annual 
performance guidance for the Job Corps program the commenters' 
suggestion is best considered as part of the yearly process of 
establishing the expected levels of performance and no changes to the 
regulatory text have been made in response to these comments.
Section 686.330 What is the length of an agreement entered into by the 
Secretary for operation of a Job Corps center and what are the 
conditions for renewal of such an agreement?
    Comments: Commenters requested the Department to clarify the 
conditions that trigger the denial of an option year, specifically how 
the average of 50 percent or higher of the expected level of 
performance for each of the six primary indicators will be calculated.
    Department Response: The Department provided a detailed description 
of the circumstances under which it will exercise an option in Sec.  
686.330(c). The Department also identified a circumstance under which 
an option year will not be exercised in Sec.  686.330(d); however, 
there may be other circumstances under which an option year may not be 
exercised. Regarding the question of how the average of the expected 
levels of performance will be calculated, the Department has determined 
that, pursuant to sec. 147(g)(1) of WIOA, it will average the most 
recent 2 years of data, consistent with Sec.  686.330(e), for each of 
the six primary indicators of performance. The Department will consider 
the standard outlined in Sec.  686.330(d)(2) met if the average on each 
of the six primary indicators for performance is below 50 percent. No 
changes have been made to the regulatory text in response to these 
comments.
    Comments: Several commenters noted that because it takes an average 
of 2 full years to improve the performance of a center, the first 
option year should always be granted to an operator taking over a low 
performing center so that any decision regarding renewal is based 
solely on the performance of the new operator and not the previous 
operator.
    Relatedly, regarding the availability of information when there has 
been a change of center operators (Sec.  686.330(e)), several 
commenters expressed concern that 6 months is an inadequate amount of 
time to assume full responsibility for the performance of the previous 
operator if the center is a low performing center (bottom 20 percent). 
These commenters noted that in order to improve performance, new 
operators are required to install new leaders, set up a new management 
team and strategic plan, hire and train new employees, set up a new 
behavior management system, develop strong student leaders, establish a 
positive student culture, and undertake other time consuming tasks in 
order to successfully improve center performance. The commenters stated 
that the point at which the performance of the center reflects the 
performance of the current operator is contingent on vastly different 
conditions and deficiencies, and noted that if a calendar date must be 
used to reflect this, it should be no less than 2 years for the new 
operator of a low performing center and at least 1 year for other 
operators. One commenter noted that the point at which the performance 
of a center reflects the performance of the current operator will vary 
based on numerous conditions, including the shortcomings of the 
previous operator. As such, the commenter recommended that the length 
of time should be determined on a case-by-case basis.
    Department Response: The Department has considered these comments 
and agrees that, given that it takes at least a year for a new operator 
to improve the performance of a center, the possibility exists that a 
center with a new operator may continue to meet the definition of a 
low-performing center despite the change in operator. Accordingly, the 
Department added a clause to Sec.  686.330(e)(1) to provide that when 
an operator takes over a center that was previously low performing, the 
first contractual option year will not be denied based on the 
performance criteria described in paragraph (d). This will provide the 
operator time to improve the performance of the center and ensure that 
the available data accurately reflects the performance of the current 
operator.
    Comments: Several commenters stated that ``or'' should be changed 
to ``and'' in Sec.  686.330(f)(1)(vii) in order to align with WIOA sec. 
147(g), noting that the law and the regulations apply different 
criteria for performance that triggers an option year denial.
    Department Response: The Department agrees with the commenters and 
has made two changes to Sec.  686.330(f). First, paragraph (f)(2) has 
been reordered and moved to paragraph (f)(1) in order to maintain the 
same order of criteria as the previous section for ease of reading. In 
addition, the ``or'' between paragraphs (f)(1) and (2) has been changed 
to an ``and'' to indicate that in order for an option year to be denied 
under this provision both criteria must be met.
    Comments: Several commenters recommended that the Department define 
the term ``significant improvements'' in Sec.  686.330(g)(1) to improve 
transparency, make expectations clear, and avoid charges of favoritism.
    Department Response: The Department has determined that because 
each performance improvement plan (PIP) is unique and tied to a 
specific set of factors that pertain to a specific contractual 
situation, it will not further define the term ``significant 
improvements'' here as those improvements will necessarily vary by PIP.
Section 686.340 How are entities selected to receive funding to provide 
outreach and admission, career transition and other operations support 
services?
    Comments: One commenter stated that the proposed regulation does 
not adequately implement the rigorous service provider selection 
criteria prescribed by Congress in WIOA and takes insufficient steps to 
ensure that Job Corps users will receive the highest quality services 
and training possible. Another commenter suggested that the Department 
utilize OMS outcome information when evaluating career transition 
service (CTS) contract proposals and set up a report to assess 
students' connection to the workforce after leaving the Job Corps 
center.
    Department Response: The selection criteria described in Sec.  
686.340(c) are taken directly from sec. 147(a)(2)(B)(i), which are the 
criteria required to be used in selecting an outreach and admissions 
(OA) or career transition services provider (CTS). The Department has 
included Sec.  686.340(c)(6) to provide flexibility to include 
additional selection criteria if the Department determines such 
criteria are necessary to ensure the highest quality service providers. 
No changes have been made to the regulatory text in response to these 
comments.
    Comments: Another commenter recommended that all CTS contracts be 
attached to prime Job Corps center contracts because it would provide a

[[Page 56234]]

cost-effective method to afford accountability to Job Corps results.
    Department Response: The Job Corps contracting processes and 
structure regarding center operations contracts and CTS contracts 
require flexibility as they are driven by the program's evolving needs. 
The Department declines to make changes to the regulatory text in 
response to this comment, and will issue guidance as necessary.
Section 686.350 What conditions apply to the operation of a Civilian 
Conservation Center?
    Comments: Commenters expressed concern regarding proposed Sec.  
686.350(e), which allows the Secretary of Labor, in consultation with 
the Secretary of Agriculture, to select an entity to operate a CCC in 
accordance with the requirements of Sec.  686.310 if the Secretary of 
Labor determines it is appropriate. The commenters recommended that 
CCCs continue to be managed by the USDA Forest Service. Commenters 
stated that USDA-operated CCCs should not be able to be replaced by a 
private for-profit entity; one commenter specifically stated that there 
is potential for contract centers to misuse resources and that contract 
centers do not have the additional layer of oversight that CCCs have.
    Several commenters opposed Sec.  686.350(f), which provides that 
the Secretary of Labor has the discretion to close CCCs if the 
Secretary determines it to be appropriate. Commenters stated that the 
CCC National Director, the Forest Service Chief, and Secretary of the 
United States Department of Agriculture (USDA) need to have control and 
the final say as to the performance and closure of any CCC, as opposed 
to closure being at the sole discretion of the Secretary of Labor. Some 
commenters stated that proposed Sec.  686.350(f) gives authority to one 
person--the Secretary of Labor--to make a unilateral decision that 
would affect thousands of people. Commenters suggested that there 
should be a wider range of people involved and time to present a case 
against closure of any particular center, as the closure of centers 
have a devastating effect on surrounding communities. Other commenters 
expressed concern that this proposed regulation would give one agency 
the ability to make employment decisions about another agency's 
personnel and would take away the personnel's ability to appeal 
employment decisions within their own agency. One commenter stated that 
this proposed provision would damage morale and create uncertainty 
among the CCC workforce. Another commenter remarked that taxpaying 
residents of the community where the CCC is located should be involved 
and/or their opinions be taken into consideration when making decisions 
regarding CCCs. Still another commenter stated that the proposed 
language focuses solely on closure. The commenter noted that with no 
clearly defined, objective assessment system in place that includes 
obtainable benchmarks, the language in proposed Sec.  686.350(f) would 
create an unaccountable system without hope for improvement. The 
commenter further noted that the valuations made on the data collected 
by the Department's systems use flawed assumptions within a system 
biased toward contractors. Some commenters suggested that instead of 
allowing the Department to close a CCC if it deems appropriate, the 
regulations should implement the text in WIOA regarding low performing 
CCCs exactly as written.
    Department Response: The Department is committed to improving the 
performance of CCCs by using the numerous tools provided by WIOA, 
including the procedures outlined in WIOA sec. 159(f)(2) and (f)(4), 
which are incorporated into the regulations at Sec.  686.1070. However, 
the Department is constantly working to ensure that its limited 
resources are used to deliver the best possible results for students. 
As part of ongoing efforts to ensure its resources are best utilized, 
the Department may conclude that closing a CCC or selecting an entity 
to operate it on a competitive basis will allow it to provide the 
highest quality program to its students more effectively. In order to 
better serve the nation's youth in acquiring career skills through 
quality job training and education, the Department must retain all of 
its options with regard to improving its centers and the program as a 
whole, including, but not limited to, considering for closure or 
private operation through a competitive procurement process those Job 
Corps centers marked with consistent and entrenched poor performance. 
While Sec.  686.350(f) does provide that the Secretary of Labor has the 
discretion to close CCCs if determined appropriate, any decision to 
close a CCC will be made in full accordance with the Department's 
published closure criteria and the procedural requirements outlined in 
WIOA. No changes have been made to the regulatory text in response to 
these comments.
5. Subpart D--Recruitment, Eligibility, Screening, Selection and 
Assignment, and Enrollment
    This subpart describes who is eligible for Job Corps under WIOA and 
provides additional factors that are considered in selecting eligible 
applicants for enrollment. It describes how applicants who meet 
eligibility and selection requirements are assigned to centers, 
reflecting WIOA's new requirements that the assignment plan consider 
the size and enrollment level of a center, including the education, 
training, and supportive services provided, and the performance of the 
Job Corps center related to the newly established expected levels of 
performance. WIOA also amended the assignment plan to provide for 
assignments at the center closest to home that offers the type of 
career and technical training selected by the individual rather than 
just the center closest to home, which improves access to high quality 
training for Job Corps students. These regulations serve to enhance the 
Job Corps program overall by ensuring that the individual training and 
education needs of applicants and enrollees are met in accordance with 
the requirements of WIOA. They also ensure that applicants and 
enrollees are provided accurate information about the standards and 
expectations of the Job Corps program and are fully prepared to be 
successful.
    In addition to changes described below, in Sec.  686.470 the 
Department has updated the citation to the regulations implementing 
sec. 188 of WIOA from 29 CFR part 37 to 29 CFR part 38.
Section 686.410 Are there additional factors which are considered in 
selecting an eligible applicant for enrollment?
    Comments: To accomplish its mission to provide disadvantaged youth 
a path to self-sufficiency, two commenters recommended that admissions 
counselors have the discretion to determine whether an applicant's 
Career and Technical Education needs can best be met through the Job 
Corps program. The commenters stated that Job Corps centers must 
provide a safe and supportive environment for young people who have the 
desire and ability to take advantage of its services, and to do this 
Job Corps cannot be considered a treatment program or a vocational 
rehabilitation program. These commenters noted that they favor the 
direction described by a Department official at the National Job Corps 
meeting in April 2015, that math, reading, interest, and aptitude 
assessments were in the offing for

[[Page 56235]]

admissions counselors to use when making their determinations.
    They also suggested that in order to determine whether an applicant 
is likely to be successful in group situations, admissions counselors 
must have access to information about the applicant's past performance 
in schools or other group settings because, if the applicant has a 
history of fighting or disruptive behavior, it is likely that this 
behavior will be brought to Job Corps and be even more disruptive in a 
residential setting, impeding the safety of others. The commenters 
noted that admissions counselors need access to mental health reports 
in cases where significant behavior problems could preclude successful 
interactions in group settings, and need to be on the medical/mental 
``need to know'' list so they can complete a thorough review of the 
additional factors in determining that Job Corps is the best fit for an 
applicant.
    Department Response: The Department has determined that Sec.  
686.410(a) and (b) provide the authority for admissions counselors to 
consider all available, relevant information in determining whether an 
applicant is eligible and well suited for Job Corps. More specifically, 
these two paragraphs provide admissions counselors with the discretion 
to make the determination, consistent with the process outlined in Job 
Corps' PRH, that an applicant has the desire and ability to take 
advantage of the services offered by the Job Corps program and that the 
applicant will not create an unsafe learning environment if admitted 
into the program. Ultimately, retaining the language proposed in the 
NPRM while providing additional guidance and detail in the PRH provides 
both the Department and admissions counselors the necessary flexibility 
and appropriate framework to administer the admissions process. No 
changes were made to regulatory text in response to these comments.
    Comments: Commenters suggested that applicants should be required 
to participate in a pre-orientation program as part of their 
eligibility assessment and should, where feasible, visit a Job Corps 
center in their local area. The commenters noted that a process to 
document the outcomes of all assessments should be developed, with the 
explanation of outcomes fully documented. In addition, when a 
determination is made that Job Corps is not the best program to meet an 
applicant's needs, a referral to a more suitable program should be 
made.
    Department Response: As discussed above, the PRH provides the 
detailed procedures governing the admissions process, including 
procedures for documenting the process and actions that should be taken 
if an applicant is denied enrollment.
    Comments: The Department received several comments about proposed 
Sec.  686.410(d), which requires that all applicants submit to a 
background check and that those who have been convicted of a felony 
consisting of murder, child abuse, or a crime involving rape or sexual 
assault be found ineligible for participation in Job Corps. Commenters 
suggested that Job Corps consider what procedures to put in place 
during the admissions process to ensure that it is not reflexively 
enrolling students with felony convictions or other violent and serious 
crimes not explicitly mentioned in WIOA, including attempted murder, 
robbery, assault/battery, and drug trafficking. The commenters 
acknowledged that while Job Corps cannot legally exclude these 
applicants from the program based solely on these convictions, the 
admissions process should include clear and universal standards for 
assessing and determining whether Job Corps will best meet these 
students' career goals and stated that a residential environment like 
Job Corps may not be a productive environment for these youth to pursue 
their career development, particularly the development of 21st century 
skills, given their past history.
    The commenters stated that clear standards and processes must be 
defined for assessments and determinations related to cases in which a 
background check reveals that an applicant is on probation, parole, 
under a suspended sentence, or under the supervision of any agency as a 
result of court action or institutionalization. The commenters also 
suggested that there should be a 6-month waiting period for an 
applicant after the individual is released from juvenile detention, 
drug rehab, or an adjudicated group home prior to being enrolled in the 
program in order to allow the individual to demonstrate successful 
engagement with the community at-large without court or other oversight 
and increase the likelihood that the individual can participate 
successfully in the program without jeopardizing the safety of other 
students.
    One commenter was concerned that this provision would give Job 
Corps too much discretion with little or no guidance to aid in the 
decision to admit an individual with a criminal record, and suggested 
that the Department provide additional guidance to aid Job Corps in 
determining whether an individual with a criminal history that does not 
include one of the identified felonies is eligible for participation. 
Without such guidance, this commenter expressed concern that there 
would be considerable risk that some applicants would be the victims of 
unfairness, arbitrariness, and perhaps discrimination.
    Department Response: As drafted, Sec.  686.410(a) and (b) provide 
the authority for admissions counselors to consider all relevant, 
available information in determining whether an applicant may be 
selected for enrollment, including information obtained from background 
checks and from the applicant. In addition, Job Corps' PRH provides 
guidance and standards on how to assess the applicant's past behavior 
in the admissions screening process, including prior felony convictions 
and all other interaction with the criminal justice system. These 
factors are designed to identify applicants that can benefit from and 
succeed in the program and to screen out individuals who are not suited 
for the program. In making the relevant eligibility determinations, the 
admissions counselor must follow the guidance and standards in the PRH. 
No changes were made to the regulatory text in response to these 
comments.
Section 686.450 How are applicants who meet eligibility and selection 
criteria assigned to centers?
    This section describes how applicants who meet eligibility 
requirements are assigned to centers. Paragraph (a)(4) of Sec.  686.450 
provides that the performance of a Job Corps center with respect to the 
expected levels of performance should be taken into account when 
assigning new students to centers.
    Comments: Several commenters expressed concern that this would 
require admissions counselors to give preference to high-performing 
centers, which would be impossible to implement for Outreach and 
Admissions (OA) contracts that are attached to and responsible for 
recruitment for a single Job Corps center, and challenging for OA 
contracts that are responsible for assignment to multiple centers 
across a State or region. The commenters questioned how the assignment 
plan would account for changing performance levels and how this will be 
reflected in the performance goals specified in OA contracts. The 
commenters noted that the Department has indicated that one of its 
requirements to exit a Performance Improvement Plan (PIP) will be to 
achieve a minimum on-board strength (OBS) threshold, and denying or 
limiting enrollments to a center on a PIP

[[Page 56236]]

could result in that center never meeting these goals despite otherwise 
improving performance. One commenter questioned how the assignment of 
students under the requirements of this section would account for 
changing performance levels since assessments are done on such a long 
term cycle, stating that experience has shown that it takes on average 
2 full years to improve the performance of a low-performing center. The 
commenter further stated that it often takes 18 to 24 months to 
recruit, hire, and develop staff, train and cultivate student leaders, 
change the student culture, and ultimately improve performance. The 
commenter expressed concern with the perceived conflict of interest 
that is generated when a single contractor handles OA and career 
transition services (CTS) functions and is the center operator.
    Department Response: Paragraph (a)(4) of Sec.  686.450 mirrors the 
requirements of WIOA at sec. 145(c)(2)(D). WIOA sec. 145(c) requires 
that the Secretary develop and implement a plan for assigning enrollees 
to Job Corps centers based on targets and analysis of specific criteria 
outlined under sec. 145(c)(1) and (2). The performance analysis 
requirement under WIOA sec. 145(c)(2)(D) relates to the expected levels 
of performance for indicators described in sec. 159(c)(1) and whether 
any actions have been taken with respect to the center under sec. 
159(f)(2) and (f)(3). While the Final Rule mirrors the statutory 
requirements, Job Corps is required under this provision to consult 
with center operators in analyzing the factors described in WIOA sec. 
145(c)(2)(D). The Department has modified Sec.  686.450(a) to clarify 
that the list of factors identified is non-exclusive. This addition 
clarifies that all of the challenges can be raised and discussed as 
part of the required analysis. Finally, on-board strength is not a 
component of the Performance Improvement Plan and is therefore 
irrelevant to this provision. Accordingly, no changes were made to the 
regulatory text in response to these comments.
6. Subpart E--Program Activities and Center Operations
    This subpart describes the services and training that a Job Corps 
center must provide. Job Corps provides residential services in 
combination with hands-on training and experience aligned with industry 
standards. While education, training, and job placement are core 
components of what the program offers, this section of the regulations 
describes how Job Corps provides a comprehensive service model that 
also includes life skills, emotional development, personal management, 
and responsibility. New regulations addressing advanced career training 
programs are included; such programs provide broader opportunities for 
higher wages and career advancement.
    This subpart also establishes the requirements for a student 
accountability system and behavior management system. Job Corps' policy 
for violence, drugs, and unauthorized goods is described. Requirements 
to ensure students are provided due process in disciplinary actions, to 
include center fact-finding and review board and appeal procedures are 
outlined. These systems and requirements serve to enhance the Job Corps 
program by ensuring that Job Corps centers are safe and secure 
environments that promote the education and training of students. 
Approved experimental, research and demonstration projects related to 
the Job Corps program are authorized in this subpart, which also serves 
to enhance the program.
    In addition to changes described below, in Sec.  686.560 the 
Department has updated the citations to the regulations implementing 
sec. 188 of WIOA from 29 CFR part 37 to 29 CFR part 38.
Section 686.500 What services must Job Corps centers provide?
    Comments: One commenter recommended that the regulatory text 
contain a statement that academic instruction includes entry-level 
workforce preparation and/or preparation for recognized postsecondary 
education and training.
    Department Response: The added detail to academic instruction 
suggested by the commenter is currently included at Sec.  686.505(b), 
which describes academic instruction in preparation for postsecondary 
education and training. Additionally, Sec.  686.505(c) further 
describes programs that must be provided to students in order to learn 
workforce preparation skills such as independent learning and living 
skills, including: Job search and career development, interpersonal 
relations, driver's education, study and critical thinking skills, 
financial literacy, and other skills specified in program guidance. In 
addition, after further review of Sec.  686.500, the Department decided 
to provide additional clarity in the language at Sec.  686.500(a)(1) by 
changing ``(iii) Employability and independent learning and living 
skills development'' to ``(iii) Employability and skills training; and 
(iv) Independent learning and living skills development.''
Section 686.505 What types of training must Job Corps centers provide?
    This section describes the training that Job Corps centers must 
provide to students. Commenters stated that Job Corps must continuously 
seek to improve student academic and technical credential attainment, 
workforce connectivity, and postsecondary attainment results to put 
graduates on the road to self-sufficiency.
    Comments: The commenters had multiple recommendations that fell 
under four broad categories: (1) Improving academic outcomes; (2) 
improving technical training and placement outcomes; (3) improving 
critical thinking, problem solving, decision-making, and other 21st 
century skills; and (4) cultivating a safe living and learning 
environment. Commenters recommended that Job Corps develop policies and 
requirements to, among other things, increase active and personalized 
learning through the use of digital tools and proper teacher training; 
expand partnerships with postsecondary institutions and 
apprenticeships; enhance employer relationship and in-demand credential 
attainment; and improve mental health and healthy relationship services 
and resources available to students.
    Department Response: The Department has determined that the 
requirements in sec. 148 of WIOA and Sec.  686.505 already capture and 
encompass many of the proposed and valuable suggestions. Additional 
training requirements and policies related to training will be 
implemented through updates to the Job Corps PRH. As such, no changes 
were made to the regulatory text in response to these comments.
    Comments: One commenter noted that teaching healthy relationship 
skills will make students more economically self-sufficient and views 
them as an essential part of employability, living skills, and 
interpersonal relationship skills.
    Department Response: Healthy relationship and living skills 
training are included in the list of training activities at Sec.  
686.505(c); all of the skills suggested by the commenter may be 
provided to students under this section.
    Comments: One commenter recommended that high school diplomas be 
regionally accredited and that secondary education programs include 
entry-level workforce preparation activities that lead to recognized 
postsecondary credentials in in-demand occupations and should be

[[Page 56237]]

included in the regulatory text under Sec.  686.505.
    Department Response: In order to retain flexibility to adjust to 
evolutions in accreditation, the Department issues guidance through the 
Job Corps' PRH.
Section 686.510 Are entities other than Job Corps center operators 
permitted to provide academic and career technical training?
    Comments: Expressing support for proposed Sec.  686.510, a 
commenter remarked on the importance of allowing unions to provide 
academic, career, and technical training, pointing out that unions have 
successfully transitioned students into apprenticeship programs. The 
commenter further stated that they are pleased that the NPRM envisions 
continued Job Corps participation by other entities that are not center 
operators but that do have a proven record of facilitating the entry of 
young people into careers that are a pathway to the middle class. 
Another commenter suggested that the Department revise this section to 
require that academic education be provided by public or regionally 
accredited private educational organizations that have demonstrated 
effectiveness in providing programs that include entry-level workforce 
preparation and/or postsecondary education and training.
    Department Response: The Department agrees that the career 
technical and academic education of Job Corps students should be 
provided by entities ``with demonstrated effectiveness'' and has 
changed this section to include this requirement. The Department will 
not limit the entities to the suggested ``public or regionally 
accredited organizations'' because all of the entities described in 
this section are statutorily required, per sec. 148(b) of WIOA, to 
provide academic instruction. The regulatory text was changed 
accordingly.
Section 686.515 What are advanced career training programs?
    Comments: A few commenters suggested ACT programs should be 
restored at Job Corps centers that eliminated them or downsized them 
due to budget cuts, noting that in many cases the programs could be 
restored with minimal costs. These commenters requested that the 
Department provide guidance to centers on how to restore their ACT 
programs or to establish new programs.
    Department Response: The Department acknowledges concerns about ACT 
programs; however, its decision to eliminate or downsize these programs 
was due to budget cuts and any decision to restore ACT programs will be 
based on available funds and will be handled on a case-by-case basis.
    Comments: Regarding the Sec.  686.515(c) provision that permits a 
center to exceed the approved capacity of the program under certain 
circumstances, two commenters requested that the Department provide 
clarification on what it means to achieve ``satisfactory rate of 
training and placement in training-related jobs.'' These commenters 
recommended that programs that exceed the centers' overall completion 
and placement-related goals over the preceding program year qualify for 
expansion without approval from the Department. The commenters also 
requested clarification as to how or whether center operators qualify 
if they have been operating the center for less than 2 program years 
when their performance is likely more reflective of the previous 
operator.
    Department Response: The Department is not making any substantive 
changes to the language in this part in response to these comments, but 
has made a minor change to align with the corresponding WIOA provision. 
The Department acknowledges the suggestion that Job Corps provide 
guidance regarding what it means to achieve a satisfactory rate of 
training and placement. The Department's change in the provision at 
Sec.  686.515(c)(1) revised the text from ``participants in such a 
program have achieved a satisfactory rate of training and placement in 
training-related jobs'' to ``participants in such a program have 
achieved a satisfactory rate of completion and placement in training-
related jobs'' to align this provision with WIOA sec. 148(c)(3)(A). 
After consideration, the Department has determined that defining a 
satisfactory rate of completion and placement, including the relevant 
data that will be reviewed in making this decision, falls under program 
administration. In order to ensure flexibility in the operation of the 
Job Corps program, because the Department continually reviews and 
revises the performance management system to effectively manage and 
best serve Job Corps' needs. Regarding the commenters' question about 
how or whether center operators qualify if they have been operating the 
center for less than 2 program years and the recommendation that if 
completion and placement goals are exceeded for a preceding program 
year the center should qualify for expansion, the Department 
acknowledges the commenters' concerns. However, the requirement for 
additional enrollments in the ACT program, which includes 2 program 
years of performance data, is statutorily required at WIOA sec. 
148(c)(3)(b), regardless of how long an operator has been operating a 
center. The change to the provision at Sec.  686.515(c)(1) is the only 
change made to the regulatory text in response to these comments.
Section 686.520 What responsibilities do the center operators have in 
managing work-based learning?
    Comments: Requesting clarification that Job Corps centers should be 
allowed to act as employers for work-based learning, two commenters 
recommended that the wording in Sec.  686.520(a) be changed to the 
following: ``The center operator must emphasize and implement work-
based learning programs for students through center program activities, 
career technical skills training, and through arrangements with 
employers . . . .''
    Department Response: The Department is not making any changes to 
the regulatory text in response to these comments. Paragraph (a) of 
Sec.  686.520 reads, ``The center operator must emphasize and implement 
work-based learning programs for students through center program 
activities, including career and technical skills training, and through 
arrangements with employers. Work-based learning must be under actual 
working conditions and must be designed to enhance the employability, 
responsibility, and confidence of the students. Work-based learning 
usually occurs in tandem with students' career technical training.'' 
The Department has determined that the language at Sec.  686.520(a) is 
identical in meaning to the language suggested by commenters. Under 
this provision centers may serve as employers for work-based learning. 
However, per the requirements of this provision, the work-based 
learning must be under actual working conditions, designed to enhance 
the employability of the student, and occur in tandem with the 
student's career technical skills training.
Section 686.530 What residential support services must Job Corps center 
operators provide?
    Comments: A few commenters recommended that the Department add 
clarifying language on medical services stating that, with the 
exception of a direct reference to the requirement for Trainee Employee 
Assistance Program (TEAP) services that related to Job Corps' zero 
tolerance policy, required medical services, should be limited to 
comparable services that exist on most college campuses. These 
commenters

[[Page 56238]]

further stated that Job Corps, in conjunction with community partners, 
should be required to educate enrollees regarding insurance access and 
requirements with respect to the Affordable Care Act and to connect 
enrollees to the appropriate insurance.
    Department Response: Section 686.530, with regard to medical 
services, states that medical services must be provided through 
provision or coordination of a wellness program that includes access to 
basic medical, dental, and mental health services, as described in the 
PRH, for all students from the date of enrollment until separation from 
the Job Corps program. Making the changes suggested by the commenters 
in the regulation would reduce the flexibility quickly to adjust the 
medical services and other residential support services required to be 
provided at a center. Accordingly, no changes were made to the 
regulatory text in response to these comments, but the PRH will 
continue to be modified as needed.
    Comments: Additionally, two commenters urged clarification in Sec.  
686.530(g) to ensure that student welfare associations can use 
fundraisers to secure funds.
    Department Response: The Department agrees with the request to 
include language to Sec.  686.530(g) clarifying that student welfare 
associations can use fundraisers to secure funds as an activity to 
support the association in addition to the specific activities listed 
to raise funds, as described in this section. As such, the section has 
been edited to include a reference to ``and other fundraising 
activities.''
Section 686.545 What is Job Corps' zero tolerance policy?
    Comments: A few commenters recommended changing the wording in 
Sec.  686.545(c) to read as follows: ``The zero tolerance policy 
specifies the offenses that result in the separation of students from 
the Job Corps. The center director is expressly responsible for 
determining when there is a violation of this policy.''
    Department Response: The Department agrees with the commenters and 
has included new language at Sec.  686.545(c) for clarity, so that the 
revised paragraph now provides that the center director is responsible 
for determining when there is a violation of the policy, as opposed to 
a violation of a specified offense.
Section 686.565 Is Job Corps authorized to conduct pilot and 
demonstration projects?
    Comments: Some commenters suggested that Outcome Measurement System 
(OMS) results should be put on hold for centers implementing pilot and 
demonstration projects until the project is completed, stating that 
this worked well with the ``Centers for Excellence'' pilot.
    Department Response: The Department has determined that the 
decision of whether the OMS results will be placed on hold for centers 
implementing pilots is best addressed on a case-by-case basis, as there 
may be multiple, unique factors to consider in each project at 
different center locations, requiring flexibility in the operation of 
the pilot or demonstration project. No changes were made to the 
regulatory text in response to these comments.
7. Subpart F--Student Support
    Subpart F discusses the support services provided to Job Corps 
enrollees, including transportation to and from Job Corps centers, 
authorized student leave, allowances and performance bonuses, and 
student clothing. In addition to being eligible to receive 
transportation to and from Job Corps centers, students are eligible for 
other benefits, including basic living allowances to cover personal 
expenses, in accordance with guidance issued by the Secretary. Students 
are also provided with a modest clothing allowance to enable them to 
purchase clothes that are appropriate for the classroom and the 
workplace. These proposed regulations will again work to strengthen the 
Job Corps program and provide access to high quality training by 
ensuring that Job Corps students are placed in the best possible 
position to prepare them for learning, and that they are rewarded for 
their success in the program.
    No public comments were submitted in response to the NPRM for this 
subpart.
8. Subpart G--Career Transition and Graduate Services
    This subpart discusses career transition and graduate services for 
Job Corps enrollees. Job Corps focuses on placing program graduates in 
full time jobs, postsecondary education, advanced training programs, 
including registered apprenticeship programs, or the Armed Forces. In 
an effort to further integrate the Job Corps program with the greater 
public workforce system and align it with the core programs, Sec.  
686.820 specifically focuses on how Job Corps will coordinate with 
other agencies, where emphasis is placed on utilizing the one-stop 
delivery system to the maximum extent practicable. This subpart also 
outlines a center's responsibilities in preparing students for career 
transition services; the career transition services that are provided 
for enrollees; who may provide career transition and graduate services, 
in addition to one-stop centers; and services provided for graduates 
and former enrollees.
Section 686.760 What services are provided to former enrollees?
    Comments: Three commenters noted that Job Corps' reputation is 
damaged when employers are connected with students who left the program 
early (for mostly drug, behavioral, or voluntary reasons) without 
obtaining their academic and technical training credentials and stated 
that these students are unlikely to advance along a viable career 
pathway without further education. These commenters proposed that the 
regulations clarify that the CTS provided to former enrollees be 
focused primarily on enrolling former enrollees in other education or 
training programs, which will maximize the resources that can be used 
to support Job Corps' graduates. The commenters proposed that no 
additional services should be provided to former enrollees following 
their placement.
    One commenter noted that all young people have access to the 
services available at one-stop centers and WIOA sponsored youth 
programs, and recommended that Job Corps' services to former enrollees 
be limited to documented referrals to one-stop centers or other WIOA 
programs. The commenter explained that this approach would allow Job 
Corps to focus resources on assisting committed graduates find 
employment or enroll in postsecondary or apprenticeship programs or the 
military. According to this commenter, such an approach also would 
increase the amount of time devoted to securing better housing, 
transportation, clothing, and other transition services that students 
need to attain self-sufficiency. The commenter proposed eliminating 
services for 90 days and only providing referrals to one-stop centers 
and other WIOA programs.
    Department Response: No change to the regulatory text was made in 
response to these comments. The statutory language provides the 
Secretary with discretion to determine what services are appropriate 
for former enrollees and this provision reiterates that Job Corps has 
discretion in

[[Page 56239]]

providing these services. The Department is issuing guidance regarding 
the provision of services to former enrollees through the PRH.
9. Subpart H--Community Connections
    This subpart highlights WIOA's focus on community relationships and 
further integration with the public workforce system. In both the new 
contracting provisions in subpart C and in this subpart, there is more 
emphasis on connections with one-stop centers, Local WDBs, and State 
and local plans. While WIA's requirement for a Business and Community 
Liaison has been eliminated, the responsibility for establishing 
beneficial business and community relationships and networks now lies 
with the director of each Job Corps center. Moreover, WIOA contains a 
new requirement that in a single-State local area, a representative of 
the State WDB must be included on the workforce council. Section 
686.810 also states, consistent with sec. 154(b)(2) of WIOA, that the 
workforce council may include employers from outside the local area 
that are likely to hire center graduates. The new requirements for the 
workforce council seek to provide greater access to high quality 
training for Job Corps students, in part by ensuring that Job Corps is 
providing training for in-demand industry sectors and occupations.
Section 686.800 How do Job Corps centers and service providers become 
involved in their local communities?
    This section describes the Job Corps center responsibilities 
regarding the establishment and development of mutually beneficial 
business and community relationships and networks.
    Comments: Two commenters stated that center directors should be 
involved in the community and in establishing connections to entities 
described in this section, but noted that without these duties assigned 
to a specified staff person, it becomes difficult for a center director 
to maintain these relationships. The commenters recommended that the 
regulations clarify that the center director will designate a staff 
member to coordinate these activities, appreciating that the nature of 
the community (i.e., the time and effort required to establish these 
relationships will be different in rural vs. urban areas) as well as 
the size and staffing of the center will influence whether the designee 
should be a full time Business and Community Liaison (BCL) or whether 
the duties can be assigned to another person on staff.
    Another commenter made a similar statement, noting that while 
center directors are involved in the community and in establishing 
connections to the entities described Sec.  686.800, without the 
assistance of a staff person such as a BCL, it will be difficult for a 
center director to personally maintain these beneficial community 
relationships and networks. The commenter proposed that the center 
director designate a staff member to coordinate these activities.
    Department Response: The regulatory language states that each 
center director must ensure the establishment and development of 
business and community relationships, but does not specify who must 
perform the work. Ultimately, assignment of these responsibilities is 
left to the discretion of each center director. It is acceptable for a 
center director to delegate this responsibility to a member of their 
staff provided that they are properly overseeing that staff member's 
work to ensure that the requirements of this provision are being met. 
No change was made to the regulatory text in response to these 
comments.
Section 686.810 What is the makeup of a workforce council and what are 
its responsibilities?
    Comments: One commenter noted that this section requires that the 
majority of workforce council members be business owners, chief 
executives (CEOs), or chief operating officers (COOs) of non-
governmental employers or other private sector employers. The commenter 
stated that it is unrealistic to expect that owners, CEOs, and COOs 
will be the active workforce council participants and noted that they 
find human resources representatives from major employers often offer 
the best perspective on employment opportunities and qualifications. 
The commenter proposed that the regulation be modified to include 
representatives of employers that are in a position to hire Job Corps 
students and/or are responsible for training and development of the 
organization's employees.
    Department Response: After considering these comments, the 
Department agrees with the logic presented by the commenters. The 
Department has changed paragraph Sec.  686.810(b) to clarify that 
business owners, CEOs, COOs of non-governmental employers, and other 
private sector employers may designate the staff person they feel is 
best suited to represent their entity on the workforce council, 
provided that the designee meets the requirements in Sec.  686.810(b).
    Comments: Several commenters noted that Job Corps is required to 
draw upon many of the same agencies for individuals to sit on its 
workforce councils that provide members to the Local WDBs. These 
commenters recommended that Sec.  679.360 allow, or even encourage, 
workforce councils to be a subcommittee of the most appropriate 
regional or Local WDBs, where applicable. The commenters noted that 
this would eliminate competition for membership and encourage greater 
collaboration between Job Corps, the Workforce Investment Board (now 
Workforce Development Board), and the one-stop delivery system. Other 
commenters further noted that Sec.  686.810(d) requires a center's 
workforce council to work with all applicable Local WDBs to review 
labor market information and make recommendations to the Secretary for 
career technical training offerings. The commenters recommended that 
where a workforce council is not affiliated with a regional or Local 
WDB, it may make sense to designate a regional or Local WDB staff 
member to sit on the workforce council to facilitate these actions.
    Department Response: No change to the regulatory text was made in 
response to these comments. Each Job Corps center director must 
establish and develop mutually beneficial business and community 
relationships and networks with entities, including Local WDBs. Under 
WIOA sec. 154(b)(2), members of the Local WDB are permitted, though not 
required, to sit on center workforce councils provided they meet the 
membership requirements outlined in Sec.  686.810(a) and (b). Section 
679.360 implements WIOA sec. 107(b)(4) and establishes the roles and 
responsibilities of standing committees within the Local WDB structure.
    Comments: With respect to Sec.  686.810(d)(2), commenters also 
recommended that a rapid-response system be developed to change career 
technical training offerings quickly to meet employer demands as 
identified and recommended by the workforce council.
    Department Response: The Department is not changing Sec.  
686.810(d)(2) to include a requirement that a rapid-response system be 
developed to change career technical training offerings quickly to meet 
employer demands as identified by the workforce council. Paragraph 
(d)(2) of Sec.  686.810 states that the workforce council must review 
all relevant labor market information, including related information in 
the State Plan or the local plan, to: Recommend in-demand industry 
sectors or occupations in the area in which the center operates; 
determine employment opportunities in

[[Page 56240]]

the areas in which enrollees intend to seek employment; determine the 
skills and education necessary to obtain the identified employment; and 
recommend to the Secretary the type of career technical training that 
should be implemented at the center to enable enrollees to obtain 
employment opportunities identified. The Department will provide 
additional guidance on how the workforce council will provide this 
information.
    Comments: One commenter also recommended that Job Corps--whether 
through a designated center employee or through members of the 
workforce council--be mandated partners in State, regional, and local 
sector partnerships as required by 20 CFR 678.435(a) (see Joint WIOA 
Final Rule) because this could significantly enhance employer 
partnerships and provide employer-driven recruitment, training, and 
placement services.
    Department Response: The Department strongly encourages sector 
partnerships that include a variety of industries and career pathways 
that may be included in a sector strategy. Given the variety of 
industries and career pathways that may be included in a sector 
strategy, which includes Job Corps, the Department at 20 CFR 678.435 
(see Joint WIOA Final Rule) is not placing regulatory requirements 
around partnerships.
10. Subpart I--Administrative and Management Provisions
    This subpart provides requirements relating to tort claims, Federal 
Employees Compensation Act (FECA) benefits for students, safety and 
health, and law enforcement jurisdiction on Job Corps center property. 
It also addresses whether Job Corp operators and service providers are 
authorized to pay State or local taxes on gross receipts, and details 
the financial management responsibilities of center operators and other 
service providers. The management of student records, as well as 
procedures applicable to the disclosure of information about Job Corps 
students and program activities are outlined. Finally, procedures 
available to resolve complaints and disputes and how Job Corps ensures 
that complaints or disputes are resolved in a timely fashion are 
addressed in this subpart. The entirety of this subpart addressing 
administrative and management principles that apply to the operation of 
the Job Corps program serves to promote its accountability and 
transparency.
    No public comments were submitted in response to the NPRM for this 
subpart. However, in Sec. Sec.  686.960 and 686.985 the Department has 
updated the citations to the regulations implementing sec. 188 of WIOA 
from 29 CFR part 37 to 29 CFR part 38.
11. Subpart J--Performance
    This subpart incorporates WIOA-specific requirements related to 
performance assessment and accountability, as well as requirements for 
performance improvement plans for Job Corps center operators who fail 
to meet expected levels of performance. The Job Corps program is now 
required to report on the primary indicators of performance common to 
all WIOA programs that provide key outcome information on how many 
students attained employment or were placed in education or training, 
their median wages, whether they attained credentials, their measurable 
skill gains, and the effectiveness in serving employers. The entirety 
of this proposed subpart serves to promote the accountability, 
performance, and transparency of the Job Corps program.
Section 686.1000 How is the performance of the Job Corps program 
assessed?
    Comments: Regarding which short-term measures should be retained in 
the new Outcome Measurement System (OMS), some commenters recommended 
that HSD/E, literacy and numeracy gains, CTT completion, credential 
attainment, and HSD/E and CTT combinations be retained. One commenter 
recommended that all current OMS categories be retained in order to 
measure student progress and noted that it is important to develop 
measures to evaluate how much a student has gained from entrance to 
exit from Job Corps (i.e., growth measures). Commenters stated that 
maintaining the current 15 OMS measures while adding new measures would 
be too cumbersome to manage and would take away from the quality of the 
programs provided. These commenters noted that Job Corps has been 
criticized by the Office of Inspector General (OIG) for having too many 
required performance indicators, the corollary of which is burdensome 
data collection, verification, and reporting requirements. These 
commenters suggested that the current emphasis on obtaining an academic 
credential not be diminished and recommend that Job Corps utilize 
measures to track the number of credentials being earned, as well as 
the size of ``measurable gains'' to reflect students that earn multiple 
credentials or make significant learning gains.
    Department Response: Job Corps' performance will be assessed in 
accordance with required procedures and standards issued by the 
Secretary through the national performance management system, which 
will take into account the performance metrics described in Sec.  
686.1000(b). The Department has determined that it will not add any 
additional performance indicators in this section. In order to 
effectively operate and evaluate the Job Corps program, performance 
indicators are regularly examined and necessary changes are made to the 
performance management system in annual performance guidance. It is 
important for the performance system to remain malleable and open to 
change on an annual basis to ensure that the Department is collecting 
the performance data that most accurately measures the performance of 
the program. Accordingly, rather than specify specific performance 
indicators in this section, the Department has decided to incorporate 
additional performance indicators in the yearly performance guidance 
described in Sec.  686.1000(b), as necessary.
    Comments: Regarding post-center performance indicators, one 
commenter stated that it will be important for Job Corps to determine 
how it will reliably obtain employment and wage information because the 
current survey system will not provide the National Office of Job 
Corps, the Department, or Congress with the reliable information they 
require to determine the efficacy of the program. This commenter also 
noted that Job Corps does not currently have access to unemployment 
insurance (UI) or social security information that will provide 
reliable information. Two other commenters stated that Job Corps should 
comment on how it intends to ensure that Job Corps has complete access 
to UI data so that Job Corps can report performance in accordance with 
the requirements for primary indicators of performance.
    Department Response: The Department recognizes the need to 
transition to the use of administrative data in order to obtain 
accurate employment and wage data in the most efficient way possible. 
The Department is working to obtain access to individual UI wage 
records and other administrative data to meet the requirements under 
WIOA sec. 159(e). The specific means by which this access will be 
acquired is under development and is expected to change over time; 
however, over the next few years the Department will work with other 
Federal and State agencies, consistent with State UI laws, to gain 
access to this information. In addition to calculating the performance 
of participants, access

[[Page 56241]]

to administrative data will allow the Department to begin collecting 
valuable information on employment outcomes for enrollees who began 
receiving services under the Job Corps program but did not remain in 
the program long enough to meet the definition of participant. As such, 
flexibility in the process is important and the mechanism for retrieval 
will not be prescribed by regulation. The annual performance guidance 
described in Sec.  686.1000 will describe how such records will be 
accessed and used. While State UI wage record data are one relevant 
data set, the Department anticipates using a variety of available, 
reliable data to assess a center's performance under all of the metrics 
comprising the performance management system.
Section 686.1010 What are the primary indicators of performance for Job 
Corps centers and the Job Corps program?
    Comments: One commenter noted that this section requires the 
inclusion of recognized postsecondary credential attainment 1 year 
after separation as one of the primary indicators of performance for 
Job Corps centers. The commenter stated that this is confusing as 
written and difficult, if not impossible, to track and monitor because 
centers themselves do not track post-center indicators: This is the 
responsibility of CTS contractors. The commenter suggested that to 
resolve this issue, along with other issues with tracking performance 
of Job Corps centers and equating that performance with placement and 
wages, all CTS contracts be attached to center operating contracts.
    Department Response: The regulation mirrors WIOA's primary 
indicators of performance in WIOA sec. 116(b)(2)(A)(ii), and sec. 
159(c)(1) which require that each center's performance be measured 
under the WIOA primary indicators of performance for youth. As 
discussed in the preamble to Sec.  686.340, the suggestion that CTS 
contracts should be attached to center operation contracts is better 
addressed as a matter of program administration because Job Corps 
contracting processes and structure regarding center operations 
contracts and CTS contracts require flexibility as they are driven by 
the program's needs.
    Comments: A commenter suggested that Job Corps use both an 
employment rate and a retention rate in the new performance management 
system. The commenter also expressed concern with how Job Corps career 
transition service (CTS) providers will be able to verify high school 
diploma, high school equivalency, or postsecondary credential 
attainment if the student achieves these outcomes after exiting from 
the center.
    Department Response: As noted above, in order to effectively 
operate and evaluate the Job Corps program, performance indicators are 
regularly examined and necessary changes are made to the performance 
management system in the annual performance guidance described in Sec.  
686.1000(b).
    Regarding how verification of high school diploma, high school 
equivalency, or postsecondary credential attainment will occur if the 
student achieves these outcomes after exiting from the center, the 
specific means by which this information will be collected is under 
development and may change over time and will not be prescribed by this 
regulation.
Section 686.1020 What are the indicators of performance for Job Corps 
outreach and admissions providers?
    Comments: Several commenters asked whether, like the performance 
indicators for centers, there will be other indicators for outreach and 
admissions. The commenters stated that if there are other indicators, 
they recommend that total arrivals be retained as a short-term 
indicator. Further, these commenters recommended that if female 
arrivals are measured, they should be weighted much lower. The 
commenters also stated that the placement measures in the current OMS 
be retained and weighted higher to fulfill the purpose of Job Corps to 
connect youth to the workforce.
    Department Response: As discussed, performance indicators and 
weights of performance measurements for OMS are not statutorily 
mandated and require continued flexibility, including the measures to 
overcome historic trends in enrollment. The Department continually 
reviews and revises the performance management system to manage 
effectively and best serve Job Corps' needs. Accordingly, in response 
to these comments, the Department has added Sec.  686.1020(e) providing 
that other indicators of performance will be adopted by the Secretary 
as necessary. These indicators are outlined in the annual performance 
guidance issued by the Secretary described in Sec.  686.1000(b), and 
may change over time to meet program administration needs.
    Comments: These commenters also stated that it is important to keep 
in mind the various constraints in the local market when setting the 
expected level of performance under Sec.  686.1020(c) for the OA 
indicator that measures the maximum achievable percentage of students 
that reside in the state where the center is located and that reside in 
the surrounding regions, as compared to the targets set by the 
Secretary for each of those measures. They also stated that these 
constraints include, but are not limited to: Whether the center is in a 
rural or urban area; what other providers offer similar training; 
whether the population of 16-24 year olds is projected to grow or 
shrink over time; and the poverty rate and unemployment rates in the 
local area. In addition, the commenters noted that it is critical that 
the expected levels of performance take into account the size of the 
local area because a national goal superimposed on a sparsely populated 
local area may cause significant multiplier effects and result in goals 
that are unattainable under any circumstance.
    Department Response: No change was made to this regulatory text in 
response to these comments; however, the Department has made a change 
to Sec.  686.450 which addresses these concerns. As described in Sec.  
686.450, when developing an assignment plan related to the maximum 
percentage of students at a center from the State and region in which 
the center is located the Department is required, in consultation with 
center operators, to analyze a number of relevant factors. The 
Department has changed Sec.  686.450(a) to indicate that the list of 
factors identified for consideration is non-exclusive; therefore, the 
constraints identified by these commenters could be discussed as part 
of the analysis.
    Comments: Commenters also stated that regarding [the OA indicator] 
under Sec.  686.1020(d) that measures the cost per enrollee calculated 
by comparing the number of enrollees at the center in a program year to 
the total budget for such center in the same program year, that they 
were unclear how this would be measured since outreach and admissions 
providers recruit for multiple centers, and questioned how they would 
be held accountable for cost per enrollee at a particular center and 
how a goal would be set for this measure. The commenters stated that 
much more needs to be provided on how this measure will be reported on 
the new OMS and recommended that instead of adding the cost per 
enrollee to OMS the cost for each center be included in the Secretary's 
report to Congress, similar to the cost per graduate that is required 
to be part of this report. The commenters noted that if the decision is 
made to add the cost per enrollee to OMS, outreach and admissions 
contracts should be attached to center contracts so that the center 
director is held accountable for

[[Page 56242]]

reasonable costs per enrollee at his/her center.
    Department Response: WIOA sec. 159(c)(2) requires that the cost per 
enrollee as described in WIOA sec. 159(d)(1)(M) be included as a 
performance indicator for OA providers, and the Department does not 
have authority to change this statutory measure. Additional detail on 
reporting cost per enrollee is provided in guidance. Finally, regarding 
the suggestion that outreach and admissions contracts be attached to 
center operations contracts, the Department determined that this 
recommendation is better addressed through procurement and 
administrative processes.
    Comments: Commenters noted that WIOA requires Job Corps to assess 
whether an applicant's needs and career goals can be best met by Job 
Corps or another local program, and if Job Corps is not deemed a best 
fit for the applicant, outreach and admissions counselors must refer 
and facilitate enrollment in alternative programs. There is currently 
no provision in the regulations for this to be measured. Commenters 
also recommended that OMS measure the efficacy of admissions counselors 
in conducting these assessments, including the rate of referrals and 
enrollment in other programs. Commenters further stated that the 
proposed indicators of performance for Job Corps outreach and 
admissions providers also should include the number of students 
retained for 30 and 60 days, since a center's performance is negatively 
impacted when students leave during their first 30 and 60 days, and 
center OBS is affected during this period due to zero tolerance 
violations for drugs and violence. The commenters also suggested OMS 
include goals and measures related to minimizing the number of Medical 
Separation with Reinstatement Rights (MSWR) terminations and fraudulent 
enrollments.
    Department Response: As discussed above in the preamble to Sec.  
686.1000, the Department continually reviews and revises the 
performance management system to effectively manage and best serve the 
students' needs. In response to these comments, as noted above, the 
Department has added Sec.  686.1020(e), providing that additional 
indicators of performance for outreach and admissions providers will be 
adopted by the Secretary as necessary. These indicators will be 
outlined in the annual performance guidance issued by the Secretary 
described in Sec.  686.1000(b), and may change over time to meet 
program administration needs.
Section 686.1030 What are the indicators of performance for Job Corps 
career transition service providers?
    Comments: Three commenters noted that because CTS providers are 
responsible for the same performance indicators as Job Corps centers 
and also other indicators that measure the type of placement received 
(the number of graduates who entered the Armed Forces, apprenticeship 
programs, job training matches, and average wages), they recommend that 
the Department attach CTS contracts to center contracts to hold the 
center director accountable to closely link education and training to 
connecting youth to the workforce and postsecondary education. Another 
commenter disagreed with this suggestion, stating that it is a blatant 
attempt on the part of center operators who are large businesses to 
exclude small businesses that fall under the OA/CTS size standard. 
Further, this commenter stated that bundling CTS to center contracts 
cannot be shown to improve placement and associated statistics.
    Department Response: As discussed in the preamble to Sec.  686.340, 
the suggestion that CTS contracts should be attached to center 
operation contracts is better addressed as a matter of program 
administration because Job Corps contracting processes and structure 
regarding center operations contracts and CTS contracts require 
flexibility as they are driven by the program's needs.
    Comments: Commenters recommended that Job Corps include performance 
indicators for the number of education placements and the number of 
postsecondary placements in addition to the performance indicators for 
CTS required by WIOA.
    Department Response: As discussed above in the preamble to Sec.  
686.1000, the Department continually reviews and revises the 
performance management system to effectively manage and best serve Job 
Corps' needs. Accordingly, in response to these comments, the 
Department has added Sec.  686.1030(h) providing that additional 
indicators of performance will be adopted by the Secretary as 
necessary. These indicators will be outlined in the annual performance 
guidance issued by the Secretary described in Sec.  686.1000(b), and 
may change over time to meet program administration needs.
    Comments: One commenter stated that they would like clarification 
on how quarters and the strict 12-month service window, as required 
under statute, will be established specifically for the purposes of 
measuring Job Corps outcomes. The commenter stated that the Job Corps 
system under WIA conflicts with WIOA with respect to CTS timelines and 
performance measurements, noting that CTS contracts have a 9-month 
window to place students and that 6 and 12 month placement follow ups 
are conducted based on the date of placement, not separation. The 
commenter noted that this creates a Job Corps CTS service window that 
can extend 18 months after graduation from Job Corps and would like to 
know whether the service window is changed to 12 months only.
    Department Response: As reflected in Sec.  686.740, WIOA sec. 
148(d) states that the Secretary shall arrange for the provision of job 
placement and support services to graduates for up to 12 months after 
the date of graduation and multiple resources, including one-stop 
partners, may support the provision of these services. In addition, as 
noted by the commenter, the indicators of performance indicator the 
percentage of program participants in education or training activities 
or unsubsidized employment during both the second and fourth quarters 
after exit from the program. Regardless of the length or extent of 
services provided to graduates under WIOA sec. 148(d), the Department 
is required to track a participant's participation in education/
training activities or in unsubsidized employment 6 and 12 months after 
exit from the program.
    Comments: A commenter also asked the Department to clarify whether 
WIOA and the proposed rules would treat former enrollees and graduates 
the same in terms of post-center services provided and the primary 
indicators of performance. Another commenter suggested that former 
enrollees and graduates should not be treated the same regarding post-
center services provided and performance indicators under WIOA, as is 
done under WIA.
    Department Response: Regarding the commenter's request for 
clarification on post-center services provided for graduates and former 
enrollees, WIOA sec. 148(d) states that the Secretary shall arrange for 
the provision of job placement and support services to graduates for up 
to 12 months after the date of graduation and multiple resources, 
including one-stop partners, may support the provision of these 
services. WIOA sec. 150(c) states that the Secretary may arrange for 
the provision of up to 3 months of employment services for former 
enrollees. These provisions are reflected in Sec. Sec.  686.740 and 
686.760, which mirror WIOA requirements for services provided. Further 
information regarding the services available to graduates and

[[Page 56243]]

former enrollees is included in the Job Corps PRH. Regarding the 
commenter's request for clarification on whether WIOA and the proposed 
rules would treat former enrollees and graduates the same in terms of 
the primary indicators of performance, former enrollees and graduates 
are treated the same if they meet the definition of participant, which 
includes both former enrollees and graduates who have completed their 
career preparation period and who have remained in the program for at 
least 60 days.
Section 686.1070 How and when will the Secretary use Performance 
Improvement Plans?
    Comments: Commenters noted that while 90 percent of the expected 
level of performance is an admirable goal, the percentage ``distance 
traveled'' toward improvement (e.g., from 50 to 75 percent versus from 
84 to 90 percent) should be taken into consideration when evaluating a 
center's progress on their PIP. These commenters suggested that 
although a center might not have reached 90 percent of the national 
average, they might have achieved significant improvement under their 
PIP.
    Department Response: As noted in Sec.  686.1070(b), the criteria 
that must be met before a PIP is completed and the center removed will 
be included in the plan itself.
    Comments: Commenters stated that specific criteria should be 
established when a PIP under WIOA sec. 159(f)(3) would be initiated so 
that if a Job Corps center is placed on a PIP, there is a transparent 
and logical reason for the PIP, expected outcomes, and the length of 
the PIP.
    Department Response: To ensure that the PIP system is responsive to 
the changing needs of the program, the criteria for PIPs established 
under WIOA sec. 159(f)(3) for centers that fail to meet criteria 
established by the Secretary, other than the expected levels of 
performance required under WIOA sec. 159(f)(2), are included in the 
Department's PIP system guidance in the PRH. No changes were made to 
regulatory text in response to these comments.
    Comments: One commenter suggested that 3 years of data be used to 
assess performance before placing a center on a PIP as is done to 
assess high-performing centers. Several commenters recommended that if 
a new operator takes over a low performing center, there be a 2-year 
grace period for that operator to make improvements before the 
Department considers the center in need of a PIP. Other commenters also 
recommend that the regulation include a reference to the process by 
which an operator may appeal its designation of requiring performance 
improvement based on extenuating circumstances. One commenter 
recommended that the regulations clearly state that the Regional 
Offices would be responsible for managing PIPs.
    Department Response: WIOA sec. 159(f)(2) specifies that if a Job 
Corps center fails to meet the expected levels of performance relating 
to the primary indicators of performance, which are established and 
measured annually, the Secretary must develop and implement a PIP with 
action to be taken during a 1-year period. Because WIOA requires the 
Department to annually establish expected levels of performance and to 
take action to improve the performance of those centers that fail to 
meet the expected levels of performance, the Department does not have 
the authority to wait 3 years to place an underperforming center on a 
PIP or to provide a new operator a 2-year grace period to make 
improvements. The Department does not consider a PIP to be punitive in 
nature. It provides an opportunity for the Department, consistent with 
the requirements of WIOA, to provide assistance and guidance to centers 
that are underperforming. Any guidance regarding a center's designation 
of requiring performance improvement would be provided in the PRH.
    Comments: Commenters urged the Department to use a progressive 
approach that seeks to improve performance at centers with as little 
disruption to staff, students, and the community as possible.
    Department Response: The Department is committed to improving the 
performance of Job Corps centers and has the authority under WIOA to 
take the following statutory actions after centers fail to meet the 
expected levels of performance: Providing technical assistance to the 
center; changing the career and technical education and training 
offered at the center; changing the management staff of the center; 
replacing the operator of the center; reducing the capacity of the 
center; relocating the center; or closing the center. The Department 
further lays out its approach to taking these actions in the PIP 
guidance published in the PRH.

K. Part 687--National Dislocated Worker Grants

1. Introduction
    National Dislocated Worker Grants are discretionary awards that 
temporarily expand service capacity at the State and local levels 
through time-limited funding assistance in response to significant 
dislocation events. These grants are governed by sec. 170 of WIOA. The 
Department received comments in support of part 687 of the NPRM, as 
well as comments requesting clarification or revisions. Additionally, 
the Department has made technical and clarifying changes to some of the 
sections. All changes to the regulatory text, and the Department's 
responses to the comments received, are explained below.
    The Department has made several global changes to this part for 
clarity and technical accuracy. First, ``National Dislocated Worker 
Grants'' will be referred to by the acronym ``DWGs'' in this part for 
simplicity.
    Second, the Department has determined it is necessary to alter the 
labels of what the NPRM called ``Regular'' and ``Disaster'' DWGs to 
more accurately describe their purpose and intended use. ``Regular'' 
DWGs have been renamed ``Employment Recovery'' DWGs, and ``Disaster'' 
DWGs have been renamed ``Disaster Recovery'' DWGs.
    Third, the term ``career services'' in Sec.  687.100(a) and (b) is 
changed to ``employment and training activities'' to clarify that the 
use of DWG funds is not limited to only career services. Training and 
supportive services also may be provided as appropriate and in 
accordance with the requirements of this part. For the same reason, 
this change has also been made in other applicable sections in this 
part (Sec. Sec.  687.170(a)(1) and (b)(2) and 687.180(b)(2) and (3)) 
where the NPRM referred to ``career services'' or ``employment-related 
assistance.''
    Fourth, the term ``temporary employment'' at Sec.  687.100(b) has 
been replaced with the term ``disaster relief employment'' to better 
align the text of this part with that of sec. 170 of WIOA. This change 
also has been made to Sec. Sec.  687.170(b)(2) and 687.180(b)(2).
    Fifth, the Department removed the word ``additional'' from 
references to ``additional guidance'' in Sec. Sec.  687.150, 687.160, 
and 687.200(b)(1). This word was unnecessary.
    Finally, the Department has made a technical correction to 
Sec. Sec.  687.180(b)(1) and 687.200(b)(2) by replacing the phrase ``by 
the State'' or ``by the States'' with a reference to Sec.  687.120(b) 
to ensure consistency with that provision, which provides that Indian 
tribal governments and outlying areas are eligible entities for 
Disaster Recovery DWGs in addition to States.
    The analyses that follows provides the Department's response to 
public comments received on the proposed

[[Page 56244]]

part 687 regulations. If a section is not addressed in the discussion 
below, it is because the public comments submitted in response to the 
NPRM did not substantively address that specific section and no changes 
have been made to the regulatory text. Further, the Department received 
a number of comments on this part that were outside the scope of the 
regulation and the Department offers no response. Lastly, the 
Department has made a number of non-substantive changes to correct 
grammatical and typographical errors to improve the readability and 
conform the document stylistically that are not all discussed in the 
analysis below.
2. Discussion of Public Comments and Changes to Individual Rules
Section 687.100 What are the types and purposes of National Dislocated 
Worker Grants (DWGs) under the Workforce Innovation and Opportunity 
Act?
    Four technical corrections have been made to the text of this 
regulation. First, the section heading is corrected from ``National 
Disclosed Worker Grants'' to ``National Dislocated Worker Grants.'' 
Second, the word ``purposes'' is added in the introductory paragraph of 
Sec.  687.100 to align with the section heading. Third, the Department 
has removed the word ``significant'' in Sec.  687.100(a) and replaced 
it with the phrase ``major economic dislocations or other events'' in 
order to be consistent with the header for this section. Finally, the 
Department has simplified the wording at Sec.  687.100(b) by removing 
``in certain situations as provided'' and replacing it with ``in 
accordance with.''
Section 687.110 What are major economic dislocations or other events 
which may qualify for a National Dislocated Worker Grant?
    Comments: The Department received a comment on proposed Sec.  
687.110 asking that plant closures be added to the list of qualifying 
events.
    Department Response: WIOA sec. 170(b) lists plant closures as an 
event for which the Department could authorize DWG funds. The 
regulation has been revised to include plant closures explicitly in 
Sec.  687.110(a)(1) and (3). In Sec.  687.110(a)(1), the Department has 
concluded that a plant closure that results in a mass layoff of 50 or 
more workers from one employer in the same area is a qualifying event. 
Under Sec.  687.110(a)(3), the Department may determine that a plant 
closure affecting fewer than 50 workers is a qualifying event if it 
significantly affects the designated community, such as what may 
happen, for example, if a closure occurs in a rural or other area with 
a small population. Additional requirements are set out in guidance, 
which will be updated as necessary.
    Additionally, the Department notes that the definition of ``mass 
layoffs'' in part 687 differs from the definition used in part 682, 
subpart C, where the Department provides a definition of ``mass 
layoff'' for the purposes of Rapid Response activities. For Rapid 
Response, the Department allows States more flexibility in defining 
mass layoffs. Rapid Response services encompass strategies and 
activities that States can provide to assist workers affected by 
layoffs and closures as described at Sec.  682.300 (including 
information about available employment and training programs), and the 
Department encourages States to do so regardless of the number of 
workers affected by the layoff.
    In contrast, the DWG program is aimed at significant events that 
cannot reasonably be expected to be accommodated within the ongoing 
operations of the formula-funded dislocated worker program. 
Accordingly, for the purposes of the DWG program, the Department 
separately defines ``mass layoff'' as those affecting 50 or more 
workers from one employer in the same area. However, the Secretary may 
determine other events eligible for an Employment Recovery DWG under 
Sec.  687.110(a)(5) for layoffs affecting fewer than 50 employees, such 
as those related to a separate and larger layoff of 50 or more 
employees. Department guidance provides policy for these circumstances.
    Comments: The Department received several comments on data 
applicants may use to demonstrate ``higher-than-average demand'' for 
employment and training activities for certain members of the Armed 
Forces and their spouses. Under WIOA sec. 170(b)(1)(D)--and Sec.  
687.110(a)(4) of the NPRM--this demand must exceed State and local 
resources to be a qualifying event for DWG funds. In proposing part 
687, the Department included examples of what data sources could be 
used to determine whether a ``higher-than-average demand'' exists.
    Some commenters requested the Department be specific regarding what 
data it will accept for showing higher-than-average demand. The 
Department also received several comments on its proposal that it may 
use Unemployment Compensation for Ex-servicemembers (UCX) data for 
defining higher-than-average demand. Commenters were concerned the 
Department using UCX data would give areas with military bases an 
unfair advantage in competing for limited resources.
    Department Response: The Department has concluded that, given the 
importance of providing services to transitioning service members and 
their spouses, it must be flexible in what administrative data sources 
it allows applicants to use to demonstrate higher-than-average demand. 
The Department will not provide a specific, proscribed list of what 
data sources it will accept, but instead set out illustrative examples 
of allowable data sources in Department guidance.
    The Department has concluded that allowing UCX data to demonstrate 
higher-than-average demand does not provide an unfair advantage to 
areas with military bases. As stated above, grantees may use other 
administrative data sources for demonstrating higher-than-average 
demand. UCX data thus is not the only acceptable source or among a 
small, closed group of acceptable data sources the Department will use 
to determine higher-than-average demand for services. Furthermore, 
potential grantees may apply for a DWG once an eligible event or 
situation occurs in accordance with Sec.  687.130 without having to 
compete against other entities for these funds. Most DWGs will be 
awarded on this basis; thus, the Department has determined its 
allowance of UCX as one of many administrative data sources that 
applicants may use to show higher-than-average demand does not create 
unfair competition for DWG funds. The Department has concluded no 
changes to the text of Sec.  687.110(a)(4) are necessary in response to 
these comments.
    Comments: Another commenter on Sec.  687.110(a)(4) requested that 
contractors be included in the higher-than-average threshold because 
contractor layoff rates are at times higher than those of the Armed 
Forces. Section 170(b)(1)(D)(i) of WIOA allows DWGs to be awarded to a 
State or Local WDB serving an area for which a higher-than-average 
demand for employment and training activities for certain members of 
the Armed Forces, or certain spouses of members of the Armed Forces, 
exists.
    Department Response: WIOA sec. 170(b)(D)(i) specifically defines 
the members of the Armed Forces and spouses who are included in 
assessing the higher-than average demand; contractors are not included. 
As a result, contractor layoff rates cannot be considered when 
determining whether a DWG can be awarded under Sec.  687.110(a)(4). No 
change is being made to the regulatory text in response

[[Page 56245]]

to this comment. However, military contractors who have suffered a 
layoff may be able to be served under other types of DWGs, such as 
those involving dislocations or events described in Sec.  687.110(a)(1) 
(mass layoffs of 50 or more workers) or Sec.  687.110(a)(3) (layoffs 
significantly increasing the total number of unemployed individuals in 
a community).
    Regarding spouses, as it stated in proposing Sec.  687.110(a)(4), 
the Department has determined it will not require applicants to 
determine the specific subset of military spouses included in the 
higher-than-average demand for services in an area. Sec. 
170(b)(1)(D)(i) of WIOA specifically limits the military spouses 
included in this analysis to ``spouses described in sec. 3(15)(E) [of 
WIOA].'' Under sec. 3(15)(E) of WIOA, these are spouses of members of 
the Armed Forces on active duty who are dislocated specifically because 
they have experienced a loss of employment as a direct result of 
relocation to accommodate a permanent change in duty station of the 
member of the military, or are unemployed or underemployed and 
experiencing difficulty in obtaining or upgrading employment. To avoid 
unnecessary burden on applicants, the Final Rule at Sec.  687.110(a)(4) 
only requires applicants for these DWGs to assess whether military 
spouses dislocated under any of the factors in sec. 3(15) of WIOA 
contribute to the higher-than-average demand for services, specifying 
that these spouses must be spouses of Armed Forces members on active 
duty. As stated previously, the Department has determined that this 
implements the intent of the WIOA provision while avoiding unnecessary 
administrative hardship.
    Comments: Another commenter asked that ``Other events, as 
determined by the Secretary'' in Sec.  687.110(a)(5) allow entities to 
apply for regional or statewide grants to address issues affecting a 
particular industry or target population.
    Department Response: Under WIOA, the Secretary has broad authority 
to award DWGs for circumstances the Secretary deems appropriate. The 
Secretary will continue to use this authority to make determinations 
about the awarding of DWG funds for other events. No change was made to 
the regulatory text in response to this comment.
    Comments: A commenter submitted several comments on what disasters 
qualify for Disaster Recovery DWGs. Proposed Sec.  687.110(b)(2) stated 
that qualifying events for a Disaster Recovery DWG include ``an 
emergency or disaster situation of national significance that could 
result in a potentially large loss of employment, as declared or 
otherwise recognized by the chief official of a Federal Agency with 
jurisdiction over the Federal response to the emergency or disaster 
situation.'' Previously, under the Workforce Investment Act, only 
Federal Emergency Management Agency (FEMA) declarations qualified an 
event for a disaster National Emergency Grant. The commenter requested 
the Department define what disasters are ``of national significance.''
    Department Response: WIOA sec. 170(a)(1)(B) grants authority to 
Federal agencies with jurisdiction over the response to an emergency or 
disaster situation to determine and declare which disasters or 
emergencies meet the ``national significance'' threshold. As such, the 
Department has determined it will defer to those agencies' expertise, 
and a declaration of an emergency or disaster situation by such an 
agency is the threshold for whether a disaster or emergency is one ``of 
national significance.''
    However, to clarify what disasters qualify for the purpose of 
applying for Disaster Recovery DWGs, the Department has altered Sec.  
687.110(b)(2) to require that any declarations or recognitions of 
disasters or emergencies be issued in writing. This change will allow 
the Department to verify independently the declaration relied upon by 
eligible entities to request Disaster Recovery DWG funds. The 
Department is not specifying the form of publication, which could 
include Web sites or other digital mediums. The regulatory text has 
been revised by adding ``and issued in writing'' to Sec.  
687.110(b)(2).
    Comments: Another comment requested that States be informed of the 
mechanisms that will be in place to notify them when a Federal agency 
other than FEMA declares or recognizes a disaster or emergency. The 
commenter also requested the Department allow the emergency or disaster 
declarations or recognitions of Governors to qualify a disaster event 
for DWG funds.
    Department Response: The Department encourages applicants to work 
with Federal and other State agencies so States are quickly notified 
once a published declaration or recognition is made by the responsible 
agency.
    Additionally, WIOA sec. 170(a)(1)(A) and (B) authorizes DWG funds 
for disasters or emergencies declared by FEMA or other Federal agencies 
with jurisdiction over the response. There is no provision in the law 
for the funds to be provided for disasters or emergencies based on 
declarations by Governors. As a result, no change was made to the 
regulatory text in response to this comment.
    Comments: Another commenter requested both natural and man-made 
disasters be major economic dislocations or other events that qualify 
for a Disaster Recovery DWG.
    Department Response: In defining qualifying disasters or 
emergencies, WIOA sec. 170(a)(1)(A) incorporates by reference the 
definitions of ``emergency'' and ``major disaster'' as defined by the 
Stafford Act at 42 U.S.C. 5122. According to the Stafford Act, a 
``major disaster'' is any natural catastrophe (including any hurricane, 
tornado, storm, high water, winddriven water, tidal wave, tsunami, 
earthquake, volcanic eruption, landslide, mudslide, snowstorm, or 
drought), or, regardless of cause, any fire, flood, or explosion, in 
any part of the United States, which in the determination of the 
President causes damage of sufficient severity and magnitude to warrant 
major disaster assistance under this chapter to supplement the efforts 
and available resources of States, local governments, and disaster 
relief organizations in alleviating the damage, loss, hardship, or 
suffering caused thereby.
    Because WIOA incorporates the Stafford Act's above definition of 
``major disaster,'' the Department has determined that, for Sec.  
687.110(b)(1), DWG funds may be used for disasters declared by FEMA 
that are either natural or man-made. The Department has concluded that 
for consistency, an emergency or disaster situation in Sec.  
687.110(b)(2) declared or recognized by Federal agencies with 
jurisdiction over the Federal response also may be either natural or 
man-made and this change is reflected in the regulatory text at Sec.  
687.110(b)(2).
    Other textual and technical corrections, as discussed in the 
Introduction above, were made to Sec.  687.110.
Section 687.120 Who is eligible to apply for National Dislocated Worker 
Grants?
    Comments: The Department received several comments indicating that 
National Farmworker Jobs Program (NFJP) grantees should be eligible 
entities for DWGs. One commenter stated that it would be appropriate to 
add a phrase in Sec.  687.120 including entities that serve special 
populations. A few commenters noted that NFJPs have successfully 
responded to freeze, drought, and floods affecting farmworkers in the 
past.

[[Page 56246]]

    Department Response: WIOA sec. 170(b)(1)(B) through (D) identifies 
eligible entities for qualifying events for disasters, emergencies, or 
certain higher-than-average demand. The list of entities for these 
qualifying events is very specific, and the NPRM aligns with this list. 
WIOA sec. 170(b)(1)(A) and sec. 170(c)(1)(B) identifies those 
applicants eligible for major economic dislocations. These eligible 
entities include States, Local WDBs, an entity described in WIOA sec. 
166(c), and ``any other entity that demonstrates to the Secretary the 
capability to effectively respond to circumstances relating to 
particular dislocations.'' Although NFJPs are not specifically 
mentioned in the law, they are not excluded, as the law states that 
other entities may be determined eligible by the Secretary. In order to 
maintain flexibility and responsiveness, it is not prudent to list all 
of the possible entities that may be considered eligible applicants. 
The Department has determined that no changes are necessary to the 
regulatory text at Sec.  687.120(a). In those instances in which DWGs 
are awarded to States, Local WDBs or entities described in WIOA sec. 
166(c), the Department encourages NFJPs and other entities to 
coordinate with these recipients as appropriate to help address the 
need.
    A technical correction was made to Sec.  687.120(a)(3) to use the 
phrase ``Indian and Native American'' to be consistent with part 684 of 
the Rule. Also, the Department has made a technical correction to Sec.  
687.120(b), restructuring the format of the list of eligible applicants 
for Disaster Recovery DWGs for clarity and alignment with the format 
used at Sec.  687.120(a).
Section 687.140 What activities are applicants expected to conduct 
before a National Dislocated Worker Grant application is submitted?
    The Department has adopted text that includes technical edits to 
Sec.  687.140(a) in order to clarify what activities applicants are 
expected to conduct before submitting an Employment Recovery DWG 
application. As the Department stated in proposing the regulation, 
Sec.  687.140(a) requires applicants to identify the needs of the 
affected workers and their interest in receiving services. Thus, the 
technical edits made to Sec.  687.140(a)(2) clarify that agencies 
should use the information gathered through rapid response activities 
in Sec.  687.140(a)(1) to provide available services as appropriate,--
including other rapid response activities.
    Comments: The Department received comments on data gathering on 
available workers required in the application for a Disaster Recovery 
DWG. Proposed Sec.  687.140(b) requires applicants to conduct a 
preliminary assessment of the work needed and ``put a mechanism in 
place to reasonably ascertain'' whether sufficient eligible individuals 
are available to conduct the planned work. One commenter agreed that 
the collection of data, as well as other activities are important, but 
requested that the Department exercise the flexibility so the 
application and award process are not delayed. Another commenter stated 
that the requirement to put a mechanism in place to determine worker 
availability is unrealistic because it is difficult to identify 
eligible and willing dislocated workers due to the type of clean-up 
work and the challenging work environment. The commenter suggested that 
the problem of inadequate supply to meet a community's demand for 
recovery workers would be addressed by allowing States to define 
``long-term unemployed'' and that the Department should award funds in 
increments to allow for a more streamlined process.
    Department Response: WIOA sec. 170(d)(2) states that the 
individuals eligible to receive disaster relief employment include the 
long-term unemployed. Further, guidance issued for DWGs specifies that 
long-term unemployed individuals, as defined by the State, are eligible 
participants. Regarding the commenter's request that funds be issued in 
increments, the Department typically funds DWGs on an incremental basis 
and will continue to do so as appropriate.
    The Department understands that in the aftermath of significant 
disasters, acquiring data may be extraordinarily difficult. Still, the 
Department has determined it is necessary to require a reasonable 
assessment to ascertain the number of eligible workers available to 
conduct the planned work. It is critical that grantees make good-faith 
efforts to gather this data to provide the Department information it 
needs to ensure the proper amount of funding is awarded to assist the 
eligible areas.
    However, to address the commenter's concern and reflect the 
Department's flexibility, the Department has removed the ``put a 
mechanism in place'' information from the Final Rule at Sec.  
687.140(b)(2). The Final Rule instructs awardees to ``reasonably 
ascertain'' that there are a sufficient number of eligible individuals 
available to conduct the work. The Department will take the particular 
circumstances of a disaster into account during the application review 
process.
Section 687.150 What are the requirements for submitting applications 
for National Dislocated Worker Grants?
    No substantive comments were received on this section; however, the 
Department made changes to the Final Rule that provide clarity to allow 
the Department to appraise the variety of needs and services under the 
new statute and tailor application requirements accordingly. The 
Department has added a sentence to this section reflecting that the 
application requirements may vary based on the category of DWG. The 
Department also has qualified the requirement that a project 
implementation plan be submitted after receiving a DWG award by adding 
the phrase ``unless otherwise specified.'' The project implementation 
plan requirement may not apply to all DWGs at all times. Requirements 
will be noted in grant terms and conditions.
Section 687.160 What is the timeframe for the Department to issue 
decisions on National Dislocated Worker Grant applications?
    Comments: The Department received several comments on this section, 
which discusses the 45-calendar-day timeframe for the Department to 
issue final decisions on DWG applications that meet the requirements of 
this part, and strongly encourages applicants consult with their 
Regional Offices on all requirements. One comment supported the 
provision, but the remaining commenters were concerned that the 45-day 
timeframe is too long for Disaster Recovery DWGs. Commenters also 
requested a 72-hour timeframe for decisions.
    Department Response: The 45-day timeframe is the maximum amount of 
time the Department has to issue a final decision, not the minimum. The 
Department typically prioritizes Disaster Recovery DWGs applications 
for immediate review, and the Department will make every effort to 
ensure they are processed as quickly as possible. Again, applicants 
should work with their Regional Offices to ensure submissions are 
complete. No change was made to regulatory text in response to this 
comment.
    Comments: One commenter asked for clarification on how and to whom 
the Notice of Obligation (NOO) (now called the Notice of Award (NOA)) 
will be disseminated.
    Department Response: The NOA typically will be disseminated 
electronically to the entity identified as

[[Page 56247]]

the applicant on the SF-424. The Department will provide specific 
technical assistance and guidance as necessary. No change was made to 
the regulatory text in response to this comment.
Section 687.170 Who is eligible to be served under National Dislocated 
Worker Grants?
    Comments: The Department received a few comments on this section, 
which addresses participant eligibility. Two commenters discussed the 
eligibility of underemployed individuals to be served under Disaster 
Recovery DWGs. One commenter asked whether the definition of 
underemployed in Sec.  684.130 applies to DWGs with respect to 
underemployed self-employed individuals as discussed at WIOA sec. 
170(d)(2)(D) and Sec.  687.170(b)(1)(iv) and (b)(2)(iv) of this 
regulation. This commenter also asked how adding the term 
``significantly'' to ``underemployed'' impacts the definition of 
underemployed as it relates to the self-employed at sec. 170(d)(2)(D) 
of WIOA and other sections of part 687. Another commenter relayed 
concern that employed individuals whose hours have been significantly 
reduced could not receive a temporary job under a Disaster Recovery DWG 
and requested that these individuals be added to the eligibility 
category. This commenter stated that doing so would align with text of 
WIOA sec. 170(d)(2)(D) by allowing self-employed individuals who become 
unemployed or significantly underemployed to be eligible for disaster 
relief employment.
    Department Response: The Department has determined that the 
definition for self-employed individuals who become unemployed or 
significantly underemployed as a result of an emergency or disaster 
does not automatically extend to those who are not self-employed. 
Regarding the question about Sec.  684.130, the needs to be addressed 
by Disaster DWG funds also are different than those discussed in part 
684, which deals with Indian and Native American program grants. 
Therefore, the definition of ``underemployed'' at Sec.  684.130 does 
not apply to this section. Neither ``underemployed'' nor 
``significantly underemployed'' are defined in sec. 3 (Definitions) of 
WIOA or in part 687. The Department has concluded it will remain 
flexible in determining the needs of underemployed individuals in the 
wake of a disaster and provide guidance as necessary.
    Regarding Sec.  687.170(b)(2), the Department has made a technical 
correction to remove the words ``humanitarian-related'' to ensure that 
the Department does not restrict the disaster relief employment to only 
humanitarian-related employment and not allow for the possibility of 
clean-up and repair-related employment. Since it is likely that most 
individuals who relocate from a disaster area will move to an area that 
is not affected by a disaster, the Department expects disaster relief 
employment activities to be rare in DWGs awarded for this qualifying 
event, and relocated individuals likely will participate in only 
employment and training activities.
    Comments: One commenter requested clarification regarding the 
individuals who relocate to another area from a disaster area as 
discussed in Sec.  687.170(b)(2). The comment suggested the regulatory 
text state that these individuals may receive services in both the 
disaster area and in the area to which they relocate.
    Department Response: The Department has added Sec.  687.170(c) to 
clarify that eligible individuals may receive services from DWG funds 
in either the State, tribal area, or outlying area affected by a 
disaster or the State, tribal area, or outlying area to which they 
relocate as a result of that disaster. Under this provision, a single 
individual may not be served in both the area affected by a disaster 
and the area to which they relocated because of the disaster. However, 
the Department also has included language in Sec.  687.170(c) to 
account for such a situation, where individuals eligible for services 
are capable of seeking services in both the State, tribal area, or 
outlying area in which a disaster occurred and the State, tribal area, 
or outlying area to which that individual has relocated as a result of 
that disaster. In these circumstances, the Secretary will make a 
determination as to whether individuals may be served with DWG funds in 
the disaster-affected area as well as the area to which those 
individuals relocated as a result of that disaster. Departmental 
guidance will set out requirements under these provisions. As discussed 
in the Introduction, the Department has made textual changes to this 
section to make this section and its requirements clearer and in better 
alignment with WIOA's text. Also, paragraphs (a)(1)(iii)(C) and (D) 
have been edited to reflect the correct cross-reference, to paragraph 
(a)(1)(iii)(B).
Section 687.180 What are the allowable activities under National 
Dislocated Worker Grants?
    The Department has made several technical corrections to this 
section. First, in Sec.  687.180(a)(1), the term, ``employment and 
training activities'' was changed to ``employment and training 
assistance'' for consistency with the wording at WIOA sec. 
170(b)(1)(A). Second, Sec.  687.180(a)(2) was revised to add ``and the 
terms and conditions of the grant'' to make it clear that supportive 
services, including needs-related payments, also are subject to any 
restrictions reflected in the terms and conditions of the grant. Third, 
Sec.  687.180(a)(2)(ii) was revised by inserting the word ``guidance'' 
to clarify that the other circumstances would be specified in guidance 
governing DWG application requirements. Fourth, in Sec.  687.180(b) the 
Department removed the second DWG acronym to eliminate redundancy. 
Fifth, the word ``emergency'' was added to Sec.  687.180(b)(1) and (2) 
to make it clear that these sections cover not only declared disaster 
areas, but declared emergency areas as well.
    Finally, the Department placed the proposed Sec.  687.180(b)(4) 
into Sec.  687.180(c) in the Final Rule. Unlike the other provisions of 
Sec.  687.180(b), this provision does not describe Disaster Recovery 
DWG activities but instead the entities through which DWG funds may be 
expended to carry out these activities. The Department also simplified 
this provision by replacing the phrase ``disaster relief, humanitarian 
assistance, and clean-up projects'' with ``activities'' discussed in 
Sec.  687.180(b).
    Comments: The Department received several comments on this section, 
which discusses the activities that may be conducted with DWGs. One 
commenter requested that the Department issue guidance on the required 
coordination with FEMA. WIOA sec. 170(d)(1)(A) requires funds awarded 
for disasters be used in coordination with FEMA. The commenter stated 
that it is more likely that a State would have more immediate access to 
and communication with their State emergency management agencies than 
FEMA.
    Department Response: Coordination of funding with FEMA is critical 
in helping ensure funding is used to provide a broad range of 
assistance while preventing duplication of services. The Department has 
determined that because each disaster is unique, and responses must be 
tailored to the disaster; decisions regarding how States, tribal, or 
outlying areas coordinate with FEMA should be made

[[Page 56248]]

by entities within affected communities. The Department declines to be 
prescriptive or proscriptive about grantees' coordination with FEMA, 
but expects that grantees will establish appropriate policies and 
procedures to meet this requirement. The Department supports and 
strongly encourages grantees' coordination with State emergency 
management agencies and other entities participating in the recovery 
process.
    Comments: A commenter requested that the Department solicit input 
on disaster relief and/or career services authorized under DWGs when a 
Federal agency other than FEMA declares a disaster or emergency 
situation.
    Department Response: This input was solicited during the comment 
period on the NPRM, which has since closed. The NPRM provided a list of 
allowable disaster relief employment activities and also stated that 
career services could be provided to eligible individuals. Examples of 
career services were provided in the Joint WIOA NPRM and are in 20 CFR 
678.430.
    Comments: Another commenter asked whether subgrantees would be 
required to report expenditures for career services as a whole.
    Department Response: In order to maintain flexibility, the 
Department will not provide information on such reporting in these 
regulations, but reserves the right to issue details in guidance. 
However, guidance on reporting for subgrantees is typically issued by 
the direct recipient of the funds; the level of detail for subgrantees 
the commenter requested might not be included in guidance issued by the 
Department.
    Comments: One commenter asked whether the NOA will indicate whether 
a grant has been authorized for a needs-related payment.
    Department Response: In most instances, authorization of needs-
related payments likely will be relayed through the grant's Terms and 
Conditions document. Other forms of communication may be used as 
necessary.
Section 687.190 How do statutory and regulatory waivers apply to 
National Dislocated Worker Grants?
    Comments: One commenter requested that the waiver process be short 
and efficient to expedite decision-making.
    Department Response: WIOA only allows the Department to waive 
certain statutory and regulatory requirements of WIOA title I, 
subtitles A, B, and E; the Department cannot waive any requirements of 
DWGs set out in sec. 170 of WIOA (which is in subtitle D) or the 
regulatory requirements of this part. For DWG funds, proposed Sec.  
687.190 allowed the use of waivers under subtitles A, B, and E that the 
Department already has approved. It delineated two processes for 
requesting that the Department apply these waivers to a DWG.
    For those applying for DWG funds, proposed Sec.  687.190 stated 
that the application must describe the already-approved waivers the 
applicant wishes to apply to the project and that the Department will 
consider the request as part of the application review and decision 
process. Proposed Sec.  687.190 required grantees seeking utilization 
of existing waivers to request a grant modification and include the 
provision to be waived, the operational barrier to be removed, and the 
effect on the outcome of the project.
    In response to the comment, the Department has restructured and 
revised Sec.  687.190 to clarify and better describe the waiver 
limitations, and to simplify the basic requirements for requesting to 
use waivers in DWG projects. The Final Rule at Sec.  687.190(a) 
articulates that the requirements of WIOA title I, subtitle D cannot be 
waived, but that already-approved waivers of the requirements under 
subtitles A, B, and E may be utilized in DWG projects. The Final Rule 
revises Sec.  687.190(b) to more clearly state that applicants with 
already-approved waivers under WIOA must describe the waiver in the 
application and request at the time of application that the specific 
waiver be applied to the DWG. The Department has simplified the 
requirements for requesting waiver utilization during the operation of 
the DWG in Sec.  687.190(c). The grantee must describe the existing 
waiver in a grant modification and request that the waiver be applied 
to the project. This removes the proposed Sec.  687.190(b)'s 
requirement that a grantee describe the provision to be waived, the 
operational barrier to be removed, and the effect on the outcome of the 
project. For added clarity, both Sec.  687.190(b) and (c) state that 
applicants may not use this process to request new waivers. The 
Department will not consider requests for new waivers as part of the 
application or modification for a DWG.
Section 687.200 What are the program and administrative requirements 
that apply to National Dislocated Worker Grants?
    Comments: The Department received comments on proposed Sec.  
687.200(b)(2), which stated that in extremely limited circumstances, 
funds available for expenditure from Disaster Recovery DWGs may be used 
for additional disasters or situations of national significance within 
the same program year the funds were awarded.
    One commenter expressed that the Rule was overly restrictive. The 
commenter remarked that there was no indication in WIOA's text that the 
subsequent disaster must occur during the same year of the award, and 
that the regulation should allow for more flexibility and permit these 
funds to be used beyond the program year. WIOA sec. 170(d)(4) allows 
the Secretary to set conditions under which these funds may be used, 
and the Department has concluded the program year restriction in the 
NPRM is the best method to help ensure the proper management and 
distribution of Disaster Recovery DWG funds. The Department made no 
changes to Sec.  687.200(b)(2) in response to these comments.
    Comments: The Department received a few comments concerning the DWG 
administrative costs addressed in Sec.  687.200(b)(3). One commenter 
asked whether the administrative cost limit is calculated against the 
full award amount, the summation of the incremental amounts received, 
or the amount expended. Another commenter, discussing part 683, 
advocated for consistency in how the administrative funds are applied 
in the formula program and the DWG; essentially, the commenter 
requested that the administrative costs be calculated against the award 
and not the expenditure amount.
    Department Response: The Department has concluded that it will 
follow this approach, and the administrative cost limit will be 
calculated against the award and not the expenditure amount. The 
Department has included this provision in the Final Rule at Sec.  
687.200(b)(3). The Department expects that in most cases, these cost 
limits will likely be proportionate to those established for the 
formula funds.
    The Department also encourages potential DWG recipients to review 
their cost per participant to ensure that it is reasonable or falls 
within normal limits based on the circumstances of the qualifying event 
and comparable grants that were previously awarded. If the cost per 
participant falls outside of normal limits, the grantee should submit a 
justification to explain the costs to reduce delays in the review 
process. The Department concluded there was no need to alter the text 
of Sec.  687.200 for this policy.

[[Page 56249]]

L. Part 688--Provisions Governing the YouthBuild Program

1. Introduction
    The Department wants to emphasize the connections across all of our 
youth-serving programs under WIOA, including the WIOA youth formula 
program and associated boards and youth committees, connections to pre-
apprenticeship and registered apprenticeship programs, and Job Corps 
centers across the country. WIOA is an opportunity to align and 
coordinate service strategies for these ETA youth training programs, as 
well as to align with our Federal partners that serve these same 
customers. WIOA also ensures that these programs are using common 
performance indicators and standard definitions, which includes 
aligning the definitions for homeless youth, basic skills deficient, 
occupational skills training, and supportive services. Additionally, 
the YouthBuild regulation adopts the six new performance indicators 
that apply to all youth-serving WIOA programs and aligns YouthBuild 
with the WIOA youth formula program.
    WIOA affirms the Department's commitment to providing high-quality 
education, training, and employment services for youth and young adults 
through YouthBuild grants by expanding the occupational skills training 
offered at local YouthBuild programs. YouthBuild programs can offer 
occupational skills training in in-demand occupations, such as health 
care, advanced manufacturing, and IT, as approved by the Secretary and 
based on the maturity of the program and local labor market 
information.
    In addition to the changes to the program required by WIOA, the 
Department makes several additional changes to the program, including 
revisions to the duration of the restrictive covenant clause (as 
detailed in the preamble at Sec.  688.730), clarifying eligibility 
criteria for participation, and describing qualifying work sites and 
minimum criteria for successful exit from the YouthBuild program. 
Beyond these regulations, the Department will continue to develop 
guidance and technical assistance to help grantees and the workforce 
development community operate highly-effective YouthBuild programs. The 
Department received several comments that expressed general support for 
the proposed YouthBuild regulations. Comments on specific sections of 
the NPRM are described in each relevant section below.
    The analyses that follows provides the Department's response to 
public comments received on the part 688 regulations. If a section is 
not addressed in the discussion below, it is because the public 
comments submitted in response to the NPRM did not substantively 
address that specific section and no changes have been made to the 
regulatory text. Further, the Department received a number of comments 
on this part that were outside the scope of the regulation and the 
Department offers no response. Lastly, the Department has made a number 
of non-substantive changes to correct grammatical and typographical 
errors to improve the readability and conform the document 
stylistically that are not discussed in the analysis below analysis 
below.
2. Subpart A--Purpose and Definitions
Section 688.100 What is YouthBuild?
    This section describes the YouthBuild program. YouthBuild is a 
workforce development program that provides employment, education, 
leadership development, and training opportunities to disadvantaged 
youth. The program also benefits the larger community by providing new 
and rehabilitated affordable housing, thereby decreasing the incidence 
of homelessness in those communities. The program recruits youth 
between the ages of 16 and 24 who are school dropouts and are either: A 
member of a low-income family, a youth in foster care, a youth who is 
homeless, a youth offender, a youth who is an individual with a 
disability, a child of an incarcerated parent, or a migrant youth.
    Comments: Several commenters advocated that the YouthBuild program 
be emphasized as one of the Department's strategies to engage 
disconnected youth, due to the YouthBuild program's high number of 
court-involved youth. These same commenters emphasized the focus within 
YouthBuild on a counseling and case management approach in order to 
support participant success in employment and education and recommended 
modifying the Department's definition of YouthBuild to read:

    YouthBuild is a workforce development program that provides 
employment, education, leadership development, service to the 
community, and training opportunities for disadvantaged youth. The 
program benefits the larger community by decreasing the incidence of 
homelessness and addressing issues of disconnection, violence, and 
lack of opportunities in those communities. YouthBuild also 
increases the affordable housing stock in these communities.

    Department Response: The Department has concluded that the 
definition of YouthBuild, as provided under Sec.  688.100, is accurate. 
The description of the YouthBuild program accurately defines the 
intent, target population, and anticipated outcomes of the program 
model. However, given the program's focus on increasing access to 
affordable housing through building or rehabilitating of low-income 
properties, the Department has revised the definition of ``YouthBuild 
Program'' in Sec.  688.120 to specifically emphasize the inclusion of 
service to the community, as described in the commenter's proposed 
definition.
    Additionally, the YouthBuild program serves a wide variety of 
eligible youth, of which court-involved youth are just one population, 
and programs funded by the Department vary widely in the ratio of 
court-involved youth they serve. The Department supports the YouthBuild 
program model as one of several approaches that can provide positive 
change and expanded opportunity to disadvantaged youth; however, court-
involved youth are not the sole population targeted by this program. 
Therefore, it is not accurate to focus on court-involved youth as a 
predominant population served. Aside from the addition of service to 
community as described above, no changes were made to the regulatory 
text in response to these comments.
Section 688.120 What definitions apply to this part?
    Comments: Several commenters recommended revisions to the proposed 
definitions in the YouthBuild NPRM, while others recommended the 
inclusion of additional definitions not included in the NPRM. Several 
commenters also expressed general approval of the definitions, 
specifically the definition of ``Adjusted income'' and ``Homeless 
individual'' and ``Homeless child and youth.''
    One commenter recommended revising the numbering within the 
existing definition of ``Adjusted income'' as the commenter believed it 
could lead to confusion as numbered. The commenter further recommended 
the inclusion of the rationale for the exclusion of earned income, at 
the discretion of a Housing Development Agency, from adjusted income, 
as defined.
    Department Response: After reviewing the definition of ``Adjusted 
income'' as written in the NPRM, the Department realized that the 
section numbering of the definition was inadvertently mislabeled, which 
made the numbering appear inconsistent, and

[[Page 56250]]

created confusion. The definition numbering has been revised in the 
final text of Sec.  688.120. The exclusion of earned income from the 
definition of adjusted income is part of the definition of ``Adjusted 
income'' in sec. 3(b) of the United States Housing Act of 1937 (42 
U.S.C. 1437a(b)). As sec. 171(b)(1) of WIOA incorporates that 
definition of ``Adjusted income,'' it cannot be changed by the 
Department in these regulations.
    Comments: One commenter requested that the definition of ``Eligible 
Entity'' clarify what counts as an eligible State under WIOA. In 
particular, the commenter was seeking clarity on how territories and 
outlying areas qualify as eligible entities under WIOA and asked that 
the Department clarify the language to permit territories and outlying 
areas to apply for YouthBuild grants.
    Department Response: The definition of ``Eligible Entity'' as 
provided in Sec.  688.120 includes ``any. . .entity eligible to provide 
education or employment training under a Federal program'' to be 
eligible to apply for YouthBuild awards. Territories and outlying areas 
that meet this part of the definition will be considered eligible 
entities in this part. The Department has concluded that no further 
clarity to the definition is necessary.
    Comments: One commenter requested the addition of a definition for 
``Energy-Efficient Improvements'' as ``all measures recognized by the 
Weatherization Assistance Program including general heat waste 
reduction weatherization materials.''
    Department Response: The Department has concluded that the 
definition of energy-efficient improvements should be provided through 
guidance rather than the regulatory process in order to ensure greater 
flexibility, as this is an emerging industry and standards are still 
being developed.
    Comments: One commenter indicated a misprint in the definition of 
``Exit'' in which the incorrect section of the regulation was cited.
    Department Response: The Department has corrected the definition 
with the correct section reference.
    No comments were received regarding the definitions of ``Homeless 
individual'' and ``Homeless child or youth;'' however, these 
definitions were revised for added clarity to fit the Final Rule text 
as the definitions for these two terms come from existing legislation. 
Specifically, the definition of ``Homeless individual'' comes from sec. 
41403(6) of the Violence Against Women Act of 1994 (42 U.S.C. 14043e-
2(6)) and the definition of ``Homeless child or youth'' comes from sec. 
725(2) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 
11434a(2)).
    Comments: One commenter requested that the definition of ``Needs-
based payments'' be modified to state: ``beyond wage[s] or stipends 
which may be provided by the program,'' as such payments are not 
required but only allowed. The commenter expressed concern that needs-
based payments should be allowable no matter how funds paid to 
participants are characterized.
    Department Response: Although the preamble section of the NPRM does 
refer to wages or stipends, the actual definition of ``Needs-based 
payments'' under Sec.  688.120 does not refer to wages or stipends. The 
Department cannot modify the language related to wages and stipends 
because neither were actually mentioned in the regulatory text of the 
NPRM and so there is not anything to modify regarding wages and 
stipends in Sec.  688.120. However, the Department agrees that both 
wages and stipends are allowable but not required and this will be 
addressed through guidance.
    Comments: One commenter suggested that the definition of ``Pre-
apprenticeship'' should be clarified to ensure that YouthBuild programs 
continue to be considered pre-apprenticeship programs, even where they 
do not meet all of the requirements of a qualifying pre-apprenticeship 
program and are not funded by the Department. The commenter suggested 
keeping the definition provided in Training and Employment Notice (TEN) 
13-12, but allowing for additional flexibility in the TEN 13-12 
definition to develop alternative strategies for career pathways for 
youth where the requirement for registered apprenticeship partnerships 
or pathways cannot be met.
    Department Response: In response to this comment, the Department 
has revised the definition of pre-apprenticeship in Sec.  688.120 to 
clarify, consistent with TEN 13-12, ``Defining a Quality Pre-
Apprenticeship Program and Related Tools and Resources'' which can be 
found at http://wdr.doleta.gov/directives, the YouthBuild programs 
receiving funding from the Department under this part meet the 
definition of pre-apprenticeship as described in that section. The 
Department further edited this definition to provide a more detailed 
and consistent explanation of the components of a pre-apprenticeship 
program as described throughout this Final Rule.
    However, the Department cannot broadly categorize YouthBuild 
programs as pre-apprenticeship programs beyond those funded under this 
part as the Department is not in a position to determine that programs 
not funded by the Department meet the requirements to be considered a 
pre-apprenticeship program. However, this does not preclude the 
Department from subsequently making such a determination on a case-by-
case basis.
    Comments: One commenter requested the addition of a definition of 
``Substantive Construction'' as construction of affordable housing, 
major renovations, and/or deconstruction.
    Department Response: Substantive construction is defined in TEGL 
No. 06-15, ``Qualifying Work Sites and Construction Projects for 
YouthBuild Grantees and Their Role in Training,'' which can be found at 
http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm. The 
Department has decided not to include this definition in the regulation 
to ensure the flexibility necessary to adapt the definition as the 
industry develops and new certifications emerge.
    The Department received no comments on the definition of 
``Supportive services,'' but has revised the language in the regulatory 
text to be consistent with the definition in Sec.  681.570.
    Comments: One commenter questioned whether the definition of 
``Underemployed'' in Sec.  684.130 applied to YouthBuild.
    Department Response: The definition of ``Underemployed'' in Sec.  
684.130 does not apply to this part.
    The Department received no comments on the definition of ``youth in 
foster care,'' but has revised the language in the regulatory text to 
be consistent with the definition in Sec.  681.210.
3. Subpart B--Funding and Grant Applications
Section 688.220 How are eligible entities selected to receive grant 
funds?
    Comments: Several commenters expressed concern that YouthBuild 
programs that outsource core program elements may compromise the 
youth's experience by having to go to several providers for different 
components of the program model. Further, there was concern that this 
can have a detrimental effect on the overall performance outcomes for 
the program compared to those that offer all core components of the 
program in-house. One commenter further expressed a fear that an

[[Page 56251]]

applicant that provides all core components in-house could be penalized 
in the grant selection process due to the added emphasis on 
partnerships in this section.
    Department Response: The Department recognizes that there are many 
different permutations of the YouthBuild model, all of which provide 
the required program components, but which provide such components in 
many different ways. Emphasizing the importance of partnerships does 
not diminish the focus on quality service delivery to participants, nor 
does it require that components be outsourced. This instead represents 
recognition of the many strong public workforce system partners that 
contribute to a safety net of services for at-risk youth. Encouraging 
active partnerships to provide a full array of services necessary to 
help youth succeed ensures that YouthBuild programs are actively 
accessing all available community resources so that such resources can 
stretch further. However, there is no requirement that a program must 
partner across each of the highlighted areas (education and training 
providers, employers, the workforce development system, the juvenile 
and adult justice systems, and faith-based and community organizations) 
but rather, where it fills a gap in services or opportunities, such 
partnerships must be pursued. As such, applicants must be able to 
demonstrate the ability to develop a comprehensive network of partners 
to provide services, both in-house and out, to support successful 
outcomes. This is a core value of the Workforce Innovation and 
Opportunity Act.
4. Subpart C--Program Requirements
Section 688.300 Who is an eligible participant?
    Comments: One commenter expressed concern related to TEGL No. 11-09 
(``Expanded Participant Eligibility for the YouthBuild Program''), 
which allowed YouthBuild programs to expand the definition of a dropout 
to include youth who had dropped out of school but had subsequently 
enrolled in a YouthBuild Charter School prior to enrollment in the 
YouthBuild program, so long as this was part of a sequential service 
strategy. The commenter stated that they believed this set a precedent 
for allowing WIOA to enroll participants who meet this criterion as 
out-of-school youth. Further, the commenter recommended that the 
definition of out-of-school youth should be applied to those youth 
attending alternative school.
    Department Response: TEGL No. 11-09 was guidance under the 
Workforce Investment Act (WIA), which included a provision for the 
sequential service strategy. WIOA expanded the YouthBuild participant 
eligibility to allow youth who were high school dropouts but had 
subsequently reenrolled to be eligible for the YouthBuild program. This 
eligibility expansion rendered the guidance in TEGL No. 11-09, and its 
related Changes 1 and 2, void. Further, Sec.  681.230 clarifies that 
youth attending alternative education programs provided under title II 
of WIOA, YouthBuild, or Job Corps are considered out-of-school youth. 
No changes were made to the regulatory text in response to this 
comment.
Section 688.320 What eligible activities may be funded under the 
YouthBuild program?
    Comments: One commenter recommended adding two additional eligible 
activities that may be funded under YouthBuild:
     Energy-efficient improvements;
     The rehabilitation of housing that is in need of 
renovation for health and safety reasons.
    Department Response: The Department has concluded that there is no 
prohibition on the above named activities as eligible activities of the 
YouthBuild program. These two activities fall under the broad 
categories of work experience and skills training as described in Sec.  
688.320. The NPRM does not go into specific detail regarding the types 
of construction training that are eligible; such detail can be 
addressed through separate guidance as necessary.
    Comments: One commenter expressed concern regarding the ``provision 
of wages, stipends or benefits to participants. . .'' as allowed under 
Sec.  688.320. The commenter was specifically concerned about the use 
of wages for YouthBuild participants and the Internal Revenue Service 
(IRS) provisions that may be triggered. The commenter stated that 
several recent IRS rulings for local YouthBuild programs had determined 
that YouthBuild participants are not employees and therefore do not 
earn wages but stipends. However, as wages are an allowable payment to 
YouthBuild participants, the commenter requested that the Final Rule 
further explain the difference between participants who are paid wages 
and participants who are paid stipends and the additional costs that 
programs may incur by using a wage payment structure (such as required 
payment into Medicare or FICA or liability for unemployment expenses, 
for example), and that the Department urge grantees to avoid using 
grant funds for the provision of wages.
    Department Response: The Department has concluded the provision of 
wages and stipends are subject to the authority of the Department's 
Wage and Hour Division and the IRS. YouthBuild programs will continue 
to be required to reach out to the appropriate Federal office to 
determine the allowable provision of payments to participants as well 
as any financial responsibilities that entails. Additionally, the 
Department will not discourage programs from choosing one method of 
payment over another as there is a diverse body of YouthBuild program 
models operating across the country, and while some may find that 
payment of wages is too onerous, in other organizations there may be 
benefits to such a payment structure. Additional information to 
grantees will be provided through guidance.
    Comments: One commenter recommended that the Final Rule encourage 
disconnected youth to be taught healthy relationship skills as part of 
workforce development training. The commenter expressed the importance 
of youth developing healthy relationship skills as these can benefit 
them across a broad spectrum of life areas, including soft skill areas 
such as communication, conflict resolution, and problem solving. The 
commenter also referenced the response provided on the WIA YouthBuild 
Final Rule (77 FR 9112, Feb. 15, 2012), in which the Department 
concurred with a similar request and indicated that such activities 
were included under the broad category of ``activities designed to 
develop employment and leadership skills.''
    Department Response: WIOA has not modified this section of the 
allowable activities. The Department reiterates the 2012 YouthBuild 
Final Rule response. The Department agrees that healthy relationships 
and development of interpersonal skills are important for the 
disconnected youth served under WIOA. These activities are supported 
under Sec.  688.320 as part of the employment and leadership skills 
development, which has been revised to read: ``which may include. . 
.peer-centered activities encouraging responsibility, interpersonal 
skills, and other positive social behaviors.''
Section 688.330 What level of training qualifies a construction project 
as a qualifying work site under the YouthBuild program?
    Comments: Several commenters recommended using the term ``skill 
area(s)'' in lieu of ``module'' in reference

[[Page 56252]]

to the description of the construction skills training curriculum in 
which youth are trained on the work site. The commenters stated that 
the term ``skill area'' is broader than a module as a module is a 
component of a skill area and the term module is likely to be confused 
with sections of a particular curriculum. These same commenters also 
requested clarification of whether it is assumed that all projects must 
include energy-efficient enhancements as it is one of the five goals of 
the YouthBuild program as described in Sec.  688.110. They further 
requested that if this cannot be assumed, it be included in the 
criteria for a qualifying work site. One commenter also recommended 
including additional fields within the construction industry as 
additional aspects of qualifying work sites, including those of 
deconstruction and environmental protection, such as radon testing.
    Department Response: The Department has revised Sec.  688.330 to 
clarify that qualifying work sites must include both multiple modules 
and skills areas. The Department requires that YouthBuild participants 
receive quality and comprehensive construction training in a real-life 
setting on a work site, such that the participant will attain 
sufficient construction experience to enter into a career pathway after 
program exit. Therefore, work sites must provide the opportunity for 
youth to have hands-on training and experience of both breadth and 
depth in order to qualify. In TEGL No. 06-15 (``Qualifying Work Sites 
and Construction Projects for YouthBuild Grantees and Their Role in 
Training''), found at www.doleta.gov/WIOA/, the Department defines 
modules as specific training sections within the curriculum of each of 
the industry-recognized credentials that relate to specific skill areas 
of construction. These skill areas could include brick masonry, 
carpentry, painting, or plumbing, as examples.
    While it may be allowable for programs to also provide more general 
rehabilitation work, such as deconstruction, landscaping, screen 
repair, fence building, etc., if a program offers training in these 
activities at a work site, the work site will not qualify under this 
section unless the program also includes experience in two or more 
modules within two or more skill areas. Any work site that does not 
include exposure to multiple modules and skill areas will not be 
considered a qualifying work site. Additional explanation and guidance 
regarding qualifying work sites is provided in TEGL No. 06-15.
    Energy-efficient enhancements are described as part of the fifth 
YouthBuild goal as it relates to improving the energy efficiency 
specifically of community and non-profit and public facilities. The 
Department has concluded that this cannot be interpreted broadly to 
mean that all work sites must include energy-efficiency enhancements in 
order to qualify, nor can it interpret this to mean that all community 
and non-profit and public facilities must include energy-efficiency 
enhancements. Such enhancements are included as part of the allowable 
activities, as explained in Sec.  688.320 above, but they are not 
required for all qualifying work sites, including community and non-
profit and public facilities.
    The Department defines the fields of deconstruction and 
environmental protection, such as radon testing and mitigation, as 
fields outside the immediate construction focus of YouthBuild. None of 
these fields directly supports the goal of increasing affordable 
housing so they are not stand-alone skill areas; however, as with 
landscaping or painting, these are areas in which youth can receive 
hands-on work experience as long as it is in conjunction with the 
broader requirement of qualifying work sites in which hands-on training 
and experience in two or more modules, each within a different skill 
area, in a construction skills training program that offers an 
industry-recognized credential is provided.
    Comments: Finally, several commenters sought clarity related to the 
preamble language of Sec.  688.330 that described the expectation that 
participants must pass a certain number of modules in order to attain 
industry-recognized construction certification. The commenters noted 
that the regulation language for Sec.  688.330 does not require the 
attainment of a credential or certification.
    Department Response: A goal of training should be the attainment of 
an industry-recognized credential; however, the factors affecting 
whether a work site qualifies for the purposes of the YouthBuild 
program, as described in Sec.  688.330, do not include a requirement 
that participants attain an industry-recognized credential. Qualifying 
work sites should provide training that supports the hands-on 
experience participants will need to attain industry-recognized 
construction credentials, but the attainment of a credential is not a 
requirement in order for a work site to qualify. No changes were made 
to the regulatory text in response to these comments.
Section 688.380 What is the role of the YouthBuild grantee in the one-
stop delivery system?
    Comments: Several commenters expressed concern with the requirement 
that YouthBuild grantees take all actions required of required partners 
as described in sec. 121 of WIOA. Specifically, the commenters were 
concerned with 20 CFR 678.420(b) (see Joint WIOA Final Rule), which 
provides that required partners use a portion of funds made available 
to the partner's program to provide applicable career services and work 
collaboratively with the State and Local WDBs to establish and maintain 
the one-stop delivery system, including by jointly funding one-stop 
infrastructure.
    The commenters indicated that if this language is interpreted to 
mean that YouthBuild programs must pay into the one-stop delivery 
system, it would put an undue burden on small discretionary programs. 
At the same time, the commenters expressed support for the opportunity 
to partner with local one-stop programs, particularly around mutual 
referrals to services, but do not expect this to require a funding 
relationship.
    One commenter expressed support for actively developing 
partnerships with the one-stop delivery system, which they consider 
critical for success and beneficial to streamlining services to youth. 
However, they recommended that the language related to this requirement 
be strengthened to ensure that both the one-stop operators and 
YouthBuild program administrators recognize it as a required 
partnership and meet to develop mutual parameters for the partnerships. 
Past experience of the commenter demonstrated that YouthBuild programs 
are sometimes rebuffed when seeking partnership with one-stop 
operators. The commenter stated that ensuring the requirement is mutual 
will lead to greater success.
    Department Response: As YouthBuild grantees are required partners 
in the one-stop delivery system, they are responsible for complying 
with the requirements in sec. 121 of WIOA and 20 CFR part 678 of these 
regulations (see Joint WIOA Final Rule). While compliance with these 
requirements may require a financial commitment from the grantee, any 
costs incurred would be an allowable cost under the grant. Ensuring 
that YouthBuild programs are required partners with the one-stop 
delivery system serves to strengthen the safety net for disconnected 
youth through stronger connection points to recruitment, referral, and 
provision of services to

[[Page 56253]]

such youth. The Department will be issuing further guidance regarding 
the requirements of partnership within the one-stop delivery system 
separate from the Final Rule. No changes were made to the regulatory 
text in response to these comments.
5. Subpart D--Performance Indicators
Section 688.400 What are the performance indicators for YouthBuild 
grants?
    Comments: One commenter expressed support for the inclusion of two 
separate placement measures under WIOA as they felt this would allow 
them to report on all enrollees, rather than a subset that was 
initially placed, as with WIA. This commenter further provided a 
recommendation that the proposed earnings measure should take into 
account the local minimum wage standards since these can vary greatly 
by location and, without context, may skew the reporting outcomes. This 
commenter also expressed concern that the counting of a secondary 
diploma only when youth are subsequently in employment or in an 
education or training program leading to a recognized postsecondary 
credential within 1 year after exit from the program will inadvertently 
devalue the importance of a high school diploma or equivalency degree 
and discourage programs from the necessary investment that must be made 
to get good secondary diploma outcomes.
    One commenter expressed general concern over the requirement of 
social security numbers, which will negatively impact the serving of 
English language learners who will be able to access programs that 
could lead to citizenship and which further places nearly unattainable 
accountability and performance standards on adult education programs.
    Department Response: Section 171(f) of WIOA applied the common 
performance indicators applicable to all youth programs authorized 
under title I of WIOA described in sec. 116(b)(2)(A)(ii) of WIOA to the 
YouthBuild program. The regulations implementing and describing the 
youth performance indicators are at 20 CFR 677.155(c) of these 
regulations (see Joint WIOA Final Rule). Because the comments 
suggesting changes to the primary indicators of performance are general 
comments on the primary indicators for youth programs, they have been 
addressed in the preamble to that 20 CFR 677.155. Further, there is no 
reference to required collection of social security numbers in part 
688. The Department has concluded that this comment is outside the 
scope of this part.
    No changes were made to the regulatory text in response to these 
comments.
6. Subpart E--Administrative Rules, Costs, and Limitations
Section 688.520 What cost limits apply to the use of YouthBuild program 
funds?
    Comments: One commenter requested clarification regarding the 
percentage of the grant award that could be used to rehabilitate 
community facilities, as separate sections of the NPRM showed a 
discrepancy.
    Department Response: The Department has revised the NPRM under 
Sec.  688.520 to correctly state that the percentage of the grant award 
that can be expended toward rehabilitation of community facilities is 
15 percent, as stated in Sec.  688.550.
Section 688.540 What are considered to be leveraged funds?
    Comments: One commenter requested clarification on leveraged funds 
and whether they can be used to pay for meals for youth. The commenter 
interpreted leveraged funds to allow the purchase of food because they 
are separate from the grant funds and required 25 percent match 
requirement of YouthBuild.
    Department Response: Per the NPRM, leveraged funds are funds used 
for allowable costs under the cost principles. Additional guidance on 
the definition of and allowable use of leveraged funds is provided 
through the ``Uniform Administrative Requirements, Cost Principles, and 
Audit Requirements for Federal Awards'' regulation. The Department does 
not have the ability to predetermine the allowability of specific costs 
through these regulations. No changes were made to the regulatory text 
in response to this comment.
Section 688.550 How are the costs associated with real property treated 
in the YouthBuild program?
    Comments: One commenter asked the Department to clarify the 
definition of costs associated with real property and what such costs 
constitute.
    Department Response: The Department describes the application of 
real property as it relates to allowable costs in this section. 
Further, TEGL No. 05-10, ``Match and Allowable Construction and Other 
Capital Asset Costs for the YouthBuild Program,'' provides additional 
guidance on the costs associated with real property within the 
YouthBuild program. No changes were made to the regulatory text in 
response to this comment.
Section 688.560 What participant costs are allowable under the 
YouthBuild program?
    While the Department did not receive any comments on this section, 
the final clause of the section has been revised to clarify that the 
meaning of ``sponsored health programs'' as those sponsored by 
employers or the government.
Section 688.600 Are YouthBuild programs subject to the Davis-Bacon Act 
labor standards?
    Comments: The Department received many comments related to the 
Davis-Bacon Act labor standard provisions. Several commenters requested 
that the Department affirm the ``12 unit rule'' under the HOME 
Investment Partnerships (HOME) program and the ``8 unit rule'' under 
the Community Development Block Grant (CDBG) program as they relate to 
the Davis-Bacon Act labor standards. These rules provide exceptions to 
the requirement that construction workers be paid prevailing wages when 
working on construction sites funded in whole or in part with Federal 
funds when the number of units within the project that are funded with 
Federal funds fall below the unit threshold of the rule. The commenters 
expressed that, in the past, YouthBuild participants have been able to 
train on such projects without triggering the prevailing wage 
requirement and are seeking the Department's affirmation of the 
allowance of these rules.
    One commenter requested that the Department reconsider the 
YouthBuild Trainee Apprenticeship Program (YB-TAP), which was a formal 
certification of the YouthBuild program to allow participants to be 
designated as trainees, rather than employees, on any Davis-Bacon-
related project. This designation as a Certified Training Program of 
the Department of Labor allowed YouthBuild participants to be paid the 
standard wages or stipends as established by their program during their 
time on Davis-Bacon work sites, rather than the required prevailing 
wage. This commenter suggested that, while the YB-TAP was not well-
received by many areas of the construction industry, this sentiment may 
have changed since YB-TAP was dismantled as there is a greater need 
across the construction industry for qualified employees than 
previously existed.
    One commenter expressed support for the continued recognition in 
the NPRM that YouthBuild programs are subject to

[[Page 56254]]

the Davis-Bacon Act standards, including prevailing wage rates, when 
participants work on projects subject to such standards. Specifically, 
this commenter stated that the Department has recognized that 
YouthBuild program participants are not considered trainees and 
therefore must be paid the prevailing wage rate when on Federally-
funded projects. The commenter supports this NPRM as they believe that 
allowing YouthBuild participants to be paid a lower wage on a Davis-
Bacon work site than the prevailing wage would undercut registered 
apprentices and incumbent workers.
    Department Response: Davis-Bacon prevailing wage rate rules are 
quite complex and cover a number of different statutes within the U.S. 
Department of Housing and Urban Development (HUD). Within some of these 
statutes, there are exemptions under which prevailing wage rates do not 
apply. HOME and CDBG are two HUD program examples cited by commenters 
for which, if the number of units within the building that have HUD 
funding assistance are small enough, the prevailing wage rules do not 
apply and YouthBuild participants may be considered active training 
participants.
    Determining exactly which units of a construction project may be 
funded with HUD assistance is quite complicated. It does not 
necessarily mean the construction itself is funded by a HUD project, 
but instead could mean rental assistance to residents is supplemented 
by HUD. Due to the complexity of determining the number of units on a 
construction site that are or are not funded with HUD assistance, the 
Department is unable to provide further guidance which could be 
misconstrued to provide approval for exempting YouthBuild participants 
from Davis-Bacon wage rules.
    While the Department supports training YouthBuild participants on 
HUD-funded projects where viable, a determination of whether YouthBuild 
participants on such projects must be paid the relevant prevailing wage 
for that project cannot be made by the Employment and Training 
Administration (ETA). Rather, HUD consulted extensively with the 
Department's Wage and Hour Division on this topic so that HUD can 
address such inquiries. YouthBuild programs that are seeking assistance 
to determine whether there may be a viable Federally-funded work site 
on which participants may train without paying participants the 
prevailing wage under the Davis-Bacon Act should consult with HUD's 
Labor Standards and Enforcement Regional/Field staff. Contact 
information for this staff can be found here: http://portal.hud.gov/hudportal/HUD?src=/program_offices/labor_standards_enforcement/laborrelstf.
    The YB-TAP was intended to support the training of YouthBuild 
participants on Federally-funded work sites, in order to provide 
greater opportunities for youth to work on low-income housing stock 
that was managed or owned by HUD. However, as discussed in the preamble 
to the 2012 YouthBuild Final Rule (77 FR 9112, 9126, Feb. 15, 2012), as 
a result of implementing YB-TAP, the Department found unintended 
consequences arose that were a concern for YouthBuild programs. Many of 
the organizations that YouthBuild seeks to partner with saw YB-TAP as 
being in direct competition because programs were allowed to pay their 
participants, as trainees, less than the prevailing wage rate. The 
lower ratio of journeyworkers to trainees approved in the YB-TAP 
program made it less expensive for a contractor to hire a YouthBuild-
sponsored construction crew versus a journeyworker-staffed crew, and 
the YB-TAP standards, in effect, created a competing program approved 
by the Department. Accordingly, the Department dismantled YB-TAP. 
Therefore, while the provisions for trainees who may be paid less than 
Davis-Bacon journeyman wage rates remain in effect as part of the 
Davis-Bacon Act labor standards, they do not apply to a YouthBuild 
program because there is no YouthBuild program that is a training 
program approved by ETA for purposes of Sec.  688.600(c) and 29 CFR 
5.5(a)(4)(ii). No changes were made to the regulatory text in response 
to these comments.
7. Subpart F--Additional Requirements
Section 688.730 What requirements apply to YouthBuild housing?
    Comments: One commenter stated that the statement ``. . . to 
increase the stock of affordable homes. . .'' should include ``safe, 
healthy, durable, resource efficient affordable homes.'' This same 
commenter expressed support for the proposed reduction in the duration 
of the restrictive covenant from a minimum of 10 years to a minimum of 
5 years.
    Department Response: This statement does not appear in the NPRM but 
only in the preamble. The NPRM recognizes the importance of safe and 
healthy housing as it requires that ``[a]ll transitional or permanent 
housing for homeless individuals or families or low-income families 
must be safe and sanitary. The housing must meet all applicable State 
and local housing codes and licensing requirements in the jurisdiction 
in which the housing is located.'' No changes were made to the 
regulatory text in response to this comment.

M. Part 651--General Provisions Governing the Wagner-Peyser Act 
Employment Service

1. Background on the Wagner-Peyser Act Employment Service
    The Wagner-Peyser Act of 1933 established the Employment Service 
(ES), which is a nationwide public labor exchange that provides 
employment services. The ES seeks to improve the functioning of the 
nation's labor markets by bringing together individuals seeking 
employment with employers seeking workers. The Wagner-Peyser Act was 
amended in 1998 to make ES part of the one-stop delivery system under 
WIA and has undergone further changes to integrate services under WIOA.
    Parts 651, 652, 653, 654, and 658 update the language and content 
of the regulations to implement amendments made by title III of WIOA to 
the Wagner-Peyser Act. In some areas, these regulations establish 
entirely new responsibilities and procedures, in other areas, the 
regulations clarify and update requirements already established. The 
regulations make important changes to definitions, data submission, and 
increased collaboration, among other requirements of WIOA.
    These regulations also address the court order from National 
Association for the Advancement of Colored People (NAACP), Western 
Region, et al. v. Brennan et al, No. 2010-72, 1974 WL 229 (D.D.C. Aug. 
13, 1974) which resulted in a detailed mandate for various Federal and 
State actions [referred to as the Judge Richey Court Order (Richey 
Order) in the remainder of this preamble]. The Richey Order required 
the Department to implement and maintain a Federal and State monitoring 
and advocacy system and set forth requirements to ensure the delivery 
of employment services, benefits, and protections to Migrant and 
Seasonal Farm Workers (MSFW) on a non-discriminatory basis, and to 
provide such services in a manner that is qualitatively equivalent and 
quantitatively proportionate to those provided to non-farmworkers.
2. Introduction to Part 651
    Title 20 CFR part 651 sets forth definitions for 20 CFR parts 652, 
653, 654, and 658.
    The Department received several comments regarding these 
definitions

[[Page 56255]]

and has eliminated, revised, and added definitions, as needed. All 
changes to the definitions and the Department's responses to the 
comments received (whether changes were made in response to the 
comments or not) are explained below. Additionally, the Department has 
made technical and clarifying changes. For the remaining definitions 
that are not discussed below, the Department received no comments and 
made no changes to the regulatory text.
3. Explanation of Changes and Responses to Public Comments
    At the beginning of part 651, the Department added clarifying text 
which states, ``In addition to the definitions set forth in sec. 3 of 
WIOA, the following definitions apply to the regulations in 20 CFR 
parts 652, 653, 654, and 658.'' This text is consistent with the 
discussion of proposed part 651 contained in the NPRM preamble. The 
Department added it to the regulatory text to ensure there is no 
confusion as to the application of these definitions and to make clear 
that the WIOA sec. 3 definitions also apply to these parts.
Agricultural Employer
    The Department added this term and its definition in response to 
commenters' concerns with the proposed definition of ``employer.'' The 
Department's rationale is described below, in the paragraph that 
responds to the comments on the term ``employer.'' This added 
definition of ``agricultural employer'' parallels that of the 
definition in the Agricultural Worker Protection Act.
Applicant Holding Office
    The Department received no comments on this definition; however, it 
changed ``U.S.-based workers'' to ``U.S. workers'' for clarification 
and uniformity across the definitions in this part. See further 
clarification of the Department's interpretation of ``U.S. workers'' 
below, in the Department's response to comments regarding the Clearance 
System definition
Applicant Holding State
    The Department received no comments on this definition; however, it 
changed ``U.S.-based workers'' to ``U.S. workers'' for clarification 
and uniformity across the definitions in this part. See further 
clarification of the Department's interpretation of ``U.S. workers'' 
below, in the Department's response to comments regarding the Clearance 
System definition.
Career Services
    The Department received no comments on this definition, but the 
Final Rule includes a technical correction to ensure the definition 
refers to the correct section of WIOA.
Clearance System
    Comments: A commenter urged the Department to revise this 
definition to make clear that it refers to the ``orderly movement of 
U.S.-based job seekers'' because the Agricultural Recruitment System 
(ARS) is specific to U.S.-based workers only.
    Department Response: The Department agrees that the reference to 
job seekers in the definition of clearance system could be clearer. The 
Department is partially adopting the commenter's suggestion by revising 
the regulatory text to refer to job seekers in this definition as, 
``U.S. job seekers.'' The Department notes that Sec.  653.500 outlines 
the requirements for the acceptance of intrastate and interstate job 
clearance orders seeking U.S. workers to perform farmwork on a 
temporary, less than year-round basis. The term, ``U.S. workers'' means 
those workers defined at 20 CFR 655.5.
    The term, ``U.S. job seekers'' means a U.S. worker who is 
interested in obtaining a job. Therefore, a ``U.S. worker'' would not 
be a ``job seeker'' if that individual is not interested in obtaining a 
job. The change from ``job seekers'' to ``U.S. job seekers'' in this 
definition clarifies the intent of the clearance system, which is to 
recruit U.S. job seekers at the intrastate and interstate level when no 
U.S. job seekers were identified for an agricultural job order placed 
at the local level through the ARS.
Employer
    Comments: A commenter recommended that the definition of employer 
include all employers or joint-employers of H-2A workers under 20 CFR 
part 655, subpart B, as well as the relevant Federal laws protecting 
farmworkers, including the Migrant and Seasonal Agricultural Workers 
Protection Act (AWPA), 29 U.S.C. 1801. In particular, this commenter 
suggested that, to allow meaningful and accurate employment 
determinations for MSFWs, the definition of employer should be further 
expanded to parallel AWPA's definition of ``agricultural employer'' as 
``any person who owns or operates a farm, ranch, processing 
establishment, cannery, gin, packing shed or nursery, or who produces 
or conditions seed, and who either recruits, solicits, hires, employs, 
furnishes, or transports any migrant or seasonal agricultural worker.'' 
Stating that incorporating this definition of agricultural employer 
into the employer definition would help ensure that MSFWs are given the 
tools to hold those who use their services and labor accountable when a 
violation occurs, this commenter concluded that a broad definition of 
employer that reflects the unique economic realities of agricultural 
employment is crucial for workers to assert their rights and force 
growers and contractors to honor their obligations.
    Department Response: Although the commenters requested a revised 
and broadened definition of ``employer,'' the Department has decided to 
retain the current definition of ``employer'' and add a separate 
definition of ``agricultural employer'' which parallels that of the 
Agricultural Worker Protection Act. The Department anticipates this 
approach will effectively allow for meaningful and accurate employment 
determinations for MSFWs.
Employment-Related Laws
    Comments: Two commenters said that the proposed definition was 
circular in that it used the term ``employment-related laws'' in the 
definition of employment-related laws; they requested clarification and 
stated it is necessary to know the definition of employment-related 
laws to identify the agencies that enforce them.
    Department Response: The Department agrees with the commenters' 
suggestion and has revised the definition by deleting the reference to 
``employment-related laws'' within the definition and replacing it 
with, ``laws that relate to the employment relationship.'' The 
Department clarifies that ``laws that relate to the employment 
relationship'' means laws such as, but not limited to, the Fair Labor 
Standards Act, the Migrant and Seasonal Agricultural Worker Protection 
Act, the Civil Rights Act, and other similar Federal, State, and local 
laws. The regulatory text provides examples of some of the agencies 
that enforce these laws to give guidance to help identify the enforcing 
agencies. However, the Department cannot identify all the agencies that 
enforce employment-related laws because such agencies may extend to 
each State's respective enforcement agencies, which vary and may change 
over time as well as Federal enforcement agencies. Maintaining the 
reference generally to agencies that enforce these laws will ensure the 
definition of ``employment-related laws'' maintains flexibility over 
time.

[[Page 56256]]

    Comments: Another commenter expressed concern about the proposed 
definition of employment-related laws, asserting it would force 
untrained SWA staff to issue actions regarding perceived issues rather 
than act on provisions that are within their statutory authority and 
stating that State agency staff's activities should relate solely to 
the statutory provisions of the authorizing Act.
    Department Response: The Department notes that the proposed 
definition does not require any action for SWA staff. For further 
discussion of SWA staff responsibilities to refer perceived violations 
of employment-related laws to the appropriate enforcement agencies, 
please see the regulations and accompanying preamble at Sec.  653.500 
and subpart E of part 658.
Employment Service (ES)
    In the NPRM, the Department added the definition of ``Employment 
Service (ES) System.'' The Department received no comments on this 
definition, but the DOL WIOA Final Rule makes a non-substantive change 
to include the complete term ``Wagner-Peyser Employment Service (ES) 
also known as Employment Service (ES),'' and other non-substantive 
editorial changes.
Employment Service Office
    In the NPRM, the Department defined ``Employment Service Office'' 
as ``a local office of a State Workforce Agency.'' The Department 
received no comments on this definition, but the rule makes a 
clarifying change to enhance consistency with the regulations at 
Sec. Sec.  652.215 and 678.305 through 315.
Farmwork
    Comments: Two commenters expressed support for the elimination of 
references to North American Industry Classification System (NAICS) 
codes to reduce complexity and support for the addition of ``fish 
farming'' to allow for alignment with WIOA sec. 167. Further, these 
commenters supported the inclusion of ``food processing,'' which they 
asserted would allow for the elimination of ``migrant food processing 
workers,'' allow the SWA to more easily train staff to identify MSFWs, 
and create stronger alignment with Wage and Hour Division (WHD) and 
Office of Foreign Labor Certification (OFLC) regulations. One commenter 
urged the Department to define who is included under ``fish farming.''
    One commenter opposed the elimination of the NAICS codes from the 
proposed definition of farmwork, stating that the NAICS code is updated 
on a regular basis to address changes in work activities. This 
commenter further asserted that including the phrase ``and any service 
or activity so identified through official Department guidance such as 
a Training and Employment Guidance Letter'' in the farmwork definition 
would make the current definitional structure even more difficult to 
understand and follow.
    Department Response: The Department is not making substantive 
changes to the regulatory text in response to these comments, but has 
made a technical edit that makes clear that the definition of 
``agricultural commodity'' applies to this definition throughout parts 
651, 652, 653, 654, and 658. The Department notes that what activities 
are covered under ``fish farming'' is addressed through guidance.
    The Department has determined that while the NAICS codes may be 
updated, the Department seeks to maintain consistency across its 
agencies. Aligning the definition at part 651 with the definition used 
at 29 CFR 500.20 and 655.103(c) is intended to help clarify and 
streamline the definition for practitioners who are otherwise forced to 
rely upon a variety of definitions depending on the program. The 
Department has determined it will be more beneficial for practitioners 
to draw upon a homogenous definition rather than to refer to a 
different and changing set of codes. Additionally, the Department 
acknowledges that issuing guidance to clarify or update aspects of the 
definition of farmwork is essential to maintain consistency with 
current practices and terminology that may change over time.
    Comments: One commenter expressed support for broadening the 
definition of farmwork to correspond with the AWPA. This commenter also 
supported broadening of the definition of ``agricultural commodities,'' 
by removing the phrase ``produced on a farm'' be removed from the 
agricultural commodities definition. In addition, this commenter stated 
the proposed agricultural commodities definition is different from the 
original source of the language at 12 U.S.C. 1141j(f) and that this 
difference could potentially exclude the type of workers that should be 
included in the movement toward inclusiveness: The commenter suggested 
the definition include downstream activities such as the handling, 
packing, and cultivating of commodities that may not traditionally be 
grown on land or on farms. This commenter suggested that such a change 
is necessary to achieve several of the proposed goals of the WIOA 
regulations.
    Department Response: The Department has determined that, in order 
to maintain consistency with the definitions used by other DOL 
agencies, ``on a farm'' should be retained. Workers who perform 
``downstream activities'' should be covered by the protections offered 
to all other non-farmworkers.
Farmworker
    The definition of ``farmworker'' was proposed in the NPRM to 
replace the definition of ``agricultural worker.''
    Comments: One commenter objected to removing ``who is legally 
allowed to work in the United States,'' from the definition and urged 
the Department to retain and strengthen this language.
    Department Response: The removal of the phrase ``who is legally 
allowed to work in the United States'' from the definition aligns this 
definition with definitions for the other programs. The Department has 
determined that it is unnecessary to mention immigration status in the 
definitions for only a subset of programs. No changes have been made to 
regulatory text in response to this comment.
    The term ``farmworker'' is used throughout this regulation, except 
that the Department uses the term ``agricultural worker'' where 
discussing OSHA standards or provisions limited to H-2A workers or 
regulations in order to maintain consistency with OSHA and H-2A 
terminology.
Field Checks
    Comments: Expressing concern with the proposed definition's 
reliance on the term ``placements,'' a few commenters recommended that, 
if the Department intends to use placements as a means to grant SWA 
staff jurisdiction to conduct field checks, the Department should 
require participating employers in the agricultural clearance system to 
report placements after work has begun to the SWA as a condition of 
participation. These commenters asserted that requiring State workforce 
agencies to seek out placements could impose a burden that is not 
expected from other job orders because many agricultural employers do 
not immediately report placements during busy harvest periods.
    Department Response: The previous definition of ``placements'' 
included the requirement that the ``employment office verif[y] from a 
reliable source, preferably the employer, that the individual had 
entered on a job.'' The definition of ``field checks'' in the Final 
Rule continues this requirement and does not place any additional 
burden on the SWA. The Department further notes that the ES office has 
the responsibility to report placements after work has begun, because 
it is facilitating the service to the employer, and follow-up

[[Page 56257]]

on such a service is a normal course of action. No change has been made 
to the regulatory text in response to these comments.
Field Visits
    Comments: Two commenters expressed support for the proposed 
definition of field visits, stating it would allow SWA staff and 
employers to understand better the difference between a field check and 
a field visit.
    One commenter asked for clarification of the following language in 
the proposed definition: ``The monitor advocate or outreach personnel 
must keep records to discuss ES services . . . .''
    Department Response: The Department acknowledges that the sentence 
``The monitor advocate or outreach personnel must keep records to 
discuss ES services . . .'' is not clear enough. To clarify, the 
Department has rearranged the text to refer to record keeping 
requirements at the end of the definition.
Full Application
    Comments: One commenter expressed concern with the removal of a 
definition of ``full application'' because of its use of ``full 
registration,'' which the commenter stated helps to ensure State agency 
staff understand the importance of getting all demographic information 
from participants.
    Department Response: The Department has determined that State 
agencies will continue to collect all pertinent demographic information 
through online systems (versus the more antiquated paper-based systems) 
because State agencies will eventually need to submit such information 
to the Department.
Individual With a Barrier to Employment
    Comments: Another commenter recommended the Department clearly 
identify receipt of Social Security disability benefits as a barrier to 
employment.
    Department Response: The Department's response to this 
recommendation that an individual in receipt of a Social Security 
Disability Insurance (SSDI) payment be considered an ``individual with 
a barrier to employment'' is discussed in the preamble text 
corresponding to Sec.  680.640.
Individual With a Disability
    Comments: The Department received comments which recommended the 
addition of a definition for ``individual with a disability'' in 
alignment with the definition from sec. 3 of the Americans with 
Disabilities Act of 1990 to ensure uniform protection of the class.
    Department Response: To emphasize that employment services are 
universal and available to everyone, the Department added the 
definition of an ``individual with a disability'' which is the same as 
the definition in WIOA sec. 3(25). All the definitions in sec. 3 of 
WIOA apply to parts 652, 653, 654, and 658; however, because of the 
importance of stressing the universal nature of employment services, 
the Department has chosen to repeat the definition in part 651, as 
noted above.
Job Development
    The Department has changed the word ``applicant'' to 
``participant'' in this definition in order to conform to the new 
definition of ``participant'' in this part, which replaced the term 
``applicant.'' No other changes were made to this definition.
    Comments: One commenter recommended revising this definition to 
include job development with an employer that does not have a job 
opening on file with the ES office.
    Department Response: Revising the definition of ``job development'' 
to include ``an employer that does not have a job opening on file with 
the ES service office'' would be overly restrictive, because a job 
development could occur with an employer who has an opening on file 
with the ES office, but the ES office may be working with the employer 
to develop a different job. Scenarios like this would create unwanted 
limitations on the prospects for assisting job seekers.
    Comments: Another commenter recommended the Department revise the 
``job development'' definition as a labor exchange service.
    Department Response: The Department acknowledges that the service 
is indeed a labor exchange service, and labor exchange services are 
considered career services. However, the Department has determined that 
this revision would not substantively improve the definition of ``job 
development.''
Job referral
    The Department received no comments on this definition, but the 
regulation changes the word ``applicant'' to ``participant,'' 
conforming to the new definition of ``participant.''
Migrant Farmworker
    Comments: A few commenters recommended revising the proposed 
definition to clarify what is meant by ``unable to return to his/her 
permanent residence within the same day.'' Two commenters stated the 
term ``unable'' is overly restrictive and the intent of the regulation 
is to consider farmworkers who are ``not reasonably able'' to return to 
their permanent residence within the same day as migrant farmworkers.
    Department Response: The Department agrees with the commenters that 
``not reasonably able,'' as recommended by the commenter, is more 
suitable and has changed the regulatory text accordingly. The 
Department will provide guidance on how it interprets ``not reasonably 
able'' to return to his/her residence within the same day.
One-Stop Center
    The Department received no comments on this definition, however the 
regulation clarifies that the term one-stop center refers to the 
physical center described in sec. 121(e)(2)(A) of WIOA, in contrast 
with the broader definition of one-stop delivery system.
Order Holding Office
    The Department received no comments on this definition; however, it 
changed ``U.S.-based workers'' to ``U.S. workers'' for clarification 
and uniformity across the definitions in this part. See further 
clarification of the Department's interpretation of ``U.S. workers'' 
under the Department's response to comments regarding the Clearance 
System definition above.
Outreach Contact
    Comments: Expressing support for the proposed definition, two 
commenters stated this term would provide clarity, particularly when 
considering the inclusion of the word ``each,'' and would raise the 
importance of the work done by MSFW outreach staff when considering 
outreach contacts do not always result in the registration of a 
participant.
    Other commenters recommended revising the definition to clarify 
what type of contacts would qualify as an outreach contact. One 
commenter stated the lack of reference to the quality or depth of 
follow-up and lack of specification regarding whether the contact needs 
to be made outside of the one-stop center makes the proposed definition 
overly broad. Another commenter asked the Department to allow for in-
office activity to be included as an outreach contact when the follow-
up activity is being conducted on an MSFW who was initially contacted 
while on outreach.
    Department Response: The Department notes the definition of

[[Page 56258]]

``outreach contact'' identifies three qualifying activities: the 
presentation of information, the offering of assistance, and follow-up 
activities; however, the definition does not specify where these 
activities need to occur. Outreach duties can take place both inside 
and outside the office space. The Department will provide further 
guidance on this subject.
Outreach Worker
    Comments: A commenter suggested the Department add a definition of 
``outreach worker'' to clarify that an outreach worker includes only 
employees of a State agency, which this commenter stated is inferred 
from proposed Sec.  653.107(b)(10). To accommodate the reality that 
many nonprofit organizations provide services to migrant and seasonal 
farmworkers (MSFWs), this commenter also suggested the Department add 
the term ``nonprofit organization outreach worker'' to mean ``an 
employee of, volunteer for, agent of, or contractor for a nonprofit 
organization that provides health, educational, social, legal, or 
financial services to MSFWs.''
    Department Response: The Department declines to add a definition of 
outreach worker to indicate they are State agency employees. Paragraph 
(a)(1) of Sec.  653.107 clearly states that outreach workers are 
employed by State agencies: ``each State agency must employ an adequate 
number of outreach workers to conduct MSFW outreach in their service 
areas.'' Paragraph (a)(3) of Sec.  653.107 further supports that 
outreach workers are only State agency employees by stating, ``for 
purposes of hiring and assigning staff to conduct outreach duties, and 
to maintain compliance with State agencies' Affirmative Action 
programs, State agencies must seek, through merit system procedures, 
qualified candidates. . . .'' Finally, Sec.  653.107(b)(10) indicates 
that ``outreach workers must be provided with, carry and display, upon 
request, identification cards or other material identifying them as 
employees of the State agency.'' These references throughout Sec.  
653.107 explicitly indicate that outreach workers referenced at 20 CFR 
parts 653 and 658 are employees of a State agency.
    The Department also declines to add a definition of ``nonprofit 
organization outreach worker.'' As explained in the preceding 
paragraph, the regulation sets out requirements of outreach workers who 
are State agency employees. The Department does not have authority over 
the outreach workers employed by nonprofit organizations that do not 
receive funding from the Department, and including a definition of them 
would cause unnecessary confusion.
Participant
    Comments: A few commenters disagreed with the NPRM's replacement of 
the term ``applicant'' with ``participant'' throughout the ES program 
regulations, stating that both employers and individual job applicants 
would find the term change odd. Two commenters asserted the NPRM 
contained insufficient justification to change terms in this way. One 
commenter suggested the alignment of definitions would help one-stop 
partners.
    Department Response: The Department disagrees that replacing the 
term ``applicant'' with ``participant'' will be odd for employers and 
job applicants because the term primarily is for internal data 
collection purposes. However, the Department has aligned these 
definitions with those used more broadly under WIOA at 20 CFR 
677.150(b) (see Joint WIOA Final Rule). The term ``reportable 
individual'' is used to cover those individuals who receive employment 
services but do not meet the definition of participant in 20 CFR 
677.150(a). This term will accurately capture those individuals 
formerly referred to in this part as ``applicants.'' With the addition 
of the term ``reportable individual,'' and by modifying the definition 
of ``participant,'' the Department has aligned these terms with the 
definitions of `reportable individual' and `participant' under the rest 
of WIOA.
Reportable Individual
    Comments: Multiple commenters raised concerns regarding the 
proposed replacement of the term ``applicant'' with ``participant,'' as 
is addressed above. This is linked to the definition of Reportable 
Individual as well.
    Department Response: As outlined in the ``participant'' definition 
in this section, the Department also has added the definition of 
``reportable individual'' in order to capture the individuals who apply 
for and/or receive Wagner-Peyser Act funded employment services and to 
ensure alignment across the programs.
Respondent
    The Department received no comments on this definition, but the 
Final Rule adds the word ``individual'' to the definition of 
respondent. A respondent is not limited to an employer or a State 
agency; rather the respondent can be any individual (such as a field 
manager, a co-worker, or a labor contractor) who responds to a 
complaint filed pursuant to 20 CFR part 658, subpart E. The Department 
determined it prudent to add ``individual'' to the definition for 
clarification.
Seasonal Farmworker
    Comments: Some commenters expressed concern that the proposed 
definition would eliminate thresholds tied to number of days (25) and 
proportion of total wages (majority in farmwork) that an individual 
must have to qualify as a farmworker. These commenters expressed 
concerns that, under the proposed definition, a person employed in 
farmwork for 1 day during the past 12 months would qualify as a 
farmworker and that this proposed definition might make it difficult to 
implement integrity processes that validate the SWA's classification of 
individuals as MSFWs.
    Department Response: The Department acknowledges commenters' 
concerns regarding the removal of the days and total wages originally 
included in the seasonal farmworker definition. However, for the 
purposes of the ES and the Department's Monitor Advocate System, if a 
farmworker qualifies as a seasonal farmworker because he or she worked 
1 day in farmwork during the previous 12 months, that is acceptable. 
The Department understands that a myriad of circumstances could have 
led to the reason why that farmworker was able to work for only 1 day. 
For example, the worker could have been unable to find other employment 
and only was able to work 1 day, or, as another example, the worker 
could have been injured on the job and needed not to return to work in 
order to heal. As such, the Department will maintain its proposed 
definition.
Supply State(s)
    The Department received no comments on this definition; however, it 
changed ``U.S.-based workers'' to ``U.S. workers'' for clarification 
and uniformity across the definitions in this part.
Supportive Services
    Comments: One commenter suggested the definition of ``supportive 
services'' should specify whether Wagner-Peyser Act funds can be spent 
on supportive services, noting that such clarification is critical to 
avoiding disallowed costs.
    Department Response: The Department received several comments about 
alignment across programs, especially aligning supportive services 
across title I and Wagner-Peyser Act (as amended by WIOA title III) 
services. The Department has modified the definition of ``supportive 
services'' at

[[Page 56259]]

Sec.  680.900 to include an inclusive, though not exhaustive, list of 
types of supportive services. To ensure consistency, the Department is 
modifying the definition of supportive services to be the same as the 
definition used in Sec.  680.900 relating to the WIOA title I formula 
programs. The list is not intended to be exhaustive, but rather 
illustrative of the types of supportive services that may be available. 
The Department notes, however, grantees must not use Wagner-Peyser Act 
sec. 7(a) funds, but may use Wagner-Peyser Act sec. 7(b) funds, to 
provide supportive services.
Tests
    Comments: Some commenters objected to the proposed elimination of 
the definition of ``tests,'' arguing that assessments and tests 
continue to be integrated into career assessments and planning, and 
citing proposed Sec.  678.430(b), which defines one-stop career 
services and addresses skills assessments and diagnostic testing (see 
Joint WIOA Final Rule).
    Department Response: The Department agrees with the commenters' 
concerns that tests are integrated into career assessments and 
planning. As a result, the Department changed the proposed definition 
to add the previous definition of ``tests'' back into this section.
United States Employment Service (USES)
    While no comments were received regarding this definition, the 
Department has deleted this definition because it is redundant with the 
definition of Wagner-Peyser Act Employment Service (ES), above. Because 
ES is used throughout the chapter and USES is not, the Department has 
determined that the definition for USES is not necessary.
Veteran
    Comments: The Department received a few comments requesting 
clarification of the term ``veteran.''
    Department Response: In response to these comments, the Department 
has added the definition of ``veteran'' to the Final Rule. The 
definition is the same as the definition in WIOA sec. 3(63)(A), which 
in turn is the same as the definition in 38 U.S.C. 101.
Workforce and Labor Market Information (WLMI)
    Comments: A couple commenters suggested the Department identify the 
types of labor market ``participants'' that make the ``employment, 
training, and business decisions'' referenced in the proposed 
definition of WLMI, including employers, educators and trainers, 
workers, students, and public and private organizations that invest in 
workforce development. These commenters also recommended additional 
WLMI examples to add to the 20 examples provided in the proposed 
definition.
    Another commenter recommended the Department consult the Workforce 
Information Advisory Council and develop guidelines by area of LMI 
regarding this balance of demand for detailed localized data and data 
quality.
    Department Response: ``Workforce and Labor Market Information'' is 
a term used to describe what types of data, information, and analysis 
may be used at the national, State, and local level to make policy 
decisions, develop strategic plans, and implement decisions. While the 
broad parameters of the system content are laid out in Wagner-Peyser 
Act sec. 15, as amended by sec. 308 of WIOA, the term WLMI is not 
itself defined in either statute. The Department based the proposed 
WLMI definition on several factors including: (1) Data that are 
commonly considered to be part of the WIA LMI system; (2) additional 
items of information that should be considered to meet the new vision 
of WIOA; (3) potential types of information that could be included 
based on the consultations with the Workforce Information Advisory 
Council; and (4) data on outcomes of local employment and training 
activities. The Department is intentionally broadening the system's 
understanding of what information can and should be considered in 
strategic planning. However, the Department is not implying that State 
labor market information agencies are required to produce all of the 
information included in the definition: such information may be derived 
from other sources, such as educational agencies and institutions, or 
economic development agencies. LMI agencies and WIOA partners should 
share and compare data with these other entities to obtain a fuller 
picture of the labor market, particularly the supply side.
    Comments: One commenter described the proposed definition of WLMI 
as a list of products resulting from an extant system usually referred 
to by itself as Labor Market Information (LMI) and recommended removing 
the word ``workforce,'' stating that it adds confusion. Stating LMI 
should be defined as a scientific process focusing on the domain of the 
labor market rather than an open ended list of products, this commenter 
recommended that Sec.  651.10 instead define LMI as follows: ``Labor 
Market Information (LMI) is an applied science; it is the systematic 
collection and analysis of data which describes and predicts the 
relationship between labor demand and supply.''
    Department Response: The Department examined the recommendation to 
shorten and simplify this simplified definition. The commenter's 
recommended definition is more restrictive than the statutory language 
describing WLMI in sec. 15(a) of the Wagner-Peyser Act. No change was 
made to the regulatory text in response to this comment.
    Comments: Commenters also suggested that additional items be added 
to the proposed WLMI definition to expand what can be considered within 
the scope of WLMI for purposes of strategic planning and public 
workforce system operations.
    Department Response: The Department agrees that clarifications were 
needed to the proposed WLMI definition, and as a result, the Final Rule 
reflects several changes. The wording of the first and second sentence 
of the introductory paragraph was modified to define WLMI and eliminate 
reference to the WLMI programs and system. This is not a policy change; 
rather, it reinforces the fact that WLMI programs do not produce all of 
the information items in the list, and DOL-funded agencies should not 
be held accountable for doing so. The proposed WLMI definition also was 
changed to add some of the items suggested by commenters and some 
wording was revised to clarify the purpose of each listed item.
Workforce and Labor Market Information System (WLMIS)
    Comments: Two commenters suggested that the Department identify the 
Federal and State agencies that actively participate in the WLMIS as 
part of the definition. One of these commenters stated that doing so 
would be consistent with the text of proposed Sec.  652.300(b)(2) and 
(5), as well as the NPRM preamble discussion of part 652, subpart D 
(Workforce and Labor Market Information), under the heading 
``Continuous improvement, in part through consultation.'' Both 
commenters also suggested that the WLMIS definition should include the 
words ``Federal-State cooperative'' before ``system.''
    Department Response: ``Federal-State cooperative'' is often used 
before ``system,'' to specifically refer to the nature of certain 
existing agreements with the Bureau of Labor Statistics and may not 
apply more broadly. Additionally, because the list may

[[Page 56260]]

change over time based on changes in agency data collection and data 
sharing policies and procedures, the Department declines to include a 
list of the Federal and State agencies that participate in WLMIS.

N. Part 652--Establishment and Functioning of State Employment Service

1. Introduction
    The regulations at 20 CFR part 652 set forth standards and 
procedures regarding the establishment and functioning of State ES 
operations. These regulations align part 652 with the WIOA amendments 
to the ES program, and with the WIOA reforms to the public workforce 
system that affect the ES program. The WIOA-amended Wagner-Peyser Act 
furthers longstanding goals of closer collaboration with other 
employment and training programs by mandating colocation of ES offices 
within one-stop centers or affiliated sites; aligning service delivery 
in the one-stop delivery system; and ensuring alignment of State 
planning and performance indicators in the one-stop delivery system. 
Other new provisions are consistent with long-term Departmental 
policies, including increased emphasis on reemployment services for UI 
claimants (sec. 7(a)); promotion of robust Workforce and Labor Market 
Information (WLMI); the development of national electronic tools for 
job seekers and businesses (sec. 3(e)); dissemination of information on 
best practices (sec. 3(c)(2)); and professional development for ES 
staff (secs. 3(c)(4) and 7(b)(3)).
    Inadvertently, the preamble explanation for Sec.  652.215 was 
duplicated in the regulatory text. That has been removed and the 
intended regulatory language, which is the original language from the 
WIA regulations at Sec.  652.215, has been added except for a 
nonsubstantive change to the last sentence. The WIOA regulatory text at 
Sec.  652.215 is not substantively different from the language 
inadvertently used in the NPRM.
    The analysis that follows provides the Department's response to 
public comments received on the proposed part 652. If a section is not 
addressed in the discussion below, it is because the public comments 
submitted in response to the NPRM did not substantively address that 
specific section and no changes have been made to the regulatory text. 
Further, the Department received a number of comments on this part that 
were outside the scope of the regulation and the Department offers no 
response. Lastly, the Department has made a number of non-substantive 
changes to correct grammatical and typographical errors to improve the 
readability and conform the document stylistically that are not 
discussed in the analysis below.
    Comments: Several comments prompted the Department to make minor 
changes to parts of the regulations in this section, as discussed 
below. One of the major areas in which the Department received comments 
was regarding colocation.
    The Department received several varying comments regarding 
colocation. This part clarifies the intent of colocation and how ES-
only affiliate sites do not meet the intent of WIOA.
    Department Response: The Department broadened language in Sec.  
678.315(b) (see Joint WIOA Final Rule) to allow multiple programs to 
meet the more than 50 percent threshold by combining the time their 
staff members are physically present and to emphasize the expectation 
that colocation should be completed as expeditiously as possible. The 
Department will issue additional guidance on this topic.
    Comments: Many commenters also raised questions and provided 
comments regarding Wagner-Peyser Act funds usage.
    Department Response: The Department clarified that there are no 
changes in the activities that may be funded by Wagner-Peyser Act 
funds. Specifically, training services may not be provided with sec. 
7(a) of the Wagner-Peyser Act funding; however, appropriate career 
services and labor exchange services may be provided to individuals in 
training and to clarify there is no restriction on funding training 
services with sec. 7(b) funds under the Wagner-Peyser Act.
    Comments: In terms of reemployment, a few commenters suggested 
including developing and documenting reemployment plans and adding 
Worker Profiling and Reemployment Services (WPRS) to the list of 
required Wagner-Peyser Act activities for UI claimants.
    Department Response: The Department noted that providing assistance 
to UI claimants in the development of a reemployment plan is not just 
for claimants served by the RESEA or the WPRS program. Such assistance 
can be provided to any unemployed worker; providing such assistance is 
an allowable Wagner-Peyser Act cost.
    Comments: Some commenters expressed concern with the regulation at 
Sec.  652.209 requiring that reemployment services provided by State 
agencies must include conducting eligibility assessments and referring 
UI claimants to and providing application assistance for training and 
education resources and programs.
    Department Response: The Department reiterates that this approach 
is consistent with the approach that existed under WIA, and will be 
continued under WIOA; States will be provided flexibility to leverage 
UI funds, W-P funds, and RESEA funds in States with RESEA programs for 
these purposes.
    With regard to workforce labor market information, some of the 
clarifications identified in this part include: there is a need to 
provide extensive education and technical assistance with regard to 
accessing wage record data; the Workforce Information Advisory Council 
(WIAC) will advise on WLMI and may consider what kind of information is 
needed for planning, but it is not involved in developing State Plans; 
and the Departments of Labor and Education will issue joint guidance 
about use of wage data for performance in the context of the 
confidentiality requirements for the use UI wage record data and 
education data under the Family Educational Rights and Privacy Act 
(FERPA). In order to address concerns regarding ``continuous 
improvement'' as it pertains to the WLMI systems (WLMIS), Sec.  652.300 
was edited to reflect that the parameters for continuous improvement 
will be identified in consultation with the WIAC. Additionally, the 
edits to this section align with WIOA and reference the Secretary's 
responsibility to prepare a 2-year plan for WLMIS.
2. Overarching Comments on Part 652
    Comments: A few commenters recommended that the Department require 
that the UI and ES programs be given priority for any remaining Federal 
equity to help address chronic underfunding, especially the need to 
modernize State computer systems.
    Department Response: The Department's response to this 
recommendation to require that UI and ES programs be given priority for 
any remaining Federal equity is addressed in the preamble text 
corresponding to Sec.  683.240.
    Comments: One commenter recommended additional funding to improve 
systems for reporting purposes to facilitate system alignment between 
core programs. The Department also received several comments on 
funding.
    Department Response: The Department notes that funding levels are 
determined by Congress and cannot be resolved through this regulatory 
process.

[[Page 56261]]

    The Department also made one clarifying change throughout this 
part. Previously, the regulatory text in part 652 has used the words 
``the Act'' to refer to the Wagner-Peyser Act. Because of the ES 
system's integration in the public workforce system, which is governed 
by a number of different Acts such as WIOA, this reference has caused 
some confusion. To make references to the Wagner-Peyser Act clear, the 
Department has replaced ``the Act'' with ``the Wagner-Peyser Act'' 
throughout the text of the regulations in this part. The definition of 
``the Act'' in part 651 has also been amended to reflect this change. 
In the titles of the regulatory sections, ``the Act'' has been replaced 
with ``the Wagner-Peyser Act.''
3. Subpart A--Employment Service Operations
    Comments: One commenter expressed support for Sec. Sec.  652.1 
through 652.8 as proposed. Another commenter urged States, localities, 
and one-stop centers to make staff-assisted services (ideally provided 
by coaches or older worker specialists) available to older workers and 
other individuals with barriers to employment. Citing data, the 
commenter explained that older workers use self-service and 
``automated'' services the least, and that access to staff makes all 
the difference. This commenter suggested that, at minimum, all front-
line staffers should be required to have adequate training in 
generational competencies in order to provide quality staff-assisted 
services to older workers with varied backgrounds and needs at every 
stage of the process. Furthermore, this commenter explained that older 
workers who may be more likely to qualify for and exhaust their UI 
benefits, also benefit from staff-assisted services such as assessment 
and reemployment services early in an episode of unemployment.
    Department Response: The Department agrees that States, localities, 
and one-stop centers must make staff-assisted services available to 
older workers and other individuals with barriers to employment and 
that these individuals can benefit from these services.
    Front-line staff training is addressed in the Wagner-Peyser Act 
sec. 3(b)(4) (as amended by sec. 303(b)(4) of WIOA), which requires 
State agencies and their staff to assist in the planning and 
implementation of activities to enhance the professional development 
and career advancement opportunities of staff. The Department strongly 
encourages such training to include competencies related to serving 
populations with barriers to employment and to accessing services, 
including older workers. Additionally, the Department added direct 
language from the Wagner-Peyser Act sec. 3(b)(4) to Sec.  652.204 to 
indicate that professional development and career advancement may be 
supported by the Governor's Reserve.
Section 652.3 Public Labor Exchange Services System
    Comments: A commenter urged the Department to work with States to 
make the Wagner-Peyser Act program as flexible as possible to integrate 
it into the service delivery design of that State. While expressing 
support for the alignment of labor exchange services under WIOA with 
those provided by the ES program, some commenters urged that the 
alignment should reflect and seek to preserve the unique structures and 
functions of the various providers, including ES. Some of these 
commenters provided examples, including encouraging partners to work 
out arrangements to accommodate legal requirements that State public 
employees assist with the filing of UI claimant applications, and 
having ES staff conduct one-stop orientations as a first entry point 
for job seekers.
    Department Response: While Sec.  652.3 focuses on the statutory 
intent and minimum required functions of the ES program, the regulation 
provides flexibility in how services are provided and what other 
services are provided. The Department acknowledges the commenter's 
examples of ES and UI functions. The regulation provides flexibility 
for States and locals to consider effective strategies for providing 
meaningful assistance to individuals in filing their UI claims, and 
other intake functions.
    Comments: A commenter suggested that the alignment of definitions 
would help for one-stop partners.
    Department Response: The Department agrees with the commenter about 
the benefit of aligning definitions across the core programs, and as a 
result the terms ``reportable individual'' and ``participant'' have 
been aligned with the performance accountability of the other core 
programs.
    Comments: A commenter noted that ES is focused on providing ``UI 
relief,'' job placement, and reemployment services, whereas WIOA 
focuses on training workers and providing wrap-around services. 
Multiple commenters further discussed how the Wagner-Peyser Act and 
WIOA are two different laws with different public policy objectives. 
Related to this point, two commenters urged the Department to use the 
word ``Act'' when referring to the Wagner-Peyser Act throughout the 
regulation (e.g., ``Wagner-Peyser Act services'' rather than ``Wagner-
Peyser services''), reasoning that it is a separate and distinct 
enacted law.
    Department Response: The Department recognizes the vital role the 
ES has in the public workforce system, often serving as the ``front 
door'' to the one-stop centers, ensuring universal access to all job 
seekers, and in providing labor exchange services that help job seekers 
and unemployed workers gain or return to employment. The Department 
notes, as the commenters mentioned, that the Wagner-Peyser Act is a 
separate law from WIOA, but is a critical component of the reforms that 
WIOA envisions. Recognizing this, the Department has added the word 
``Act'' behind the references to ``Wagner-Peyser'' to accurately 
reflect the distinction between the Wagner-Peyser Act and WIOA.
    Comments: In response to the Department's request for comments on 
challenges in aligning labor exchange services described under WIOA 
with those provided by the ES, one commenter asserted that additional 
funds would be needed to create a cohesive, collective reporting system 
for WIOA implementation.
    Department Response: The Department received several comments on 
funding; however, funding levels are determined by Congress and beyond 
the scope of the NPRM; therefore they cannot be resolved through this 
regulatory process.
    Comments: Some commenters suggested that the Department revise 
Sec.  652.3(f) to refer to sec. 7(a) of the Wagner-Peyser Act, and thus 
ES labor exchange services. Although acknowledging that the referenced 
career services under WIOA are similar, these commenters asserted that 
they are not a substitute for Wagner-Peyser Act sec. 7(a) services.
    Department Response: The Department agrees with the commenters that 
career services under WIOA are not a substitute for Wagner-Peyser Act 
sec. 7(a) services; Sec.  652.3(f) has been amended to add reference to 
sec. 7(a) of the Wagner-Peyser Act.
    Comments: A commenter asked whether business service 
representatives are required to ``facilitate the match between job 
seekers and employers'' (Sec.  652.3(c)) or whether this provision 
referred to the overall ES program responsibility.
    Department Response: The Department considers the facilitation of 
the match between job seekers and employers to be a part of the overall 
responsibility of the ES program.

[[Page 56262]]

Business services are an important component of the one-stop delivery 
system. While the Wagner-Peyser Act is responsible for facilitating the 
match between job seekers and employers, local areas may implement 
business services teams that include staff funded by the Wagner-Peyser 
Act and other partner programs to ensure quality services to area 
businesses and to avoid duplication of services.
Section 652.8 Administrative Provisions
    The Department simplified the language in Sec.  652.8(j)(1) by 
removing ``including laws prohibiting discrimination on the basis of 
age, race, sex, color, religion, national origin, disability, political 
affiliation or belief'' because this is redundant with the phrase 
immediately preceding it, ``any applicable nondiscrimination law.'' 
Conforming edits were also made at Sec. Sec.  653.501(c)(ii), 
658.411(c)(1) and (2), and 658.420(b)(1).
    The Department made a clarifying change to Sec.  652.8(i) by 
removing the sentence ``Similarly, all complaints involving such 
matters should also be reported to the Secretary directly and 
immediately'' and changing the first sentence to read ``Any persons 
having knowledge of fraud, criminal activity or other abuse must report 
such information directly and immediately to the Secretary, including 
all complaints involving such matters.'' This clarifies that complaints 
related to fraud and abuse must be reported to the Secretary directly 
and immediately. The change reduces confusion about whether the 
requirement to report complaints is different from the requirement to 
report information to the Secretary; the requirement is the same for 
both.
Section 652.9 Labor Disputes
    Comments: Stating that proposed Sec.  652.9(a) could be 
misinterpreted by States and Workforce Development Boards, two 
commenters recommended that the provision be revised to say, ``State 
agencies must not make'' instead of ``State agencies may not make.''
    Department Response: The Department considers job referrals on job 
orders which aid directly or indirectly in the filling of a job opening 
which is vacant because of a strike, labor dispute, or work stoppage to 
be inconsistent with the Department's policy of neutrality in 
activities that may impact union organizing. The Department proposed no 
changes to this section, as WIOA did not make any amendments to the 
Wagner-Peyser Act relevant to this section. This language--``State 
agencies may not make'' was used under previous practice and there were 
no apparent misinterpretations or issues. No change was made to the 
regulatory text in response to this comment.
4. Subpart B--Services for Veterans
    Comments: Some commenters expressed support for proposed Sec.  
652.100, particularly the inclusion of the statement regarding 
veterans' priority of service.
    However, several commenters recommended that the Department define 
the term ``veteran'' by specifying that, as provided in 38 U.S.C. 101, 
``the term veteran means a person who served in the active military, 
naval, or air service, and who was discharged or released therefrom 
under conditions other than dishonorable.'' In addition to urging a 
definition of ``veteran,'' a commenter also recommended that the 
Department establish definitions for ``eligible spouse,'' ``significant 
barriers to employment,'' and ``priority of service.'' Additionally, 
this commenter recommended that the regulation state veteran referral 
qualifications to the Disabled Veterans Outreach Program (DVOP) because 
these referrals are Wagner-Peyser Act funded services and not charged 
to the Jobs for Veterans State Grants (JVSG).
    A commenter recommended that the Department include an option for 
LWDBs to require that one-stop operators adhere to labor standards for 
staff that work in the one-stop delivery system.
    Department Response: The Department agrees with the commenters that 
adding a definition of ``veteran'' to the ES regulations would be 
beneficial, showing the consistent definition across multiple programs. 
The definition under 38 U.S.C. 101 applies to the Wagner-Peyser Act, 
WIOA, and veterans' Priority of Service under 38 U.S.C. 4215. (The 
definition of ``eligible veteran'' used in the JVSG program authorized 
under chapter 41 of title 38 of the U.S.C., is a different definition.) 
The Department added the definition of ``veteran'' consistent with 38 
U.S.C. 101 and sec. 3(63)(A) of WIOA to the regulation at Sec.  651.10.
    In response to the commenters' suggestions to state veteran 
referral qualifications to DVOP, as well as define ``eligible spouse,'' 
``significant barriers to employment,'' and ``priority of service,'' 
these concerns are already covered by joint guidance from the Veterans' 
Employment and Training Service and the Employment and Training 
Administration. See TEGL No. 19-13 (``Expansion and Clarification of 
Homeless Definition as a Significant Barrier to Employment (SBE)''), 
Change 2 and TEGL No. 10-09 (``Implementing Priority of Service for 
Veterans and Eligible Spouses in all Qualified Job Training Programs 
Funded in whole or in part by the U.S. Department of Labor (DOL)''), 
which can be found at http://wdr.doleta.gov/directives). Also, 
``eligible spouse'' and ``priority of service'' are fully described in 
the regulations governing the JVSG program at 20 CFR parts 1001 and 
1010. No change was made to the regulatory text.
    The Department's response to the recommendation for LWDBs to 
require that one-stop operators adhere to labor standards is addressed 
in the Joint WIOA Final Rule preamble discussion for 20 CFR part 678, 
subpart C.
5. Subpart C--Wagner-Peyser Act Services in a One-Stop Delivery System 
Environment
Section 652.201 What is the role of the State Workforce Agency in the 
one-stop delivery system?
    Comments: The Department received a few comments stating that this 
section should clarify that Wagner-Peyser Act services must be 
colocated in at least one one-stop center in each local area and 
requested that the Department provide additional direction on what 
should be included in the MOU to make sure that local Wagner-Peyser Act 
operations are closely connected with Local WDB priorities.
    Department Response: The requirements for Wagner-Peyser Act 
services to be colocated are outlined in Sec. Sec.  652.202, 678.310, 
and 678.315 (see Joint WIOA Final Rule). The Department expects that 
the entity that administers the ES system, in consultation with LWDBs 
and one-stop partners, may need to make the necessary changes to comply 
with this requirement. Additionally, the specific requirements for MOUs 
are contained in 20 CFR 678.500, which outlines what must be included 
in the MOU executed between the LWDBs, with the agreement of the CEO, 
and the one-stop partners relating to the operation of the one-stop 
delivery system in the local area. No change was made to the regulatory 
text.
Section 652.202 May local employment service offices exist outside of 
the one-stop delivery system?
    Comments: Some commenters stated that either the existing Sec.  
652.202(b) should be retained or that Sec.  652.202 should specify that 
``one-stop centers in this rule refer to both comprehensive and 
affiliate one-stop centers.'' These commenters reasoned that the 
Wagner-Peyser Act requires State workforce

[[Page 56263]]

agencies to provide ES ``statewide in underserved areas.'' They cited 
two Department-sponsored studies that they stated demonstrate that the 
ES program in affiliated sites was the backbone and core component of 
these technologically linked one-stop center sites in many rural 
communities where LWDBs could not establish full-service one-stop 
centers. Further, these commenters asserted that maintaining current 
Sec.  652.202(b) would be consistent with proposed Sec.  680.100(b)(1), 
which permits services at ``affiliated sites or at specialized 
centers.'' Expressing similar concerns about ES access in rural areas, 
a commenter asked whether proposed Sec.  652.202 means that affiliate 
ES offices may no longer physically exist.
    One commenter explained that the WIOA NPRM's proposed requirements 
relating to colocation would do little to improve efficiencies and 
stabilization of facilities costs. For example, this commenter stated 
that adding one partner program staff to the ES office simply for 
complying with the NPRM against stand-alone ES offices (proposed at 20 
CFR 678.315(b)) would be fairly simple to accomplish, but meaningless 
as far as the stated goals for improved service and coordination, less 
duplication, and greater access. This commenter stated that a 
requirement to colocate adult and dislocated worker with ES into full 
centers would likely be sufficient impetus over time to have the major 
core program partners concentrate on finding suitable facilities, 
although it would pose a difficult problem in many localities. This 
commenter and another stated that although proposed Sec.  652.202 and 
related discussion in Sec. Sec.  678.310 and 678.315 (see Joint WIOA 
Final Rule) is intended to address greater partner integration where ES 
are delivered, the discussion is confusing with overlapping references 
to one-stop centers, affiliated sites, and even affiliated sites. These 
commenters suggested that perhaps WIOA and the ES program should be 
required to colocate in proportion to participants served, forming over 
time the basis of a more financially sound, center-based system with 
fewer affiliates and locally unique inviting core and non-core program 
partners as space is available.
    Department Response: Colocation is intended to achieve several 
purposes: improved service delivery and coordination, less duplication 
of services, and greater access to services in underserved areas. While 
the Department understands that it may be difficult to establish full-
service one-stop centers in some rural communities, it has concluded 
that retaining the previous Sec.  652.202(b) and allowing local ES 
offices to operate solely as affiliated sites or through electronically 
or technologically linked access points contradicts the intent of WIOA. 
No change was made to the regulatory text in response to these 
comments.
    Additionally, Sec.  678.315(b) (see Joint WIOA Final Rule) allows 
multiple programs to meet the more than 50 percent threshold by 
combining the time their staff members are physically present. This is 
further discussed in the preamble accompanying 20 CFR 678.315.
    Additionally, the Department has determined that requiring 
colocation of WIOA and ES program services in proportion to 
participants served would be too burdensome a requirement to impose on 
States.
    Comments: Two commenters asked if there was a timeline for the 
requirement that ES offices must be colocated in one-stop centers.
    Department Response: The Department expects colocation to be 
completed as expeditiously as possible. However, it acknowledged that 
there are legitimate concerns about the timeline for the requirement 
that ES offices must be colocated in one-stop centers, due to factors 
such as real property issues, decisions on site locations, discussions 
with municipal or county governments, and development of memoranda of 
understanding. Therefore, as indicated in 20 CFR 678.310 (see Joint 
WIOA Final Rule), a State in such circumstance must be prepared to 
provide the Department with a plan that details the steps the State 
will take to achieve colocation of ES and a timetable showing how the 
State will achieve this within a reasonable amount of time. The 
Department is issuing guidance on the approach it will use to obtain 
required plans and timelines for completion.
Section 652.203 Who is responsible for funds authorized under the 
Wagner-Peyser Act in the workforce development system?
    The Department did not receive any comments on this section. No 
changes were made to this section of the regulatory text.
Section 652.204 Must funds authorized under section 7(b) of the Wagner-
Peyser Act (the Governor's Reserve) flow through the one-stop delivery 
system?
    Comments: Some commenters recommended that this section should 
include activities that enhance the professional development and career 
advancement for ES staff as an activity that can be supported by the 
Governor's Reserve following the amendment of sec. 3(b)(4) of the 
Wagner-Peyser Act (amended by sec. 303(b)(4) of WIOA) to make such 
activities required. One commenter emphasized the importance of 
training activities to enhance the professional development of ES 
staff, given WIOA's expansion of services and the central role of ES 
staff in providing referrals and application and assistance for 
training and education programs and resources.
    Expressing support for proposed Sec.  652.204, one commenter urged 
the Department to promote the training of staff on how to assist older 
workers.
    Department Response: The Department acknowledges and supports 
professional development for ES staff, and considers it to be essential 
in building staff capacity and ensuring staff are fully equipped to 
provide seamless and high-quality service to all customers who need ES 
services. The commenters' recommendations and support for front-line 
staff training are addressed in the Wagner-Peyser Act at sec. 3(b)(4) 
(as amended by sec. 303(b)(4) of WIOA), which requires State agencies 
and their staff to plan and implement opportunities to enhance the 
professional development of staff to ensure quality service delivery. 
This is consistent with the uses of funds under sec. 7(b)(3) of the 
Wagner-Peyser Act, which allow the funds to be used for ``models for 
enhancing professional development and career advancement opportunities 
of State agency staff.'' The Department has added language to Sec.  
652.204 to clarify that professional development and career advancement 
of SWA staff can be supported by funds under sec. 7(b) of the Wagner-
Peyser Act (the Governor's Reserve). The Department also has added 
language to the title of Sec.  652.204 to clarify that Sec.  652.204 
refers to the sec. 7(b) funds. Additionally, the Department added 
language to Sec.  652.204 to clearly state that under sec. 7(b) of the 
Wagner-Peyser Act, 10 percent of the State's Wagner-Peyser Act 
allotment is reserved for these activities.
    With regard to the suggestion to train front-line staff on 
assisting older workers, the Department expects that staff are trained 
and equipped with the knowledge, skills, and motivation to provide 
superior service to all job seekers, including older workers.
Section 652.205 May funds authorized under the Wagner-Peyser Act be 
used to supplement funding for labor exchange programs authorized under 
separate legislation?
    Comments: A commenter asked which other programs would be funded by 
the Wagner-Peyser Act, specifically

[[Page 56264]]

whether training would be funded and asked how this is consistent with 
Sec.  652.206.
    Department Response: Section 652.205 made no changes in the 
activities that may be funded by Wagner-Peyser Act funds. Although 
Sec.  652.205(a) states that States may use such funds to supplement 
any work activity carried out under WIOA, the paragraph clearly applies 
to ``funds authorized under 7(a) or 7(b) of the Wagner-Peyser Act.'' 
Section 7(b) of the Wagner-Peyser Act allows for the provision of 
training services, however that is not the primary purpose of 7(b), and 
any training services provided with these funds must be consistent with 
the allowable activities in 7(b). These allowable 7(b) activities 
include services for groups with special needs as well as the extra 
costs of exemplary models for delivering labor exchange services, as 
well as the other services under sec. 7(a) of the Wagner-Peyser Act.
Section 652.206 May a State use funds authorized under the Wagner-
Peyser Act to provide applicable ``career services,'' as defined in the 
Workforce Innovation and Opportunity Act?
    Comments: Some commenters recommended that the Department revise 
Sec.  652.206 to make clear that the labor exchange services under WIOA 
and under the Wagner-Peyser Act are distinct. They proposed removing 
the phrase ``funds under sec. 7(a) of the Act must be used,'' so that 
this section would be amended as follows:
    ``Yes, 90 percent of the funds allotted to States under the Wagner-
Peyser Act must be used for services identified under sec. 7(a) of the 
Act to assist job seekers and employers and to provide career services 
as identified in Sec.  678.430(a) of this chapter and secs. 
134(c)(2)(A)(i)-(xi) of WIOA . . . .''
    Department Response: The Department has determined that it is not 
necessary to amend the regulation as the commenters have requested, 
because Sec.  652.206 states that career services must be provided 
consistent with the requirements of the Wagner-Peyser Act, which 
specifies that 90 percent of the funds allotted to States may be used 
for services identified under sec. 7(a) of the Wagner-Peyser Act to 
assist job seekers and employers. In addition, sec. 7(b) states that 10 
percent of the State's allotment under the Wagner-Peyser Act is 
reserved for 7(b) activities. As discussed above, the Department has 
added language to Sec.  652.204 to clarify the amount of funds reserved 
for 7(b) activities.
    Comments: In response to the Department's request for comments on 
how services provided by the ES can be more aligned with other services 
in the one-stop delivery system, two commenters suggested that the 
Department: (1) Require, over time, maximum colocation of ES and title 
I adult and dislocated worker staff forming full one-stop centers with 
foundations of at least these two core programs in each labor market 
area (which may be sub-areas of local areas); (2) implement 
standardized triage processes/forms used by staff that are voluntary 
for customers; (3) require mandatory coordination of business services; 
and (4) encourage more purposeful and deliberate ongoing joint staff 
development training.
    Department Response: The Department notes the comments about the 
alignment of ES services and those of the one-stop delivery system. The 
Department intends to ensure colocation of ES and title I adult and 
dislocated worker staff over time. The Department has determined that 
requiring these specific activities in the regulation as suggested by 
the commenters would limit flexibility. The Department will provide 
guidance on allowable activities and may address this topic in future 
technical assistance. No changes were made to regulatory text in 
response to these comments.
    Comments: One commenter asked for clarification regarding the 
statement that ``career services must be provided consistent with 
requirements of the Wagner-Peyser Act,'' particularly whether this 
means that career services are charged to the Wagner-Peyser Act only 
and how supportive services should be charged. Some commenters 
requested that the Department clarify that career services can be 
delivered remotely using technology due to the limited number of 
Wagner-Peyser Act staff that are available for traditional services.
    Department Response: Funds under sec. 7(a) of the Wagner-Peyser Act 
may be used to provide career services, whereas funds under sec. 7(b) 
may be used to provide career services, supportive services, and 
training, as discussed above. The Department encourages Local WDBs to 
coordinate ES with title I and other partner programs to have a full 
range of training and supportive services available to participants. 
The Department understands the importance of providing staff-assisted 
services virtual and clarifies that facilitated self-help can be 
provided in-person or virtually. The Department emphasizes, however, 
that, as stated in 20 CFR 678.305(d)(3) (see Joint WIOA Final Rule), to 
meet the definition of providing sufficient ``access'' through the one-
stop center, services provided through a technological ``direct 
linkage'' must be meaningful, available in a timely manner, and not 
simply a referral to additional services at a later date or time. While 
virtual services that do not meet this definition may be provided, they 
must supplement the ``access'' to services provided by other means, and 
cannot stand-alone as the only access provided through the one-stop 
center.
    Comments: Requesting clarification regarding what services would 
qualify as ``individualized career services,'' a commenter agency urged 
the Department to provide joint training with the one-stop partners to 
carry out the intent of Sec.  652.206.
    Department Response: ``Individualized career services'' are defined 
in 20 CFR 678.430(b) (see Joint WIOA Final Rule) and include: (1) 
Comprehensive and specialized assessments of the skill levels and 
service needs of adults and dislocated workers; (2) development of an 
individual employment plan; (3) group counseling; (4) individual 
counseling; (5) career planning; (6) short-term pre-vocational 
services; (7) internships and work experiences that are linked to 
careers (as described in 20 CFR 680.180); (8) workforce preparation 
activities; (9) financial literacy services (as described in sec. 
129(b)(2)(D) of WIOA and 20 CFR 681.500); (10) out-of-area job search 
assistance and relocation assistance; and (11) English language 
acquisition and integrated education and training programs.
    The Department has issued guidance with regard to the provision of 
career services under the ES program in TEGL No. 03-15 (``Guidance on 
Services Provided through the Adult and Dislocated Worker Program under 
the Workforce Innovation and Opportunity Act (WIOA or Opportunity Act) 
and Wagner Peyser, as Amended by WIOA, and Guidance for the Transition 
to WIOA Services'') (see http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm); the Departments may provide 
additional training, guidance, and technical assistance on this 
subject.
    Comments: One commenter asked under what conditions the Wagner-
Peyser Act program is no longer authorized for funding and/or 
transferred to another funding source and if the ``line of 
demarcation'' is when the participant initiates training.
    Department Response: WIOA provides flexibility in what Wagner-
Peyser Act funds may be used and when referrals to other programs take 
place; however, training is not an allowable

[[Page 56265]]

activity under sec. 7(a) funds. Coordination among programs including 
the transfer or referral of participants, is a local decision. 
Therefore, the referral process to other programs must generally be 
determined at the local level consistent with State one-stop policies.
Section 652.207 How does a State meet the requirement for universal 
access to services provided under the Wagner-Peyser Act?
    Comments: A couple commenters recommended expanding the 
characterization of virtual services to include facilitated self-help 
services in which ES staff are proactive; for example, ES staff 
initiating email invitations to consider applying for matched job 
openings. One commenter disagreed with proposed Sec. Sec.  652.207 and 
652.208's reference to services provided remotely or via online self-
service as ``virtual services.'' Stating that these are ``real 
services'' and that staff-assisted services can also be provided via 
online mechanisms, this commenter recommended that these provisions 
instead reference provision of services in person, remotely, or via 
other online mechanisms, whether staff-assisted or self-service.
    Department Response: Facilitated self-help can be provided in 
person or virtually. However, the Department emphasizes that as stated 
in 20 CFR 678.305(d)(3) (see Joint WIOA Final Rule), services provided 
through technology must be meaningful, available in a timely manner and 
not simply a referral to additional services at a later date or time. 
Additionally, while the Department agrees that ``virtual services'' are 
actual services and that staff-assisted services may also be provided 
via online mechanisms, to prevent potential confusion with a change in 
this terminology, no change was made in the regulatory text.
    Comments: A commenter recommended that Sec.  652.207(b)(1) provide 
further detail regarding how States are required to serve individuals 
with disabilities, such as a specific reference to WIOA sec. 188, 
ensuring programmatic and physical accessibility of all services, and 
other applicable sections of the Americans with Disabilities Act. This 
commenter expressed concern that the delay in the issuance of sec. 188 
nondiscrimination regulations could create possible misunderstandings 
concerning States' legal obligations to serve individuals with 
disabilities.
    Department Response: The Department acknowledges the commenter's 
concern about ensuring States are required to serve individuals with 
disabilities and ensuring programmatic and physical accessibility of 
all services. The ES program, like all services funded by the 
Department, must be physically and programmatically accessible to 
individuals with disabilities, as further described in 20 CFR 678.800 
and 678.305(e) (see Joint WIOA Final Rule), WIOA sec. 188 at 29 CFR 
part 38, and any subsequent Civil Rights Center regulations which 
govern one-stop center accessibility.
Section 652.208 How are applicable career services related to the 
methods of service delivery described in this part?
    Comments: A commenter recommended that access points should be 
defined in Sec.  652.208 as a means to link job participants back to 
the one-stop center to ensure area-wide service.
    Department Response: The Department has determined that the 
commenter's suggested definition for ``access points'' would not 
provide enough clarity and consistency in the intent of this term. 
Instead, an applicable example of ``access points'' is contained in 20 
CFR 678.310 (see Joint WIOA Final Rule), which states that, in addition 
to the requirement for a physical center in each local area where 
required one-stop partners must provide access to their programs, 
services, and activities, the one-stop delivery system may also provide 
access to programs, services, and activities through a network of 
eligible one-stop partners that provide at least one or more of the 
programs, services, and activities at a physical location or through an 
electronically or technologically linked access point, such as a 
library.
    Comments: One commenter asked at which point registration must 
occur for purposes of Wagner-Peyser Act accountability.
    Department Response: The Department understands the commenter is 
referring to the point performance accountability begins when they 
asked about registration. For the core WIOA programs, of which the ES 
system is one, performance accountability begins after a determination 
of eligibility and an individual receives a service beyond a self-
service or information-only service consistent with 20 CFR 677.150(a) 
(see Joint WIOA Final Rule) and Sec.  680.110. For the Wagner-Peyser 
Act, which is a program that provides `universal access,' there are no 
eligibility criteria. All job seekers meet the eligibility criteria of 
the Wagner-Peyser Act, so for performance accountability purposes, it 
is when an individual becomes a ``participant'' as discussed in part 
651 and 20 CFR 677.150(a). An individual needs to receive a service 
beyond self-service or information-only services either in person or 
remotely through virtual services in order to be considered a 
participant in 20 CFR 677.150(a).
    Comments: Noting that proposed Sec.  652.208 appears to contradict 
regulations in other sections by use of the word ``may,'' some 
commenters urged the Department to ensure that regulations governing 
how career services are delivered are consistent for all sections.
    Department Response: The word ``may'' is used in Sec.  652.208 to 
communicate that the States have different methods by which they may 
choose to deliver services under the Wagner-Peyser Act. This is 
consistent with the different options in delivering services under 
other WIOA title I programs. Regarding the consistency between Wagner-
Peyser Act services and career services in other programs, the 
Department notes that the primary function of the Wagner-Peyser Act 
under sec. 7(a) is to provide labor exchange services to job seekers. 
Labor exchange services are considered a type of career services under 
WIOA, and other WIOA career services may be provided consistent with 
the Wagner-Peyser Act regulations at Sec.  652.206, or through other 
programs.
Section 652.209 What are the requirements under the Wagner-Peyser Act 
for providing reemployment services and other activities to referred 
unemployment insurance claimants?
    Comments: Several commenters recommended that Sec.  652.209(b)(2) 
should include developing and documenting reemployment plans as another 
reemployment services activity provided by ES staff.
    Some of these commenters stated that the reemployment plan is a 
component of the Worker Profiling and Reemployment Services (WPRS) and 
Reemployment and Eligibility Assessment (REA) programs, and consists of 
an agreement between the claimant and the SWA that requires 
participation by claimants in selected reemployment services. 
Commenters observed that in those programs the failure of the claimant 
to agree to, attend, or satisfactorily complete a plan may result in 
the denial of benefits. A State agency asked for clarification 
regarding how the use of Wagner-Peyser Act funds to support 
reemployment and related services to UI claimants fits with the State's 
REA and Reemployment Services and Eligibility Assessments (RESEA) 
programs. In particular, this

[[Page 56266]]

commenter asked if a claimant starts with UI versus ES, whether the 
State can assist them in a comprehensive center.
    Department Response: Providing assistance to UI claimants in the 
development of a reemployment plan is not just for claimants served by 
the RESEA or the WPRS program, but can be for any unemployed worker, 
and providing such assistance is an allowable Wagner-Peyser Act cost. 
The Department plans to address these issues in guidance.
    Wagner-Peyser Act funds may be used to support reemployment 
services to UI claimants fits with the State's RESEA program, States 
have considerable flexibility to effectively leverage these two funding 
sources. The Department notes that not all States have RESEA programs 
and RESEA only serves a small percentage of UI claimants. Therefore, 
the Department expects that Wagner-Peyser Act funds will be used to 
serve all UI claimants more broadly.
    States have flexibility under UI and ES to provide services through 
a comprehensive center. Two activities that can be funded with either 
funding source are conducting eligibility assessments and reviewing 
compliance with the State's work search requirements as a condition of 
UI eligibility.
    Comments: Two commenters disagreed with the proposed requirement 
that reemployment services provided by State agencies must include 
conducting eligibility assessments and referring UI claimants to and 
providing application assistance for training and education resources 
and programs. Stating that WIOA does not require including these 
services as required reemployment services provided to UI claimants but 
merely requires that when these services are provided, States must use 
Wagner-Peyser Act sec. 7(a) funds to pay for them, these commenters 
stated that proposed Sec. Sec.  652.209 and 652.210 go beyond what is 
in the Wagner-Peyser Act and reduce States' flexibility in designing 
reemployment services. Expressing concern that activities for UI 
claimants should not pull ES staff from providing career services and 
other MOU responsibilities, one commenter recommended that the 20 CFR 
part 652, subpart C regulations emphasize that both basic career 
services and reemployment services must be provided under ES.
    Department Response: The approach the Department is taking is to 
serve UI claimants and other unemployed workers consistent with the 
approach that existed under WIA, and will be continued under WIOA. 
States must have the capacity to deliver these services as part of the 
Wagner-Peyser Act services. However, it is also the Department's intent 
to provide States with flexibility to leverage UI funds, ES funds, and 
RESEA funds, in States with RESEA programs, for these purposes and will 
clarify that flexibility in future guidance.
    Comments: One commenter requested clarification regarding 
``referrals and application assistance'' for training and education 
resources in proposed Sec.  652.209(b)(3), asking whether ES staff will 
be required to provide application assistance for Pell grants and other 
student assistance grants.
    Department Response: The Department has determined that the 
language in the Wagner-Peyser Act sec. 7(a)(3), as amended by sec. 
305(b) of WIOA, regarding providing UI claimants with referrals to and 
application assistance for training and education programs is clear; no 
change was made in the regulatory text. Because training and education 
program application processes vary in complexity, the Department 
chooses not to be overly prescriptive, giving States flexibility with 
regard to implementing this requirement.
    Comments: Another commenter asked whether the Profiling 
Reemployment Program (PREP) and the RESEA programs would satisfy the 
requirement to provide ``reemployment services and other activities'' 
to UI claimants.
    Department Response: The Department assumes the Profiling 
Reemployment Program referenced in the comment is a State name for the 
Federally required WPRS program. Neither the RESEA program nor the WPRS 
program fully satisfies the requirement to provide reemployment 
services and other activities to UC claimants. The RESEA program is a 
relatively small temporary program that currently serves only a small 
percentage of UI claimants and is not operational in all States. The 
WPRS program is similarly small in scope. The Department will clarify 
this issue in future guidance. No changes were made to the regulatory 
text in response to these comments.
    Comments: Stating that UI claimants are core customers of the ES, 
one commenter expressed support for the proposed expanded definition of 
``enhanced career services'' in the one-stop centers to include 
assistance with UI claim filing and eligibility assessments. This 
commenter discussed recent occurrences of UI claimants flooding one-
stop centers seeking help with claim filing because they are unable to 
file claims remotely during periods of service disruption or seasonally 
high unemployment.
    Department Response: The Department notes the commenter's support 
and no change was made to the regulatory text.
Section 652.210 What are the Wagner-Peyser Act's requirements for 
administration of the work test, including eligibility assessments, as 
appropriate, and assistance to unemployment insurance claimants?
    Comments: Expressing concern that ``necessary guidance and 
counseling'' is a very intensive service, a few commenters requested 
clarification about what is required under this term, and recommended 
that the Department make clear that using technology to provide 
services remotely is allowable.
    Department Response: The Department acknowledges the commenters' 
concerns that ``necessary guidance and counseling'' can be an intensive 
service. This particular section of the regulation only applies to UI 
claimants ``requiring assistance,'' and, therefore, it is not the 
entire universe of claimants. If the claimant ``requires assistance,'' 
he/she is likely to need staff-assisted services. The Department 
intends to address this in future guidance.
    Comments: One commenter asked who would administer the work test 
and eligibility assessments and to what degree are States required to 
assist UI claimants if they are a call center State. Another commenter 
asked whether the services provided in the WPRS and the RESEA programs 
would satisfy the requirements of Sec.  652.210.
    Department Response: With regard to using Wagner-Peyser Act 
resources to support the work test and eligibility assessments, the 
Department is consistent with the approach that existed under WIA, and 
will be continued under WIOA; this approach requires that States have 
the capacity to deliver these services as part of the Wagner-Peyser Act 
endorsement services program. It is also the Department's intent, 
however, to provide States with flexibility to leverage UI funds, 
Wagner-Peyser Act funds, and RESEA funds in States that operated RESEA 
programs for these purposes, and will clarify that flexibility in 
future guidance.
    Neither the RESEA program nor the WPRS program fully satisfies the 
requirement to provide reemployment services and other activities to UC 
claimants. The RESEA program is a relatively small temporary program 
that serves currently only a small percentage of UI claimants and is 
not operational in

[[Page 56267]]

all States. The WPRS program is similarly small in scope. This will be 
clarified in future guidance from the Department.
Section 652.211 What are State planning requirements under the Wagner-
Peyser Act?
    The Department received only supportive comments on this section, 
so no changes were made to the regulatory text.
    Section 652.215 Do any provisions in the Workforce Innovation and 
Opportunity Act change the requirement that State merit staff employees 
must deliver services provided under the Wagner-Peyser Act?
    Comments: Several commenters requested that the Department continue 
to allow the exemptions for Massachusetts, Colorado, and Michigan from 
the merit-based staffing requirements under sec. 3(a) of the Wagner-
Peyser Act that the Secretary of Labor granted prior to WIA. According 
to some of these commenters, because the exemptions pre-date WIA, WIOA 
does not specifically address or rescind the merit staff exemptions 
granted under the Wagner-Peyser Act, and the Department's WIOA NPRM was 
silent on the status of the exemptions, the existing State merit staff 
exemptions for the demonstration sites remain in full effect. Some 
commenters discussed how their one-stop operators chartered under the 
existing exemption are performing well and have met or exceeded 
performance standards.
    One commenter said that in some of the Massachusetts local areas, 
Wagner-Peyser Act services are provided by State employees (employed by 
the State university) and that the State university meets all the 
requirements of merit staff, although it is not part of the SWA. This 
commenter recommended that the Department allow any State employees 
currently providing Wagner-Peyser Act services whose employing agency 
meets the definition of merit staff (5 CFR part 900) to be able to 
continue providing those services. According to this commenter, 
allowing these employees to continue providing Wagner-Peyser Act 
services would meet all of the objectives associated with the 
Department's State merit staffing requirement.
    Two commenters cited a Department comparative evaluation of the 
three merit staff exemption States that they asserted did not conclude 
that alternative delivery was improved, and suggested that, if one of 
the three demonstration States ceases using non-State government staff, 
the temporary demonstration authority should lapse and not be further 
authorized by the Department.
    Several other commenters indicated that Sec.  652.215 should re-
affirm that no additional demonstrations of alternative delivery of 
Wagner-Peyser Act services by non-State government employees should be 
authorized. Another commenter requested that Sec.  652.215 specify 
whether additional demonstrations would be authorized.
    Some commenters urged the Department to remove the State merit 
staffing requirement from the Final Rule or, at a minimum, allow for a 
waiver whereby States can apply to ``opt out'' of the requirement. 
These commenters stated that given that the ``core services'' under 
WIA, the ``career services'' under WIOA and the ``employment services'' 
under the Wagner-Peyser Act are essentially the same services, there no 
policy or economic rationale for maintaining a State merit staff 
requirement in the ES program while city, county, and non-governmental 
employees simultaneously provide the same services in the WIOA 
programs. According to these commenters, the Michigan v. Herman court 
ruling (81 F. Supp. 2nd 840 (W.D. Mich. 1998)) established that 
continuing or eliminating the merit staffing policy was at the 
discretion of the Department, meaning that the Department could modify 
or eliminate the merit staffing policy simply by changing its 
regulations.
    Department Response: The Department acknowledges the varying 
concerns and points of view regarding the State merit staffing 
requirement. The benefits of merit staffing in promoting greater 
consistency, efficiency, accountability, and transparency have been 
well established, and the Department intends to continue Wagner-Peyser 
Act merit staffing requirements under WIOA. To further clarify the 
merit staffing requirement, the Department, as noted above, has 
replaced the preamble language that was duplicated inadvertently in the 
NPRM with the WIA regulatory text of Sec.  652.215, which is not 
different substantively from the preamble description in the NPRM. The 
only change in the regulatory text from that used in that section of 
WIA is that in place of the original last sentence from WIA regulations 
at Sec.  652.215, the Department has revised the last sentence to read: 
``No additional exemptions, other than the ones previously authorized 
under the Wagner-Peyser Act as amended by WIA, will be authorized.'' 
The Department does not consider this a substantive change from the 
language in the WIA version of Sec.  652.215 since the last sentence in 
the WIA regulations at Sec.  652.215 was that ``No additional 
demonstrations will be authorized.''
Section 652.216 May the one-stop operator provide guidance to State 
merit staff employees in accordance with the Wagner-Peyser Act?
    Comments: In response to the Department's request for comments 
about whether any other changes are needed to allow one-stop operators 
to ensure the efficient and effective operations of the one-stop 
center, some commenters urged that the purview of one-stop operators 
over ES staff should not be expanded because it would undermine the 
impartial and unbiased delivery of public labor exchange services to 
job seekers and employers throughout the State. Some of these 
commenters stated that just as UI staff members located in one-stop 
centers are not under the authority of non-State government management, 
so too should ES staff not be under the authority of private entity 
one-stop operators. These commenters reasoned that undue influence or 
pressure by non-State government operators could adversely affect the 
integrity of the labor exchange process and undermine the integrity of 
work test activities that are mandated under the Wagner-Peyser Act.
    Some commenters expressed concerns that a mandatory competitive 
process for choosing operators would increase the chance for private 
entities as operators overstepping their span of control over State 
agency staff from guidance to operational direction for ES programs. 
These commenters urged the Department to make clear in the regulations 
that the role of operators should not be management of other entity 
program staff and especially of processes operated by State merit 
staff.
    Some commenters expressed support for this proposed section.
    Department Response: The Department clarifies that the regulations 
for this section did not expand the purview of one-stop operators over 
State merit staff. These regulations are unchanged from before WIOA, 
with the exception of an added reference to Sec.  678.500 (see Joint 
WIOA Final Rule), which provides the requirements for the local MOU.
    Regarding concern about the competitive process for choosing 
operators and its impact on guidance to and oversight of State merit 
staff, the Department reiterates that one-stop operators only may 
provide State merit staff employees guidance that is programmatic in 
nature regarding the provision of labor exchange services,

[[Page 56268]]

and such guidance must be consistent with the Wagner-Peyser Act, local 
MOU, and collective bargaining agreements. All personnel matters remain 
under the authority of the State agency. No changes were made to the 
regulatory text in this section.
6. Subpart D--Workforce and Labor Market Information
Overarching Comments on Part 652, Subpart D
    Comments: In the event wage record reporting requirements are 
changed, one commenter emphasized the importance of a strong 
educational effort tailored towards State agencies and employers on new 
data elements and adapting data systems.
    Department Response: The Department agrees with the need to provide 
extensive education with regard to accessing wage record data and is 
issuing guidance on this issue, and will provide necessary technical 
assistance.
    Comments: One commenter asked for clarification regarding the 
Workforce Information Advisory Council's (WIAC) role under WIOA, 
including whether the Council is involved in developing State Plans or 
whether it is an independent activity.
    Department Response: The WIAC will provide input and 
recommendations regarding Unified and Combined State Plans, but it will 
not be involved in developing them.
    Comments: One commenter asked about the references to work with 
other ``Federal agencies'' in Sec. Sec.  652.300 and 652.302; in 
particular, to which agencies does this term refer and how will this 
partnership be tied to the Federal WIOA process (if at all)?
    Department Response: The Department has determined it is not 
necessary to list the Federal and State agencies that participate in 
the WLMIS, because it is inadvisable to create a list that may change 
over time based on changes in agency data collection and data sharing 
policies and procedures.
    Comments: One commenter suggested that one area needing additional 
work is comparing real-time LMI data with State and local area job 
vacancy surveys to better understand labor market operations. This 
commenter urged that Federal support must be continued at adequate 
levels for key infrastructure groups, such as Analyst Resource Center 
(ARC), Local Employment and Wage Information Systems (LEWIS), and 
Projections Managing Partnership (PMP). Another commenter urged the 
Department to require that improvements to the WLMIS include a more 
effective and more widely used national job advertising system that 
allows employers to quickly and easily post job openings to any and all 
one-stop centers located in regions from which they would hire.
    Department Response: The Department also acknowledges the 
commenter's concern regarding adequate Federal funding; however, 
funding levels are determined by Congress and cannot be resolved 
through this regulatory process.
    The WLMIS already includes or directs employers and job seekers to 
some job-posting tools, such as the National Labor Exchange (NLX), 
which allows employers to request that their job openings be posted 
nationwide.
    Comments: One commenter recommended that UI records be available to 
NFJP grantees.
    Department Response: The Department is reviewing the needs for wage 
record access by a wide array of public workforce system grantees and 
is working with States on mechanisms to provide aggregate performance 
data, including through systems designed to facilitate data sharing of 
wage record information.
Section 652.300 What role does the Secretary of Labor have concerning 
the Workforce and Labor Market Information System?
    Comments: Expressing concerns about the inability to confirm job 
matches in neighboring States, one commenter stated that accuracy on 
WIOA performance indicators would be greatly improved if the Department 
encouraged and supported sharing of UI data across State lines. This 
commenter encouraged a Department-led initiative for data exchange in 
multi-State economic and workforce regions. Similarly, a commenter 
encouraged the Department to facilitate a timely process for Wage 
Record Interchange System (WRIS) renegotiation to allow States to more 
easily exchange wage records across State lines and improve overall 
performance. The letter also urged the Departments of Labor and 
Education to issue joint guidance on how to match administrative data 
from education, training, and wage systems while maintaining important 
privacy protections, such as those provided under the Family 
Educational Rights and Privacy Act (FERPA) and UI confidentiality 
regulations.
    Department Response: The Department is working with States on 
improved mechanisms to provide wage data through systems designed to 
facilitate data sharing of wage record information. The Department also 
is exploring the feasibility of providing cross-State data to enable 
States to produce better labor market information, such as labor shed 
analysis in regions that cross State borders.
    The Departments of Labor and Education are issuing joint guidance 
with regard to use of wage data for performance in the context of the 
confidentiality requirements for the use UI wage record data and 
education data under FERPA.
    Comments: One commenter expressed support for the proposed language 
at Sec.  652.300 that codified the WLMI requirements in WIOA and 
created a platform for their implementation. Regarding the codification 
of the Secretary's duties related to ``continuous improvement'' of the 
WLMIS, a commenter stated that there is no clear definition of 
``continuous improvement'' and asked how the Secretary will determine 
what is considered an improvement and how much funding will be made 
available to provide measurable improvement of local area LMI. Another 
commenter similarly stated the importance that adequate funding be 
maintained for LMI programs to produce the information required to 
support WIOA under part 652, subpart D.
    Department Response: The Department understands the importance of 
identifying what is considered ``continuous improvement'' as it 
pertains to the WLMIS. As a result, Sec.  652.300(a) has been updated 
to reflect that, ``The Secretary will consult with the Workforce 
Information Advisory Council on these matters and consider the 
council's recommendations.'' This regulatory text contemplates using 
the WIAC consultation process to inform the continuous improvement of 
the WLMIS. The Department also acknowledges the comments regarding 
funding; however, funding levels are determined by Congress and cannot 
be resolved through this regulatory process.
    Comments: A commenter suggested that, in Sec.  652.300(b), the 
Department add a reference to or text from 29 U.S.C. 49l-2(c) 
concerning the Secretary's responsibility to prepare a 2-year plan for 
the WLMIS.
    Department Response: The Final Rule has been updated to reflect 
this responsibility, adding the following language: ``Prepare a 2-year 
plan for the workforce and labor market information system, as 
described in the Wagner-Peyser Act sec. 15(c), as amended by WIOA sec. 
308(d).''

[[Page 56269]]

Section 652.301 What are wage records for purposes of the Wagner-Peyser 
Act?
    Comments: In objecting to the proposed changes in the wage record 
confidentiality provisions at 20 CFR part 603, a couple of commenters 
explained that providing wage records to educational entities creates 
too many opportunities for mistaken use or misuse of UI confidential 
information to be of benefit to the State's need for efficiency and 
integrity in performance reporting. These commenters asserted that the 
inclusion of the Federal Employer Identification Number (FEIN) and 
availability of employer name and address only creates the opportunity 
for training providers to misuse that information as part of direct 
marketing campaigns. These commenters asserted that FEIN data elements 
are not essential to the calculation of common measures, because a 
unique identifier for each employer could be a State UI account number 
instead. Moreover, these commenters suggested that the only reason to 
include a FEIN as part of a State wage record definition is the 
capacity to integrate wage records into a national database.
    Department Response: The Department is committed to ensuring the 
confidentiality of UI wage data. The regulations in 20 CFR part 603 
establish the permissible disclosures and allowable uses of the data 
and include non-disclosure requirements. These requirements must be 
embedded in the MOU between the State agency that collects wage record 
data and the entity that receives the data in accordance with the 
regulation. The Department notes that many public educational 
institutions were already able to access wage record data and, 
therefore, does not consider the more explicit identification of public 
institutions of higher education as a ``public official'' to be a 
significant expansion of entities that are permitted to receive the 
data.
    With regard to the concern for the use of the FEIN, the commenter 
is correct that the FEIN is not necessary for performance purposes; it 
has the potential to be valuable in the context of creating labor 
market information. No changes were made to the regulatory text in 
response to these comments.
Section 652.302 How do the Secretary of Labor's responsibilities 
described in this part apply to State wage records?
Standardizing Definitions of Wage Information Elements
    Comments: Commenting that standard definitions would help wage 
records be more consistent across States, a few commenters expressed 
support for the proposed language at Sec.  652.302 that directs the 
Department, in consultation with other Federal agencies, States, and 
the Workforce Information Advisory Council, to develop standard 
definitions for wage records and help improve their collection and 
reporting. A commenter stated that standard definitions are the most 
critical potential contribution of any Federal regulations, both from 
the perspective of employers (for whom diverse definitions create 
complexity in recordkeeping systems) and for the national LMI system, 
which also faces complexity and uncertainty if core elements are 
defined differently by States. Some commenters noted the difficulty of 
standardizing definitions, emphasizing the need for substantial and 
ongoing outreach, guidance, training, and audit support for employers 
to implement them correctly.
    This commenter also discussed how enhancement of wage records could 
involve considerable costs to update the systems, while one other 
commenter indicated that there could be efficiencies, costs savings, 
and reduction in reporting burden if systems used by States were 
standardized, rather than needing to contain customized elements for 
each State. Another commenter added that standard definitions would 
require changes to Federal law and/or regulations, which would likely 
necessitate changes to State laws and/or regulations.
    Several commenters expressed contrasting views on the workload 
burden of wage record changes on both State workforce agencies and 
employers, some saying it would reduce the burden and others saying it 
would increase it and also inquiring on the source of funds for the 
costs incurred to make such changes.
    Department Response: The Department acknowledges the positive 
comments concerning standardization of data definitions for wage record 
data and improved process for collection of the data. The Department 
notes that moving to standardized definitions and new reporting 
requirements for wage record data will involve some burden on 
employers, payroll associations and other third-party administrators, 
and States, and it will also require resources to support it. 
Therefore, the Department is committed to approaching this effort in a 
highly inclusive and consultative manner that recognizes the realities 
of the changes that will need to be made by all the impacted 
stakeholders and the resources required to accomplish the change. The 
Workforce Information Advisory Council's work may also help inform this 
effort. Noting that there are significant benefits to achieving 
standardization of data definitions and reporting processes, the 
Department made no changes to regulatory text in response to these 
comments.
New Wage Information Data Elements
    Comments: While acknowledging the potential benefits of receiving 
additional information through the wage record reporting process, some 
commenters urged the Department to consider the costs and potential 
burden of any change to wage record reporting for both employers and 
State agencies. These commenters and others suggested that increased 
data elements could result in missing or inaccurate data resulting in 
costs for State agencies to follow-up on rejected wage reports.
    When considering additional data elements, one commenter cautioned 
that the Department should examine whether certain data are already 
being provided in some other format (e.g., new hire reporting) such 
that requiring as part of quarterly wage records could create 
duplicative reporting requirements.
    Two commenters expressed concerns that more onerous reporting 
requirements would decrease timely filing compliance that could make it 
more difficult to set up timely and accurate initial monetary 
determinations, which could lead to an increase in improper payments.
    One commenter asked for clarification regarding whether new data 
that might be added to wage record reports would be governed by 
different confidentiality standards (other than 20 CFR part 603).
    Another commenter urged the Department to include all impacted 
stakeholders in the review of the costs and benefits of enhancing wage 
records. Similarly, one commenter encouraged the Department to seek 
employer input on any changes to the wage records process and to add 
employers to the list of stakeholders with which the Secretary is 
required to consult included in Sec.  652.302(b).
    Department Response: The language in the preamble of the NPRM with 
regard to the potential for adding data elements to wage records simply 
signaled the Department's intent to continue exploration of adding new 
data elements to wage records to support improved labor market 
information. It acknowledged the need for continued work with the 
Workforce Information Advisory Council and consultation with the full 
range of stakeholders. There also was an acknowledgement that to 
implement a requirement for new data elements would require 
legislation.

[[Page 56270]]

There is no regulatory text on this issue; therefore, a change is not 
necessary.
Section 652.303 How do the requirements of part 603 of this chapter 
apply to wage records?
    The Department received only supportive comments on this section. 
No changes were made to the regulatory text in this section.

O. Part 653--Services of the Wagner-Peyser Act Employment Service

    In subparts B and F, the Department is implementing the WIOA title 
III amendments to the Wagner-Peyser Act, as well as streamlining and 
updating certain sections to eliminate duplicative and obsolete 
provisions. The Department is also updating the regulations to maintain 
consistency with the Judge Richey Court Order (``Richey Order''), NAACP 
v. Brennan, 1974 WL 229, at *7, as it pertains to services to migrant 
and seasonal farmworkers.
1. Subpart B--Services for Migrant and Seasonal Farmworkers
Section 653.102 Job Information
    The Department made several changes to Sec.  653.102, including a 
requirement that State Workforce Agencies (SWAs) make job order 
information conspicuous and available to migrant and seasonal 
farmworkers (MSFWs) ``. . . by all reasonable means'' rather than ``in 
all local offices'' to reflect the obligation of State agencies to 
contact MSFWs who are not being reached by the normal intake activities 
including at their working, living, or gathering areas to explain the 
services available at the local one-stop center.
    Comments: One commenter suggested the Department add a bulleted 
list to provide clarification on what is meant by ``all reasonable 
means.''
    Department Response: In order to maintain flexibility for the 
Department and SWAs to continue to serve MSFWs, the Department will 
provide guidance on what is meant by making job order information 
conspicuous and available by ``all reasonable means.'' No changes were 
made to the regulatory text in response to this comment.
Section 653.103 Process for Migrant and Seasonal Farmworkers To 
Participate in Workforce Development Activities
    Comments: One commenter asked for clarification regarding the Sec.  
653.103(b) requirement for SWAs to ensure MSFWs who are English 
Language Learners (ELLs) receive, free of charge, language assistance 
necessary to afford them meaningful access to the programs, services, 
and information offered by one-stop centers. Specifically, this 
commenter asked whether this would require access to interpreters or 
that an interpretive language phone line should be made available.
    Department Response: SWAs must satisfy this requirement by making 
interpretive language phone lines available and free of charge to the 
individual who needs or requests such services. See Executive Order 
13166 (``Improving Access to Services for Persons with Limited English 
Proficiency'') and TEGL No. 26-02 (``Publication of Revised Guidance 
Regarding the Title VI Prohibition Against National Origin 
Discrimination Affecting Limited English Proficient (LEP) Persons'') 
for further guidance.
Section 653.107 Outreach and Agricultural Outreach Plan
    Comments: One commenter urged the Department to ensure all State 
Monitor Advocate (SMA) and outreach staff full-time equivalent (FTE) 
efforts are exclusively dedicated to MSFW services as detailed in the 
Agricultural Outreach Plan (AOP). To ensure MSFWs receive dedicated 
staff effort and the corresponding benefits, this commenter suggested 
requiring States to track personnel time via payroll timesheets and 
report that time to the Department to compare actual MSFW time with the 
FTE specified in the AOP.
    Department Response: The regulations at Sec.  653.108(d) provide 
that the SMA must work full-time on monitor advocate functions. It 
further requires that any State that proposes less than full-time staff 
dedication, demonstrate to its Regional Administrator that the SMA 
function can be effectively fulfilled with part-time staffing. As such, 
Sec.  653.108(a) explains ``The State Administrator has overall 
responsibility for State Workforce Agency self-monitoring.'' Such 
regulations are meant to ensure the SMA is devoted to all appropriate 
activities on a full-time basis. Furthermore, the regulations at Sec.  
653.107(a)(4) require that the 20 States with the highest estimated 
year-round MSFW activity to assign full-time, year-round staff to 
conduct outreach duties. The assignment of staff must be made in 
accordance with State merit staff requirements. The Secretary will 
identify the 20 States with the highest estimated year-round MSFW 
activity in guidance. These same regulations require the remainder of 
the States to hire year-round part-time outreach staff and, during 
periods of the highest MSFW activity, to hire full-time outreach staff. 
The Department does not deem it necessary for a SWA to track dedicated 
MSFW personnel time via payroll timesheets and report that time to the 
Department. In light of the State Administrator's requirement for self-
monitoring, however, if an individual knows the State Administrator is 
not requiring these provisions, and a formal variance has not been 
granted for SMA part-time status, the individual must inform the 
Regional Administrator and the Regional Monitor Advocate (RMA) for 
appropriate action.
    Furthermore, the provision of employment and training services to 
MSFWs is the responsibility of the SWA through its local one-stop 
centers, and is not exclusively the responsibility of the SMA or the 
outreach workers. This is made explicit through the mandates of the 
Richey Order, where it states, ``The Federal and State monitoring 
system reviews on a continuous basis the services provided to MSFWs, as 
well as the benefits and protections to MSFWs, the functioning of the 
Complaint System, and the compliance of State ES offices with all 
applicable laws, regulations, and directives.''
Section 653.107(a) State Workforce Agency Outreach Responsibilities
    Comments: Several commenters supported the incorporation of the 
Richey Order language to ``employ an adequate number of outreach 
workers'' into Sec.  653.107(a)(1). Although the language in proposed 
Sec.  653.107(a)(1) and (4) articulates an expectation for the SWA to 
assign outreach staff, other commenters expressed concern that the 
language does not provide a threshold, which these commenters explain 
could allow SWAs the ability to reduce staffing levels below one MSFW 
outreach FTE per significant MSFW office due to reduced availability of 
resources. For this reason, the commenters requested the Department 
provide clarification on what is meant by the term ``adequate.''
    Department Response: The Department interprets the term, 
``adequate'' to mean a sufficient number of staff who must locate and 
contact MSFWs who are not being reached by the normal intake activities 
conducted by the ES offices. The Department does not intend the term 
``adequate'' to mean that a SWA should reduce the number of outreach 
workers hired--if anything, a SWA may need to bring more outreach 
workers on board to meet the needs of MSFWs in the State or work 
collaboratively with partners (pursuant to collaborative agreements) to 
ensure satisfactory outreach activities are satisfied. The Department 
acknowledges that each State allocates Wagner-Peyser

[[Page 56271]]

Act funds in accordance with its respective needs in serving MSFWs. No 
change was made to regulatory text in response to these comments.
    Comments: One commenter asked whether the provision to hire an 
adequate number of outreach workers means that all States, no matter 
what their MSFW population, must have outreach workers. This commenter 
asserted that this would be difficult in a State where MSFW activity is 
low and concentrated for a short duration of time in one area of the 
State, but then is spread out in isolated remote areas far from each 
other. Stating that interns make good outreach workers, this commenter 
asked if interns could meet the criteria for hiring adequate outreach 
workers.
    Another commenter requested clarification regarding appropriate 
funding for year-round part-time staff and specifically whether Wagner-
Peyser Act funds would pay for it under career services. This commenter 
also asked that the Department allow non-top 20 States to use 
discretion as to what times of year in their regions would be 
appropriate to hire outreach workers, if at all.
    Department Response: All States (significant and non-significant) 
are required to hire outreach workers to locate and contact MSFWs who 
are not being reached by the normal intake activities conducted by the 
ES offices. Each non-significant State must determine, through fact-
based research, which time of year hosts the peak number of MSFWs, and 
the State must hire full-time outreach staff during such periods. 
Wagner-Peyser Act funds must be used to hire such outreach workers. 
Correspondingly, the Department notes Sec.  653.107(a)(3), outlines the 
provisions for hiring outreach workers. Under these provisions, the 
SWAs must seek to hire qualified outreach workers through merit system 
procedures. Because interns are almost never hired according to merit 
system procedures, hiring interns would generally not meet the criteria 
of hiring adequate outreach workers.
    Comments: One commenter recommended revising the first sentence of 
Sec.  653.107(a)(1) to read, ``Each State agency must employ an 
adequate number of outreach workers to conduct MSFW outreach in their 
service area local ES offices that serve a significant number of 
MSFWs.'' This commenter reasoned the Richey Order mandated State 
agencies employ an adequate number of staff and assign them to ES 
offices that serve a significant number of MSFW workers.
    Department Response: The Department has determined the language at 
Sec.  653.107(a)(1) requiring each SWA to employ an adequate number of 
outreach workers to conduct outreach in its service areas is sufficient 
and does not need further clarification. As required in the Richey 
Order, it is the Department's responsibility to deliver to MSFWs on a 
non-discriminatory basis all services, benefits, and protections 
authorized by law and required by Department regulations, to extend 
coverage of local job order information to rural areas, and to provide 
MSFWs with assistance to enable them to use such information on a non-
discriminatory basis.
    Comments: Numerous commenters expressed support for the Sec.  
653.107(a)(1) language that SWA Administrators must ensure SMAs and 
outreach workers coordinate their outreach efforts with WIOA sec. 167 
(NFJP) grantees, public and private community service agencies, and 
MSFW groups. One of these commenters asserted that currently 
coordination is inconsistent and varies widely.
    Department Response: The Department agrees that outreach workers' 
coordination with NFJP grantees is essential and that requirement is 
maintained in Sec.  653.107(a)(1). The Department has also changed the 
word ``should'' to ``must'' in Sec.  653.107(a)(2)(i) and (ii), to 
clarify that these aspects of SWAs' outreach efforts are required.
    Comments: One commenter noted the text at proposed Sec.  
653.107(a)(3) appeared to be missing part of the last sentence 
(paragraph (a)(3)(iii)) because it dropped off with the word ``and'' 
following paragraphs (a)(3)(i) and (ii). This commenter asked if the 
intent was to remove the optional qualification of being racially or 
ethnically representative of the MSFWs in the service area and 
recommended that the Department maintain the ``and/or'' in the current 
regulatory language so that an outreach worker does not have to be both 
from an MSFW background and bilingual.
    Department Response: Text in Sec.  653.107(a)(3)(iii) was 
accidentally omitted from the NPRM. The text should read, ``Who are 
racially or ethnically representative of the MSFWs in the service 
area.'' The Department has included this language (which is taken 
verbatim from the existing regulation and has not been altered) in the 
Final Rule. Additionally, the Department concurs with the commenters' 
recommendation to maintain ``and/or'' to allow for hiring outreach 
workers who may have one or more of the required characteristics but 
are not required to have all three. The regulatory text reflects these 
changes.
    Comments: One commenter stated proposed Sec.  653.107(a)(4) would 
strengthen the obligation of SWAs to hire dedicated MSFW outreach staff 
in part by eliminating the ability of a Regional Administrator to 
permit a SWA to deviate from this outreach-staffing obligation. In 
contrast, a different commenter objected to the proposed changes in 
this provision, stating States have limited resources and hiring 
outreach workers is no guarantee the State will achieve the goal 
discussed in the preamble to ``ensure that States have a means to 
contact MSFWs who are not being reached by the normal intake activities 
conducted by the local ES offices.'' Because States are required to 
submit outreach plans annually, this commenter suggested that it should 
be sufficient to meet the intent of WIOA if the State submits an 
acceptable plan for providing the needed services given its particular 
circumstances and conditions, without the need to hire additional 
workers for this purpose.
    Department Response: Section 653.107(a)(4) states that a SWA may 
not need to hire additional outreach workers if it is already meeting 
the needs of MSFWs in the State. Additionally, the Department does not 
consider the AOP to ``be sufficient to meet the intent of WIOA.'' As is 
described at Sec.  653.107(d)(2)(iii), the AOP requires a SWA to, 
``Describe the State Workforce Agency's proposed outreach activities 
including strategies on how to contact MSFWs who are not being reached 
by the normal intake activities conducted by the ES offices'' and--as 
stated at Sec.  653.107(d)(2)(iv)--to, ``[d]escribe the activities 
planned for providing the full range of employment and training 
services to the agricultural community, both MSFWs and agricultural 
employers, through the one-stop centers.'' Such activities are 
anticipated activities/plans. The mechanism in place to ensure a State 
is meeting its outreach goals is self-monitoring and periodic reviews 
conducted by State, Regional, and the National Monitor Advocate, as 
discussed in Sec.  653.108.
    Section 653.107(a)(5) provides a requirement that a SWA must 
publicize the availability of ES ``through such means as newspaper and 
electronic media publicity,'' and one commenter recommended the 
Department add ``social media'' as another way to publicize because it 
is the widest possible method to distribute information. Another 
commenter asked

[[Page 56272]]

whether it could use Wagner-Peyser Act funds to publicize the 
availability of ES.
    Department Response: The Department considers social media to be 
included in electronic media. The Department plans to issue guidance on 
publicizing employment services and appropriate funding sources.
    Comments: Regarding proposed Sec.  653.107(a)(3), one commenter 
recommended that outreach staff qualifications include bilingual staff 
to serve monolingual farmworkers, staff to concentrate in rural 
agricultural areas, and to carry additional marketing/promotional 
materials to attract farmworkers to the job centers.
    Department Response: The Department notes that Sec.  653.107(a)(3) 
requires SWAs to hire and assign staff through merit system procedures, 
who are either: from MSFW backgrounds and/or speak a language common 
among MSFWs in the State and/or are racially or ethnically 
representative of the MSFWs in the service area. Additionally, Sec.  
653.107(a)(4) states, ``All outreach staff must be multilingual if 
warranted by the characteristics of the MSFW population in the State, 
and must spend a majority of their time in the field.'' The Department 
also notes it will offer suggestions for outreach worker materials to 
provide MSFWs via technical assistance. No changes have been made in 
regulatory text in response to this comment.
    Comments: In Sec.  653.107(a)(4), commenters recommended the 
Department implement a minimum threshold of at least 50 percent MSFW 
outreach staff total hours that they must spend at places where MSFWs 
live, work, and congregate (outside of the outreach staff's local 
office). Stating that this is particularly important in the top 20 
States with the highest estimated year-round MSFW activity, these 
commenters reasoned that due to strained resources, local managers 
increasingly rely on MSFW outreach staff to backfill for other 
positions that may reduce MSFW outreach staff's ability to reach MSFWs 
effectively.
    Department Response: The Department notes the requirement at Sec.  
653.107(a)(4) whereby, ``The 20 States with the highest estimated year-
round MSFW activity, as identified in guidance issued by the Secretary, 
must assign, in accordance with State merit staff requirements, full-
time, year-round staff to conduct outreach duties.'' Outreach duties 
mean those duties identified at Sec.  653.107(b) and include traveling 
to locations where MSFWs congregate, as well as conducting follow-up 
activities. This means outreach workers will need to conduct outreach 
activities at the areas where MSFWs live, work, and congregate, as well 
as from the local ES office. When outreach workers are hired as full-
time, year-round staff, they must dedicate all such time to outreach 
activities described at Sec.  653.107(b). Outreach workers in States 
which are not classified as the top 20 significant States, who are 
hired as year round part-time outreach workers, may dedicate part of 
their time to other activities as required by the ES office so long as 
they are satisfying their outreach activities pursuant to Sec.  
653.107(b) on a part-time basis. No changes were made to regulatory 
text in response to these comments.
Section 653.107(b) Outreach Worker's Responsibilities
    Comments: Many commenters expressed support for the inclusion of 
training on sexual harassment in Sec.  653.107(b)(7). These commenters 
also suggested the Department consider expanding this provision to 
include similar language about human sexual coercion, assault, and 
human trafficking. One commenter recommended the Department include a 
provision requiring outreach workers provide MSFWs affected by sexual 
harassment with information about the full range of services available 
to them in the community, including sexual assault services, the U.S. 
Equal Employment Opportunity Commission (EEOC), law enforcement, and 
legal services. This commenter also suggested the regulatory text 
require outreach workers who become aware of possible sexual harassment 
to refer the information to the EEOC or other appropriate enforcement 
agency.
    Department Response: The Department agrees that in addition to 
training outreach workers on how to identify and refer possible 
incidents of sexual harassment, training on similar issues such as 
sexual coercion, assault, and human trafficking is also key in helping 
to connect victims with appropriate resources and support networks. The 
Department has added such language to the regulatory text at Sec.  
653.107(b)(7). Regarding the suggestion for the Department to require 
outreach workers who become aware of possible violations to refer the 
information to the appropriate enforcement agencies, the Department 
notes that outreach workers' referral responsibilities are discussed at 
Sec.  653.107(b)(6).
    Comments: Two commenters objected to the NPRM's deletion of the 
requirement that ``significant MSFW local offices should conduct 
especially vigorous outreach in their service areas,'' expressing 
concern that without the word ``vigorous'' some State agency employees 
might interpret this as not being a priority or a requirement.
    Department Response: The Department's intention is not to signal a 
reduction in the required intensity of outreach activities because all 
outreach efforts must be vigorous. However, because commenters suggest 
the omission could be interpreted to make such a statement, the 
Department has decided to include the paragraph in the Final Rule text 
at Sec.  653.107(b)(11).
    Comments: One commenter suggested the requirement that outreach 
workers must explain to MSFWs information on other organizations 
serving MSFWs in their area (Sec.  653.107(b)(1)(iii)), and the 
regulatory text should include ``information on other organizations 
serving MSFWs in their intended area of employment or permanent home.''
    Department Response: The Department agrees that such information 
should be provided when requested. Such information may be provided as 
a follow-up activity with an MSFW who has requested it. No change was 
made to the regulatory text in response to this comment.
    Comments: One commenter stated the proposed Sec.  653.107(b)(2) 
prohibition on outreach workers entering an employer's property or work 
area without permission of the employer, owner, or farm labor 
contractor should be reviewed. The commenter explained that outreach 
workers can enter workers' living quarters if they are doing an 
inspection for H-2A employers as part of the field inspection prior to 
50 percent of the contract with the employer.
    Department Response: The Department notes that SWA staff may enter 
MSFW working and housing areas during a field check pursuant to Sec.  
653.503. Furthermore, Sec.  653.503(a) requires the SWA to notify an 
employer in writing of such field checks.
    Comments: Also related to outreach worker access to employer sites, 
one commenter recommended the Department revise Sec.  653.107(b)(2) to 
secure access rights of SWA outreach workers and to provide for a 
reasonable right of access for nonprofit organization outreach workers 
at employer-owned or employer-controlled housing. This commenter 
explained that the limitations on workers' right of access to conduct 
outreach proposed in the NPRM are more onerous than the 1980 
regulations because the proposed language would expand the limitation 
from entering ``work areas'' to ``an employer's property,'' which this

[[Page 56273]]

commenter stated would commonly include employer-controlled MSFW 
housing. The commenter concluded the Department offered no rationale 
for this substantial revision of the outreach worker access regulation 
in the NPRM, explaining that entry by outreach personnel onto employer 
property that is not a work area, such as MSFW housing and gathering 
areas, does not implicate the considerations that justify obtaining 
permission to enter work areas. The commenter proposed several reasons 
to support the need for expanded outreach worker right of access, 
including the following:
     Farmworkers in employer-controlled housing are uniquely 
vulnerable to exploitation and abuse.
     The law is unclear on the right of access by service 
providers
     Employers impede outreach workers' access to MSFWs, 
including via threats of violence, threats of arrest and prosecution 
and arrest.
     Ensuring nonprofit health, education, social, and legal 
service providers the right of access to MSFWs would directly further 
the central purposes of the Wagner-Peyser Act and WIOA.
    In addition, based on the Department's justification of requiring 
``permission of the employer, owner, or farm labor contractor,'' the 
commenter suggested that the Department should add the phrase ``as 
applicable'' after the first use of the word ``without'' in Sec.  
653.107(b)(2). Incorporating all of its comments discussed immediately 
above, the commenter recommended specific language for Sec.  
653.107(b)(2), which it asserted appropriately balances the rights and 
responsibilities of employers, property owners, farm labor contractors, 
and SWAs.
    Department Response: The Department notes that SWA staff may access 
MSFWs at their working and living areas through field checks and site 
visits. However, the Department has determined it is beyond the scope 
of this regulation to secure ``reasonable'' access rights for nonprofit 
organization outreach workers to enter employer-owned or employer-
controlled housing. The Department additionally notes its intention was 
not to further limit outreach worker access to MSFWs; this was 
unintended. The Department has changed Sec.  653.107(b)(2) to use the 
original language as included in the existing regulation at 20 CFR 
653.107(j)(1)(v), except that the word ``shall'' is replaced with 
``must'' throughout.
    Comments: A commenter also urged the Department to clarify that, if 
a parcel of land or property serves as both a worksite/work area and 
housing for MSFWs, outreach personnel do not need to obtain permission 
from workers to enter the housing portion of such a parcel or property.
    Department Response: Section 653.107(b)(2) requires outreach 
workers to obtain permission from workers before entering their living 
area and that they must comply with appropriate State laws regarding 
access.
    Comments: In response to proposed Sec.  653.107(b)(8), one 
commenter recommended the Department allow for MSFW outreach records to 
be maintained or reproduced by the State's official data collection 
system to avoid duplication of data entry.
    Department Response: The Department has determined that State 
agencies may maintain and reproduce outreach records as they deem 
appropriate and in accordance with relevant records retention laws, 
since such laws vary by State.
Section 653.107(c) ES Office Outreach Responsibilities
    Comments: One commenter recommended the Department exempt non-
significant ES offices from the requirement to file with the SMA a 
monthly summary report of outreach efforts because they do not normally 
conduct outreach and the requirement would impose an unnecessary burden 
on those offices. Another commenter requested clarification on Sec.  
653.107(c) regarding whether all States must establish outreach 
programs, or that only those top 20 States with significant MSFW 
populations establish an outreach program and their local ES office 
managers must report on outreach activities to the SMA.
    Department Response: The Department will not provide an exemption 
for non-significant ES offices from submitting the monthly summary 
report because it is important for the SMA to know what efforts all ES 
offices are making to locate and contact MSFWs. However, the Department 
notes that summary reports must be submitted for months when outreach 
is conducted. The Department concluded that maintaining this 
requirement as proposed will not impose an unnecessary burden on 
offices any more than what was already required at 20 CFR 653.107(n).
Section 653.107(d) State Agricultural Outreach Plan (AOP)
    Comments: Several commenters urged the Department to incorporate 
language requiring SWAs consult with National Farmworker Jobs Program 
(NFJP) grantees or give NFJP grantees the opportunity to contribute to 
the AOP. One of these commenters stated that because these plans are 
far more important now, they should be treated with that significance. 
A commenter stated that the NFJP grantee community was required to 
review and comment on these plans under prior legislation.
    Department Response: The Department concurs with commenters that 
SWAs must consult NFJP grantees and that the grantees have the 
opportunity to contribute to AOPs. The Department has changed paragraph 
(d)(3) to incorporate the language in the existing regulation at 20 CFR 
653.107(d) back into the Final Rule. The Department made nonsubstantive 
updating changes to that language to make it consistent with the Final 
Rule. The Department also replaced the words ``Regional Administrator'' 
with ``the Department'' to be consistent with the new State Plan 
submission process described in 20 CFR part 676 (see Joint WIOA Final 
Rule). AOPs will now be submitted to the Department through a portal, 
along with the State Plans.
Section 653.108 State Workforce Agency and State Monitor Advocate 
Responsibilities
    Comments: Two commenters expressed support for the removal of the 
requirement for SMAs to work in the State central office.
    One commenter sought clarification on the Sec.  653.108(g)(1) 
requirement whereby the SMA must conduct an ``ongoing review'' of the 
delivery of services and protections afforded by ES regulations to 
MSFWs by the SWA and local ES offices. Further, this commenter asked 
whether this requirement would apply to every State or to the top 20 
designated States and whether the SMA must review each local ES office. 
Asking what ``ongoing review'' would specifically require, this 
commenter urged the Department to clarify which local offices must be 
reviewed annually, biannually, or less frequently.
    Department Response: All SMAs are required to conduct the duties 
set forth in Sec.  653.108--which apply to SMAs in both significant and 
non-significant States. This includes reviewing the data and reports 
submitted by local ES offices as they are submitted to the SWA. The 
Department further notes Sec.  653.108(g)(3), which requires that all 
SWAs, ``Ensure all significant MSFW one-stop centers not reviewed 
onsite by Federal staff, are reviewed at least once per year by State 
staff.'' Therefore, all significant offices must be reviewed at least 
one time per year if they are not reviewed by Federal staff.

[[Page 56274]]

    Comments: One commenter suggested the Department revise Sec.  
653.108(i) to require local ES office managers transmit copies of the 
entire Complaint System log, rather than transmitting only copies of 
logs of MSFW complaints to be consistent with Sec.  658.410 and because 
this information is required for reporting.
    Department Response: The Department supports the suggestion and has 
revised the regulatory text at Sec.  653.108(i) to require local ES 
office managers to transmit copies of the entire Complaint System log 
as required in Sec.  658.140. Such a change will maintain consistency, 
as proposed by the commenter.
    Comments: Regarding proposed Sec.  653.108(k) and (l), several 
commenters expressed support for strengthening of the relationship 
between SMAs and NJFP grantees and coordinating their service delivery. 
Some commenters suggested the Department provide guidelines for the 
Memorandum of Understanding (MOU), as well as additional guidance and 
training for SMAs and NFJP grantees on their respective relationships, 
roles, and responsibilities. One commenter recommended the creation of 
an evaluation tool or feedback mechanism for NFJP grantees and the SMA.
    Department Response: The Department will issue guidance for the 
Memorandum of Understanding (MOU) between the SMA and NFJP grantees and 
additional guidance and training for the SMA and NFJP grantees on their 
respective relationships, roles, and responsibilities.
    Additionally, paragraph (1) has been changed to clarify the 
requirement to establish an MOU. It now makes clear that an MOU must be 
established between the SMA and the NFJP grantees, and the SMA may 
establish an MOU with the other organizations serving farmworkers.
    Comments: Proposed Sec.  653.108(s) required that the SMA prepare 
an Annual Summary, and some commenters suggested the Department require 
the summary be provided to NFJP grantees along with any service-related 
findings because the guidelines for the Annual Summary includes 
instances where the SMA would be summarizing and commenting on NFJP 
service delivery both explicitly (Sec.  653.108(s)(7)) and implicitly 
where NFJP is part of the one-stop center and the broader ES system. 
Another commenter similarly recommended the Department require the SMA 
to make the Annual Summary available to grantees. The commenter also 
suggested the Department require the SMA to provide grantees a template 
of the report in advance to ensure grantees collect pertinent 
information throughout the program year. Another commenter asked if the 
Annual Summary for the MSFW program could be included in the annual 
performance report required under WIOA sec. 116(d).
    Department Response: While the Department fully supports increasing 
collaboration between the SMA and the NFJP grantees, it has determined 
that sharing the Annual Summary with the NFJP grantee is not required. 
Because some information contained in the Annual Summary may be for 
internal (State/Federal) government use only, the Department does not 
deem it in the best interest of the SWA to share such information. 
Regarding the suggestion for the Department to require the SMA to 
provide grantees a template of the Annual Summary in advance to ensure 
grantees collect pertinent information throughout the program year, the 
Department notes that such data collection may vary from State to State 
and may depend upon each State's MOU with the NFJP grantee. Therefore, 
the Department recommends each SMA come to an agreement with the NFJP 
grantee (through the MOU) about what data must be shared or collected. 
Additionally, the Department has determined the Annual Summary should 
not be submitted through the annual performance report process pursuant 
to WIOA sec. 116(d) because Sec.  653.108(s) procedures will expedite 
the review process for those who need to analyze the reports.
Section 653.109 Data Collection and Performance Accountability Measures
    Comments: A couple commenters recommended the Department revise the 
references to the pre-WIOA performance indicators. Another commenter 
noted that some of the proposed performance indicators in Sec.  653.109 
are not in line with the WIOA measures to track participants in 
unsubsidized employment in the second quarter after exit, participants 
in unsubsidized employment in the fourth quarter after exit, and median 
earnings. Therefore, this commenter recommended the Department bring 
those measures in line with WIOA to ensure consistency across all 
programs.
    Department Response: The Department agrees and has changed Sec.  
653.109(b)(5), (6) & (7) to be consistent with the WIOA performance 
indicators listed in sec. 116 of the law.
    The Department has also made a minor edit to Sec.  653.109(b)(9), 
to add data on ``apparent violations'' to the list of data the SWA must 
collect. This is consistent with the data collection that the SWAs 
already perform. Additionally, the Department has added reference to 
the data required to be collected by the Combined Plans to Sec.  
653.109(d). The regulatory text already referenced the Unified Plans, 
and this change aligns the paragraph with the requirements of sec. 103 
of WIOA.
Section 653.110 Disclosure of Data
    Comments: One commenter recommended the Department revise Sec.  
653.110 to clarify that data and records relating to employer 
participation in the job service are only confidential in limited 
circumstances and that these regulatory disclosure requirements preempt 
State laws that render the records and data privileged or confidential. 
This commenter raised a 2015 court decision, Texas RioGrande Legal Aid, 
Inc., et al. v. Range (TRLA case), in which the Fifth Circuit found 
that current Sec.  653.110 did not confer a specific right to obtain 
records, which was a rejection of the Departments of Labor and Justice 
position in the amicus brief the Departments filed in the case. Stating 
that the TRLA case gives the Department a clear road map of how it can 
remove all ambiguity from Sec.  653.110, the commenter made specific 
suggestions for revisions of the regulatory text.
    Department Response: Section 653.110 (a) states, ``SWAs must 
disclose to the public, on written request, in conformance with 
applicable State and Federal law, the data collected by SWAs and ES 
offices pursuant to Sec.  653.109'' and Sec.  653.109(f) requires SWAs 
to ``(s)ubmit additional reports to the Department as directed.'' These 
reports are considered records, and they, as well as additional reports 
submitted by the SWAs to the Department as directed by the Department, 
must be disclosed to the public pursuant to Sec.  653.109. In order to 
maintain flexibility as data collection evolves, the Department 
declines to specify specific required disclosures in this regulation. 
Additionally, the regulations at Sec.  653.110(d) allow the SWAs to 
withhold from public disclosure intra-agency memoranda and reports (or 
parts thereof) and memoranda and reports (or parts thereof) between the 
SWA and the ETA, to the extent that they contain statements of opinion 
rather than facts, provided the reason for withholding is given to the 
requestor in writing. The regulations also allow the State to withhold 
documents or parts thereof, which, if disclosed, would constitute an 
unwarranted invasion of personal or employer privacy, if the reason for 
withholding is given to the requestor in

[[Page 56275]]

writing. The Department concludes that records are implicitly included 
in Sec. Sec.  653.109 and 653.110.
    The Department will address each of the commenter's requests for 
revisions as bulleted below.
     Include explicit language conferring a public right to 
obtain the records included in Sec.  653.109. Department Response: The 
Department interprets the requirements for disclosure at Sec.  
653.110(a) to include those reports required at Sec.  653.109(f) and 
memoranda and reports referenced at Sec.  653.110(d).
     Revise Sec.  653.110(a) to include all ``records'' as well 
as all ``data,'' possibly including reference to a well-established 
definition of records such as the Freedom of Information Act's 
definition at 5 U.S.C. 552a(a)(4). Department Response: The Department 
does not deem it necessary to revise Sec.  653.110(a).
     Include a right to all records related to employer 
participation in the job service, rather than only the data 
specifically enumerated in Sec.  653.109. Alternatively, the Department 
could revise Sec.  653.109 to include a requirement that State agencies 
retain the records underlying the data that section already requires 
those agencies to keep. Department Response: The Department will not 
make these changes because it would not place such requirements in the 
regulations without first requesting public input.
     Add a provision in Sec.  653.110 that explicitly preempts 
States from enacting laws that would categorically render employer 
records identified in Sec.  653.109 undisclosable as privileged and 
confidential. Department Response: The Department cannot make this 
change because it is outside the scope of what was originally proposed 
in the NPRM.
     Remove the language ``or are otherwise privileged against 
disclosure'' in Sec.  653.110(d) that the Department proposed be added 
in the NPRM. The commenter stated that a court could construe this 
language to include State public records acts that render employer 
records privileged, confidential, or both. Department Response: The 
Department finds upon further reflection that the additional language 
has caused confusion and is unnecessary. The Department strikes the 
phrase from the Final Rule.
Section 653.111 State Workforce Agency Staffing Requirements
    Comments: One commenter suggested the requirement in proposed Sec.  
653.111(b) for the State agency to hire sufficient numbers of 
qualified, permanent, minority staff in significant MSFW ES offices 
should apply only to significant MSFW States or significant MSFW areas. 
Another commenter asked whether this provision would require State job 
postings to include specifically hiring of ``minorities'' from MSFW 
backgrounds.
    Department Response: The Department declines to change the 
regulatory text in response to this comment. Paragraph (b) of Sec.  
653.111 is not limited to significant MSFW States or areas; it applies 
to significant MSFW ES offices. Even in cases where a State or area is 
not deemed significant, there may yet be a significant number of MSFWs 
using or located near a significant ES office. The Department seeks to 
ensure such MSFWs have the resources they need to access ES services 
and significant offices which hire qualified, permanent minority staff 
may help facilitate such provision of services
    Additionally, a SWA may utilize appropriate language from the Final 
Rule for the job postings.
2. Subpart F--Agricultural Recruitment System for U.S. Workers
Section 653.500 Purpose and Scope of Subpart
    Comments: One commenter urged the Department to clarify what it 
considered imprecise language in Sec.  653.500, stating the proposed 
language left unclear which sections of subpart F apply to U.S. 
farmworkers who apply for employment under clearance orders that are 
attached to applications for foreign temporary agricultural orders. 
This commenter suggested the Department confirm if the third sentence 
should read ``This subpart affects all job orders for workers . . .'' 
rather than, ``This section affects all job orders for workers,'' which 
would ensure that the provisions of the Agricultural Recruitment System 
(ARS) apply to all clearance orders.
    Department Response: The Department changed the regulatory text at 
Sec.  653.500 to clarify that the purpose described in Sec.  653.500 
applies to this entire subpart F versus a single section. To the extent 
that the commenter was expressing confusion as to how this subpart 
applies to agricultural clearance orders seeking temporary foreign 
workers, the Department notes that this subpart is about the ARS, which 
is a system used to recruit U.S. workers for temporary, less than year-
round farmwork. Part 655 of this chapter explains the process for 
hiring non-U.S. workers for this type of work.
Section 653.501 Requirements for Processing Clearance Orders
    Comments: One commenter objected to the continuation of the 
requirement to recruit workers in three sequential steps: Locally, 
followed by intrastate recruitment, then interstate recruitment, if 
needed. This commenter stated the sequential process is inconsistent 
with proposed Sec.  653.102, which directs State agencies make job 
order information available by all reasonable means, including the 
internet, labor exchange systems, and one-stop centers. This commenter 
suggested it might be discriminatory and inconsistent with the Richey 
Order to carry out a successive local, intrastate, and interstate 
recruitment for temporary agricultural jobs while all other jobs are 
broadcast at once through every available means.
    Similarly, another commenter recommended the Department eliminate 
the ARS process because most States use Web-based, online job listing 
sites, which after 24 hours automatically upload job orders to the 
national level on two sites (US.jobs of the National Labor Exchange and 
JOBcentral). This commenter stated the ARS process is obsolete, 
outdated, burdensome, and time consuming. Further, the commenter 
suggested the ARS regulations need clarification if the ARS is to 
remain and recommended that, if retained, the ARS should be required 
only for significant MSFW States.
    Another commenter suggested the Department update the part 653 ARS 
language to account for technological advancements in labor exchange 
systems.
    Department Response: The Richey Order requires the Department to: 
(1) Extend coverage of local Job Bank order information to rural areas 
and provide MSFWs with assistance to enable them to use such 
information on a non-discriminatory basis; (2) Review all interstate 
job orders prior to approval for transmission and require all State and 
Federal offices processing such interstate job orders to comply with 
specific requirements; and (3) Require each State ES agency to review 
and process all intrastate job orders in accordance with the procedures 
and requirements set forth in sec. I-D of the Order.
    Connecting employers with job seekers at the local level helps both 
parties, as there are fewer transportation and housing costs. This 
sequential process is particular for agricultural job orders and may 
not be appropriate for other employment sectors. Furthermore, 
agricultural work is typically rural and housing and transportation 
accommodations may be necessary to ensure the workers are able to 
access the appropriate worksite. For these reasons, the Department has 
determined job

[[Page 56276]]

orders should begin at the local level. Furthermore, the Department has 
determined it is required to facilitate a system by which job orders 
are cleared through intrastate, then interstate processes as required 
under the Richey Order.
    In addition, the Department also deems it necessary for non-
significant MSFW States to participate in ARS for three primary 
reasons: (1) Equality of opportunity: employers in non-significant 
States (just as significant States) must have the opportunity to hire 
U.S. workers through the ES system; (2) Uniformity of ES services: ARS 
is one of the many services offered through the ES system and should be 
offered to agricultural employers and individuals who seek agricultural 
employment in any State, regardless of its designation as a significant 
State; and (3) Requirement to maintain a system of clearing labor 
between the States: sec. 3(a) of the Wagner-Peyser Act mandates the 
Department assist SWAs in maintaining a system of clearing labor 
between the States which provides workers maximum opportunity to have 
access to agricultural jobs.
    To reconcile the need to test the local labor market and 
subsequently test the intrastate and interstate clearance systems when 
using the internet, the Department recommends ES offices suppress 
employer information. Suppressing employer information means that a job 
seeker will need to contact the ES office in order to receive all 
pertinent information regarding the job and the ES office then has the 
opportunity to gauge the level of interest in the job from U.S. job 
seekers. It also allows the ES office to provide the job seeker with 
not only the employment opportunity specifically sought, but also 
information on all other services and opportunities offered through the 
center.
    The Richey Order mandates the Department ``require each State ES 
agency to review and process all intrastate job orders in accordance 
with the procedures and requirements set forth in section I-D of [the] 
Order'' and to review ``all interstate job orders prior to approval for 
transmission and shall require all State and Federal offices processing 
such interstate job orders to comply with the following requirements.'' 
The Department's step-by-step process in the regulations implements the 
mandates of the Order by ensuring job seekers and employers have access 
to ARS in a logical and organized manner.
    Lastly, the Department agrees that the references to ``State 
agencies'' would be better clarified by the term, ``State Workforce 
Agencies'' or ``SWAs.'' As such, the Department will replace the terms 
throughout the Final Rule. The Department has also edited Sec.  
653.501(c)(1)(ii) to make the regulatory text consistent with 29 CFR 
part 38.
Section 653.501(b) ES Office Responsibilities
    Comments: One commenter submitted two recommended revisions for the 
agricultural clearance form prescribed by the Department (ETA Form 790) 
to require an employer to identify and provide contact information of 
the grower business for each worksite identified in the job order and, 
for those employers who will use the job order in connection with a 
future application for temporary employment certification for H-2A, to 
provide contact information for the person(s) who will perform 
recruiting activities for the job.
    Department Response: The Department notes the Paperwork Reduction 
Act (PRA) provides the public an opportunity to submit comments and 
requests for revisions for the Department's forms, including ETA Form 
790. The PRA process should be used to suggest changes to a specific 
form.
    Further, the Department notes the ETA Form 790 is intended for the 
recruitment of domestic, U.S. workers and not for the recruitment of 
foreign workers. Instead, Form 9142A, H-2A Application for Temporary 
Employment Certification, addresses the requirement for employers 
seeking to hire foreign workers. The Department has determined the 
suggestion to include recruiter information for foreign workers would 
more appropriately be addressed through the PRA process for the Form 
9142A. The Department welcomes such comments at that time.
Section 653.501(c) SWA Responsibilities
    Comments: A few commenters objected to the language requirement at 
proposed Sec.  653.501(c)(1)(i) stating it may limit the SWA's ability 
to effectively communicate job requirements (particularly with 
Management Information Systems [MIS] or job match systems that contain 
character limits) or may impact the look and format to make an 
announcement less visibly pleasing. Further, these commenters suggested 
the language in this section could be required on all job orders and 
that it should not be required on agricultural clearance orders alone.
    Department Response: The language in Sec.  653.501(c)(1)(i) is 
substantively the same language required at existing Sec.  653.501(a) 
and (b). The only difference is ``JS'' is replaced with ``ES.'' 
Therefore, there should be no additional burden placed on State 
agencies from what was originally required. The Department notes the 
language is already included in the ETA Form 790; as such, a SWA will 
not need to alter its internal systems to accommodate new/different 
language.
    While no comments were received regarding Sec.  653.501(c)(3)(i), 
the Department revised the regulatory text to clarify that order-
holding office notification must be in writing and that email 
notification may be acceptable. This revision does not substantively 
change the notification requirement but it clarifies the intent of the 
requirement to make notification verifiable. This is consistent with 
the Department's response to the comment received on Sec.  
653.501(c)(3)(iv), described in the following paragraph.
    Comments: One commenter recommended that Sec.  653.501(c)(3)(iv) be 
changed to require an employer to provide notification in writing 
(which may include email) rather than the proposed language that 
requires employers to provide an assurance that they will notify the 
order-holding office or State agency by email and telephone immediately 
upon learning that a crop is maturing earlier or later or other factors 
have changed the terms of employment. This commenter reasoned that 
allowing notification by telephone could result in miscommunication as 
well as difficulties for a State agency to confirm that an employer 
provided appropriate notice if the employer states it made a call to 
the State agency. Additionally, this commenter suggested that any 
changes prompted by this comment may result in needed changes to Sec.  
653.501(d)(8).
    Department Response: The Department notes Sec.  653.501(c)(3)(iv) 
requires the employer to notify the order-holding office or SWA by 
``emailing and telephoning immediately upon learning that a crop is 
maturing earlier or later . . . .'' This telephonic requirement ensures 
information is relayed most expeditiously in case the recipient is not 
checking his/her email. It also ensures there is written correspondence 
to confirm such notification.
    As discussed earlier in Sec.  651.10, the Department has decided to 
revise the definition of migrant farmworkers. While the Department did 
not receive any comments specifically relating to Sec.  
653.501(c)(3)(vi), the Department received comments referring to the 
definition of migrant farmworkers who are ``unable'' versus ``not 
reasonably able'' to return to their permanent

[[Page 56277]]

residence within the same day (regarding the definitions in Sec.  
651.10). The Department agrees with the commenters that ``unable'' 
appears more restrictive than intended. The Department has decided to 
use the words ``not reasonably able'' to return to a permanent 
residence, rather than ``unable.'' To align changes in Sec.  651.10 
with Sec.  653.501(c)(3)(vi), the Department revised the paragraph to 
use the term ``not reasonably able.''
    Comments: One commenter urged the Department to elaborate on what 
``reasonable access'' for outreach workers means in Sec.  
653.501(c)(3)(vii). In addition, this commenter recommended the 
Department modify Sec.  653.501(c)(3)(vii) allowing nonprofit 
organization outreach workers to have reasonable access to MSFWs to 
perform general outreach activities, to meet with a worker who has 
requested such meeting, and to meet with the nonprofit organization's 
clients or customers. Two other commenters requested clarification on 
this provision, asking if the intent is for outreach staff to provide 
only outreach services to U.S. workers for clearance orders where a 
placement has been confirmed. These commenters stated such 
clarification would eliminate the SWA's ability to conduct outreach to 
H-2A clearance orders where a placement has not been made.
    Department Response: The Department declines to define ``reasonable 
access'' in the regulatory text, however reasonable access means that 
outreach workers must be able to locate, contact, and interact with 
MSFWs at their worksites, living quarters, and gathering areas in order 
to be able to provide MSFWs with services and information pursuant to 
the outreach workers' duties outlined at Sec.  653.107. Regarding the 
commenter's request for the Department to modify Sec.  
653.501(c)(3)(vii) to allow nonprofit organization outreach workers 
reasonable access to MSFWs to perform general outreach activities, to 
meet with a worker who has requested such meeting, and to meet with the 
nonprofit organization's clients or customers, the Department has 
determined it is beyond the scope of this regulation to secure 
``reasonable'' access rights for nonprofit organization outreach 
workers and so is not amending the regulation to include such 
provisions. Regarding the request for clarification on whether the 
intent of Sec.  653.501(c)(3)(vii) is for outreach staff to provide 
only outreach services to U.S. workers for clearance orders where a 
placement has been confirmed, the Department seeks to clarify the 
intent is not for outreach workers to only provide outreach services to 
U.S. workers. All outreach workers must follow the requirements set 
forth at Sec.  653.107(b).
    Comments: A few commenters requested clarification regarding 
``eligible workers,'' in Sec.  653.501(c)(5), asking if the Department 
intends for the first week wage guarantee to be applicable to all 
workers referred (including local workers) or only those workers who 
live beyond the local area of intended employment (migrant workers).
    Department Response: The eligible workers referred to in Sec.  
653.501(c)(5) are those identified at paragraph (d)(4): all referred 
farmworkers, farm labor contractors on behalf of farmworkers, or family 
heads on behalf of farmworker family members.
    Comments: A few commenters also recommended the Department modify 
the last sentence of paragraph (c)(5) to align with ES complaint 
procedures, which could require an immediate referral to the 
Department's Wage and Hour Division (WHD). This sentence as proposed 
stated, ``If an employer fails to comply under this section the order 
holding office may notify DOL's Wage and Hour Division for possible 
enforcement.''
    Department Response: The proposed language stating the order 
holding office ``may'' notify WHD was intended to allow the issue to be 
resolved at the local level without immediate referral to WHD. If the 
issue is not resolved at the local level within 5 business days, it 
must be referred to WHD for possible enforcement. The Department made 
no change to Sec.  653.501(c)(5).
    Comments: One commenter urged the Department to clarify the 
employer liability outlined in Sec.  653.501(c)(5) applies to U.S. 
workers who are referred pursuant to H-2A clearance orders. Also 
relating to this provision, one commenter recommended the Department 
revise the first sentence to remove the ``at least 10 working days 
prior'' phrase to read, ``If there is a change to the anticipated date 
of need and the employer fails to confirm with the applicant-holding 
office or the order-holding office, prior to referred workers 
departure, the employer must pay eligible workers referred through the 
clearance system.''
    Department Response: Section 653.501(c)(5) applies to any worker 
referred through the Agricultural Recruitment System. In response to 
the suggestion for the Department to revise Sec.  653.501(c)(5), the 
Department has determined that maintaining the language as proposed is 
the best way to ensure that migrant workers have ample notice before 
departing their residence to begin work pursuant to the clearance 
order.
Section 653.501(d) Processing Clearance Orders
    Comments: One commenter stated it has always been instructed that 
the H-2A precertification process mirrors the ARS process and that 
Sec.  653.501 should be followed when recruiting and referring U.S. 
domestic workers to H-2A jobs. Two other commenters similarly expressed 
concerns with this language, asserting that because all clearance 
orders processed by their State are H-2A, the statement that this 
section does not apply to foreign temporary workers would eliminate the 
first week wage guarantee, which applied to all ARS orders under WIA, 
including those tied to H-2A. These commenters also expressed concern 
that the workers' rights brochure they use to comply with WIA rules 
would no longer be applicable to H-2A clearance orders and, thus, would 
be eliminated.
    One commenter suggested the Department revise the first sentence of 
Sec.  653.501(d) to read, ``This subsection does not apply to clearance 
orders . . .'' (rather than ``section''), to clarify the exclusion 
applies only to paragraph (d). Asserting that additional confusion is 
created by the Sec.  653.501(c)(5) pay guarantee reference to Sec.  
653.501(d)(4), this commenter stated that the inconsistent use of 
section and subsection make it difficult to read the intent of subpart 
F's various provisions. This commenter asserted there is no rationale 
for excluding clearance orders attached to H-2A orders from Sec.  
653.501(d) provisions other than clearance order transmitting-related 
provisions at Sec.  653.501(d)(1) and (3), including the 
nondiscrimination criteria (Sec.  653.501(d)(2)), the date-of-need 
protections (Sec.  653.501(d)(4), (7), and (9)), and the mandate to 
local ES offices to provide workers with a list of workers' rights 
(Sec.  653.501(d)(11)). Stating the Department has a mandate to ensure 
that the employment of H-2A workers ``will not adversely affect the 
wages and working conditions of workers in the U.S. similarly 
employed'' (8 U.S.C. 1188(a)(1)(B)), this commenter expressed concern 
that these U.S. worker protections in the event of an unexpected or 
unannounced change in the date of need are vital to ensuring that H-2A 
employers follow through with their statutory obligation to hire 
qualified U.S. workers.
    Department Response: Only Sec.  653.501(d)(3) does not apply to 
clearance orders that are attached to applications for foreign 
temporary agricultural workers, pursuant to part

[[Page 56278]]

655, subpart B, as such clearance orders must be sent to the Chicago 
National Processing Center. The Department has clarified the regulatory 
text at Sec.  653.501(d) by removing the statement ``This section does 
not apply to clearance orders that are attached to applications for 
foreign temporary agricultural workers pursuant to 20 CFR 655 subpart 
B.'' from the opening paragraph of Sec.  653.501(d), and inserting it 
at paragraph (d)(3), which clarifies that the approval process 
described in paragraph (d)(3) does not apply to clearance orders that 
are attached to applications for foreign temporary agricultural workers 
pursuant to 20 CFR part 655, subpart B, and that such clearance orders 
must be sent to the Chicago National Processing Center.
    The Department notes that all steps and requirements for processing 
clearance orders at Sec. Sec.  653.500 through 653.503 are intended for 
the recruitment of U.S. workers. However, U.S. workers may continue to 
be recruited once a job order becomes part of the H-2A process pursuant 
to Sec.  655.135(d). The Department will issue guidance on the 
Agricultural Recruitment Process.
    Comments: In response to the Sec.  653.501(d)(1) requirement that 
the order-holding office must transmit a copy of the approved clearance 
order to the State agency, one commenter suggested the order-holding 
office should be required to transmit the completed clearance order to 
the SMA for approval and distribution to streamline the process and 
minimize the chance for errors. For similar reasons, this commenter 
also suggested the Department replace the Sec.  653.501(d)(3) 
requirement for the ETA regional office to review and approve the order 
with a requirement for the supply State's SMA to review and approve the 
order within 10 working days. The commenter reasoned that regional 
offices often approve only to have supply States return the order with 
a denial, further delaying the order.
    Department Response: The requirement to transmit the completed 
clearance order applies to the SWA and it is the SWA's decision whether 
the primary individual charged with processing clearance orders is the 
SMA or a different SWA employee. The Department has determined the 
Regional office is in an appropriate position to assess labor supply 
States based on the ES reports it receives from each State in its 
region. No change was made to regulatory text in response to this 
comment.
    Comments: A few commenters recommended the Department remove 
proposed Sec.  653.501(d)(4) because it places burdens on the job 
seeker to contact the applicant-holding office 9 to 5 days before the 
date of need to secure the first weeks wage guarantee and on the SWA to 
document such communication. One commenter recommended the Department 
revise this paragraph to read, ``The applicant-holding office should 
notify referred workers to contact the applicant-holding office or the 
order-holding office to verify the date of need cited prior to their 
departure.'' This commenter stated this would allow for more 
flexibility due to the nature of the industry and would give the worker 
the most up-to-date information on the contract prior to departing.
    Department Response: The Department has determined it cannot remove 
Sec.  653.501(d)(4), as wage guarantees are a requirement under the 
Judge Richey Court Order. Further, the Department does not agree with 
the commenter that the paragraph should be revised such that the 
referred workers should contact the applicant-holding office or the 
order-holding office, because the applicant's primary contact is with 
the applicant-holding office, not the order-holding office. The 
Department has determined it would be an undue burden on the job seeker 
to contact the order-holding office. The Department will provide 
additional guidance on this process.
    Comments: One commenter asked if the checklists that local ES 
office staff are required to provide farmworkers and applicants in 
their native language (Sec.  653.501(d)(6) and (d)(10)) could be 
replaced with the requirement to provide a copy of the clearance order 
itself. This commenter noted that it has encountered issues where 
workers hired on the interstate clearance orders have indicated they 
did not receive accurate information prior to arriving on the job site. 
The commenter asserted that requiring staff to provide a copy of the 
approved clearance order would help eliminate any confusion and 
misinterpretations.
    Department Response: The Department notes that some clearance 
orders may be more than 20 pages and if a SWA was required to supply 
the clearance order to each job seeker, it could overly burden the SWA. 
Consistent with the Judge Richey Court Order, the Department has 
concluded that notifying the job seeker that the clearance order is 
available upon request is sufficient, as long as referred job seekers 
obtain a full explanation of the terms and conditions of employment.
Section 653.502 Conditional Access to the Agricultural Recruitment 
System
    Comments: One commenter expressed concerns that the steps and 
requirements outlined in Sec.  653.502 assume that employers have full 
knowledge of the ARS in order to submit a written request for 
conditional access to the intrastate or interstate clearance system. In 
particular, this commenter asserted that for employers to be 
sufficiently familiar with the intricacies of the ARS to submit 
advanced requests for conditional access would require SWAs to mount a 
massive marketing and educational program, which this commenter 
asserted would be a large burden.
    Department Response: SWA staff should be trained in the ARS 
process. When an employer seeks workers for agricultural work, it is 
incumbent upon the SWA to explain all available options to the 
employer, including the ARS process and the option for conditional 
access if applicable. The Department has determined this will not 
overly burden SWAs as it was originally required at 20 CFR 654.403.
Section 653.503 Field Checks
    Comments: Commenters expressed support for the proposed changes to 
this section. However, many commenters expressed concerns or requested 
clarification regarding proposed Sec.  653.503.
    One commenter stated the requirements of Sec.  653.503(a) are 
contradictory to the WIOA structures for statewide activities and that 
completing mandatory field checks would cause a significant reduction 
in the time spent by the SWA in meeting WIOA's requirements.
    Department Response: The Department notes the Judge Richey Court 
Order mandated that the Department ensure each SWA hires staff to 
conduct field checks and determine whether wages, working, and housing 
conditions are as specified in job orders and that actual conditions 
and terms of employment do not violate State and Federal law.
    Comments: A few commenters recommended the Department remove the 
language in proposed Sec.  653.503(a), stating that notifying an 
employer after a placement is made would not be transparent and would 
add unnecessary burden on State agency staff. Instead, these commenters 
recommended the Department add language on the ETA Form 790 or its 
supporting documents that employers interested in participating in the 
ARS should be informed a field check may be conducted if a worker is 
placed.

[[Page 56279]]

    Department Response: The Department agrees with the commenter 
stating employers should be notified that a field check may be 
conducted for all job orders placed through ARS and that such 
notification must be transparent. The Department notes Sec.  653.503(a) 
requires the SWA to notify the employer in writing, that if a worker is 
placed on a clearance order, the SWA, through its ES offices, and/or 
Federal staff, will conduct random, unannounced field checks to 
determine and document whether wages, hours, and working and housing 
conditions are being provided as specified in the clearance order.
    To guarantee employers have been notified and have signed a 
document accepting field checks, the Department concurs that such 
notification may be provided through the attachment to the ETA Form 
790. Including the notification in the ETA Form 790 would help ensure 
the employer has been notified and concurs with the requirement. The 
Department will propose the language be added to the attachment to the 
ETA Form 790 in the next Paperwork Reduction Act public notice for the 
Form.
    Comments: A commenter asked the Department to clarify whether the 
``worker placed on a clearance order'' in Sec.  653.503(a) should be 
one that would have been referred through the ES system or not. In 
addition, the commenter asked if the referenced clearance orders also 
include criteria clearance orders, and requested the Department clarify 
whether notification in writing can include email.
    Department Response: Field checks only pertain to placements made 
through the ARS process (pursuant to part 653, subpart F) and can 
include criteria and non-criteria job orders--but Sec.  653.503 
specifically refers to the placement of U.S. workers. Regarding whether 
notification in writing can include email, the Department notes the 
attachment to the ETA Form 790 includes such notification and when a 
SWA provides the form to the employer and the employer signs it, Sec.  
653.503(a) has been satisfied. Additionally, if the SWA so chooses, the 
SWA may send an email to the employer when a worker has been placed 
which re-emphasizes the possibility for a field check pursuant to Sec.  
653.503.
    Comments: Several commenters asked for clarification on Sec.  
653.503(b). One commenter sought clarification on the meaning of, ``or 
at 100 percent of the worksites where less than 10 employment service 
placements have been made.'' Another commenter asked the Department to 
clarify if field checks at 100 percent of jobsites are required for 
clearance orders that have fewer than 10 placements for each order or 
if the entire State agency has made fewer than 10 placements on 
clearance orders during the quarter. If the field checks at 100 percent 
of jobsites is still required for clearance orders with fewer than 10 
placements, this commenter asked if the 25 percent minimum still would 
apply overall. Another commenter recommended the Department revise 
Sec.  653.503(b) to require field checks on ``25 percent of all 
agricultural worksites where U.S. placements have been made,'' stating 
the language as proposed would burden States that have a low or no 
placement rate with conducting field checks of all employers 
participating in the H-2A program if the expectation is to include 
visits to employers where no placement of U.S. workers has taken place. 
One commenter expressed similar concerns, suggesting that because the 
majority of employers in that State do not request more than one or two 
workers, proposed Sec.  653.503(b) would require the State to visit 
each of the 400 plus employers participating in the State's H-2A 
program, which would be burdensome. Another commenter requested the 
Department clarify whether the Sec.  653.503(b) requirement applies to 
criteria clearance orders as well. Reasoning that ``less than 10'' 
would include worksites with zero placements, this commenter further 
suggested the Department revise this language to States, ``worksites 
where less than 10 or more than 1 placement was made.''
    Department Response: Based on the number of requests the Department 
received to clarify the regulatory text at Sec.  653.503(b), the 
Department has revised the regulatory text to clarify the requirements. 
Section 653.503(b) requires that where the SWA has made placements on 
10 or more agricultural clearance orders during the quarter, the SWA 
must conduct field checks on at least 25 percent of the total of such 
orders. Where the SWA has made placements on at least one but not more 
than 9 job orders during the quarter, the SWA must conduct field checks 
on all such orders. For example, if a SWA has made placements of U.S. 
workers on 100 separate job orders through ARS, the SWA is required to 
conduct field checks on at least 25 of those job orders (25 percent of 
100). In another example, if a SWA has made placements of U.S. workers 
on 6 job orders through ARS, the SWA is required to conduct field 
checks on all 6 job orders (100 percent of the orders because there was 
more than 1 but fewer than 9 job orders). These field checks only 
pertain to placements made through the ARS process (which can include 
criteria and non-criteria job orders--but Sec.  653.503 specifically 
refers to the placement of U.S. workers). ``Placements,'' which is 
defined at Sec.  651.10, means the hiring by a public or private 
employer of an individual referred by the ES office for a job or an 
interview, provided that the employment office completed all of the 
following steps:
     Prepared a job order form prior to referral, except in the 
case of a job development contact on behalf of a specific applicant;
     Made prior arrangements with the employer for the referral 
of an individual or individuals;
     Referred an individual who had not been specifically 
designated by the employer, except for referrals on agricultural job 
orders for a specific crew leader or worker;
     Verified from a reliable source, preferably the employer, 
that the individual had entered on a job; and
     Appropriately recorded the placement.
    Comments: One commenter asserted that Sec.  653.503(c) expands the 
field check requirements from ``wages, hours, working, and housing 
conditions'' to the ``full terms and conditions of employment,'' which 
would lead to unfair and unequal enforcement activities because ``full 
terms and conditions'' is not defined. Further, this commenter stated 
the Sec.  653.503(c) requirement that field checks must occur ``at a 
time when workers are present'' would lead to a reduction in the time 
allowed for training and job placement activities.
    Department Response: The Department does not interpret the change 
in language to be a substantive expansion from what is now required. 
The Department notes that requesting employers sign the ETA Form 790, 
thereby agreeing to abide by the ``full terms and conditions'' of 
employment, for which field checks appropriately ensure such 
compliance. Additionally, the Judge Richey Court Order requires those 
conducting field checks, ``to determine whether wages, working and 
housing conditions are as specified in job orders and that actual 
conditions and terms of employment do not violate State and Federal 
law.'' The Department further notes that SWA staff is charged with 
providing and explaining to MSFWs information and resources regarding 
ES services, other organizations serving MSFWs in the area, and a basic 
summary of farmworker rights, including their rights with respect to 
the terms and conditions

[[Page 56280]]

of employment. Therefore, conducting such outreach activities (as 
required at Sec.  653.107) does not constitute time away from training 
and job placement. In fact, such outreach is intended to extend 
training and job placement opportunities to MSFWs.
    Comments: A commenter stated that the proposed field check 
requirements in Sec.  653.503(b) and (d) would have a chilling effect 
on employers' decisions to use the ARS. This commenter also suggested 
the required field checks are not authorized by the controlling 
statutes and may not be constitutional.
    Department Response: The Department notes that field checks and 
referrals of apparent violations are now required under 20 CFR 653.503, 
and employers continue to use the ARS. The existing regulations at 20 
CFR 653.503 further require the State agency to document the finding 
and attempt informal resolution if through a field check, State agency 
personnel observe or receive information, or otherwise have reason to 
believe that conditions are not as stated on the job order, or that an 
employer is violating an employment related law. The existing 
regulations further require the SWA to follow the procedures of subpart 
F of this chapter if the matter has not been resolved within 5 working 
days.
    Attempting informal resolution at the local level is also intended 
to assist employers in remedying certain apparent violations that may 
resolve the issue and not necessitate the need for a referral to an 
enforcement agency.
    Further, the Department disagrees with the commenter's suggestion 
that the required field checks are not authorized by the controlling 
statutes and that they do not provide sufficient certainty and 
regularity required to make ``warrantless inspections constitutional.'' 
Employers know of field checks, which are conducted with sufficient 
regularity due to the requirement at Sec.  653.503(b) mandating field 
checks on certain percentages of placements depending on how many 
placements a State has made.
    Comments: A commenter raised concerns regarding the Sec.  
653.503(d) requirement to report violations of employment-related law 
suggesting it would (among other things) negatively impact the ARS 
process; be challenging to implement; and would lead to an increase in 
referrals to enforcement agencies.
    Department Response: The Department does not agree that Sec.  
653.503(d) will foster hostile attitudes between employers and 
employees, towards SWA staff, and to the ARS in general. The Department 
has received information on numerous occasions from employers and SWA 
staff that the ability to resolve issues informally at the local level 
has been beneficial because it gives the employer a chance to rectify 
the situation before it is referred to an enforcement agency. Not all 
issues may be informally resolved and many may be referred to an 
enforcement agency, but the regulations generally allow for such 
informal resolution where appropriate. The Department has changed the 
regulatory text to clarify this.
    Comments: Regarding the Sec.  653.503(e) provision that would allow 
State agencies to enter into agreements with State and Federal 
enforcement agencies to conduct field checks on behalf of SWA 
personnel, a commenter stated the information sharing permitted under 
this provision would lead to an unwillingness of both workers and 
employers to use the system, with an unintended consequence of an 
increase in use of Farm Labor Contractors and the H-2A program. 
Further, the commenter asserted Sec.  653.503(e) is contradictory in 
that the non-SWA ``may conduct field checks instead of and on behalf of 
State agency personnel'' but then provides: ``The SWA must supplement 
enforcement agency efforts with field checks focusing on areas not 
addressed by enforcement agencies.''
    Department Response: The Department notes that such arrangements 
between State and Federal enforcement agencies are now permitted in the 
regulations at 20 CFR 653.503(b) and this has not, to its knowledge, 
caused an unwillingness of both workers and employers to use the 
system. The Department disagrees with the commenter and has determined 
that such arrangements are useful for SWAs in meeting their field check 
requirements.

P. Part 654--Special Responsibilities of the Employment Service System

1. Introduction
    In the NPRM, the Department proposed to revise the ETA regulations 
governing housing for farmworkers at 20 CFR part 654, subpart E, issued 
under the authority of the 1933 Wagner-Peyser Act by updating outdated 
terminology and by establishing an expiration date for the ETA 
standards. This proposed expiration date was intended to transition 
housing currently governed by the ETA standards to the Occupational 
Safety and Health Administration (OSHA) regulations governing temporary 
labor camps for agricultural workers as set forth at 29 CFR 1910.142. 
After considering the public comments received on this aspect of the 
proposal, the Department withdraws its proposal to establish an 
expiration date for the ETA standards in order to transition housing 
currently governed by the ETA standards to the OSHA standards, as 
explained in further detail below.
    The analysis that follows provides the Department's response to 
public comments received on the proposed part 684 regulations. If a 
section is not addressed in the discussion below, it is because the 
public comments submitted in response to the NPRM did not substantively 
address that specific section and no changes have been made to the 
regulatory text. Further, the Department received a number of comments 
on this part that were outside the scope of the regulation and the 
Department offers no response. Lastly, the Department has made a number 
of non-substantive changes to correct grammatical and typographical 
errors to improve the readability and conform the document 
stylistically that are not discussed in the analysis below.
    Several commenters expressed support for the proposed changes to 
subpart E of part 654 stating the housing standards would be 
strengthened, would increase safety and sanitation requirements, and 
would positively impact the overall health and quality of life for 
MSFWs. However, most commenters expressed concerns about the proposal 
and in many cases asked that the proposal be withdrawn.
    Comments: One commenter noted in the absence of updated OSHA 
temporary labor camp regulations, it opposed the phase-out and repeal 
of the ETA housing standards because, according to this commenter, 
there are several instances where the ETA regulations provide clear, 
unambiguous numerical standards, while the OSHA regulations offer vague 
guidance. This commenter further asserted that clearly delineated 
obligations, with specific numerical benchmarks, eliminate disputes as 
to the housing provider's obligations.
    Additionally, commenters raised the following reasons for not 
supporting the proposal: (1) The high cost of making the necessary 
changes; (2) insufficient economic analysis conducted by the 
Department; (3) lack of availability of funding assistance; (4) 
difficulty (or potential impossibility) in obtaining permits (including 
zoning permits); (5) lack of sufficient time to transition; (6) the 
difficulty or impossibility of complying with OSHA's requirement at 29 
CFR 1910.142(a)(2), which states: ``The principal camp area in which 
food

[[Page 56281]]

is prepared and served and where sleeping quarters are located shall be 
at least 500 feet from any area in which livestock is kept.''; (7) DOL 
hearings conducted in the 1970s pursuant to the same proposal concluded 
there was not an adequate basis for the publication of a new final 
standard or for the issuance of a new proposal; and (8) there is no 
indication that housing under the ETA standards is any less adequate, 
safe, or sanitary than that under the OSHA standards.
    Many commenters also suggested that the impossibility of complying 
with the new standards would lead to a loss of available farmworker 
housing because existing housing would still be out of compliance. A 
few commenters stated the proposal would put some agricultural 
employers out of business. One commenter posited the NPRM did not 
provide evidence that employers, SWAs, Department personnel, employees, 
or anyone else is experiencing any ``confusion'' about how farmworker 
housing is inspected. This commenter also questioned whether the 
Department may legally expand the application of the OSHA housing 
standards it adopted under special procedures available for consensus 
standards to housing to which the OSHA standards never previously 
applied.
    One commenter suggested the Department allow agricultural employers 
a variance for the OSHA requirement at 29 CFR 1910.142(a)(2), asserting 
it is not always possible or desirable to have at least 500 feet 
between the livestock and food processing/sleeping areas. In order to 
better understand the impact of the proposed regulations, the 
Department solicited the following information from the public through 
the NPRM: (1) The approximate number of agricultural housing units in 
the United States provided by agricultural employers for farmworkers; 
(2) the approximate percentage of the total farmworker housing units 
that currently fall under the ETA standards set forth in 20 CFR part 
654; and (3) the estimated cost of bringing those housing units from 
the ETA standards into compliance with the OSHA standards. The 
Department received few responses. The limited feedback suggested it 
would cost individual employers between $15,000 and $300,000 to 
transition into the OSHA standards, with one commenter suggesting it 
would cost over $1 million for employers in one State. One commenter 
indicated that most of its housing inspections fell under the ETA 
standards. Several commenters also had specific questions for the 
Department.
    Department Response: The Department has taken the aforementioned 
comments into consideration and withdraws its proposal to establish an 
expiration date for the ETA standards in order to transition housing 
currently governed by the ETA standards to the OSHA standards governing 
temporary labor camps for agricultural workers as set forth at 29 CFR 
1910.142. The Department based its decision on the following reasons: 
(1) It did not receive sufficient information in response to its 
solicitation for information in order to conduct a thorough impact 
analysis; (2) it seeks to further investigate information received 
suggesting the specificity and clarity provided by the ETA standards 
may be helpful when disputes arise; (3) it acknowledges the possible 
financial and logistical burdens that the OSHA standards could impose 
on some agricultural employers; and (4) it seeks to further study 
farmworker housing, how it could be improved, and the impact such 
improvement would have on stakeholders.
    While the Department withdraws its proposal at this time, it 
continues to interpret the regulations at part 654, subpart E, to be 
transitional until such time when one set of improved agricultural 
housing standards may be used for all farmworkers.
    The Department will continue to require compliance with the 
regulations at 20 CFR part 654, subpart E, for farmworker housing built 
prior to April 3, 1980, or where prior to March 4, 1980, a contract for 
the construction of the specific housing was signed. However, 
subsequent housing must comply with OSHA temporary labor camp standards 
at 29 CFR 1910.142.
    The provisions of Sec.  654.403 have been relocated to 20 CFR 
653.502 because they more directly relate to the governance and 
operation of the Agricultural Recruitment System (ARS) rather than the 
condition of worker housing.
Section 654.408 Screening
    Comments: One commenter suggested the Department revise proposed 
screen requirements at Sec.  654.408 to allow for an exception for 
housing with central air conditioning.
    Department Response: The Department does not support creating an 
exception for housing with central air conditioning because, in cases 
where such central air conditioning fails, it would be necessary for 
the windows to have proper screens in place. No change to the 
regulatory text was made in response to this comment.
Section 654.414 Garbage and Other Refuse
    Comments: Asserting that most local municipalities do not provide 
for twice weekly garbage disposal services, one commenter recommended 
the Department revise the Sec.  654.414(b) language requiring the 
``collection of refuse at least twice a week'' to include ``or as often 
as possible according to local collection schedules.''
    Department Response: The ``at least twice a week'' requirement 
helps ensure refuse is properly disposed of and maintains the health 
and safety of the workers and the environment. No change to the 
regulatory text was made in response to this comment.

Q. Part 658--Administrative Provisions Governing the Wagner-Peyser Act 
Employment Service

1. Introduction
    Part 658 sets forth systems and procedures for complaints, 
monitoring for compliance assessment, enforcement, and sanctions for 
violations of the ES regulations and employment-related laws, including 
discontinuation of services to employers and decertification of State 
Workforce Agencies (SWAs).
    The analyses that follows provides the Department's response to 
public comments received on the proposed part 658 regulations relating 
to administrative provisions governing the ES program. If a section is 
not addressed in the discussion below, it is because the public 
comments submitted in response to the NPRM did not substantively 
address that specific section and no changes have been made to the 
regulatory text. The Department has made a number of non-substantive 
changes to correct grammatical and typographical errors to improve the 
readability and conform the document stylistically that are not 
discussed in the analysis below. Lastly, the Department will issue 
guidance on the Complaint System, informal resolution, referring 
complaints and apparent violations, and on subpart F--Discontinuation 
of Services to Employers by the Employment Service.
2. Subpart E--Employment Service and Employment-Related Law Complaint 
System
    This subpart covers the purpose and scope of the Complaint System, 
the requirements pertaining to complaints filed at the local and State 
level, and the requirements for when a complaint rises to the Federal 
level.
    Comments: One commenter urged the Department to reinstate the 
original Job

[[Page 56282]]

Service Complaint System as established in 1980 as a cost-effective and 
efficient alternative to litigation for disputes between farmworkers 
and the employers to whom they have been referred through the job 
service network. Stating that the Job Service Complaint System, 
established in response to the Richey Order, allowed farmworkers to 
obtain quick resolution of complaints regarding jobs to which they had 
been referred by the ES system, this commenter stated that the changes 
to the Complaint System following the passage of the Immigration Reform 
and Control Act of 1986 resulted in the current Complaint System being 
of little use to aggrieved workers because they no longer have the 
opportunity to participate in the processing of their complaint. 
According to this commenter, because the deadlines set out in the 1980 
regulations that had made the Complaint System so attractive to 
farmworkers have been removed, the Complaint System is no longer an 
attractive alternative to litigation. Further, this commenter stated 
that because the current Complaint System does not ordinarily result in 
a formal finding regarding the worker's complaint, it rarely generates 
a result that provides the basis for discontinuation of services to an 
employer who has violated the rights of a farmworker referred through 
the ES system. For this reason, the commenter stated, employers are 
free to violate the rights of domestic farmworkers with impunity, 
knowing there is virtually no chance they will face the potentially 
severe sanction of discontinuation of employment services (with the 
corresponding lack of access to the H-2A program) if they ignore the 
guarantees and assurances in their clearance orders.
    Department Response: The Department clarifies that complainants 
continue to have the opportunity to participate in the processing of 
their complaint pursuant to Sec.  658.411(e)(1) and (2), at which time 
the complainant must determine if the complaint has been resolved to 
his/her satisfaction or if the complaint should be elevated to the next 
level of review. Regarding deadlines for resolution of complaints, the 
Department notes for complaints submitted to the ES office, the 
Complaint System representative is required to send the complaint to 
the SWA for resolution or further action if resolution has not been 
achieved to the satisfaction of the complainant within 15 working days 
after receipt of the complaint, or 5 working days for complaints filed 
by or on behalf of MSFWs. For complaints submitted or referred to the 
SWA, the SWA is required to make a written determination regarding the 
complaint if resolution at the SWA level has not been accomplished 
within 30 working days after the complaint was received by the SWA; 
this requirement applies whether the complaint was received directly or 
from an ES office under paragraph (d)(2)(ii) of this section. The 
Department has determined that such time periods are relatively short 
and do not place an undue burden on the complainants seeking to resolve 
complaints. For employment-related law complaints referred to 
enforcement agencies outside of the Department, the Department notes it 
is beyond its jurisdiction to impose resolution deadlines for such 
agencies. For employment-related law complaints referred to agencies 
within the Department, the Department notes that each agency must abide 
by its respective regulations and any change to such regulations would 
require a Notice of Proposed Rulemaking. Should an organization seek 
changes to any such regulations, the Department recommends submitting 
comments when such an opportunity presents itself.
    Regarding the commenter's assertion that because the current 
Complaint System does not ordinarily result in a formal finding 
regarding the worker's complaint, it rarely generates a result that 
provides the basis for discontinuation of services to an employer who 
has violated the rights of a farmworker referred through the ES, the 
Department clarifies that a formal finding (i.e., a final determination 
by an enforcement agency) is only one of the many bases for 
discontinuation of services specified at Sec.  658.501. For example, 
Sec.  658.501(a)(1) through (3) do not necessitate such a determination 
(as do many of the other provisions under Sec.  658.501).
    No change to the regulatory text was made in response to these 
comments.
Section 658.400 Purpose and Scope of Subpart
    Comments: One commenter stated the proposed change to Sec.  
658.400(a) to require the acceptance of ES-related complaints made 
within 2 years of the occurrence (increased from 1 year) would have an 
adverse effect on SWA performance. Specifically, this commenter 
predicted that States would accrue unresolved complaints resulting from 
complainants leaving the area before completion of the investigation, 
in particular MSFWs. However, a different commenter expressed support 
for the expansion from 1 to 2 years, stating that expanding the period 
of time to allow an aggrieved worker to file a complaint would 
alleviate some of the burdens workers face when asserting their rights, 
including fear of retaliation from employers or discomfort in filing 
complaints against an employer while still employed when workers 
discovered violations before their work ends. Other obstacles addressed 
by this commenter were associated with the transient and mobile nature 
of the work, such as moving several times, lack of information or 
resources to file a complaint, and temporary inability to maintain the 
complaint proceedings.
    Department Response: While the Department acknowledges the 
potential for more complaints to remain unresolved for a longer period 
of time the Department has determined that the positive effects 
outweigh the fact that some complaints may take longer to resolve. It 
is exactly because of the transient nature of MSFWs that it is 
important to allow more time for complainants to come forward and for 
complaints to be resolved.
    The Department made no changes to the regulatory text, except for 
the clarifying change to add ``parts 651, 652, 653, 654, and'' to the 
end of Sec.  658.400(a). This change clarifies that the ES complaint 
system accepts complaints involving the failure to comply with the ES 
regulations under parts 651, 652, 653, 654, and part 658, not just part 
658, as was proposed. This is consistent with the jurisdiction of the 
complaint system under the existing regulations.
    Comments: One commenter stated that the Department's proposed 
changes to Sec.  658.400(c) significantly expand the required 
enforcement activities from ``wages, hours, working, and housing 
conditions'' to all employment-related laws, and this commenter 
suggested that establishing SWA staff as the ultimate enforcement agent 
for dozens of diverse regulatory regimes is counter to WIOA's goals for 
preparing an educated and skilled workforce and for meeting the skilled 
workforce needs of employers.
    Department Response: The Department clarifies that SWA staff 
(unless otherwise authorized) are not enforcement agents for 
employment-related laws. Rather, SWA staff that become aware of 
possible violations of employment-related laws through field checks or 
apparent violations is charged with attempting to resolve the issue at 
the local level (when appropriate) and, if not resolved, referring the 
case to the appropriate enforcement agency.

[[Page 56283]]

Section 658.410 Establishment of Local and State Complaint Systems.
    Comments: Stating the NPRM is unclear as to how staffing should be 
assigned to address complaints at the various levels (managers and line 
staff), some commenters recommended the Department allow local areas to 
determine how management and line staff are engaged in handling 
complaints, whether in person, on the phone, or other types of 
correspondence. One commenter expressed support for having local areas 
decide how management and line staff are engaged in handling complaints 
and recommended that this process be included in the local plan.
    Department Response: The Department clarifies that as long as the 
requirements at Sec.  658.410 are met, the ES office manager may 
determine specific processes that are conducive for his/her respective 
office. The Department has determined the SWA must make decisions 
regarding the inclusion of this process in the local plan,
    Comments: One commenter asked whether the Department would make the 
Complaint System posters available to the SWAs for the Sec.  658.410(d) 
requirement that SWAs ensure information pertaining to the use of the 
Complaint System is publicized with an ETA-approved poster in each one-
stop center.
    Department Response: The Complaint System poster is accessible on 
the internet at http://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=2820.
    Comments: Two commenters recommended the Department either remove 
the Sec.  658.410(m) requirement that the Complaint System 
representative must regularly follow up on complaints after they are 
referred to an enforcement agency, or only require SWA staff to request 
that an enforcement agency follow up once a resolution to the complaint 
has been achieved. These commenters reasoned that, although an existing 
requirement under WIA, it is ineffective despite technological advances 
because most enforcement agencies do not share outcomes of 
investigations with SWA staff due to confidentiality 
requirements.A19AU0.
    Department Response: The Department notes that the requirement for 
the Complaint System representative to follow-up on complaints 
submitted by MSFWs pursuant to Sec.  658.410(m) is intended to ensure 
complaint resolution. Such follow-up helps ensure that complaints are 
progressing within the enforcement agency, and that MSFWs are updated 
on the status of their complaints. The Department understands that many 
enforcement agencies may be restricted from sharing specific 
information. However, the Department has determined that follow-up 
activities will deter the possibility for complaints to remain stagnant 
and instead will push them closer to resolution. The Department has 
determined that eliminating the requirement for follow-up with MSFW 
complainants would adversely affect complainants. The Department 
further notes that Sec.  658.140(m) has been changed to remove the 
requirement for quarterly follow-up on non-MSFW complaints. This is 
consistent with Sec.  658.411(b)(1)(i). This inconsistency in the NPRM 
was an error.
    The Department added two paragraphs to Sec.  658.410, paragraphs 
(n) and (o), in response to comments received on proposed Sec.  
658.411. Those comments and additions are discussed below.
Section 658.411 Action on Complaints.
    Comments: While stating their understanding that the intent is for 
Boards to coordinate with all relevant enforcement agencies concerning 
MSFW complaints, two commenters recommended the Department retain the 
reference to 29 CFR part 42 (which the NPRM removed) because that 
regulation coordinates Wage and Hour Division (WHD), Occupational 
Safety and Health Administration (OSHA), and Department activities 
relating to MSFWs.
    Department Response: The Department clarifies that it does not 
intend for Workforce Development Boards (WDBs) to coordinate with all 
relevant enforcement agencies concerning MSFW complaints; rather, SWAs 
must follow the procedures required at Sec.  658.411.
    The Department concurs with the commenters that coordination of the 
activities of the Wage and Hour Division (WHD), within the former 
Employment Standards Administration, OSHA, and the Employment and 
Training Administration (ETA) relating to MSFWs is essential. The 
intention behind the proposed regulations at Sec.  658.411 was to not 
limit coordination to only those agencies, but to expand it to all 
employment-related law enforcement agencies. No changes were made to 
the regulatory text. Still, the Department acknowledges the vital 
importance of Coordinated Enforcement at 29 CFR part 42 and will work 
to carry out such activities described at 29 CFR part 42 and also work 
to expand coordination with other enforcement agencies such as the 
Equal Employment Opportunity Commission (EEOC).
    Comments: One commenter recommended the Department add a 
requirement that any notices sent to the worker regarding their 
complaint must be sent in the worker's native language. Further, this 
commenter urged the Department to require all correspondence with a 
MSFW regarding his/her complaint be required both by phone and by 
certified mail. In addition, this commenter urged the Department to 
revise the regulatory text to clarify that any time the regulations 
specify that ES staff, the SMA, or other person must communicate with a 
MSFW, that communication must be directed to the MSFW's representative, 
if he or she has one. This commenter reasoned that because MSFWs 
frequently move and change telephone numbers, ES communication directed 
to the MSFW's local address or last known telephone number may go 
unanswered.
    Department Response: The Department agrees with recommendation that 
all SWA correspondence regarding a complaint be sent to the worker in 
his/her native language would benefit English Language Learner (ELL) 
MSFWs and would be consistent with some requirements at part 653 of 
this chapter (i.e., assistance in understanding the terms and 
conditions of employment must be provided in the worker's native 
language if requested, and the provision of a checklist must be 
provided in the workers native language where necessary). The 
Department has added paragraph (n) to the regulatory text at Sec.  
658.410 requiring complaint related correspondence between the 
complainant and the SWA to be translated into the complainant's native 
language. The Department has determined translating such correspondence 
will ensure the complainant understands the status of the complaint and 
whether he/she is required to take any action.
    The Department also agrees it would be beneficial for the ES office 
or the SWA to attempt to communicate with the MSFW in the manner most 
likely to reach him/her, particularly via telephone. The Department 
recommends that SWAs attempt communication via telephone with MSFWs; 
however, the requirement for written notification stands as the 
official means for notification because such correspondence helps both 
parties maintain records of the complaint status.
    The Department further agrees with the commenter that, in cases 
where the

[[Page 56284]]

complainant has a designated representative and has requested that the 
ES office or the SWA communicate through the representative, such 
communication will facilitate complaint resolution and in cases where 
the complainant is a MSFW who moves frequently, a representative may be 
the most convenient individual to contact. The Department has added a 
provision allowing a complainant to designate an individual to act as 
his/her representative throughout the filing and processing of a 
complaint to the regulatory text at Sec.  658.410(o). References to the 
complainant's representative also were added to paragraphs (a)(3) and 
(4) of Sec.  658.411. These changes are consistent with the references 
to a complainant's representative that were included throughout 
proposed Sec.  658.411. The Department received no comments on these 
references and made no changes to the regulatory text. It is logical 
that ES staff and SWAs following-up on such complaints must be able to 
communicate with the complainant's representative if he/she has so 
designated.
    Comments: One commenter expressed concern that the ES office may 
not necessarily be in the best position to determine on its own which 
is the most appropriate referral for a worker with a wage claim, 
possible Migrant and Seasonal Agricultural Worker Protection Act (AWPA) 
violation, or sexual harassment complaint. The commenter suggested the 
goal of the complaint process should be to facilitate MSFW's access to 
enforcement agencies and other resources and not to become a source of 
delay or obstacle. This commenter concluded that the Complaint System 
regulations should provide MSFWs with the resources to make their own 
informed choices about whether to attempt informal resolution or file a 
complaint with an enforcement agency, rather than have the ES office 
decide for them.
    Department Response: The Department seeks to clarify that one of 
the intentions of the Complaint System is to facilitate the resolution 
of complaints for MSFWs and non-MSFWs. If an ES staff member or 
outreach worker receives information about a possible violation of the 
ES regulations or employment-related laws, it is incumbent upon that 
individual to assist. Such assistance may mean taking a formal 
complaint from the individual or, if that individual does not choose to 
submit a complaint, the staff member must attempt resolution through 
the apparent violation process outlined at Sec.  658.419. For concerns 
that staff may not know the most appropriate avenue to refer the 
worker, the Department notes the requirement for outreach workers to be 
trained pursuant to Sec.  653.107(b)(7). For MSFWs with the resources 
to make their own choice about whether to attempt informal resolution 
or file a complaint, the Department clarifies that the complainant has 
a choice to submit a formal complaint or allow the ES representative to 
file an apparent violation. Either way, the ES staff must assist the 
MSFW and attempt to resolve the situation; the tactics for resolving 
the situation will vary depending on the issue. For example, EO and CRC 
related complaints must be immediately logged and referred to the 
appropriate enforcement agency.
Section 658.411(a) Filing Complaints
    Comments: Two commenters recommended that Sec.  658.411(a)(3) 
provide flexibility for staff to use other complaint forms, rather than 
the Complaint/Referral Form prescribed or approved by the Department, 
when it is immediately determined that the complaint falls under the 
jurisdiction of another agency and such a complaint form is available. 
These commenters asserted that such flexibility would be helpful 
because most of the employment -related law complaints received by the 
SWA involve allegations of lack of payment of wages, which mainly fall 
under the jurisdiction of a different State agency.
    Department Response: In response to these comments, the Department 
has changed Sec.  658.411(a)(3) to provide the flexibility for SWA 
staff to use other complaint forms rather than the Complaint/Referral 
Form prescribed by the Department so long as the alternate form has 
been approved by the Department. The Department included the 
requirement that the alternate form be one approved by the Department, 
to ensure the ability of the Department to track ES action on 
complaints or apparent violations accurately. If SWAs use forms from 
different agencies that the Department has not approved, it may make 
tracking complaint resolution more challenging.
    Comments: Regarding the requirement that ES office and SWA staff 
consider complaints submitted via letter or email, two commenters 
asserted that the regulatory text proposed does not provide sufficient 
understanding of the difference between a customer concern that does 
not require formal processing versus a formal complaint. While agreeing 
with allowing such flexibility for customers to exercise their right to 
file a complaint, these commenters requested guidance on what can be 
considered as a signature in an email and what minimum information is 
needed to establish that the SWA has sufficient information to initiate 
an investigation. Expressing confusion regarding how complaints are 
received and processed, some commenters requested the Department 
provide clear and consistent guidance. Another commenter recommended 
the Department eliminate the requirement for complaints to be signed to 
permit MSFW representatives to file complaints on behalf of MSFWs.
    Department Response: The Department will issue guidance explaining 
the difference between a customer concern and a formal complaint, 
including what can be considered a signature in an email, what minimum 
information is needed to establish an investigation, and how to receive 
and process complaints.
    The Department does not agree that the requirement for complaints 
to be signed by the complainant be eliminated as a signature is helpful 
in processing complaints and referring complaints to the appropriate 
enforcement agencies. However, the Department agrees it would be 
helpful for MSFW complainants if a representative could file the 
complaint on behalf the MSFW. The Department added language to Sec.  
658.411(a)(3) allowing a MSFW or his/her representative to sign the 
complaint if the MSFW has designated a representative pursuant to Sec.  
658.410(o).
    Comments: One commenter recommended the Department clarify the 
language with respect to taking complaints to specify whether an ES 
office must communicate the referral to the MSFW representative.
    Department Response: The Department clarifies that when an MSFW (or 
his/her representative) files a complaint at an ES office, the 
Complaint System representative must follow-up with the complainant or 
his/her representative if the complaint has been referred to an 
enforcement agency.
Section 658.411(b) Complaints Regarding an Employment-Related Law
    Comments: A few commenters objected to the proposed requirement 
that local ES offices and SWAs attempt informal resolution of the 
complaint. These commenters asserted that incorporating the additional 
step of attempted informal resolution by the SWA staff would delay the 
referral and investigation, and would become burdensome on the SMA. One 
commenter stated that staff are not trained in how to conduct 
investigations

[[Page 56285]]

and this process could directly interfere with a possible investigation 
by an enforcement agency because it might cause the employer to be 
alert of an onsite investigation. Another commenter expressed concern 
that if informal resolution was achieved, the complaint would no longer 
be referred to a relevant enforcement agency, which would result in the 
agency not being able to document the allegation and the resolution 
within their management information system.
    Department Response: The Department clarifies that ``informal 
resolution'' means an attempt to resolve an issue at the local level. 
Such resolution may be conducted by the ES office Complaint System 
representative and is intended to expedite resolution of certain 
complaints. For example, the Complaint System representative can work 
with the complainant and the employer to resolve miscommunications or 
issues relating to wages or working hours, or in some cases, assist the 
employer in coming into compliance with certain working or housing 
conditions. Such mediation can be faster than referring the case to an 
enforcement agency. However, the Department notes that not all issues 
are appropriate for attempted informal resolution, such as most equal 
opportunity (EO) or forced labor-related complaints (e.g., human 
trafficking, sexual harassment, sexual coercion). In these cases, the 
Department has added clarifying language to Sec.  658.411(b)(1)(ii)(B) 
requiring the complaints be immediately logged and referred to the 
appropriate enforcement agency for prompt action. Certain complaints 
also are required to be immediately logged and referred, as discussed 
in Sec.  658.411(c). The Department will issue guidance on informal 
resolution and referring complaints/apparent violations. Regarding the 
concern that informal resolution means that cases are not referred to 
enforcement agencies, the Department notes that not all cases need to 
be referred to an enforcement agency and in some cases, resolving the 
issues at the local level achieves the best outcome for all parties. 
Moreover, the Department requires SWAs track all complaints and 
apparent violations which are then reported to the Department. 
Therefore, the Department still receives such information for tracking 
and analysis.
    Comments: One commenter urged the Department to revise Sec.  
658.411(b)(1)(ii) to specify that any MSFWs affected by an apparent 
employment -related law violation should be given outreach materials 
identifying the full range of agencies that may be able to assist them, 
including health services and legal aid offices, regardless of whether 
the ES office determines that a referral is necessary. If the issue is 
not resolved within 5 business days, this commenter recommended the 
workers be given the option of a referral to appropriate enforcement 
agencies, legal aid organizations, or consumer advocate organizations, 
regardless of whether the ES office determines that such referral is 
appropriate. Expressing concerns about the level of discretion with 
respect to the ES office decision to refer a MSFW's complaint regarding 
an employment-related law, this commenter urged the Department to 
revise Sec.  658.411(b)(1)(ii)(C) and (D) to make clear that referral 
of a complaint is mandatory.
    Department Response: The Department notes the regulatory text 
requires outreach workers to explain to MSFWs at their working, living 
or gathering areas the services available at the local one-stop center, 
information on the Complaint System and on the other organizations 
serving MSFWs in the area, and a basic summary of farmworker rights, 
including their rights with respect to the terms and conditions of 
employment. This explanation must be provided in a language readily 
understood by the MSFWs. The Department interprets the provision of 
such information to include health and legal aid services. Further, the 
Department recommends through training and guidance that outreach 
workers bring outreach material on the various services provided in the 
area for the MSFWs. If an ES staff member observes or is in receipt of 
information regarding an apparent violation, it may not be feasible to 
provide affected MSFWs with the pertinent information at that time; 
however, such information may be provided as a follow-up activity.
    The Department clarifies that referring employment-related law 
complaints to the appropriate enforcement agency after 5 days if the 
complaint has not been resolved is required if the issue is not 
resolved within 5 business days. The Department further seeks to 
clarify that the statement, ``the representative must determine if the 
complaint should be referred to . . .'' does not mean that the 
representative must determine whether the complaint will be referred; 
rather it means the representative must determine if the complaint 
should be referred to ``the appropriate enforcement agency'' or 
``another public agency'' or a ``legal aid organization,'' etc. Given 
that the use of the word ``if'' in this sentence has caused confusion 
and may be misinterpreted, the Department has changed the regulatory 
text by rewording Sec.  658.411(b)(1)(ii)(C) as follows: If the issue 
is not resolved within 5 business days, the representative must refer 
the complaint to the appropriate enforcement agency (or another public 
agency, a legal aid organization, or a consumer advocate organization, 
as appropriate) for further assistance.
    Comments: Regarding the Sec.  658.411(b)(2) requirement that the 
SWA must initiate procedures for discontinuation of services if an 
enforcement agency makes a final determination that the employer 
violated an employment-related law, one commenter recommended the 
Department require agencies to notify the SWA when such agency has made 
a final determination. For non-Department agencies, this commenter said 
it would support the development of a form to be used by all agency-
referred cases under the Complaint System that would request 
notification of the outcome of the referral and explain the need for 
the agency to inform the SWA of the results of the referred complaint.
    Department Response: The Department agrees it would be helpful if 
enforcement agencies notified the SWA when a final determination has 
been made. In order to facilitate the communication, the Department 
encourages SWAs to enter into agreements with enforcement agencies 
regarding notification of final determination of complaints.
Section 658.411(c) Complaints Alleging a Violation of Rights Under the 
Equal Employment Opportunity Commission (EEOC) Regulations or Enforced 
by the Department of Labor's Civil Rights Center (CRC)
    Comments: Two commenters requested clarification for handling 
complaints alleging a violation of rights by employers, asking whether 
all complaints must be forwarded to the EEOC if received at the local 
or State level. One commenter recommended the Department revise Sec.  
658.411(c) to require all complaints involving discrimination be 
forwarded directly to the EEOC, rather than requiring the extra steps 
of referring a local Equal Opportunity (EO) representative, who would 
refer it to the State EO representative, who would then refer the case 
to the EEOC. This commenter suggested that the extra steps would add a 
layer of complexity and inevitable delay, which could be detrimental to 
discrimination complaints given the short limitations period for filing 
a charge of discrimination with the EEOC.

[[Page 56286]]

Another commenter asked whether the Sec.  658.411(c)(1) requirement 
that the local Complaint System representative must refer the complaint 
to a local EO representative would go to the local area EO officer or 
the State EO officer.
    Department Response: The Department clarifies the EO referral 
process. When an ES office or a SWA receives an EO-related complaint, 
the complaint must immediately be logged and referred to either the EO 
representative at the local or State level, or the EEOC. Once the EO 
representative has received the referral, he/she will make a 
determination as to whether it is appropriate to resolve the complaint 
at that level, or if it should be referred to a different level (e.g., 
a State EO representative may determine that the case would most 
appropriately be resolved by the EEOC, or the EEOC may determine that 
the case would most appropriately be resolved by the State EO 
representative). In order to clarify this in the regulatory text, the 
Department removed Sec.  658.411(c)(3) through (4) and clarifies in 
(c)(1) that EO-related complaints immediately must be logged and 
referred to an EO representative for appropriate handling. The 
Department further seeks to clarify that SWAs should not attempt 
informal resolution on EO-related complaints or apparent violations as 
these matters are highly sensitive and require trained EO 
investigators.
    The Department has also edited Sec.  658.411(c)(1) and (2) to make 
the regulatory text consistent with the anti-discrimination protections 
in 29 CFR part 38 and the role of the Department's Civil Rights Center.
Section 658.411(d) Complaints Regarding the ES Regulations
    Comments: Noting that many MSFWs do not have a reliable, permanent 
mailing address, one commenter urged the Department to revise Sec.  
658.411(d) to provide that, when the local ES office needs additional 
information from the complainant, the office should communicate with 
the complainant in the way most likely to reach him or her, such as by 
cell phone or social media. If the complainant fails to respond, and 
the ES office determines that it is unable to resolve the complaint or 
complete the investigation without the requested information, this 
commenter suggested that the complaint be referred to the SMA to 
determine whether further action is possible. In addition, this 
commenter recommended the Department revise Sec.  658.411(d)(2) to 
include allowing for filing of a complaint by email.
    Department Response: Regarding the commenter's suggestion at Sec.  
658.411(d) for the Department to provide that, when the ES office needs 
additional information from the complainant, the office should 
communicate with the complainant in the way most likely to reach him or 
her, such as by cell phone or social media, the Department agrees that 
it would be beneficial for the ES office to attempt to communicate with 
the MSFW in the manner most likely to reach him/her, particularly via 
telephone. However, the Department has concerns about attempting to 
contact the MSFW via social media, as social media may not be a private 
communication forum. The Department recommends that SWAs attempt 
communication via telephone with MSFWs pursuant to Sec.  658.411(d); 
however, the requirement for written notification stands as the 
official means for notification because such correspondence helps both 
parties maintain records of the complaint status.
    Regarding the suggestion for the ES office to refer a complaint to 
the SMA if the complainant has not responded, the Department does not 
deem this necessary due to its change to the regulations at Sec.  
658.400(a) whereby the Complaint System now covers ES-related 
complaints made within 2 years of the alleged violation. Increasing the 
limitations period to 2 years will provide greater protections to those 
participating in the ES by accommodating those individuals who may not 
be able to file complaints within a year from the alleged occurrence. 
No change was made to the regulatory text in response to these 
comments.
    In response to the suggestion to allow filing a complaint by email, 
the Department notes it proposed in the NPRM that a complaint could be 
filed by email and has made no change to the regulatory text at Sec.  
658.411(a)(4).
    The Department made technical corrections to clarify in (d)(2)(i) 
that the complaint would be in regard to an ``alleged'' violation of 
the ES regulations and also that the appropriate ES office Complaint 
System representative must investigate and attempt to resolve the 
complaint immediately upon receipt if all necessary information has 
been submitted to the ES office pursuant to paragraph (a)(4)). The 
Department corrected the cross-references and corresponding language in 
the regulatory text at paragraphs (d)(2)(ii), (d)(3)(ii), and 
(d)(4)(ii).
Section 658.411(e) Resolution of Complaints
    Comments: Suggesting the NPRM would disproportionately dismiss MSFW 
complaints, one commenter recommended the Department eliminate 
complaint resolution based on the complainant's failure to respond 
within 20 working days or 40 working days if the worker is a MSFW. 
Discussing the barriers MSFWs might face in promptly responding to 
requests for information, the commenter asserted that MSFWs generally 
have limited access to mail services, as mail delivered to labor camps 
may be distributed sporadically and is often screened by employers 
prior to delivery. Moreover, according to this commenter, a MSFW may 
move several times over the course of the season and often does not 
know what his or her physical address will be in the future. While 
stating that allowing for email correspondence is helpful, this 
commenter cautioned that few labor camps have internet access and 
workers often do not own cell phones or have an alternative means to 
access email. This commenter further suggested the Department either 
expand the deadline for complaint resolution to 1 year or, or in the 
alternative, allow a provision for MSFWs to reopen complaints within 1 
year of being closed for failure to respond to a request for 
information. Reasoning that many MSFWs return to the same area each 
year for a particular crop, this commenter asserted that establishing a 
1-year deadline would allow for the possibility that a worker would 
return to the same area and be able to respond to requests for 
information related to the complaint.
    Department Response: The Department agrees that because MSFWs move 
so frequently, it can be difficult for them to receive mail. The 
Department seeks to ensure that complaints may be followed through to 
resolution without placing a burden on the complainant or the SWA. The 
Department has determined that allowing a MSFW to reopen a case after 1 
year, as the commenter suggested, is appropriate. It is consistent with 
the provision in Sec.  658.400(a) that allows a complainant to file a 
complaint with a 2-year limitations period. Such flexibility also 
ensures the Department is taking into account the unique needs of MSFWs 
and helping such individuals resolve complaints. The Department does 
not anticipate an increased burden on the SWA because the complaint 
would already be filed with the SWA. Even if the complaint was closed, 
the complainant could issue another complaint (regarding the same issue 
but

[[Page 56287]]

opening it as a new complaint) because of the 2-year limitations 
period. It would not place an additional burden on the SWA because the 
SWA would not need to open a new complaint. Instead, it would reopen 
the original complaint and have access to much of the information 
needed to process the complaint. The Department added Sec.  658.411(f) 
to give a complainant the opportunity to reopen a complaint up to 1 
year after the SWA has closed the case.
    Comments: One commenter urged the Department to require the 
reviewer to verify whether any lack of response from a MSFW is 
intentional (i.e., the MSFW actually received the request) before 
dismissing a complaint, such as by phone call, email, return mail 
receipt, or personal delivery by outreach workers.
    Department Response: The Department has determined that requiring 
the reviewer to verify whether any lack of response from a MSFW is 
intentional would be too great a burden on the SWA and would be too 
subjective in nature to establish any continuity across the States. No 
change was made to the regulatory text in response to this comment.
Section 658.419 Apparent Violations
    Comments: Regarding the proposed requirement to refer apparent 
violations of employment-related laws to ES office managers, one 
commenter recommended that if the apparent violation involves MSFWs, 
the SMA also should receive a copy of the documentation.
    Department Response: The Department notes that data pertaining to 
apparent violations will be sent to SMAs as such information is 
required in the Labor Exchange Agricultural Reporting System (LEARS). 
No change was made to the regulatory text in response to this comment.
    Comments: One commenter requested clarification as to whether the 
move of the Apparent Violations section from the MSFW section to the 
Complaint System section is an indication that it applies to all 
employment industries.
    Department Response: The Department notes the Richey Order requires 
it to ensure that each State or ES office ``refer every violation of 
State or Federal law of which it has knowledge to appropriate State or 
Federal enforcement officials, including officials or other agencies of 
DOL and of Federal agencies and departments other than DOL, and utilize 
to the maximum possible extent the full resources of the DOL monitor/
advocate system in expediting such referrals.'' In this light, the 
Department takes it upon itself to ensure that any violation is 
appropriately referred while taking into account the procedures 
outlined at part 658, subpart E. Furthermore, the Department seeks to 
clarify that the Complaint System as stated at Sec.  658.400(a) handles 
complaints against an employer about the specific job to which the 
applicant was referred through the ES, and complaints involving the 
failure to comply with the ES regulations under this part; the 
Complaint System also accepts, refers, and, under certain 
circumstances, tracks complaints involving employment-related laws. The 
Department interprets the mandates of the Richey Order to apply to 
industries outside of farm work, however the Complaint System 
explicitly contemplates only what is described at part 658, subpart E.
Section 658.420 Responsibilities of the Employment and Training 
Administration Regional Office
    While the Department did not receive comments regarding Sec.  
658.420, it changed the language in paragraphs (b)(1) and (2) to make 
it consistent with current civil rights provisions in WIOA sec. 188 and 
the implementing regulations at 29 CFR part 38. It also added an 
exception in paragraph (c) to complaints filed pursuant to paragraphs 
(b)(1) and (2), and added the following sentence, ``The RMA must 
follow-up monthly on all complaints filed by MSFWs including complaints 
under (b)(1) and (b)(2).'' These changes are consistent with current 
practice and were added for clarity.
Section 658.421 Handling of Employment Service Regulation-Related 
Complaints
    Comments: Suggesting the Department clarify the role of the 
Regional Administrator in the ES complaint process, one commenter 
recommended the Department revise Sec.  658.421 such that complainants 
who allege a violation of the ES regulations may bring a complaint 
directly to the Regional Administrator, especially in situations where 
the administrative exhaustion procedures in Sec.  658.421(a)(1) are 
likely to adversely affect workers.
    Department Response: The Department has changed the language of 
Sec.  658.421(a)(2) to clarify that this section allows for a complaint 
to be filed with the Regional Administrator and if the Regional 
Administrator determines that the nature and scope of a complaint 
described in paragraph (a) of this section is such that the time 
required to exhaust the administrative procedures at the SWA level 
would adversely affect a significant number of individuals, the RA must 
accept the complaint and take certain actions.
Section 658.422 Handling of Employment-Related Law Complaints by the 
Regional Administrator
    Comments: One commenter recommended the Department clarify in Sec.  
658.422 that complainants may submit employment-related law complaints 
directly to the Regional Administrator, commenting that the proposed 
text of this section did not clarify what office should take the 
complaints.
    Department Response: The Department agrees the language in Sec.  
658.422 was not explicit in stating that employment-related law 
complaints could be filed directly with the Regional Administrator and 
that only the title alluded to such a process. The Department added 
paragraph (a) that makes this explicit in the regulatory text of this 
section. The remaining paragraphs have been renumbered accordingly. 
Paragraph (c) has also been changed to clarify that complaints received 
from non-MSFWs must be logged, just as complaints from MSFWs under 
paragraph (b).
3. Subpart F--Discontinuation of Services to Employers by the 
Employment Service
    Comments: A few commenters requested general clarification 
regarding proposed part 658, subpart F. These commenters stated they 
were unclear as to the process and impact of these regulations.
    Department Response: The Department will issue guidance on part 
658, subpart F.
Section 658.501 Basis for Discontinuation of Services
    Comments: Relating to outreach workers' access to employer sites, 
one commenter noted proposed Sec.  658.501(a)(7) continues the 
requirement for the SWA to initiate discontinuation of services to a 
grower who refuses to cooperate in the conduct of field checks pursuant 
to Sec.  653.503. The commenter states this means an employer would not 
face a penalty for failing to permit outreach workers access to MSFWs 
to perform outreach duties. As such, this commenter recommended the 
Department revise Sec.  658.501(a)(7) to require State agencies 
initiate discontinuation of services to employers who interfere with 
the access rights of State agency or nonprofit organization outreach 
workers or fail to provide those workers with reasonable access to 
MSFWs.

[[Page 56288]]

    Department Response: The Department notes Sec.  658.501(a)(2) 
provides the basis for discontinuation of services if an employer 
submits a job order and refuses to provide assurances, in accordance 
with 20 CFR part 653, subpart F. The attachment to the ETA Form 790 
includes a requirement whereby ``the employer also assures that 
outreach workers shall have reasonable access to the workers in the 
conduct of outreach activities pursuant to 20 CFR 653.107.'' The 
Department further notes that Sec.  658.501(a)(3) states 
discontinuation of services will apply if the employer is found to have 
failed to comply fully with assurances made on job orders. The 
Department has determined that an employer who does not grant outreach 
workers reasonable access to MSFWs as required in the assurances 
attachment to the ETA Form 790 may be subject to discontinuation of 
services pursuant to part 658, subpart F. No changes have been made to 
the regulatory text in response to this comment. However, the 
Department seeks to clarify that the subject of granting outreach 
workers employed by nonprofit organizations access to MSFWs hired 
through the ES is beyond the scope of the Department.
Section 658.504 Reinstatement of Services
    Comments: Noting that proposed subpart F did not include a minimum 
time during which services are to be discontinued, one commenter 
recommended the period of discontinuation of services should be no less 
than 2 years if an employer is found to have engaged in the misconduct 
set forth in Sec.  658.501. Regarding the restitution provision at 
Sec.  658.504(a)(2)(ii), this commenter urged the Department to require 
services to be discontinued until the employer provides restitution to 
all workers who are harmed by the employer's conduct, rather than 
requiring restitution only to the complainant. The commenter asserted 
that requiring restitution to only the complainant would give an 
employer incentive to violate the terms of the job order.
    Department Response: The Department disagrees with the commenter 
about the suggestion to impose a minimum time during which services 
must be discontinued. The Department disagrees because the time will 
vary for an employer to remedy the situation. Once an employer remedies 
the issue, employment services may resume (except where the employer 
has undergone the discontinuation of services pursuant to Sec.  
658.501(a)(8)). Regarding the suggestion for the Department to require 
the discontinuation of services continue until an employer provides 
restitution to all workers who were harmed by the employer's conduct, 
the Department proposes that such a determination must be made on a 
case-by-case basis by the appropriate enforcement agency. No changes 
have been made to the regulatory text in response to this comment.
4. Subpart G--Review and Assessment of State Workforce Agency 
Compliance With Employment Service Regulations
    Comments: Expressing support for the flexibility and understanding 
of things outside of a State agency's control relative to performance 
outcomes, a few commenters recommended the Department extend this 
flexibility and understanding to local areas.
    Department Response: The Department acknowledges these comments. As 
SWAs are the Department's grantees, the Department recommends 
commenters request any additional local flexibility (outside what is 
required in these regulations) through the SWA.
Section 658.601 State Workforce Agency Responsibility
    Comments: Regarding the self-appraisal system for ES operations to 
determine success in reaching goals and correct deficiencies in 
performance, one commenter requested the Department take into account 
statistical adjustments regarding economic conditions and participant 
characteristics which may be a factor when identifying plan goals.
    Department Response: The Department notes WIOA sec. 102 requires 
the State Plan include an analysis of the economic conditions in the 
State and WIOA sec. 116 requires the Department to take into account 
participant characteristics. Because such information is required under 
WIOA, the Department agrees with the commenter and will take 
statistical adjustments regarding economic conditions and participant 
characteristics into account. The Department received no other comments 
on subpart G, and made no changes to the regulatory text except for 
occasional non-substantive editorial changes, and changes from USES to 
``Employment Service System or ES System,'' to be consistent with the 
changes made in part 651.

VI. Rulemaking Analyses and Notices

A. Executive Orders 12866 and 13563: Regulatory Planning and Review

    Executive Order (E.O.) 12866 directs agencies, in deciding whether 
and how to regulate, to assess all costs and benefits of available 
regulatory alternatives, including the alternative of not regulating. 
E.O. 13563 is supplemental to and reaffirms E.O. 12866. It emphasizes 
the importance of quantifying current and future costs and benefits; 
directs that regulations be developed with public participation; and 
where relevant and feasible, directs that regulatory approaches be 
considered that reduce burdens, harmonize rules across agencies, and 
maintain flexibility and freedom of choice for the public. Costs and 
benefits should include both quantifiable measures and qualitative 
assessments of possible impacts that are difficult to quantify. If 
regulation is necessary, agencies should select regulatory approaches 
that maximize net benefits. The Office of Management and Budget (OMB) 
determines whether a regulatory action is significant and, therefore, 
is subject to review.
    Section 3(f) of E.O. 12866 defines a ``significant regulatory 
action'' as any action that is likely to result in a rule that could:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising from legal mandates, 
the President's priorities, or the principles set forth in E.O. 12866.
    The Final Rule is not a significant regulatory action under sec. 
3(f) of E.O. 12866. The economic effects of the costs and transfers 
(i.e., monetary payments from one group to another that do not affect 
total resources available to society) that will result from the changes 
in this Final Rule are not economically significant because they are 
less than $100 million for the first year and all subsequent years 
after implementation of the rule.
Outline of the Analysis
    Section V.A.1 describes the need for the DOL WIOA Final Rule, and 
section V.A.2 describes the alternatives that were considered in the 
DOL WIOA NPRM. Section V.A.3 summarizes the public comments received 
related to the NPRM, and provides the Department's

[[Page 56289]]

responses to the comments. Section V.A.4 describes the process used to 
estimate the costs of this rule and the general inputs used such as 
wages and number of affected entities. Section V.A.5 explains updates 
made to the assumptions and inputs used in the analysis of this Final 
Rule relative to the assumptions and inputs used in the analysis of the 
NPRM. Section V.A.5 also describes how these changes affected the costs 
and transfers of this Final Rule. Section V.A.6 describes how the 
provisions of this Final Rule will result in quantifiable costs and 
transfers and presents the calculations the Department used to estimate 
them. Finally, section V.A.7 summarizes the estimated first-year and 
10-year total costs and transfers and describes the qualitative 
benefits of this Final Rule.
Summary of the Analysis
    The Department provides the following summary of the Regulatory 
Impact Analysis:
    (1) This Final Rule is not an ``economically significant rule'' 
under sec. 3(f)(4) of E.O. 12866.
    (2) This Final Rule is not expected to have a significant cost 
impact on a substantial number of small entities.
    (3) This Final Rule will not impose an unfunded mandate on Federal, 
State, local, or tribal governments as defined by the Unfunded Mandates 
Reform Act of 1995.
    In total, the Department estimates that this Final Rule will 
generate costs and transfer payments. As shown in Exhibit 1, this Final 
Rule is estimated to have an average annual cost of $35.0 million and a 
total 10-year cost of $278.8 million (with 7-percent discounting). In 
addition, the Final Rule is estimated to result in annual transfer 
payments of $12.9 million and total 10-year transfer payments of $96.9 
million (with 7-percent discounting).

 Exhibit 1--Estimated Monetized Costs and Transfer Payments of the Final
                                  Rule
                             [2015 dollars]
------------------------------------------------------------------------
                                            Total costs    Transfers  ($
                                              ($ mil)          mil)
------------------------------------------------------------------------
Undiscounted 10-Year Total..............          $350.4          $128.9
10-Year Total with 3% Discounting.......           314.9           113.2
10-Year Total with 7% Discounting.......           278.8            96.9
10-Year Average.........................            35.0            12.9
Annualized with 3% Discounting..........            36.9            13.3
Annualized with 7% Discounting..........            39.7            13.8
------------------------------------------------------------------------

    The largest contributor to the total cost of this Final Rule is the 
requirement related to the development and continuous improvement of 
the workforce development system, followed by the Local WDBs career 
pathways development and the colocation of ES services. See the cost 
subsection of section V.A.6 (Subject-by-Subject Analysis) below for a 
detailed explanation.
    The Department was unable to quantify several important benefits to 
society due to data limitations and a lack of existing data or 
evaluation findings. We describe qualitatively the benefits related to 
required competition for all one-stop operators. In addition, based on 
a review of empirical studies (primarily studies published in peer-
reviewed academic publications and studies sponsored by the 
Department), the Department identified the following societal benefits: 
(1) Training services increase job placement rates; (2) participants in 
occupational training experience higher reemployment rates; (3) 
training is associated with higher earnings; and (4) State performance 
accountability measures, in combination with the Board membership 
provision requiring employer representation, is expected to improve the 
quality of the training and, ultimately, the number and caliber of job 
placements. The Department identified several channels through which 
these benefits might be achieved: (1) Better information about training 
providers enables workers to make more informed choices about programs 
to pursue; (2) sanctions on under-performing States serve as an 
incentive for both States and local entities to monitor performance 
more effectively and to intervene early; and (3) enhanced services for 
dislocated workers, self-employed individuals, and workers with 
disabilities lead to the benefits discussed above.
    In addition, the Final Rule will result in transfer payments. The 
Department estimates that this Final Rule will result in annual average 
transfer payments of $12.9 million and a total 10-year transfer payment 
of $96.9 million (with 7-percent discounting). These transfers result 
from increased funding for targeting out-of-school youth (OSY). See the 
transfer subsection of the section V.A.6 (Subject-by-Subject Analysis) 
below for a detailed explanation.
1. Need for Regulation
    Public Law 113-128, the Workforce Innovation and Opportunity Act 
(WIOA), enacted on July 22, 2014, statutorily requires publication of 
implementing regulations, if required, no later than 180 days after the 
date of enactment. The Department has determined that implementing 
regulations are necessary for the WIOA program to be operated 
efficiently and effectively and that such regulations shall provide 
Congress and others with uniform information necessary to evaluate the 
outcomes of the new workforce law.
2. Alternatives in Light of the Required Publication of Regulations
    OMB Circular A-4, which outlines best practices in regulatory 
analysis, directs agencies to analyze alternatives outside the scope of 
their current legal authority if such alternatives best satisfy the 
philosophy and principles of E.O. 12866. Although WIOA provides little 
regulatory discretion, the Department assessed, to the extent feasible, 
alternatives to the regulations.
    In the NPRM, the Department considered significant alternatives to 
accomplish the stated objectives of WIOA, while also seeking to 
minimize any significant economic impact of the Final Rule on small 
entities. This analysis considered the extent to which WIOA's 
prescriptive language presented regulatory options that also will allow 
for achieving the Act's articulated program goals. The Department, in 
many instances, has reiterated the Act's language in the regulatory 
text, and has expanded some language to provide clarification and 
guidance to the regulated community. The additional regulatory guidance 
should result in more efficient administration of the program by 
reducing ambiguities and

[[Page 56290]]

subsequent State and local revisions because of unclear statutory 
language.
    In addition, the Departments considered the issuance of sub-
regulatory guidance in lieu of additional regulations. This policy 
option has two primary benefits to the regulated community. First, sub-
regulatory guidance will be issued following publication of the Final 
Rule, thereby allowing States and local areas additional time to adhere 
to additional guidance. Second, sub-regulatory guidance is more 
flexible, allowing for faster modifications and any subsequent 
issuances, as necessary.
    The Department considered two possible alternatives in the NPRM:
    (1) Implement the changes prescribed in WIOA, as noted in this 
Final Rule, thereby satisfying the statutory mandate; or
    (2) Publish no regulations and rescind existing WIA final 
regulations, thereby ignoring the WIOA statutory requirement to publish 
implementing regulations, thus forcing the regulated community to 
follow statutory language for implementation and compliance purposes.
    The Department considered these two options in accordance with the 
provisions of E.O. 12866 and chose to publish the WIOA Final Rule--that 
is, the first alternative. The Department considered the second 
alternative--retaining existing WIA regulations as the guide for WIOA 
implementation--but concluded that the requirements have changed 
substantially enough that new implementing regulations are necessary 
for the public workforce system to achieve program compliance. The 
Department considered, but rejected, the third alternative--not to 
publish an implementing regulation and rescind existing WIA final 
regulations--because the WIOA legislative language, inherently, does 
not provide sufficient detailed guidance to implement WIOA effectively; 
regulations are necessary to achieve program compliance.
    In addition to the regulatory alternatives noted above, the 
Department also considered phasing in certain elements of WIOA over 
time (different compliance dates), thereby allowing States and 
localities more time for planning and successful implementation. As a 
policy option, this alternative appears appealing in a broad 
theoretical sense and, where feasible (e.g., Wagner-Peyser Act 
colocation of services), the Department has recognized and made 
allowances for different implementation schedules. Upon further 
consideration and to begin to achieve the intended legislative benefits 
of WIOA, however, additional implementation delays beyond those noted 
in this Final Rule could outweigh the benefits of alternative starting 
dates. Specifically, because many critical WIOA elements depend on the 
implementation of other provisions (e.g., technology and performance 
reporting are intrinsically related), discussions indicated that the 
alternative of delaying additional aspects was operationally 
infeasible.
    Furthermore, in assessing alternatives (e.g., different 
requirements for different-sized firms) the data necessary to review 
this option fully will not exist until Local WDBs conduct procurements 
and announce awards. Similarly, performance standards will be 
negotiated at a future time and will be based on a variety of factors, 
including State and local economic conditions, resources, and 
priorities. Establishing standards in advance of this statutorily 
defined process might not be efficient or effective. The enforcement 
methods described in the Final Rule reflect prescribed WIOA 
requirements, and entity size, in and of itself, should not create 
alternative methods for compliance or different periods for achieving 
compliance. The Department has not determined sufficiently valid 
reasons for altering compliance timeframes beyond those described in 
the Final Rule for small entities.
    The Department's impact analysis has concluded that, by virtue of 
WIOA's prescriptive language, particularly the requirement to publish 
implementing regulations within 180 days, no available regulatory 
alternatives other than those discussed above are viable.
3. General Comments Received on the Economic Analysis in the Notice of 
Proposed Rulemaking
    The Department received several public comment submissions that 
addressed the economic analysis in the NPRM. The Department considered 
the comments received. The significant comments and summaries of the 
Department's analyses and determinations are discussed below.
a. A Status Quo Alternative in the Cost-Benefit Analysis
    In the NPRM, after considering two possible alternatives: (1) 
Implement the changes prescribed in WIOA, or (2) not publish regulation 
and rescind existing WIA final regulations, the Department chose the 
first alternative.
    Comments: Several commenters stated that the Department is required 
to present alternatives to the rule and explain why those alternatives 
were not selected instead of the approach chosen for the rule. The 
commenters suggested that the Department should choose the long-
standing status quo as an alternative, which would maintain the current 
system. The commenters stated that the current system has worked for 
more than 40 years and would avoid problems that the rule would create.
    Department Response: The economic analysis involves assessing one 
or more regulatory alternatives against the status quo. OMB's Circular 
A-4 provides guidance to agencies for conducting a cost-benefit 
analysis and explains that each agency should consider alternative 
regulatory approaches and properly evaluate the costs and benefits of 
regulations and their alternatives.\1\ An agency, however, is not 
required to consider the status quo as a regulatory alternative. As is 
frequently the case, for this rule, the status quo is the same as the 
baseline, which is the situation likely to occur in the absence of 
regulation.
---------------------------------------------------------------------------

    \1\ OMB (2003) Circular A-4 Retrieved from: https://www.whitehouse.gov/omb/circulars_a004_a-4/.
---------------------------------------------------------------------------

b. Contextualizing Workforce Innovation and Opportunity Act Costs
    In the NPRM, to contextualize the cost of the proposed rule, the 
Department expressed the annual cost of the NPRM as being between 1.1 
and 1.2 percent of the average annual cost of WIA over fiscal year (FY) 
2012 through FY 2014 (using 3-percent and 7-percent discounting, 
respectively). The average annual budget for WIA implementation from FY 
2012 through FY 2014 for the Department was $2.8 billion.
    Comments: One commenter objected to the NPRM's discussion of the 
incremental burden of WIOA as a proportion of the Department's annual 
$2.8 billion WIA budget. Another commenter stated that contextualizing 
WIOA costs in terms of the WIA budget does not reflect the complexities 
of implementing WIOA. These commenters suggested that comparing the 
incremental WIOA burden against the administrative funds available to 
States would be more accurate because these would be the funding source 
for most of the new requirements.
    In addition, one commenter stated that the Department did not 
provide its source of the average annual WIA budget estimate. The 
commenter cited DOL's Training and Employment Services budget as a 
proxy, which showed that the Department's funding decreased 1.8 percent 
from FY 2014 to FY 2015. This percentage is greater than the 1.1 to 1.2 
percent of the estimated

[[Page 56291]]

WIOA implementation costs presented in the NPRM.
    Department Response: In this Final Rule, the Department presents 
the incremental burden of WIOA both as a proportion of the average 
annual budget for WIA implementation of $3.5 billion and as a 
proportion of the administration and transition funds that might be 
used for WIOA implementation.\2\ The source of the average annual 
budget for WIA implementation is the Employment and Training 
Administration (ETA) budget Web sites.\3\ The Department summed the WIA 
funding for the adult, dislocated worker, youth, and ES programs for 
each fiscal year from 2012 to 2014 and then averaged the sum over the 
3-year period. For the adult and dislocated worker programs, each 
fiscal year's funding is calculated as the sum of the program year's 
July funding and the previous program year's October funding. The youth 
program's and ES program's funding are obligated to States in April and 
July, respectively, and therefore corresponds to the fiscal year in 
which it is obligated.
---------------------------------------------------------------------------

    \2\ This value increased from $2.8 billion in the NPRM to $3.5 
billion in the Final Rule because the Department added WIA funding 
for the Wagner-Peyser Act ES program from FY 2012 to FY 2014 and the 
funding was inflated to 2015 dollars. The Department calculated the 
inflation factor using data from Table 24. ``Historical Consumer 
Price Index for All Urban Consumers (CPI-U): U.S. City Average, All 
Items.''
    \3\ U.S. Department of Labor, Employment and Training 
Administration. (2015). Archive of State Statutory Formula Funding. 
Retrieved from: https://www.doleta.gov/budget/py01_py09_arra_archive.cfm. The Department used data from the 
following files to estimate the average annual WIA budget: WIA Adult 
Activities Program (Program Years [PYs] 2011, 2012, 2013, and 2014); 
WIA Dislocated Worker Activities Program (PYs 2011, 2012, 2013, and 
2014); and WIA Youth Activities (PYs 2012, 2013, and 2014). The 
youth activities funding is obligated to States in April and 
therefore corresponds to the fiscal year in which it is obligated. 
The Department inflated the funding for each fiscal year, so that 
the average annual WIA budget is in 2015 dollars.
    U.S. Department of Labor, Employment and Training 
Administration. (2015) State Statutory Formula Funding. Retrieved 
from: https://www.doleta.gov/budget/statfund.cfm. The Department 
also used data from the following files to estimate the average 
annual WIA budget: Employment Services Program Dollar Tables (PYs 
2012, 2013, and 2014). The youth activities funding is obligated to 
States in April and therefore corresponds to the fiscal year in 
which it is obligated. The Department inflated the funding for each 
fiscal year, so that the average annual WIA budget is in 2015 
dollars.
---------------------------------------------------------------------------

c. Workforce Investment Act Costs
    Comments: One commenter suggested that the Department should have 
conducted a cost-benefit analysis for both WIA and WIOA. The commenter 
also indicated that any estimates from the original WIA regulations are 
outdated.
    Department Response: The Department estimated incremental costs of 
WIOA from WIA as the baseline. Although we did not quantify the WIA 
baseline, to the extent possible, we considered the WIA baseline when 
estimating the incremental burden. In addition, this analysis includes 
no cost-benefit estimates associated with the WIA regulations.
d. Wage Rate Assumptions
    To estimate the cost of the requirements in the NPRM, the 
Department multiplied the amount of time required to perform an 
activity by workers' hourly mean wage rates for their occupational 
categories and the loaded wage factors to reflect total compensation, 
which includes non-wage factors such as health care and retirement 
benefits.
    Comments: One commenter asked the Department to provide the sources 
of the estimated wage rates and the loaded wage factors.
    Department Response: In the NPRM, the Department used the 2013 
Bureau of Labor Statistics (BLS) wage rates for State government 
employees, including hospitals and schools, for State and local 
employees based on the general occupational category of the workers who 
would perform the proposed activities. The loaded wage factor is based 
on the employer cost for employee compensation data contained in the 
BLS Employment Cost Index.
    For the Final Rule, please refer to section V.A.4 (Analysis 
Considerations) for a description of the sources of the occupational 
categories and the loaded wage factor.
e. Burden Estimation Process
    Comments: One commenter asked the Department to clarify the process 
and assumptions used to develop the labor burden estimates for the rule 
requirements.
    Department Response: To develop the labor burden estimates of the 
rule, the Department considered how much effort would be required for 
each activity needed to meet the requirements relative to the baseline 
(i.e., the current practice under WIA). We consulted with ETA program 
experts to obtain estimates. Please refer to section V.A.4 (Analysis 
Considerations) for a description of how the Department estimated the 
burden for this Final Rule.
f. Underestimated Costs
    In the NPRM, the Department estimated that the rule would result in 
an undiscounted total 10-year cost of $384.4 million.
    Comments: A few commenters stated that costs for many requirements 
were significantly underestimated in the NPRM by the Department. They 
also pointed out that the only costs quantified in the NPRM were new 
implementation costs and ongoing costs of required activities carried 
over from WIA were not considered in the NPRM.
    Department Response: The commenters did not provide any cost data 
to substantiate their assertion that the Department significantly 
underestimated the costs of the requirements in the NPRM. The 
Department accurately estimated the compliance costs to affected 
entities to the extent possible based on best available information and 
program experience. We acknowledge, however, that our cost estimates 
are subject to potential uncertainty in, and variability of, the data 
and assumptions used in the analysis. Nevertheless, these cost 
estimates represent the Department's expert judgment regarding the 
additional labor and capital costs associated with the new 
requirements. Although we did not quantify the WIA baseline, we 
considered the WIA baseline to the extent possible when estimating the 
incremental burden associated with implementing this WIOA-required 
Final Rule by the requirements of Executive Order 13563, Executive 
Order 12866, and OMB Circular A-4. This analysis includes no cost-
benefit estimates associated with the WIA regulations.
g. Data Reporting Requirements
    In the NPRM, the Department requested public comments on the 
challenges and benefits of requiring additional data elements in 
quarterly wage reports, including: (1) Program participants' social 
security numbers; (2) the wages program participants earn after exiting 
the program; and (3) the names, addresses, States, and (when known) the 
Employer Identification Numbers of the employers paying those wages.
    Comments: One commenter estimated that the initial and ongoing 
costs of modifying its reporting system to accommodate a new data 
element on employer wage reports would be approximately $2 million and 
that this estimate does not account for other costs associated with 
reporting additional information. The commenter stated that costs 
associated with audits and delinquent reporting reviews would increase 
if additional elements were added to wage reporting.

[[Page 56292]]

    Several commenters stated that WIOA's data collection requirements 
would require a large effort to track, record, validate, and report; 
the commenters also found some of the data to be questionable. The 
commenters stated that these proposed requirements would cause hardship 
for small States with limited funding.
    Department Response: The Department's program experts estimated the 
costs of data reporting requirements under WIOA based on their program 
experience and consultations with State and local programs. The costs 
of modifying the reporting system will vary by size of the program; 
therefore, the Department used average cost estimates in the analysis. 
The Department did not quantify benefits of the data reporting 
requirements related to improved performance reporting and program 
evaluation.
h. Mandatory Employment and Services
    Comments: One commenter questioned whether any analysis was 
available that estimated the projected cost of mandated employment and 
services to youth and students with disabilities.
    Department Response: The Department is unaware of any cost analysis 
of mandated employment and services to youth and students with 
disabilities in the United States. The Department does not mandate 
supported employment in this DOL WIOA Final Rule.
i. Migrant and Seasonal Farmworker Housing--Estimated Impact on 
Employers
    In the NPRM, the Department estimated that most of the 
approximately 6,400 U.S. employers who hire foreign workers under the 
H-2A program and who already provide housing would not be affected by 
the NPRM because Occupational Safety and Health Administration (OSHA) 
housing standards apply more frequently than the ETA standards for 
housing investigations. Specifically, the Department estimated that 
every region, except the Northeast and Pacific Northwest, has 
agricultural housing that predominantly falls under the OSHA standards. 
Compliance, however, varies by State. For example, housing inspections 
in Colorado and Wyoming largely fall under ETA standards.
    Comments: Four commenters rejected the argument that most employers 
who hire foreign workers under the H-2A program would not be affected. 
For example, commenters cited that 65 to 75 percent of housing units in 
Virginia follow ETA standards with southern States having similar 
rates. These commenters objected to the Department's method for 
estimating the total number of employers affected by the housing 
provision. They suggested that, instead of basing its analysis on 
approximations and assumptions due to a lack of housing data, the 
Department should ask State Workforce Agencies, which inspect housing 
H-2A workers use and operate on behalf of DOL to report data on the 
number of housing units inspected. Alternatively, the Department should 
contact agricultural employers for cost estimates. Several commenters 
provided estimates.
    Department Response: The Department agrees that some State 
Workforce Agencies may be able to provide the number of housing units 
subject to OSHA or ETA standards. In the Final Rule, however, the 
Department is rescinding the proposal to establish an expiration date 
for the ETA standards in order to transition housing currently governed 
by the ETA standards to the OSHA standards. Therefore, estimating the 
number of affected employers is no longer necessary for this rule.
j. Migrant and Seasonal Farmworker Housing--Cost Estimates
    In the NPRM, the Department did not quantify the costs associated 
with the provision related to Migrant and Seasonal Farmworker (MSFW) 
housing. The Department asked the public to provide comments on: (1) 
The number of housing units farmworkers use, (2) the percentage of 
housing units that currently fall under the ETA standards, and (3) the 
cost to change from ETA to OSHA standards.
    Comments: Several commenters objected that the cost of provision 
(w) ``Migrant and Seasonal Farmworker (MSFW) Housing'' was not 
quantified.
    Department Response: In the Final Rule, the Department is 
rescinding its proposal to establish an expiration date for the ETA 
standards in order to transition housing currently governed by the ETA 
standards to the OSHA standards. Therefore, farmers will experience no 
additional costs because of this rule.
k. Migrant and Seasonal Farmworker Housing--Benefits
    Department Response: In the Final Rule, the Department is 
rescinding its proposal to establish an expiration date for the ETA 
standards in order to transition housing currently governed by the ETA 
standards to the OSHA standards. Therefore, neither farmers nor 
farmworkers will experience benefits related to this provision because 
of this rule.
l. Initial Regulatory Flexibility Analysis
    Comments: Numerous commenters suggested that the Department failed 
to comply with the requirements of the Regulatory Flexibility Act by 
not preparing an Initial Regulatory Flexibility Analysis (IRFA) and 
making the IRFA available for public comment. The commenters stated 
that the IRFA must describe the impact of the proposed rule on small 
entities and present alternatives to the proposed rule that would 
minimize the impact while accomplishing the stated objectives of the 
applicable statutes. In doing so, the IRFA must meet certain guidelines 
regarding why the action is being taken, the estimate of small entities 
to which the proposed rule would apply, and the discussion of 
alternatives.
    Department Response: The Department certifies that this rule will 
not have a significant economic impact on a substantial number of small 
entities because they already receive financial assistance under the 
WIA program and likely will continue to do so under the WIOA program. 
The Department expects that WIOA will have no cost impact on small 
entities and, therefore, preparing an IRFA was unnecessary. See section 
V.B (Regulatory Flexibility Act) below for more details.
m. Impact on Small Businesses
    Comments: One commenter found that concluding the NPRM would have 
no cost impact on small entities was unreasonable. The commenter stated 
that the analysis did not show how transfer payments would fully 
finance the incremental costs of WIOA. In addition, the analysis did 
not quantify the existing costs or identify sources or mechanisms to 
pay for the new costs. The commenter also stated that in addition to 
affecting one-stop center operators, the regulation would affect small 
entities such as small training providers and service providers.
    Department Response: The Department considered small training 
providers and service providers as small entities in the Regulatory 
Flexibility Analysis. We indicated that transfer payments are a 
significant aspect of this analysis in that most WIOA cost burdens on 
State and Local WDBs will be fully financed through Federal transfer 
payments to States. The Department expects that this Final Rule will 
have no net cost for small entities.
4. Analysis Considerations
    The Department estimated the additional costs and transfers 
associated with implementing this WIOA-required Final Rule from the 
existing program

[[Page 56293]]

baseline, that is the current practices complying with, at a minimum, 
the 2000 WIA Final Rule (65 FR 49294, Aug. 11, 2000).
    The Department explains how the required actions of States, Local 
WDBs, employers and training entities, government agencies, and other 
related entities were linked to the expected costs, benefits, and 
transfers. We also consider, where appropriate, the unintended 
consequences introduced by this Final Rule. The Department has made 
every effort, where feasible, to quantify and monetize the costs, 
benefits, and transfers of this Final Rule. We are unable to quantify 
benefits associated with the Final Rule because of data limitations and 
a lack of operational data or evaluation findings on the provisions of 
the Final Rule or WIOA in general. Therefore, we describe some benefits 
qualitatively.
    The Department has made every effort to quantify all incremental 
costs associated with the implementation of WIOA as distinct from those 
that already exist under WIA, WIOA's predecessor statute. Despite our 
best efforts, however, we might be double counting some activities that 
occur under WIA. Thus, the costs itemized below represent an upper 
bound for the potential burden of implementing WIOA.
    In addition to this Final Rule, DOL and ED are publishing a Joint 
Final Rule to implement specific requirements of WIOA that fall under 
both Departments' purviews (Joint WIOA Final Rule). The Department 
acknowledges that these final rules and their associated impacts might 
not be fully independent from one another, but we are unaware of a 
reliable method to quantify this interdependence. Therefore, this 
analysis does not capture the correlated impacts of the costs, 
benefits, and transfers of this Final Rule and those associated with 
the Joint WIOA Final Rule.
    In accordance with the regulatory analysis guidance articulated in 
Circular A-4 and consistent with the Department's practices in previous 
rulemakings, this regulatory analysis focuses on the likely 
consequences (i.e., costs, benefits, and transfers that accrue to 
citizens and residents of the United States) of this WIOA-required 
Final Rule. The analysis covers 10 years (2016 through 2025) to ensure 
it captures major additional costs and transfers that accrue over time. 
The Department expresses all quantifiable impacts in 2015 dollars and 
uses 3-percent and 7-percent discounting following Circular A-4.
    Exhibit 2 presents the number of entities expected to experience a 
change in level of effort (workload) due to the requirements included 
in this Final Rule. The Department provides these estimates and uses 
them extensively throughout this analysis to estimate the cost of each 
provision.

             Exhibit 2--Number of Affected Entities by Type
------------------------------------------------------------------------
                                                             Number of
                       Entity type                           entities
------------------------------------------------------------------------
States impacted by DOL program requirements \4\.........          \5\ 57
States without colocated Wagner-Peyer offices and one-            \6\ 10
 stop delivery systems (one-stops)......................
States without sector strategies........................          \7\ 21
States without policies for career pathways.............          \8\ 27
States that must pay their share for proportionate use            \9\ 54
 of one-stops...........................................
States that receive sanctions...........................          \10\ 5
Local areas without colocated ES offices and one-stops..        \11\ 100
Local WDBs..............................................        \12\ 580
Local WDBs newly selecting one-stop operators...........        \13\ 250
Local WDBs performing regional plan modifications.......        \14\ 300
Eligible Training Providers (ETPs)......................     \15\ 11,400
------------------------------------------------------------------------

Estimated Number of Workers and Level of Effort
    The Department presents the estimated average number of workers and 
the estimated average level of effort required per worker for each 
activity in the subject-by-subject analysis. To derive these estimates, 
ETA program experts consulted with State programs to estimate the 
average levels of effort and the average number of workers needed for 
each activity to meet the requirements relative to the baseline (i.e., 
the current practice under WIA). These estimates are the national 
averages for all States; thus, some States could experience higher 
actual costs, while actual costs could be lower for other States.
---------------------------------------------------------------------------

    \4\ For simplicity, the Department's use of the term ``States'' 
in this RIA refers to the 50 States; the District of Columbia; the 
U.S. territories of American Samoa, Guam, the Commonwealth of the 
Northern Mariana Islands, the Commonwealth of Puerto Rico, and the 
Virgin Islands; and the Republic of Palau, a country in free 
association with the United States.
    \5\ Based on internal Department of Labor data.
    \6\ Department of Labor estimate.
    \7\ Ibid.
    \8\ U.S. Department of Education, U.S. Department of Labor, and 
U.S. Department of Health and Human Services. (2014). Viewing Party 
Guide. National Dialogue on Career Pathways Retrieved from: https://learnwork.workforce3one.org/view/2001425433998607383/info.
    \9\ Department of Labor estimate.
    \10\ Ibid.
    \11\ Ibid.
    \12\ Ibid.
    \13\ Ibid.
    \14\ Ibid.
    \15\ Ibid.
---------------------------------------------------------------------------

Compensation Rates
    In the subject-by-subject analysis, the Department presents the 
additional labor and other costs associated with the implementation of 
each provision in this Final Rule. Exhibit 3 presents the compensation 
rates for the occupational categories expected to experience an 
increase in level of effort (workload) due to the Final Rule. We use 
the BLS mean hourly wage rate for State and local 
employees.16 17 We adjust the wage rates using a loaded wage 
factor to reflect total compensation, which includes non-wage factors 
such as health and retirement benefits.\18\ For the State and local 
sectors, we use a loaded wage factor of 1.57, which represents the 
ratio

[[Page 56294]]

of average total compensation \19\ to average wages in 
2015.20 21 We then multiply the loaded wage factor by each 
occupational category's wage rate to calculate an hourly compensation 
rate.
---------------------------------------------------------------------------

    \16\ Bureau of Labor Statistics. (2016). May 2015 national 
industry-specific occupational employment and wage estimates: NAICS 
999200--State government, excluding schools and hospitals (OES 
designation). Retrieved from: http://www.bls.gov/oes/current/naics4_999200.htm.
    \17\ Bureau of Labor Statistics. (2016). May 2015 national 
industry-specific occupational employment and wage estimates: NAICS 
999300--Local government, excluding schools and hospitals (OES 
designation). Retrieved from: http://www.bls.gov/oes/current/naics4_999300.htm.
    \18\ The Department believes that the overhead costs associated 
with this Final Rule are small because the additional activities 
required by the Final Rule will be performed by existing employees 
whose overhead costs are already covered. However, acknowledging 
that there might be additional overhead costs, as a sensitivity 
analysis of results, we calculated the impact of more significant 
overhead costs by including an overhead rate of 17 percent. This 
rate has been used by the Environmental Protection Agency (EPA) in 
its final rules (see, for example, EPA Electronic Reporting under 
the Toxic Substances Control Act Final Rule, Supporting & Related 
Material), and is based upon a Chemical Manufacturers Association 
study. An overhead rate from chemical manufacturing may not be 
appropriate for all industries, so there may be substantial 
uncertainty concerning the estimates based on this illustrative 
example. (In contrast, DOL's Employee Benefits Security 
Administration (EBSA) includes overhead costs that are substantially 
higher and more variable across employee types than EPA's--between 
39 and 138 percent of base wages for compensation and benefits 
managers, lawyers, paralegals and other legal assistants, and 
computer systems analysts--as presented in detail at www.dol.gov/ebsa/pdf/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-march-2016.pdf.) Using an overhead rate of 17 percent 
would increase the total cost of the Final Rule by 17 percent, from 
$89.9 million in Year 1 to $105.1 million. Over the 10-year period, 
using an overhead rate of 17 percent would increase the total 
undiscounted cost of the Final Rule from $350.4 million to $409.9 
million, or 17 percent.
    \19\ Bureau of Labor Statistics. (2016). 2015 Employer Costs for 
Employee Compensation. Retrieved from: http://www.bls.gov/schedule/archives/ecec_nr.htm. The Department calculated this value using 
data from Table 3. ``Employer Costs per Hour Worked for Employee 
Compensation and Costs as a Percent of Total Compensation: State and 
Local Government Workers, by Major Occupational and Industry 
Group.'' Total compensation for all workers. To calculate the 
average total compensation in 2015 of $44.53, the Department 
averaged the total compensation for all workers provided in March, 
June, September, and December releases.
    \20\ Bureau of Labor Statistics. (2016). 2015 Employer Costs for 
Employee Compensation. Retrieved from: http://www.bls.gov/schedule/archives/ecec_nr.htm.
    The Department calculated this value using data from Table 3. 
``Employer Costs per Hour Worked for Employee Compensation and Costs 
as a Percent of Total Compensation: State and Local Government 
Workers, by Major Occupational and Industry Group.'' Wages and 
salaries for all workers. To calculate the average wage and salary 
in 2015 of $28.41, the Department averaged the wage and salaries for 
all workers provided in March, June, September, and December 
releases.
    \21\ The State and local loaded wage factor was applied to all 
non-Federal employees. Discerning the number of State and local-
sector employees and private-sector employees at the local level is 
difficult; therefore, the Department used the State and local-sector 
loaded wage factor (1.57) instead of the private-sector wage factor 
(1.44) for all non-Federal employees to avoid underestimating the 
costs.
---------------------------------------------------------------------------

    The Department uses the hourly compensation rates presented in 
Exhibit 3 throughout this analysis to estimate the labor costs for each 
provision.

                                          Exhibit 3--Compensation Rates
                                                 [2015 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                                      Hourly
                            Position                              Average hourly    Loaded wage    compensation
                                                                     wage rate        factor           rate
                                                                               a               b       c = a x b
----------------------------------------------------------------------------------------------------------------
                                                 Local Employees
----------------------------------------------------------------------------------------------------------------
Computer systems analysts.......................................          $38.70            1.57          $60.76
Database administrators.........................................           37.96  ..............           59.60
Lawyers.........................................................           47.63  ..............           74.78
Management analysts.............................................           38.60  ..............           60.60
Management occupations staff....................................           40.53  ..............           63.63
Secretaries and administrative assistants.......................           18.66  ..............           29.30
Social workers..................................................           25.77  ..............           40.46
----------------------------------------------------------------------------------------------------------------
                                                 State Employees
----------------------------------------------------------------------------------------------------------------
Chief executive.................................................           54.26            1.57           85.19
Computer systems analysts.......................................           35.78  ..............           56.17
Database administrators.........................................           36.32  ..............           57.02
Lawyers.........................................................           41.71  ..............           64.48
Management analysts.............................................           29.22  ..............           45.88
Management occupations staff....................................           41.65  ..............           65.39
Secretaries and administrative assistants.......................           17.30  ..............           27.16
Social and community service managers...........................           34.53  ..............           54.21
Social workers..................................................           22.43  ..............           35.22
----------------------------------------------------------------------------------------------------------------

    At a minimum, all affected entities are currently required to 
comply with the 2000 WIA Final Rule (65 FR 49294, Aug. 11, 2000); 
however, some affected entities might already comply with some 
provisions of the Final Rule. This analysis estimates the incremental 
costs and transfers that affected entities that are not yet compliant 
with the Final Rule will incur. The equation below shows the method the 
Department uses to calculate the incremental total cost for each 
provision over the 10-year analysis period. The methodology used in 
estimating the quantifiable transfers is provided in the subject-by-
subject analysis.
[GRAPHIC] [TIFF OMITTED] TR19AU16.001

Where,

Al Number of affected entities that will incur labor 
costs,
Ni Number of staff of occupational category i,
Hi Hours required per staff of occupational category i,
Wi Mean hourly wage rate of staff of occupational 
category i,
Li Loaded wage factor of staff of occupational category 
i,
Aj Number of affected entities incurring non-labor costs 
of type j,
Cj Non-labor cost of type j,
i Occupational category,
n Number of occupational categories,
j Non-labor cost type,
m Number of non-labor cost types, and
T Year.

    The total cost of each provision is calculated as the sum of the 
total labor cost and total non-labor cost incurred each year over the 
10-year period (see Exhibit 28 for the average annual cost of the Final 
Rule by provision). The total labor cost is the sum of the labor costs

[[Page 56295]]

for each occupational category i (e.g., computer systems analyst, 
database administrators, and lawyers) multiplied by the number of 
affected entities that will incur labor costs, Al. The labor 
cost for each occupational category i is calculated by multiplying the 
number of staff required to perform the required activity, 
Ni; the hours required per staff member to perform the 
required activity, Hi; the mean hourly wage rate of staff of 
occupational category i, Wi; and the loaded wage factor of 
staff of occupational category i, Li. The total non-labor 
cost is the sum of the non-labor costs for each non-labor cost type j 
(e.g., consulting costs) multiplied by the number of affected entities 
that will incur non-labor costs, Aj.
Transfer Payments
    In addition, the Department provides an assessment of transfer 
payments associated with transitioning the Nation's public workforce 
system from the requirements of WIA to the new requirements of WIOA. In 
accordance with Circular A-4, we consider transfer payments as payments 
from one group to another that do not affect total resources available 
to society.
    One example of transfer payments results from the expectation that 
available U.S. workers trained and hired who were previously unemployed 
will no longer seek new or continued unemployment insurance benefits. 
Assuming other factors remain constant, the Department expects State 
unemployment insurance expenditures to decline because of the hiring of 
U.S. workers following WIOA implementation. We, however, cannot 
quantify all transfer payments due to a lack of adequate data.
5. Updates to the Cost-Benefit Analysis for the Final Rule
    In total, the Department estimates that this Final Rule will 
generate costs over a 10-year period. The Final Rule is estimated to 
result in 10-year undiscounted costs of $350.4 million (in 2015 
dollars). In the NPRM, the Department estimated that the proposed rule 
would result in $384.4 million in undiscounted costs (in 2013 dollars). 
The Final Rule also quantifies transfer payments of $128.9 million (in 
2015 dollars). As discussed below, after reviewing public comments and 
with further consultation with program experts in the DOL program 
areas, we updated the cost and transfer analyses and made changes to 
specific provisions in the NPRM that affected costs and transfers. 
While the updates made to each provision (i.e., changes from the NPRM 
estimates) are discussed under the relevant headings below, a detailed 
description of each cost provision remains in section V.A.6 (Subject-
by-Subject Analysis).
General Updates
    In the Final Rule economic analysis, the Department updates all 
costs and transfers to 2015 dollars from 2013 dollars in the NPRM. This 
update increases the estimated costs and transfers of the Final Rule 
relative to the costs presented in the NPRM.
    In addition, the Department has made several updates to labor 
costs. First, we use more specific occupational categories than those 
used in the NPRM (i.e., administrative staff, WDB members, counsel 
staff, local stakeholders, managers, and technical staff). In the Final 
Rule, the occupational categories include chief executives, computer 
systems analysts, database administrators, lawyers, management 
analysts, management occupations staff, secretaries and administrative 
assistants, social and community service managers, and social workers. 
Due to the numerous changes made in the analysis, which are described 
in detail below, these occupational categories add more specificity to 
the labor costs, but determining whether they had a positive or 
negative effect on costs or transfers was not possible.
    Second, the Department has updated labor costs, including wage 
rates and loaded wage factors, to reflect 2015 BLS data. Furthermore, 
instead of using State government employee wage rates for workers at 
both the State level and local level as in the NPRM, we applied wage 
rates for State government employees and local government employees to 
workers at the State and local levels, respectively. Depending on the 
occupational category, the State-level wage rate could be higher or 
lower than the corresponding local-level wage rate; thus, determining 
whether this had a positive or negative effect on costs was not 
possible.
    Third, based on further discussions with program experts, the 
Department has increased the overall number of States from 56 to 57 in 
the Final Rule because we concluded that the WIOA requirements also 
will affect the Republic of Palau.
New State WDB Membership Requirements
    This section describes the updates to the NPRM's provision (a) 
``New State Workforce Development Board Membership Requirements.'' In 
this Final Rule's subject-by-subject analysis, costs related to this 
provision are found in provision (a) ``New State WDB Membership 
Requirements.'' The cost of this provision reflects the cost for States 
to establish State WDBs in accordance with the membership requirements. 
The total undiscounted 10-year cost of this provision decreased from 
$313,000 in the NPRM to $272,000 in the Final Rule.\22\
---------------------------------------------------------------------------

    \22\ This variance in cost is a result of the Department's 
updates of the wage rates used throughout this analysis.
---------------------------------------------------------------------------

    At the State level for the DOL programs, the Department made the 
changes presented in Exhibit 4. We replaced the manager with the more 
precise occupational categories of chief executives and management 
occupations staff. We assumed that 25 percent of the effort would be 
the responsibility of a chief executive and 75 percent of a management 
occupations staff member. We also replaced the technical staff with the 
more precise occupational category of management analyst.

                                                 Exhibit 4--Updates to Costs of State-Level DOL Programs--New State WDB Membership Requirements
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                    (a) New state workforce development board membership requirements                                            (a) New state WDB membership requirements
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           20  One time.............  56 States............  Chief executive....            1            5  One time............  57 States.
------------------------------------------------------------                                              -----------------------------------------------

[[Page 56296]]

 
Counsel staff....................            1           15                                                Management                     1           15
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            2           20                                                Lawyer.............            1           15
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................            1           20                                                Management analyst.            2           20
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Secretary or admin.            1           20
                                                                                                            assistant.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Development and Continuous Improvement of the Workforce Development 
System
    This section describes the updates to the NPRM's provision (b) 
``Development and Continuous Improvement of the Workforce Development 
System.'' In the Final Rule's subject-by-subject analysis, this cost 
provision and provision (f) ``Identification of Regions,'' have been 
combined in the Final Rule to form provision (b) ``Development and 
Continuous Improvement of the Workforce Development System.'' This 
provision of the Final Rule estimates the cost for State WDBs to assist 
State Governors in: (1) The development and continuous improvement of 
the State's workforce development systems, and (2) the identification 
of regions, including planning regions, and the designation of local 
areas, after consultation with Local WDBs and chief elected officials 
(CEOs). The cost estimate for the first item was initially included in 
provision (b) of the NPRM along with a portion of the second item.\23\ 
For these items, the total undiscounted 10-year cost decreased from 
$92.1 million in the NPRM to $65.5 million in the Final Rule.\24\
---------------------------------------------------------------------------

    \23\ See provision (f) ``Identification of Regions'' below for 
revised cost estimates related to the second item, identifying 
regions and designating local areas.
    \24\ This variance in cost is a result of the Department's 
updates of the wage rates used throughout this analysis.
---------------------------------------------------------------------------

    Exhibit 5 presents the updates to the State-level DOL program. The 
Department replaced the technical staff with the more precise 
occupational category of management analyst.

                               Exhibit 5--Updates to Costs of State-Level DOL Programs--Development and Continuous Improvement of the Workforce Development System
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
              (b) Development and continuous improvement of the workforce development system                   (b) Development and continuous improvement of the workforce development system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Sector Strategies           Sector Strategies
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1          300  Annual...............  21 States............  Management                     1          300  Annual..............  21 States w/o
                                                                                                            occupations staff.                                                   extensive and
                                                                                                                                                                                 systematic
                                                                                                                                                                                 sector
                                                                                                                                                                                 strategies.
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            2        1,260                                                Management analyst.            2        1,260
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                             Career Pathways             Career Pathways
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1          300  Annual...............  27 States............  Management                     1          300  Annual..............  27 States w/o
                                                                                                            occupations staff.                                                   policies for
                                                                                                                                                                                 career
                                                                                                                                                                                 pathways.
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            2        1,260                                                Management analyst.            2        1,260
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 56297]]

 
                                             Identify Regions            Identify Regions
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           40  One time.............  56 States............  Management                     1           40  One time............  57 States.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Counsel staff....................            1           40                                                Lawyer.............            1           40
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            1           80                                                Management analyst.            1           80
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................            1           20                                                Secretary or admin.            1           20
                                                                                                            assistant.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Development of Statewide Policies Affecting the State's One-Stop 
Delivery System
    This section describes the updates to the NPRM's provision (c) 
``Development of Statewide Policies Affecting the State's One-Stop 
System.'' In the Final Rule, costs related to this provision, found in 
(d) ``Development of Statewide Policies Affecting the State's One-Stop 
System,'' reflect the efforts of State WDBs to help Governors develop 
and review statewide policies affecting the coordinated provision of 
services through the States' one-stop delivery systems. The total 
undiscounted 10-year cost of this provision increased from $1.2 million 
in the NPRM to $1.4 million in the Final Rule.
    Exhibit 6 presents the updates to the State-level DOL program. The 
Department replaced the managers in our previous estimate with the more 
precise occupational categories of management occupations staff and 
social and community service managers. After consulting with program 
experts, we increased the level of effort for managerial staff from 40 
hours to 60 hours to account for the effort related to developing 
policies governing service delivery to job seekers under WIOA. We 
estimated that 30 percent of the effort (18 hours) would be for a 
management occupations staff member and 75 percent (42 hours) for a 
social and community service manager. We also increased the level of 
effort for lawyers from 40 hours to 60 hours. In addition, we increased 
the number of technical staff from two to three and replaced them with 
the more precise occupational category of management analyst.

                            Exhibit 6--Updates to Costs of State-Level DOL Programs--Development of Statewide Policies Affecting the State's One-Stop Delivery System
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
               (c) Development of statewide policies affecting the state's one-stop system                  (d) Development of statewide policies affecting the state's one-stop delivery system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           40  One time.............  56 States............  Management                     1           18  One time............  57 States.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Counsel staff....................            1           40                                                Social & community             1           42
                                                                                                            service manager.
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            2          120                                                Lawyer.............            1           60
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Management analyst.            3          120
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Development of Strategies for Technological Improvements
    This section describes the updates to the NPRM's provision (d) 
``Development of Strategies for Technological Improvements.'' In the 
Final Rule, costs related to this provision can be found in provision 
(e) ``Development of Strategies for Technological Improvements.'' The 
cost of this provision reflects the efforts of State WDBs to help 
Governors develop strategies for technological improvements to 
facilitate access to and improve the quality of services and activities 
provided through the one-stop delivery system. The total undiscounted 
10-year cost of this provision decreased from $2.3 million in the NPRM 
to $2.0 million in the Final Rule.\25\
---------------------------------------------------------------------------

    \25\ This variance in cost is a result of the Department's 
updates of the wage rates used throughout this analysis.
---------------------------------------------------------------------------

    Exhibit 7 presents the updates to the State-level DOL program. The 
Department replaced the technical staff with the more precise 
occupational category of computer systems analyst.

[[Page 56298]]



                                        Exhibit 7--Updates to Costs of State-Level DOL Programs--Development of Strategies for Technological Improvements
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                       (d) Development of strategies for technological improvements                                     (e) Development of strategies for technological improvements
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           20  Annual...............  56 States............  Management                     1           20  Annual..............  57 States.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            1           40                                                Computer systems               1           40
                                                                                                            analysts.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

State Plan Modification
    This section describes the updates to the NPRM's provision (e) 
``State Plan Modification.'' After careful consideration, the 
Department has decided that incremental costs related to State Plan 
modifications are captured in the costs for Unified and Combined State 
Plan biennial modifications in the Joint WIOA Final Rule. See provision 
(b) ``Unified or Combined State Plans: Expanded Content, Biennial 
Modification, and Submission Coordination Requirements'' of the Joint 
WIOA Final Rule economic analysis. Therefore, the total undiscounted 
10-year cost of this provision of $135,000 in the NPRM was removed in 
the Final Rule. Exhibit 8 presents the updates to the State-level DOL 
program.

                                                        Exhibit 8--Updates to Costs of State-Level DOL Programs--State Plan Modification
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                       (e) State plan modification                                                                    Moved to joint DOL-ED final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           10  4th year.............  56 States............                              N/A. See Joint WIOA Final Rule
------------------------------------------------------------
Counsel staff....................            1            4
------------------------------------------------------------
Technical staff..................            2           10
------------------------------------------------------------
Admin. staff.....................            1            4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Identification of Regions
    This section describes the updates to the NPRM's provision (f) 
``Identification of Regions.'' This provision and provision (b) 
``Development and Continuous Improvement of the Workforce Development 
System,'' have been combined in the Final Rule to form provision (b) 
``Development and Continuous Improvement of the Workforce Development 
System.'' It reflects the efforts of State WDBs to assist the Governor 
in: (1) Developing and continuously improving the State's workforce 
development system, and (2) identifying regions, including planning 
regions, and designating local areas, after consultation with Local 
WDBs and CEOs. A cost estimate for the second item only was initially 
included in provision (f) of the NPRM. The total undiscounted 10-year 
cost of this provision decreased from $1.1 million in the NPRM to 
$968,000 in the Final Rule.\26\
---------------------------------------------------------------------------

    \26\ This variance in cost is a result of the Department's 
updates of the wage rates used throughout this analysis.
---------------------------------------------------------------------------

    Exhibit 9 presents the updates to the State-level DOL program. The 
Department replaced the technical staff with the more precise 
occupational category of management analyst.

                                                       Exhibit 9--Updates to Costs of State-Level DOL Programs--Identification of Regions
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                      (f) Identification of regions                                            (b) Development and continuous improvement of the workforce development system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Identification of Regions
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            2           40  2nd & 6th years......  56 States............  Management                     2           40  2nd & 6th years.....  57 States.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------

[[Page 56299]]

 
Counsel staff....................            1           10                                                Lawyer.............            1           10
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            3           15                                                Management analyst.            3           15
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................            2           10                                                Secretary or admin.            2           10
                                                                                                            assistant.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Appoint New Local WDB and Appropriate Firewalls
    This section describes the updates to the NPRM's provision (g) 
``Appoint New Local Workforce Development Board and Appropriate 
Firewalls.'' In the Final Rule, costs related to this provision can be 
found in provision (f) ``Appoint New Local WDB and Appropriate 
Firewalls.'' It reflects the requirement to appoint new Local WDBs and 
establish sufficient firewalls and conflict-of-interest policies and 
procedures approved by the Governor when a Local WDB is selected as a 
one-stop operator through a sole-source procurement. The total 
undiscounted 10-year cost of this provision decreased from $4.6 million 
in the NPRM to $4.5 million in the Final Rule.\27\
---------------------------------------------------------------------------

    \27\ This variance in cost is a result of the Department's 
updates of the wage rates used throughout this analysis.
---------------------------------------------------------------------------

    Exhibit 10 presents the updates to Local WDBs. In our estimates for 
appointing new Local WDBs, the Department replaced the technical staff 
with the more precise occupational category of management analyst. In 
our estimates for appropriate firewalls, the Department replaced the 
technical staff with the more precise occupational category of computer 
systems analyst.

                                                   Exhibit 10--Updates to Costs of Local WDBs--Appoint New Local WDB and Appropriate Firewalls
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
               (g) Appoint new local workforce development board and appropriate firewalls                                  (f) Appoint new local WDB and appropriate firewalls
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                          Appoint New Local WDB       Appoint New Local WDB
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           20  One time.............  580 Local WDBs.......  Management                     1           20  One time............  580 Local WDBs.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Counsel staff....................            1           15                                                Lawyer.............            1           15
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            2           20                                                Management analyst.            2           20
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................            1           20                                                Secretary or admin.            1           20
                                                                                                            assistant.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                          Appropriate Firewalls       Appropriate Firewalls
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1            8  One time.............  580 Local WDBs.......  Management                     1            8  One time............  580 Local WDBs.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Counsel staff....................            1            8                                                Lawyer.............            1            8
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            1           20                                                Computer systems               1           20
                                                                                                            analyst.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Career Pathways Development
    This section describes the updates to the NPRM's provision (h) 
``Career Pathways Development.'' In the Final Rule's subject-by-subject 
analysis, costs related to this provision can be found in provision (g) 
``Local WDB Career Pathways Development.'' The cost of this provision 
reflects the cost for Local WDBs, with representatives of secondary and 
postsecondary education programs, to lead efforts in developing and 
implementing career pathways in the local area by aligning the 
employment, training, education, and supportive services needed by 
adults and youth, particularly individuals with barriers to employment. 
The total undiscounted 10-year cost of this provision decreased from 
$70.7 million

[[Page 56300]]

in the NPRM to $65.4 million in the Final Rule.\28\
---------------------------------------------------------------------------

    \28\ This variance in cost is a result of the Department's 
updates of the wage rates used throughout this analysis.
---------------------------------------------------------------------------

    Exhibit 11 presents the updates related to Local WDBs. The 
Department replaced the technical staff in our previous estimate with 
the more precise occupational category of management analyst. All other 
aspects of the analysis, including the number of hours by occupational 
category, remain unchanged.

                                                             Exhibit 11--Updates to Costs of Local WDBs--Career Pathways Development
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                     (h) Career pathways development                                                             (g) Local WDB career pathways development
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           80  Annual...............  580 Local WDBs.......  Management                     1           80  Annual..............  580 Local WDBs.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Counsel staff....................            1           10                                                Lawyer.............            1           10
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            1           80                                                Management analyst.            1           80
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................            1           20                                                Secretary or admin.            1           20
                                                                                                            assistant.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Development of Proven and Promising Practices
    This section describes the updates to the NPRM's provision (i) 
``Development of Proven and Promising Practices.'' In the Final Rule, 
costs related to this provision can be found in provision (h) ``Local 
WDB Development of Proven and Promising Practices.'' It reflects the 
cost for Local WDBs to lead local efforts in identifying and promoting 
proven and promising strategies and initiatives for meeting the needs 
of employers, workers, and job seekers (including individuals with 
barriers to employment). Examples include providing physical and 
programmatic accessibility to the one-stop delivery system and 
identifying and disseminating information on proven and promising 
practices conducted in other local areas for meeting such needs. The 
total undiscounted 10-year cost of this provision increased from $2.9 
million in the NPRM to $21.4 million in the Final Rule.\29\
---------------------------------------------------------------------------

    \29\ This variance in cost is a result of increasing the number 
of affected entities from 56 States to 580 Local WDBs. Because the 
activities performed will be similar for workers at the State and 
local level, the level of effort was not reduced.
---------------------------------------------------------------------------

    Exhibit 12 presents the updates to the local-level DOL program. The 
Department replaced the technical staff with the more precise 
occupational category of management analyst and removed the counsel and 
administrative staff because they would not be involved in local 
efforts in identifying and promoting proven and promising strategies at 
the Local WDB level.

                                             Exhibit 12--Updates to Costs of Local-Level DOL Programs--Development of Proven and Promising Practices
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            (i) Development of proven and promising practices                                           (h) Local WDB development of proven and promising practices
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           20  Annual...............  56 States............  Management                     1           20  Annual..............  580 Local WDBs
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Counsel staff....................            1           10                                                Management analyst.            1           40
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Technical staff..................            1           40
------------------------------------------------------------
Admin. staff.....................            1           15
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Technology
    This section describes the updates to the NPRM's provision (j) 
``Technology.'' In the Final Rule, costs related to this provision can 
be found in provision (i) ``Local WDB Development of Technology 
Strategies for Public Workforce System Accessibility and 
Effectiveness.'' It reflects the efforts of Local WDBs to develop 
strategies for using technology to maximize the accessibility and 
effectiveness of the local workforce development system for employers, 
workers, and job seekers. The total undiscounted 10-year cost of this 
provision decreased from $23.7 million in the NPRM to $21.5 million in 
the Final Rule.\30\
---------------------------------------------------------------------------

    \30\ This variance in cost is a result of the Department's 
updates of the wage rates used throughout this analysis.

---------------------------------------------------------------------------

[[Page 56301]]

    Exhibit 13 presents the updates to the Local WDBs. The Department 
replaced the technical staff with the more precise occupational 
category of computer systems analyst.

                                                                     Exhibit 13--Updates to Costs of Local WDBs--Technology
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                              (j) Technology                                                  (i) Local WDBs development of technology strategies for public workforce system
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           20  Annual...............  580 Local WDBs.......  Management                     1           20  Annual..............  580 Local WDBs.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            1           40                                                Computer systems               1           40
                                                                                                            analyst.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Selection of the One-Stop Operator
    This section describes the updates made to the NPRM's provision (k) 
``Selection of the One-Stop Operator.'' In the Final Rule, costs 
related to this provision can be found in provision (j) ``Competitive 
Process for Selection of the One-Stop Operator.'' The cost of this 
provision reflects Local WDBs' selection of a one-stop operator through 
a competitive process. The total undiscounted 10-year cost of this 
provision decreased from $19.0 million in the NPRM to $14.2 million in 
the Final Rule.\31\
---------------------------------------------------------------------------

    \31\ This variance in cost is a result of the Department's 
updates of the wage rates used throughout this analysis.
---------------------------------------------------------------------------

    Exhibit 14 presents the updates to Local WDBs. The Department 
replaced the technical staff with the more precise occupational 
category of social worker.

                                                         Exhibit 14--Updates to Costs of Local WDBs--Selection of the One-Stop Operator
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                  (k) Selection of the one-stop operator                                               (j) Competitive process for selection of the one-stop operator
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           80  2nd, 6th, & 10th       250 Local WDBs newly   Management                     1           80  2nd, 6th, & 10th      250 Local WDBs
                                                              years.                 selecting one-stop     occupations staff.                             years.                newly selecting
                                                                                     operators.                                                                                  one-stop
                                                                                                                                                                                 operators.
------------------------------------------------------------                                              -----------------------------------------------
Counsel staff....................            1           40                                                Lawyer.............            1           40
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            2          120                                                Social worker......            2          120
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................            1           40                                                Secretary or admin.            1           40
                                                                                                            assistant.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Coordination With Education Providers
    This section describes the updates to the NPRM's provision (l) 
``Coordination with Education Providers.'' In the Final Rule, costs 
related to this provision can be found in provision (k) ``Local WDB 
Coordination with Education Providers.'' The cost of this provision 
reflects Local WDBs coordinating activities with education and training 
providers in the local area. The total undiscounted 10-year cost of 
this provision increased from $3.2 million in the NPRM to $21.4 million 
in the Final Rule.\32\
---------------------------------------------------------------------------

    \32\ This variance in cost is a result of increasing the number 
of affected entities from 56 States to 580 Local WDBs. Because the 
activities performed will be similar for workers at the State and 
local level, the level of effort was not reduced.
---------------------------------------------------------------------------

    Exhibit 15 presents the updates to the local-level DOL program. The 
Department replaced the technical staff with the more precise 
occupational category of management analyst. We removed the counsel and 
administrative staff because they would not be involved in this effort 
at the Local WDB level.

[[Page 56302]]



                                                 Exhibit 15--Updates to Costs of Local-Level DOL Programs--Coordination With Education Providers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                (l) Coordination with education providers                                                   (k) Local WDB coordination with education providers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           30  Annual...............  56 States............  Management                     1           20  Annual..............  580 Local WDBs.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Counsel staff....................            1           10                                                Management analyst.            1           40
------------------------------------------------------------                                              --------------------------------------------------------------------------------------
Technical staff..................            1           40
------------------------------------------------------------
Admin. staff.....................            1           10
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Regional Plans
    This section describes the updates to the NPRM's provision (m) 
``Regional Plans.'' In the Final Rule, costs related to this provision 
can be found in provision (l) ``Regional Plans.'' The cost of this 
provision reflects the efforts of Local WDBs and CEOs within a planning 
region to prepare, submit to the State, and obtain approval of a single 
regional plan that includes a description of the regional planning 
activities described in WIOA and incorporates local plans for each 
local area in the planning region. The total undiscounted 10-year cost 
of this provision decreased from $10.3 million in the NPRM to $9.5 
million in the Final Rule.\33\
---------------------------------------------------------------------------

    \33\ This variance in cost is a result of the Department's 
updates of the wage rates used throughout this analysis.
---------------------------------------------------------------------------

    Exhibit 16 presents the updates to Local WDBs. The Department 
replaced the technical staff with the more precise occupational 
category of management analyst.

                                                                   Exhibit 16--Updates to Costs of Local WDBs--Regional Plans
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                            (m) Regional plans                                                                               (l) Regional plans
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            2           20  2nd & 6th years......  580 Local WDBs.......  Management                     2           20  2nd & 6th years.....  580 Local WDBs.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Counsel staff....................            1            8                                                Lawyer.............            1            8
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            2           40                                                Management analyst.            2           40
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................            1            8                                                Secretary or admin.            1            8
                                                                                                            assistant.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Local and Regional Plan Modification
    This section describes the updates to the NPRM's provision (n) 
``Local and Regional Plan Modification.'' In the Final Rule, costs 
related to this provision can be found in provision (m) ``Local and 
Regional Plan Modification.'' The cost of this provision reflects the 
efforts of each Local WDB, in partnership with the CEO, to review the 
local plan every 2 years and submit a modification as needed, based on 
significant changes in labor market and economic conditions and other 
factors. The total undiscounted 10-year cost of this provision 
decreased from $4.1 million in the NPRM to $3.8 million in the Final 
Rule.\34\
---------------------------------------------------------------------------

    \34\ This variance in cost is a result of the Department's 
updates of the wage rates used throughout this analysis.
---------------------------------------------------------------------------

    Exhibit 17 presents the updates to the Local WDBs for regional 
plans. For local and regional plan modification, the Department 
replaced the technical staff with the more precise occupational 
category of management analyst.

[[Page 56303]]



                                                    Exhibit 17--Updates to Costs of Local-Level Boards--Local and Regional Plan Modification
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                 (n) Local and regional plan modification                                                         (m) Local and regional plan modification
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Local Plan Modification     Local Plan Modification
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           10  4th year.............  580 Local WDBs.......  Management                     1           10  4th year............  580 Local WDBs.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Counsel staff....................            1            4                                                Lawyer.............            1            4
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            2           10                                                Management analyst.            2           10
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................            1            4                                                Secretary or admin.            1            4
                                                                                                            assistant.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Regional Plan Modification  Regional Plan Modification
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            2           10  4th & 8th years......  300 Local WDBs that    Management                     2           10  4th & 8th years.....  300 Local WDBs
                                                                                     will modify regional   occupations staff.                                                   that will
                                                                                     plans.                                                                                      modify regional
                                                                                                                                                                                 plans.
------------------------------------------------------------                                              -----------------------------------------------
Counsel staff....................            1            4                                                Lawyer.............            1            4
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            2           20                                                Management analyst.            2           20
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................            1            5                                                Secretary or admin.            1            5
                                                                                                            assistant.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Improved Information About Potential Training Program Providers
    This section describes the updates to the NPRM's provision (o) 
``Improved Information about Potential Training Program Providers.'' In 
the Final Rule, costs related to this provision can be found in 
provision (n) ``Improved Information about Eligible Training Program 
Providers.'' The cost of this provision reflects the efforts of State-
maintained Eligible Training Provider Lists (ETPLs) to provide 
information to the public on the effectiveness of Eligible Training 
Providers (ETPs) in achieving positive outcomes for WIOA training 
participants. The total undiscounted 10-year cost of this provision 
increased from $5.5 million in the NPRM to $4.5 million in the Final 
Rule.\35\
---------------------------------------------------------------------------

    \35\ This variance in cost is a result of the Department's 
updates of the wage rates used throughout this analysis.
---------------------------------------------------------------------------

    Exhibit 18 presents the updates to the State-level DOL program. The 
Department replaced the technical staff in our previous estimate with 
the more precise occupational category of management analyst.

                                    Exhibit 18--Updates to Costs of State-Level DOL Programs--Improved Information About Potential Training Program Providers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                   (o) Improved information about potential training program providers                               (n) Improved information about eligible training program providers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           32  Annual...............  56 States............  Management                     1           32  Annual..............  57 States.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            2           40                                                Management analyst.            2           40
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................            1           80                                                Secretary or admin.            1           80
                                                                                                            assistant.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 56304]]

Sanctions on Under-Performing States
    This section describes the updates to the NPRM's provision (p) 
``Sanctions on Under-Performing States.'' In the Final Rule, costs 
related to this provision can be found in provision (o) ``Sanctions on 
Under-Performing States.'' It reflects the costs related to States that 
are sanctioned when they fail to meet the State-adjusted levels of 
performance for a program for a second consecutive program year or if 
they fail to submit a report for any program year. The total 
undiscounted 10-year cost related to this provision decreased from $5.2 
million in the NPRM to $408,000 in the Final Rule.\36\
---------------------------------------------------------------------------

    \36\ This variance in cost is a result of the reduction in the 
number of affected States.
---------------------------------------------------------------------------

    Exhibit 19 presents the updates to the State-level DOL program. In 
the NPRM, the Department accounted for the cost of each State to 
calculate the annual performance levels of its core programs to 
determine whether it is subject to sanctions. After consulting with our 
program experts, the Department acknowledges that the determination on 
whether States receive sanctions will be made at the Federal level 
using an objective statistical model. This cost is now accounted for in 
provision (c) of the Joint WIOA Final Rule economic analysis. In this 
DOL WIOA Final Rule, the Department is now accounting only for costs 
associated with receiving a sanction. We reduced the number of States 
from 56 to 5 because only five States, at most, are expected to receive 
a sanction each year. We replaced the technical staff in our previous 
estimate with the more precise occupational category of management 
analyst.

                                                 Exhibit 19--Updates to Costs for State-Level DOL Programs--Sanctions on Under-Performing States
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                 (p) Sanctions on under-performing states                                                         (o) Sanctions on under-performing states
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           40  Annual...............  56 States............  Chief executive....            1           40  Annual..............  5 States.
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            1           80                                                Management analyst.            1           80
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................            1           40                                                Secretary or admin.            1           40
                                                                                                            assistant.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Colocation of ES Services
    This section describes the updates to the NPRM's provision (q) 
``Colocation of Wagner-Peyser Services.'' In the Final Rule, costs 
related to this provision can be found in provision (p) ``Colocation of 
ES Services.'' The cost of this provision reflects the requirement for 
ES offices and one-stop centers to colocate. The total undiscounted 10-
year cost for this provision decreased from $63.9 million in the NPRM 
to $57.9 million in the Final Rule.\37\
---------------------------------------------------------------------------

    \37\ This variance in cost is a result of the Department's 
updates of the wage rates used throughout this analysis.
---------------------------------------------------------------------------

    Exhibit 20 presents the updates to the State-level DOL program. The 
Department replaced the technical staff with the more precise 
occupational category of management analyst. In addition, we inflated 
the consultant cost from $10,000 in 2013 dollars to $10,200 in 2015 
dollars.\38\ The consultants will assist with planning, property issues 
(e.g., selling buildings currently owned by ES and finding buildings 
that meet certain safety requirements), and integrating information 
technology (IT) and case management systems.
---------------------------------------------------------------------------

    \38\ Bureau of Labor Statistics. (2016). CPI Detailed Report 
Data for February 2016. Retrieved from: http://www.bls.gov/cpi/cpid1602.pdf.
    The Department calculated the inflation factor of 1.02 using 
data from Table 24. ``Historical Consumer Price Index for All Urban 
Consumers (CPI-U): U.S. City Average, All Items.'' To calculate the 
inflation factor, the Department divided the average annual CPI-U 
for 2015 by the average annual CPI-U for 2013 (=237.017/232.957).

                                                       Exhibit 20--Updates to Costs of State-Level DOL Programs--Colocation of ES Services
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                      (q) Colocation of ES services                                                                    (p) Colocation of ES services
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................           10           40  One time.............  10 States............  Management                    10           40  One time............  10 States.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Counsel staff....................           10           10                                                Lawyer.............           10           10
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................           20           25                                                Management analyst.           20           25
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................           10            5                                                Secretary or admin.           10            5
                                                                                                            assistant.
------------------------------------------------------------                                              -----------------------------------------------
Consultant cost..................           $10,000                                                        Consultant cost....           $10,200
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 56305]]

    Exhibit 21 presents the updates to the local-level DOL program. The 
Department replaced the technical staff with the more precise 
occupational category of management analyst.

                                                       Exhibit 21--Updates to Costs of Local-Level DOL Programs--Colocation of ES Services
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                      (q) Colocation of ES services                                                                    (p) Colocation of ES services
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................          100           40  One time.............  100 Local areas......  Management                   100           40  One time............  100 Local areas.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................          200           25                                                Management analyst.          200           25
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................          100            5                                                Secretary or admin.          100            5
                                                                                                            assistant.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Partners Required To Pay Their Share for Proportionate Use of One-Stop 
Delivery System
    This section describes the updates to the NPRM's provision (r) 
``Partners Required to Pay their Share for Proportionate Use of One-
Stop Delivery System.'' In the Final Rule, costs related to this 
provision can be found in provision (q) ``Partners Required to Pay 
their Share for Proportionate Use of One-Stop Delivery System.'' It 
reflects the cost related to each one-stop partner contributing its 
proportional share to the funding of one-stop infrastructure costs. The 
total undiscounted 10-year cost decreased from $68.0 million in the 
NPRM to $45.6 million in the Final Rule.
    Exhibit 22 presents the updates to the State-level DOL program. The 
Department replaced the technical staff with the more precise 
occupational category of social worker. All other aspects of the 
analysis, including the number of hours by occupational category, 
remain unchanged.

                        Exhibit 22--Updates to Costs for State-Level DOL Programs--Partners Required To Pay Their Share for Proportionate Use of One-Stop Delivery System
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
        (r) Partners required to pay their share for proportionate use of one-stop delivery system          (q) Partners required to pay their share for proportionate use of one-stop delivery
----------------------------------------------------------------------------------------------------------                                         system
                                                                                                          --------------------------------------------------------------------------------------
                                     Average      Average                                                                                      Average
         Labor  category            number of    level  of         Frequency         Number of  affected                          Average     level  of                             Number of
                                     workers       effort                                  entities           Labor category     number of      effort          Frequency           affected
                                                   (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................           50           40  3rd, 6th, & 9th years  54 States that need    Management                    50           40  3rd, 6th, & 9th       54 States that
                                                                                     to pay their           occupations staff.                             years.                need to pay
                                                                                     proportional share.                                                                         their
                                                                                                                                                                                 proportional
                                                                                                                                                                                 share.
------------------------------------------------------------                                              -----------------------------------------------
Counsel staff....................           50            1                                                Lawyer.............           50            1
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................          100           40                                                Social worker......          100           40
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................           50            5                                                Secretary or admin.           50            5
                                                                                                            assistant.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Establishing Training Provider Eligibility Procedures, Including Adding 
Registered Apprenticeship
    This section describes the updates to the NPRM's provision (s) 
``Establishing Training Provider Eligibility Procedures, Including 
Adding Registered Apprenticeship.'' In the Final Rule, costs related to 
this provision can be found in provision (r) ``Establishing Training 
Provider Eligibility Procedures, Including Procedures for Adding 
Registered Apprenticeship Programs to the State Eligible Training 
Provider List.'' The cost of this provision reflects the efforts of the 
Governor, after consultation with the State WDB, to establish criteria, 
information requirements, and procedures for the eligibility of 
providers of training services to receive funds under WIOA for the 
provision of training services in local areas in the State (i.e., 
procedures for initial determination and renewals of eligibility). The 
total undiscounted 10-year cost related to this provision increased 
from $529,000 in the NPRM to $2.5 million in the Final Rule.
    Exhibit 23 presents the updates to the State-level DOL program. For 
establishing eligibility procedures for training providers, the 
Department replaced the technical staff with the more precise 
occupational category of management analyst. We also added a

[[Page 56306]]

burden for reporting: One database administrator per ETP that will 
incur a 3-hour, one-time cost.

                   Exhibit 23--Updates to Costs to State-Level DOL Programs--Establishing Training Provider Eligibility Procedures, Including Adding Registered Apprenticeship
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
   (s) Establishing training provider eligibility procedures, including adding registered apprenticeship     (r) Establishing training provider eligibility procedures, including procedures for
----------------------------------------------------------------------------------------------------------   adding registered apprenticeship programs to the state eligible training provider
                                                                                                                                                    list
                                                  Average                                                 --------------------------------------------------------------------------------------
                                     Average     level  of                           Number of  affected                                       Average
         Labor  category            number of      effort          Frequency               entities                               Average     level  of                             Number of
                                     workers       (hrs.)                                                     Labor category     number of      effort          Frequency           affected
                                                                                                                                  workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Establishing Training Provider Eligibility Procedures
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           40  One time.............  56 States............  Management                     1           40  One time............  57 States.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Counsel staff....................            1           20                                                Lawyer.............            1           20
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            1           80                                                Management analyst.            1           80
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            Reporting
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Database                       1            3  One time............  11,400 ETPs.
                                                                                                            administrator.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Determining Eligibility of New and Previously Eligible Providers
    This section describes the updates to the NPRM's provision (t) 
``Determining Eligibility of New and Previously Eligible Providers.'' 
In the Final Rule, costs related to this provision can be found in 
provision (s) ``Determining Initial Eligibility of New and Previously 
Eligible Providers.'' The costs reflect the efforts of the Governor, 
after consultation with the State WDB, to establish procedures for 
determining eligibility of providers and include application and 
renewal procedures, eligibility criteria, and information requirements. 
The total undiscounted 10-year cost of this provision decreased from 
$1.1 million in the NPRM to $879,000 in the Final Rule.
    Exhibit 24 presents the updates to the State-level DOL program. The 
Department replaced the technical staff with the more precise 
occupational category of management analyst.

                                   Exhibit 24--Updates to Costs of State-Level DOL Programs--Determining Eligibility of New and Previously Eligible Providers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                   (t) Determining eligibility of new and previously eligible providers                         (s) Determining initial eligibility of new and previously eligible providers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           40  One time.............  56 States............  Management                     1           40  One time............  57 States.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            2          110                                                Management analyst.            2          110
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................            2           50                                                Secretary or admin.            2           50
                                                                                                            assistant.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Biennial Review of Eligibility
    This section describes the updates to the NPRM's provision (u) 
``Biennial Review of Eligibility.'' In the Final Rule, costs related to 
this provision can be found in provision (t) ``Biennial Review of 
Training Provider Eligibility.'' The cost of this provision reflects 
the costs of training providers to submit information for evaluation as 
specified in the Governor's eligibility criteria, information 
requirements, and procedures. The total undiscounted 10-year cost of 
this provision decreased from $2.7 million in the NPRM to $2.1 million 
in the Final Rule.\39\
---------------------------------------------------------------------------

    \39\ This variance in cost is a result of the Department's 
updates of the wage rates used throughout this analysis.
---------------------------------------------------------------------------

    Exhibit 25 presents the updates to the State-level DOL program. The 
Department replaced the technical staff with the more precise 
occupational category of management analyst.

[[Page 56307]]



                                                    Exhibit 25--Updates to Costs of State-Level DOL Programs--Biennial Review of Eligibility
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                    (u) Biennial review of eligibility                                                               (t) Biennial review of eligibility
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           30  4th, 6th, 8th, & 10th  56 States............  Management                     1           30  4th, 6th, 8th, &      57 States.
                                                              years.                                        occupations staff.                             10th years.
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            2           60                                                Management analyst.            2           60
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................            2           30                                                Secretary or admin.            2           30
                                                                                                            assistant.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Disseminating the Training Provider List With Accompanying Information
    This section describes the updates to the NPRM's provision (v) 
``Disseminating the Training Provider List with Accompanying 
Information.'' In the Final Rule, costs related to this provision can 
be found in provision (u) ``Disseminating the Training Provider List 
with Accompanying Information.'' The cost of this provision reflects 
the efforts of the Governor or State agency to disseminate the State 
ETPL and accompanying performance and cost information to Local WDBs in 
the State and to members of the public. The total undiscounted 10-year 
cost of this provision decreased from $1.7 million in the NPRM to $1.5 
million in the Final Rule.\40\
---------------------------------------------------------------------------

    \40\ This variance in cost is a result of the Department's 
updates of the wage rates used throughout this analysis.
---------------------------------------------------------------------------

    Exhibit 26 presents the updates to the State-level DOL program. The 
Department replaced the technical staff with the more precise 
occupational category of management analyst.

                                Exhibit 26--Updates to Costs of State-Level DOL Programs--Disseminating the Training Provider List With Accompanying Information
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                (v) Disseminating the training provider list with accompanying information                       (u) Disseminating the training provider list with accompanying information
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manager..........................            1           30  One time.............  56 States............  Management                     1           30  One time............  57 States.
                                                                                                            occupations staff.
------------------------------------------------------------                                              -----------------------------------------------
Technical staff..................            2           80                                                Management analyst.            2           80
------------------------------------------------------------                                              -----------------------------------------------
Admin. staff.....................            2           45                                                Secretary or admin.            2           45
                                                                                                            assistant.
------------------------------------------------------------                                              -----------------------------------------------
IT reprogramming or database                 2          125                                                Database                       2          125
 staff.                                                                                                     administrator.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Migrant and Seasonal Farmworker Housing
    This section describes the updates to the NPRM's provision (w) 
``Migrant and Seasonal Farmworker Housing.'' The cost of this provision 
was not quantified in the NPRM because this this provision has been 
rescinded in the Final Rule.
    In addition, the Department moved one provision that appeared in 
the Joint WIOA NPRM to this DOL WIOA Final Rule. The Department 
describes this provision below.
Identification and Dissemination of Best Practices
    After careful consideration, the Department has concluded that the 
costs associated with provision (d) ``Identification and Dissemination 
of Best Practices'' in the Joint WIOA NPRM economic analysis are more 
appropriate for this Final Rule because the requirement affects State 
WDBs only. The costs of this provision reflect efforts by State WDBs to 
assist Governors in identifying and disseminating best practices. This 
provision results in a total undiscounted 10-year cost of $3.1 million.

[[Page 56308]]



                                          Exhibit 27--Updates to Costs of State-Level DOL Programs--Identification and Dissemination of Best Practices
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPRM                                                                                          Final rule
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Moved from joint WIOA NPRM                                                         (c) Identification and dissemination of best practices
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Average                                                                                      Average
                                     Average     level  of                           Number of  affected                          Average     level  of                             Number of
         Labor  category            number of      effort          Frequency               entities           Labor category     number of      effort          Frequency           affected
                                     workers       (hrs.)                                                                         workers       (hrs.)                              entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                         N/A. See Joint WIOA NPRM                                          Management                     1           20  Annual..............  57 States.
                                                                                                            occupations staff.
                                  -------------------------------------------------
                                                                                                           Management analyst.            2           40
                                  -------------------------------------------------
                                                                                                           Secretary or admin.            1           20
                                                                                                            assistant.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Youth Funds Targeting Out-of-School Youth
    This section describes the updates to the transfer payments 
analysis. In the NPRM, the Department described the transfer payments 
qualitatively due to data limitations and a lack of operational data or 
evaluation findings on the provisions of the NPRM or WIOA in general. 
In this DOL WIOA Final Rule, the Department was able to quantify the 
transfer payments related to youth funds targeting OSY. This accounts 
for transfers expected to result from decreases in burdens on taxpayers 
as more youth leave the youth programs and obtain employment. For 
transfers associated with youth funds targeting OSY, the quantified 
transfer payments increased from $0 in the NPRM to $128.9 million in 
the Final Rule.
6. Subject-by-Subject Analysis
    The Department's analysis below covers the expected costs of the 
following 21 provisions of the WIOA Final Rule against the baseline of 
the current practice under WIA: (a) ``New State WDB Membership 
Requirements;'' (b) ``Development and Continuous Improvement of the 
Workforce Development System;'' (c) ``Identification and Dissemination 
of Best Practices;'' (d) ``Development of Statewide Policies Affecting 
the State's One-Stop System;'' (e) ``Development of Strategies for 
Technological Improvements;'' (f) ``Appoint New Local WDB and 
Appropriate Firewalls;'' (g) ``Local WDB Career Pathways Development;'' 
(h) ``Local WDB Development of Proven and Promising Practices;'' (i) 
``Local WDB Development of Technology Strategies for Public Workforce 
System Accessibility and Effectiveness;'' (j) ``Competitive Process for 
Selection of the One-Stop Operators;'' (k) ``Local WDB Coordination 
with Education Providers;'' (l) ``Regional Plans;'' (m) ``Local and 
Regional Plan Modification;'' (n) ``Improved Information about Eligible 
Training Program Providers;'' (o) ``Sanctions on Under-Performing 
States;'' (p) ``Colocation of ES Services;'' (q) ``Partners Required to 
Pay their Share for Proportionate Use of the One-Stop Delivery 
System;'' (r) ``Establishing Training Provider Eligibility Procedures, 
Including Procedures for Adding Registered Apprenticeship Programs to 
the State Eligible Training Provider List;'' (s) ``Determining Initial 
Eligibility of New and Previously Eligible Providers;'' (t) ``Biennial 
Review of Training Provider Eligibility;'' and (u) ``Disseminating the 
Training Provider List with Accompanying Information.''
    In addition, the Department analyzed the expected transfers related 
to ``Youth Funds Targeting Out-of-School Youth.''
    The Department emphasizes that many of the provisions in this WIOA-
required Final Rule also are existing requirements under WIA. For 
example, the requirement that States ``prepare annual reports'' is a 
current requirement under WIA that States routinely undertake. 
Accordingly, our regulatory analysis focuses on new costs and transfers 
that can be attributed exclusively to the enactment of WIOA, as 
addressed in this Final Rule. Much of WIA's infrastructure and 
operations are carried forward under WIOA and, therefore, are not 
considered ``new'' burdens resulting from this Final Rule.
Quantifiable Costs of the Final Rule
    The following sections describe the provisions that are expected to 
result in costs.
a. New State WDB Membership Requirements
    States must establish State WDBs in accordance with the membership 
requirements of WIOA sec. 101(b). Under WIOA sec. 101(b)(1)(C)(i), the 
majority of the State WDB representatives must be from businesses or 
organizations in the State. These representatives must be owners, chief 
executive officers, or chief operating officers of the businesses or 
executives with optimum policy-making or hiring authority. WIA did not 
include specific requirements for percentage of State WDB business 
members.
    WIOA sec. 101(b)(1)(C)(ii) requires at least 20 percent of State 
WDB members to be representatives of labor organizations who have been 
nominated by State labor federations and at least one member to be a 
member of a labor organization or a training director from a joint 
labor-management apprenticeship program (if such program exists in the 
State). Members may include representatives of community-based 
organizations (CBOs) that have demonstrated expertise in addressing the 
employment, training, or education needs of individuals with barriers 
to employment or eligible youth.
    WIA sec. 111(b)(1)(C) required that State WDB members include 
representatives of labor organizations, representatives of 
organizations that have experience with respect to youth activities and 
expertise in the delivery of workforce investment activities, including 
chief executive officers of community colleges and CBOs. No minimum 
percentage requirement for this type of membership, however, was 
required. In accordance with WIOA sec. 101(b)(2), State WDB membership 
must represent the diverse geographic areas of the State. WIA did not 
include a requirement that State WDB representation cover the diverse 
geographic areas of the State.
Costs
    To estimate State WDB costs (see Exhibit 4), the Department 
multiplied the estimated average number of chief executives per State 
(1) by the time required to adjust the State WDB membership (5 hours) 
and by the hourly

[[Page 56309]]

compensation rate ($85.19/hour). We repeated the calculation for the 
following occupational categories: lawyers (1 lawyer at $65.48/hour for 
15 hours), management occupations staff (1 manager at $65.39/hour for 
15 hours), management analysts (2 analysts at $45.88/hour for 20 hours 
each), and secretaries or administrative assistants (1 assistant at 
$27.16/hour for 20 hours). We summed the labor cost for all five 
occupational categories ($4,767) and multiplied the result by the 
number of States (57). This calculation results in a one-time cost of 
$271,742 in the first year of the Final Rule, which is an average 
annual cost of $27,174.
b. Development and Continuous Improvement of the Workforce Development 
System
    WIOA sec. 101(d)(3)(A) through (G) require the State WDB assist the 
Governor in developing and continuously improving the State's workforce 
development system, including identifying barriers and means for their 
removal to coordinate and align programs and activities better; 
developing career pathway strategies to support individuals in entering 
or retaining employment; developing customer outreach strategies; 
developing and expanding strategies to meet the need of employers, 
workers, and job seekers through industry or sector partnerships 
related to in-demand industry sectors and occupations; identifying 
regions, including planning regions, and designating local areas (after 
consultation with Local WDBs and CEOs); \41\ developing and 
continuously improving the one-stop delivery system; and developing 
strategies to train and inform staff.
---------------------------------------------------------------------------

    \41\ According to WIOA sec. 106(a)(1), identification of regions 
is part of the process for developing the State Plan and is 
necessary to receive an allotment under other provisions of WIOA.
---------------------------------------------------------------------------

    WIA sec. 111(d)(2) also required the State WDB to assist the 
Governor in developing and continuously improving the statewide 
workforce development system; however, the list of included activities 
was limited to review of local plans and development of linkages to 
ensure coordination and non-duplication among the programs and 
activities of one-stop partners. Like WIOA, WIA required State WDBs to 
assist the Governor in designating local areas (WIA sec. 111(d)(4)). 
State WDBs, however, have significantly more explicit responsibilities 
in terms of developing strategies for workforce development systems in 
the State.
Costs
    The Department estimated the State WDBs' annual labor costs for 
developing or expanding sector strategies (see Exhibit 5) by 
multiplying the estimated average number of management occupations 
staff members per State (1) by the time required to review the 
workforce development system (300 hours) and by the hourly compensation 
rate ($65.39/hour). We performed the same calculation for the 
management analysts (2 analysts at $45.88/hour for 1,260 hours each). 
We summed the labor cost for both categories ($135,235) and multiplied 
the result by the number of States that do not have extensive and 
systematic sector strategies (21). Over the 10-year period, this 
calculation yields an estimated recurring annual cost of $2.8 million 
($2,839,927), which is equal to a 10-year total cost of $28.4 million 
($28,399,266).
    Similarly, the Department estimated the State WDBs' annual labor 
cost for expanding career pathways strategies by multiplying the 
estimated average number of management occupations staff members per 
State (1) by the time required to review the workforce development 
system (300 hours) and by the hourly compensation rate ($65.39/hour). 
We repeated the calculation for the management analysts (2 analysts at 
$45.88/hour for 1,260 hours each). We summed the labor cost for the two 
occupational categories ($135,235) and multiplied the result by the 
number of States that do not have policies for career pathways 
(27).\42\ Over the 10-year period, this calculation yields an estimated 
recurring annual cost of $3.7 million ($3,651,334), which is equal to a 
total 10-year cost of $36.5 million ($36,513,342).
---------------------------------------------------------------------------

    \42\ U.S. Department of Education, U.S. Department of Labor, and 
U.S. Department of Health and Human Services (2014, September). 
Viewing party guide. National Dialogue on Career Pathways. Retrieved 
from: https://learnwork.workforce3one.org/view/2001425433998607383/info.
---------------------------------------------------------------------------

    The Department estimated the labor cost that State WDBs will incur 
to identify regions by multiplying the estimated average number of 
lawyers per State (1) by the time required to review the workforce 
development system (40 hours) and by the hourly compensation rate 
($65.48/hour). We performed the same calculation for the following 
occupational categories: Management occupations staff (1 manager at 
$65.39/hour for 40 hours), management analysts (1 analyst at $45.88/
hour for 80 hours), and secretaries or administrative assistants (1 
assistant at $27.16/hour for 20 hours). We summed the labor cost for 
all four occupational categories ($9,448) and multiplied the result by 
the number of States (57) to estimate this one-time labor cost of 
$538,559. Over the 10-year period, this calculation yields an average 
annual cost of $53,856.
    The Department estimated the labor cost for State WDBs (See Exhibit 
9) by first multiplying the estimated average number of lawyers per 
State (1) by the time required to identify regions in the State (10 
hours each) and by the hourly compensation rate ($65.48/hour). We 
performed the same calculation for the following occupational 
categories: Management occupations staff (2 managers at $65.39/hour for 
40 hours each), management analysts (3 analysts at $45.88/hour for 15 
hours each), and secretaries or administrative assistants (2 assistants 
at $27.16/hour for 10 hours each). We summed the labor costs for all 
four occupational categories ($8,494) and multiplied the result by the 
number of States (57) to estimate this cost as $484,147, occurring in 
2017 and 2021 and resulting in an average annual cost of $96,829. This 
is equal to a total 10-year cost of $968,293.
    The sum of these costs yields a total average annual cost of $6.6 
million ($6,641,946) for individuals from the State level to review the 
workforce development system. This is equal to total 10-year cost of 
$66.4 million ($66,419,460).
c. Identification and Dissemination of Best Practices
    Under WIOA sec. 101(d)(6), State WDBs must assist Governors in 
identifying and disseminating best practices, including practices for:
    1. The effective operation of one-stop centers, relating to the use 
of business outreach, partnerships, and service delivery strategies, 
including strategies for serving individuals with barriers to 
employment.
    2. The development of effective Local WDBs, which could include 
information on contributing factors to enable Local WDBs to exceed 
negotiated levels of performance, sustain fiscal integrity, and achieve 
other measures of effectiveness.
    3. The development of effective training programs that support 
efficient placement of individuals into employment or career pathways 
and that respond to real-time labor market analysis; that effectively 
use direct assessment and prior learning assessment to measure an 
individual's prior knowledge, skills, competencies, and experiences; 
and that evaluate such skills and competencies for adaptability.
    WIA did not include requirements relating to State WDBs supporting 
the

[[Page 56310]]

development of best practices. Therefore, costs will be incurred by 
State WDBs to assist Governors in identifying and disseminating the 
best practices. State WDBs will incur annual labor costs to become 
compliant with this provision.
Costs
    The Department estimated the labor cost that States would incur 
(see Exhibit 27) by multiplying the estimated average number of 
management occupations staff members per State (1) by the time required 
to assist in the development of best practices (20 hours) and by the 
hourly compensation rate ($65.39/hour). We performed the same 
calculation for the management analysts (2 analysts at $45.88/hour for 
40 hours each) and secretaries or administrative assistants (1 
assistant at $27.16/hour for 20 hours). We summed the labor cost for 
all three occupational categories ($5,521) and multiplied the result by 
the number of States (57) to estimate this annual labor cost at 
$314,720, which results in a 10-year cost of $3.1 million ($3,147,198).
d. Development of Statewide Policies Affecting the State's One-Stop 
Delivery System
    Under WIOA sec. 101(d)(6), State WDBs must assist Governors in 
developing and reviewing statewide policies that affect the coordinated 
provision of services through the State's one-stop delivery system. 
These policies include those concerning objective criteria and 
procedures for Local WDBs to assess one-stop centers and guidance for 
the allocation of one-stop center infrastructure funds, and policies 
relating to the appropriate roles and contributions of one-stop 
partners within the one-stop delivery system, including approaches to 
facilitating equitable and efficient cost allocation.
    WIA did not include requirements relating to State WDBs' support of 
the development of policies affecting the coordinated provision of 
services through the State's one-stop delivery system.
Costs
    The Department estimated the labor cost that State WDBs will incur 
(see Exhibit 6) by multiplying the estimated average number of lawyers 
per State (1) by the time required to provide objective criteria and 
procedures (60 hours) and by the hourly compensation rate ($65.48/
hour). We performed the same calculation for the management occupations 
staff (1 manager at $65.39/hour for 18 hours), social and community 
service managers (1 manager at $54.21/hour for 42 hours), and 
management analysts (3 analysts at $45.88/hour for 120 hours each). We 
summed the labor cost for all four occupational categories ($23,899) 
and multiplied the result by the number of States (57) to estimate this 
one-time labor cost at $1.4 million ($1,362,268), which results in an 
average annual cost of $136,227.
e. Development of Strategies for Technological Improvements
    Under WIOA sec. 101(d)(7), State WDBs must assist Governors in 
developing strategies for technological improvements to facilitate 
access to and improve the quality of services and activities provided 
through the one-stop delivery system. These strategies include 
improvements to enhance digital literacy skills, accelerate acquisition 
of skills and recognized postsecondary credentials by participants, 
strengthen professional development of providers and workforce 
professionals, and ensure technology is accessible to individuals with 
disabilities and individuals residing in remote areas.
    WIA did not include requirements relating to State WDBs' support of 
the development of strategies for technological improvements to 
facilitate access to, and improve the quality of, one-stop delivery 
system services and activities.
Costs
    The Department estimated the labor cost that State WDBs will incur 
(see Exhibit 7) by multiplying the estimated average number of 
management occupations staff members per State (1) by the time required 
to develop strategies (20 hours) and by the hourly compensation rate 
($65.39/hour). We repeated the calculation for the computer systems 
analysts (1 analyst at $56.17/hour for 40 hours). We summed the labor 
cost for both categories ($3,555) and multiplied the result by the 
number of States (57) to estimate a recurring annual cost of $202,612, 
which is equal to a total 10-year cost of $2.0 million ($2,026,122).
f. Appoint New Local WDB and Appropriate Firewalls
    The Local WDB is appointed by the CEOs in each local area in 
accordance with State criteria established under WIOA sec. 107(b) and 
is certified by the Governor every 2 years, in accordance with WIOA 
sec. 107(c)(2). The WIOA sec. 107(b)(2) membership criteria differ from 
the WIA sec. 117(b)(2) Local WDB membership criteria, and will result 
in a new one-time cost incurred by local CEOs in each local area 
because they will have to appoint a new Local WDB whose membership 
satisfies the requirements of WIOA sec. 107(b)(2). In particular, WIOA 
requires that a majority of Local WDB members be representatives of 
local area business (sec. 107(b)(2)(A)), whereas WIA required 
membership from local area business but did not include the requirement 
that such membership be a majority.
    Additionally, WIOA sec. 107(b)(2)(B) requires that at least 20 
percent of Local WDB membership be representatives of labor 
organizations (including at least one member from a joint labor-
management apprenticeship program, if one exists in the local area); 
CBOs (optional); and organizations with youth employment, training, or 
educational expertise (optional). WIA required Local WDB membership 
from representatives of labor organizations and CBOs, but did not 
include reference to apprenticeship programs or organizations with 
youth expertise, nor did WIA include the minimum 20-percent 
requirement.
    Further, WIOA requires Local WDB membership to include a 
representative from an adult education provider and a representative of 
higher education providing workforce investment activities (including 
community colleges), while the WIA Local WDB membership requirements 
did not reference such membership representation.
    Under Sec.  679.410(a), a Local WDB may be selected as a one-stop 
operator through sole-source procurement or through successful 
competition, in accordance with part 678, subpart D (see Joint WIOA 
Final Rule). The procedures for sole-source selection of one-stop 
operators include requirements about maintaining written documentation 
and developing appropriate firewalls and conflict-of-interest policies. 
Therefore, when a Local WDB is selected as a one-stop operator through 
a sole-source procurement, it must establish sufficient firewalls and 
conflict-of-interest policies and procedures that the Governor 
approves. These requirements will result in one-time costs for the 
Local WDBs that will elect sole-source one-stop operator competition.
Costs
    The Department estimated the labor costs incurred by Local WDBs 
(see Exhibit 10) by multiplying the estimated average number of lawyers 
per Board (1) by the time required to appoint a new Local WDB (15 
hours) and by the hourly compensation rate ($74.78/hour). We performed 
the same calculation for the following occupational categories:

[[Page 56311]]

Management occupations staff members (1 manager at $63.63/hour for 20 
hours), management analysts (2 analysts at $60.60/hour for 20 hours 
each), and secretaries or administrative assistant (1 assistant at 
$29.30/hour for 20 hours). We summed the labor cost for the four 
occupational categories ($5,404) and multiplied the result by the 
number of Local Boards (580) to estimate this one-time cost as $3.1 
million ($3,134,494), which results in an average annual cost of 
$313,449.
    In addition, the Department estimated the labor cost for Local WDBs 
to develop written agreements by multiplying the estimated average 
number of lawyers per Local WDB (1) by the time required to develop 
written agreements (8 hours) and by the hourly compensation rate 
($74.78/hour). We repeated the calculation for the management 
occupations staff members (1 manager at $63.63/hour for 8 hours) and 
computer systems analysts (1 analyst at $60.76 for 20 hours). We summed 
the labor cost for the three occupational categories ($2,322) and 
multiplied the result by the number of Local WDBs (580) to estimate 
this one-time cost as $1.3 million ($1,347,038), which results in an 
average annual cost of $134,704.
    In total, these calculations yield a one-time cost of $4.5 million 
($4,481,532), which results in an average annual cost of $448,153 for 
individuals from the local level to appoint new Local WDBs and set 
administrative firewalls that avoid conflicts of interest.
g. Local WDB Career Pathways Development
    Under WIOA sec. 107(d)(5), Local WDBs, with representatives of 
secondary and postsecondary education programs, must lead efforts to 
develop and implement career pathways within the local area by aligning 
the employment, training, education, and supportive services needed by 
adults and youth, particularly individuals with barriers to employment. 
WIA did not include requirements relating to Local WDBs developing or 
implementing career pathways.
Costs
    The Department estimated the labor cost for Local WDBs (see Exhibit 
11) by first multiplying the estimated average number of lawyers per 
Local WDB (1) by the time required to develop and implement career 
pathways (10 hours) and by the hourly compensation rate ($74.78/hour). 
We performed the same calculation for the following occupational 
categories: Management occupations staff members (1 manager at $63.63/
hour for 80 hours), management analysts (1 analyst at $60.60/hour for 
80 hours), and secretaries or administrative assistants (1 assistant at 
$29.30/hour for 20 hours). We summed the labor cost for all four 
occupational categories ($11,272) and multiplied the result by the 
number of Local WDBs (580) to estimate a recurring annual cost of $6.5 
million ($6,537,876), which is equal to a total 10-year cost of $65.4 
million ($65,378,760).
h. Local WDB Development of Proven and Promising Practices
    Under WIOA sec. 107(d)(6), Local WDBs must lead efforts in the 
local area to identify and promote proven and promising strategies and 
initiatives for meeting the needs of employers, workers, and job 
seekers (including individuals with barriers to employment), including 
providing physical and programmatic accessibility to the one-stop 
delivery system, in accordance with WIOA sec. 188 and the Americans 
with Disabilities Act, if applicable. This provision further requires 
Local WDBs to identify and disseminate information on proven and 
promising practices carried out in other local areas for meeting such 
needs. WIA did not include requirements for Local WDBs to identify or 
promote proven strategies for meeting the needs of employers, workers, 
and job seekers in the local workforce development system.
Costs
    For Local WDBs (see Exhibit 12), the Department estimated this 
labor cost by first multiplying the estimated average number of 
management occupations staff members per State (1) by the time required 
to identify and promote proven strategies (20 hours) and by the hourly 
compensation rate ($63.63/hour). We performed the same calculation for 
the management analyst occupational category (1 analyst at $60.60/hour 
for 40 hours). We summed the labor cost for these two occupational 
categories ($3,697) and multiplied the result by the number of Local 
WDBs (580) to estimate a recurring annual cost of $2.1 million 
($2,144,028), which is equal to a total 10-year cost of $21.4 million 
($21,440,280).
i. Local WDB Development of Technology Strategies for Public Workforce 
System Accessibility and Effectiveness
    Under WIOA sec. 107(d)(7), Local WDBs must develop strategies for 
using technology to maximize the accessibility and effectiveness of the 
local workforce development system for employers, workers, and job 
seekers by facilitating connections among the case management 
information systems for the one-stop partner programs, facilitating 
access to services provided through the one-stop delivery system 
(including facilitating access in remote areas), identifying strategies 
for better meeting the needs of individuals with barriers to employment 
(such as improving digital literacy skills), and leveraging resources 
and capacity within the local workforce development system. WIA did not 
include requirements for Local WDBs to develop technology strategies 
for improving accessibility and effectiveness of the local workforce 
development system.
Costs
    The Department estimated the cost for Local WDBs (see Exhibit 13) 
by first multiplying the estimated average number of management 
occupations staff members per Local WDB (1) by the time required to 
develop technology strategies (20 hours) and by the hourly compensation 
rate ($63.63/hour). We performed the same calculation for the computer 
systems analysts (1 analyst at $60.76/hour for 40 hours). We summed the 
labor cost for these two occupational categories ($3,703) and 
multiplied the result by the number of Local WDBs (580) to estimate a 
recurring annual cost of $2.1 million ($2,147,740), which is equal to a 
total 10-year cost of $21.5 million ($21,477,400).
j. Competitive Process for Selection of the One-Stop Operator
    Under WIOA sec. 107(d)(10)(A), Local WDBs must, consistent with 
WIOA sec. 121(d) and with the agreement of the CEO for the local area, 
designate or certify one-stop operators and may terminate for cause the 
eligibility of such operators. WIOA sec. 121(d)(2)(A) specifies that 
selection of a one-stop operator must be through a competitive process. 
WIA sec. 117(d)(2) also required Local WDBs to designate one-stop 
operators; however, WIA sec. 121(d)(2) allowed for designation of a 
one-stop operator through either a competitive process or in accordance 
with an agreement reached between the Local WDB and a consortium of 
entities that includes at least three one-stop partners. Therefore, 
WIOA requires a newly competitive procurement process for all Local WDB 
designations of one-stop operators. The one-stop competition 
regulations at part 678, subpart D (see Joint WIOA Final Rule), 
however, provide for sole-source procurement for one-stop operators 
under limited conditions. Nevertheless,

[[Page 56312]]

because of the new WIOA requirement mandating competitive one-stop 
operative procurement, this analysis assumes that all 580 Local WDBs 
would have to implement a competitive procurement process. Of these 
Local WDBs, only 250 Local WDBs would have to newly implement a 
competitive procurement process.
Costs
    The Department estimated the cost for Local WDBs (see Exhibit 14) 
by first multiplying the estimated average number of lawyers per Local 
WDB (1) by the time required to designate one-stop operators (40 hours) 
and by the hourly compensation rate ($74.78/hour). We performed the 
same calculation for the following occupational categories: Management 
occupations staff members (1 manager at $63.63/hour for 80 hours), 
social workers (2 workers at $40.46/hour for 120 hours each), and 
secretaries or administrative assistants (1 assistant at $29.30/hour 
for 40 hours). We summed the labor costs for these four occupational 
categories ($18,964) and multiplied the result by the number of Local 
WDBs that will be newly selecting one-stop operators competitively 
(250) to estimate a cost of $4.7 million ($4,741,000) occurring in 
2017, 2021, and 2025. Over the 10-year period, this calculation yields 
an average annual cost of $1.4 million ($1,422,300), which is equal to 
a total cost of $14.2 million ($14,223,000).
k. Local WDB Coordination With Education Providers
    Under WIOA sec. 107(d)(11), Local WDBs must coordinate activities 
with education and training providers in the local area, including 
providers of workforce investment activities, providers of adult 
education and literacy activities under title II of WIOA, certain 
providers of career and technical education, and local agencies 
administering certain plans under the Rehabilitation Act of 1973. WIA 
did not include requirements relating to Local WDB coordination with 
education providers.
Costs
    For Local WDBs, the Department estimated this labor cost (see 
Exhibit 15) by first multiplying the estimated average number of 
management occupations staff members per State (1) by the time required 
to coordinate activities with local education and training providers 
(20 hours) and by the hourly compensation rate ($63.63/hour). We 
performed the same calculation for the management analyst occupational 
category (1 analyst at $60.60/hour for 40 hours). We summed the labor 
cost for both occupational categories ($3,697) and multiplied the 
result by the number of Local WDBs (580) to estimate a recurring annual 
cost of $2.1 million ($2,144,028), which is equal to a 10-year total 
cost of $21.4 million ($21,440,280).
l. Regional Plans
    WIOA sec. 106(c)(2) requires Local WDBs and CEOs within a planning 
region to prepare, submit to the State, and obtain approval of a single 
regional plan that includes a description of the regional planning 
activities described in WIOA and incorporates local plans for each 
local area in the planning region. Specifically, WIOA sec. 106(c)(1) 
specifies that regional planning must include the following seven 
activities: (1) Establishment of regional service strategies, including 
use of cooperative service delivery alignment; (2) development and 
implementation of sector initiatives for in-demand industry sectors or 
occupations for the region; (3) collection and analysis of regional 
labor market data (in conjunction with the State); (4) establishment of 
administrative cost arrangements, including the pooling of funds for 
regional administrative costs, as appropriate; (5) coordination of 
transportation and other supportive services, as appropriate, for the 
region; (6) coordination of services with regional economic development 
services and providers; and (7) establishment of an agreement 
concerning how the planning region will negotiate collectively and 
reach agreement with the Governor on local levels of performance for, 
and report on, the performance accountability measures for local areas 
or the planning region. WIA did not include provisions relating to 
State WDB identification of regions or regional coordination.
Costs
    For Local WDBs (see Exhibit 16), the Department estimated this cost 
by first multiplying the estimated average number of lawyers per Local 
WDB (1) by the time required to prepare, submit, and obtain approval of 
a single regional plan (8 hours) and by the hourly compensation rate 
($74.78/hour). We performed the same calculation for the following 
occupational categories: Management occupations staff members (2 
managers at $63.63/hour for 20 hours each), management analysts (2 
analysts at $60.60/hour for 40 hours each), and secretaries or 
administrative staff (1 staff member at $29.30/hour for 8 hours). We 
summed the labor cost for the four occupational categories ($8,226) and 
multiplied the result by the number of Local WDBs (580) to estimate 
this cost as $4.8 million ($4,770,987), which occurs in 2017 and 2021. 
This calculation results in an average annual cost of $954,197, which 
is equal to a total 10-year cost of $9.5 million ($9,541,974).
m. Local and Regional Plan Modification
    Under WIOA sec. 108(a), each Local WDB, in partnership with the 
CEO, must review the local plan every 2 years and submit a modification 
as needed, based on significant changes in labor market and economic 
conditions and other factors. These factors include changes to local 
economic conditions, changes in the financing available to support WIOA 
title I and partner-provided WIOA services, changes to the Local WDB 
structure, and a need to revise strategies to meet performance goals. 
If the local area is part of a planning region, the Local WDB must 
comply with WIOA sec. 106(c) in the preparation and submission of a 
regional plan. WIA sec. 118 did not require local plan review and 
modification more frequently than the 5-year duration of a WIA local 
plan.
Costs
    For Local WDBs (see Exhibit 17), the Department estimated the local 
plan modification cost by first multiplying the estimated average 
number of lawyers per Local WDB (1) by the time required to review and 
modify the 4-year plan (4 hours) and by the hourly compensation rate 
($74.78/hour). We performed the same calculation for the following 
occupational categories: management occupations staff members (1 
manager at $63.63/hour for 10 hours), management analysts (2 analysts 
at $60.60/hour for 10 hours each), and secretaries or administrative 
assistants (1 assistant at $29.30/hour for 4 hours). We summed the 
labor cost for all four occupational categories ($2,265) and multiplied 
the result by the number of Local WDBs (580) to estimate this one-time 
cost of $1.3 million ($1,313,480), occurring in 2019. Over the 10-year 
period, this calculation yields an average annual cost of $131,348.
    Similarly, the Department estimated the regional plan modification 
cost for Local WDBs by first multiplying the estimated average number 
of lawyers per regional board (1) by the time required to review and 
modify the 4-year plan (4 hours) and by the hourly compensation rate 
($74.78/hour). We performed the same calculation for the following 
occupational categories: management occupations staff members (2 
managers at $63.63/hour for 10 hours

[[Page 56313]]

each), management analysts (2 analysts $60.60/hour for 20 hours each), 
and secretaries or administrative assistants (1 assistant at $29.30/
hour for 5 hours). We summed the labor cost for all four occupational 
categories ($4,142) and multiplied the result by the number of regional 
boards (300) to estimate a cost of $1.2 million ($1,242,666), occurring 
in 2020 and 2023. Over the 10-year period, this calculation yields an 
average annual cost of $248,533, which is equal to a total cost of $2.5 
million ($2,485,332).
    The sum of these costs yields a 10-year cost of $3.8 million 
($3,798,812), which results in an average annual cost of $379,881 for 
individuals from the Local WDBs to review and modify the 4-year plan.
n. Improved Information About Eligible Training Program Providers
    WIOA sec. 122 establishes requirements for State ETPLs to provide 
information to the public on the effectiveness of ETPs in achieving 
positive outcomes for WIOA training participants. The State-maintained 
ETPLs provide adults, dislocated workers, and other workers with better 
information about potential training program providers and enable them 
to make better-informed choices about programs to pursue. As explained 
in WIOA sec. 122, the required information for the State ETPL includes 
performance information on WIOA participants including percentage 
employed 2 and 4 quarters after program exit, median earnings 2 
quarters after exit, and percentage obtaining a credential. Other 
reporting requirements for the State ETPLs include the cost of 
attendance for WIOA participants, credentialing program information, 
program completion rate, and additional information the State may 
require.\43\
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    \43\ The costs associated with performance reporting for ETPs is 
explained in the WIOA sec. 116 analysis in the ``Workforce 
Innovation and Opportunity Act; Joint Rule for Unified and Combined 
State Plans, Performance Accountability, and the One-Stop System 
Joint Provisions''; Notice of Proposed Rulemaking at 80 FR 20573.
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    To be included on an ETPL, training providers must establish 
eligibility through an application procedure and then must maintain 
eligibility, including a biennial review by a State- appointed agency, 
according to a State Governor's procedure. Once it determines 
eligibility for ETPs, the State must make easily understood ETPLs 
publicly available, through electronic means and the one-stop delivery 
system. Finally, information analyzed and published by the Local WDBs 
about local labor markets also will help trainees and providers target 
their efforts and develop reasonable expectations about outcomes.
Costs
    At the State level for DOL programs (see Exhibit 18), the 
Department estimated this labor cost by first multiplying the estimated 
average number of management occupations staff members per State (1) by 
the time required to provide additional information about eligible 
training program providers (32 hours) and by the hourly compensation 
rate ($65.39/hour). We performed the same calculation for the following 
occupational categories: Management analysts (2 analysts at $45.88/hour 
for 40 hours each), and secretaries or administrative assistants (1 
assistant at $27.16/hour for 80 hours). We summed the labor cost for 
all three occupational categories ($7,936) and multiplied the result by 
the number of States (57) to estimate a recurring annual cost of 
$452,334. This is equal to a 10-year total cost of $4.5 million 
($4,523,338).
o. Sanctions on Under-Performing States
    Section 116(f)(1)(B) of WIOA requires the Department to assess a 
sanction if a State fails to meet the State-adjusted levels for program 
performance for a second consecutive program year or if ``a State fails 
to submit a report under subsection (d) for any program year.'' Three 
reports are required under WIOA sec. 116(d): State annual performance 
reports, local area performance reports, and ETP performance reports. 
Of these, only the State annual performance report must be submitted by 
the State to the Secretary of Labor. Section 116(f)(1) of WIOA requires 
that sanctions for performance failure continue until such date the 
Secretary of Labor or the Secretary of Education (as appropriate) 
determines that the State meets such State-adjusted levels of 
performance and has submitted such reports for the appropriate program 
years. Under WIA, the Department had discretion over whether to issue 
sanctions for underperformance or failure to submit a performance 
report.
Costs
    At the State level (see Exhibit 19), the Department estimated the 
costs by first multiplying the estimated average number of chief 
executives per State (1), the time required to evaluate State 
performance (40 hours), and the hourly compensation rate ($85.19/hour). 
We performed the same calculation for management analysts (1 analyst at 
$45.88/hour for 80 hours) and secretaries or administrative assistants 
(1 assistant at $27.16/hour for 40 hours). We summed the labor cost for 
all three occupational categories ($8,164) and multiplied the result by 
the number of States receiving sanctions (5) to estimate a recurring 
annual cost of $40,822, which is equal to a 10-year total cost of 
$408,220.
p. Colocation of ES Services
    WIOA sec. 121(e)(3) requires colocation of ES offices and one-stop 
centers established under title I of WIOA. Fulfilling this requirement 
could involve resolving real property issues, decisions on site 
locations, discussions with municipal or county governments, and 
development of agreements with partners to participate at both 
comprehensive and affiliated sites. Colocation is intended to improve 
service delivery, avoid duplication of services, and enhance 
coordination of services, including location of staff to ensure 
expanded access to services in underserved areas. WIA did not include 
requirements for collocation.
Costs
    At the State level for DOL programs (see Exhibit 20), the 
Department estimated this labor cost by first multiplying the estimated 
average number of lawyers per State (10), the time required to colocate 
ES services (10 hours each), and the hourly compensation rate ($65.48/
hour). We performed the same calculation for the following occupational 
categories: Management occupations staff members (10 managers at 
$65.39/hour for 40 hours each), management analysts (20 staff at 
$45.88/hour for 25 hours each), and secretaries or administrative 
assistants (10 assistants at $27.16/hour for 5 hours each). We summed 
the labor cost for all four occupational categories ($57,002) and 
multiplied the result by the number of States without colocated ES 
services (10) to estimate a one-time cost of $570,020, which results in 
an annual cost of $57,002.
    At the State level, the Department estimated consultant costs for 
assisting with planning, property issues (e.g., selling buildings 
currently owned by ES and finding buildings that meet certain safety 
requirements), and integrating IT and case management systems by 
multiplying the estimated consultant costs ($10,200) by the number of 
States without colocated ES services (10). This calculation yields an 
estimated one-time cost of $102,000, resulting in an average annual 
cost of $10,200.
    At the local level (see Exhibit 21), the Department estimated labor 
costs by first multiplying the estimated average number of management 
occupations

[[Page 56314]]

staff members for all local entities within a State (100), the time 
required to colocate ES services (40 hours each), and the hourly 
compensation rate ($63.63/hour). We performed the same calculation for 
the management analysts (200 analysts at $60.60/hour for 25 hours each) 
and secretaries or administrative assistants (100 assistants at $29.30/
hour for 5 hours each). We summed the labor cost for all three 
occupational categories ($572,170) and multiplied the result by the 
number of local areas without colocated ES offices and one-stop centers 
(100) to estimate a one-time cost of $57.2 million ($57,217,000), 
resulting in an annual cost of $5.7 million ($5,721,700).
    The sum of these costs yields a one-time cost of $57.9 million 
($57,889,020), which results in an average annual cost of $5.8 million 
($5,788,902) for individuals from the State and local levels to 
colocate ES services.
q. Partners Required To Pay Their Share for Proportionate Use of One-
Stop Delivery System
    An important goal under both the local and State funding mechanisms 
is to ensure that each one-stop partner contributes its proportional 
share to the funding of one-stop infrastructure costs, consistent with 
Federal cost principles. Under WIOA sec. 121(h), in general, Governors 
must ensure that one-stop partners appropriately share costs. 
Contributions must be based on a proportional share of use and all 
funds must be spent solely for allowable purposes in a manner 
consistent with the applicable authorizing statute and all other 
applicable legal requirements, including Federal cost principles. WIOA 
sec. 121(h)(1) established two methods for funding the infrastructure 
costs of one-stop centers: A local funding mechanism and a State 
funding mechanism. Both methods use the funds provided to one-stop 
partners by their authorizing legislations; there is no separate 
funding source for one-stop infrastructure costs. WIA did not include 
directives relating to the funding of the one-stop infrastructure.
Costs
    At the State level (see Exhibit 22), the Department estimated the 
costs related to this provision (e.g., the cost of developing memoranda 
of understanding) by first multiplying the estimated average number of 
lawyers per State (50), the time required for States to comply with 
payment requirements proportional to use of one-stop delivery systems 
(1 hour each), and the hourly compensation rate ($65.48/hour). We 
performed the same calculation for the following occupational 
categories: Management occupations staff members (50 managers at 
$65.39/hour for 40 hours each), social workers (100 workers at $35.22/
hour for 40 hours each), and secretaries or administrative assistants 
(50 assistants at $27.16/hour for 5 hours each). We summed these 
products for all four occupational categories ($281,724) and multiplied 
the result by the number of States that need to pay their proportional 
share (54) to estimate a cost of $15.2 million ($15,213,096) occurring 
in 2018, 2021, and 2024, resulting in an average annual cost of $4.6 
million ($4,563,929). This is equal to a total 10-year cost of $45.6 
million ($45,639,288).
r. Establishing Training Provider Eligibility Procedures, Including 
Procedures for Adding Registered Apprenticeship Programs to the State 
Eligible Training Provider List
    Under WIOA sec. 122(a)(1), the Governor, after consultation with 
the State WDB, must establish criteria, information requirements, and 
procedures regarding the eligibility of providers of training services 
to receive funds under WIOA for the provision of training services in 
local areas in the State (i.e., procedures for initial determination 
and renewals of eligibility). In establishing the ETP eligibility 
criteria, the Governor must take into account: (1) The performance of 
training providers; (2) the need to ensure access to training services 
throughout the State, including in rural areas and through the use of 
technology; (3) information reporting to State agencies with respect to 
other Federal and State programs involving training services, including 
one-stop partner programs; (4) the degree to which the training 
programs relate to in-demand industry sectors and occupations in the 
States; (5) any relevant State licensing requirements for the program; 
(6) ways in which the criteria can encourage providers to use industry-
recognized certifications; (7) the ability of the providers to offer 
programs that lead to recognized postsecondary credentials; (8) the 
quality of a training program; (9) the ability of the providers to 
provide training services to individuals who are employed and 
individuals with barriers to employment; and (10) other factors the 
Governor determines appropriate to ensure accountability of the 
providers, informed choice of participants, one-stop centers ensure 
providers meet the needs of local employers and participants, and 
collection of information is not unduly burdensome or costly to 
providers (WIOA sec. 122(b)(1)).
    In establishing the information requirements, the Governor must 
require that a training provider submit appropriate, accurate, and 
timely information to the State, which must include information on 
performance, recognized postsecondary credentials received by 
participants, cost of attendance, the program completion rate, and 
eligibility criteria established by the Governor (WIOA sec. 122(b)(2)).
    As explained in Sec.  680.410, training providers, including those 
operating under the individual training account exceptions, must 
qualify as ETPs, except for those engaged in on-the-job and customized 
training (for which the Governor should establish qualifying procedures 
as discussed in Sec.  680.530). Registered apprenticeship programs are 
automatically eligible to be included in the ETPL, provided the program 
remains a registered apprenticeship program. All registered 
apprenticeship programs must be informed of their automatic eligibility 
to be included on the list, and must be provided an opportunity to 
consent to their inclusion, before being placed on the State list of 
eligible training providers and programs. The Governor must establish a 
mechanism for registered apprenticeship program sponsors in the State 
to be informed of their automatic eligibility and to indicate that the 
program sponsor wishes to be included on the State list of eligible 
training providers and programs. The regulation specifies that this 
mechanism must place minimal burden on registered apprenticeship 
program sponsors and must be developed in accordance with guidance from 
the U.S. Department of Labor Office of Apprenticeship representative in 
the State or with the assistance of the recognized State apprenticeship 
agency, as applicable.
    Under WIA sec. 122(b)(2), the Governor had to establish a procedure 
for Local WDBs to use to determine initial eligibility. Other than 
requiring performance information, however, WIA did not prescribe 
requirements for what must be included in the Governor-established 
eligibility criteria, information requirements, and ETP procedures. 
Regarding apprenticeships, WIA sec. 122(b)(1) required such training 
programs to submit an ETP application to the relevant Local WDB to 
include such information as the Local WDB may require.
Costs
    At the State level (see Exhibit 23), the Department estimated this 
cost by first multiplying the estimated average

[[Page 56315]]

number of lawyers per State (1); the time needed to establish criteria, 
information requirements, and procedures for training provider 
eligibility (20 hours); and the hourly compensation rate ($65.48/hour). 
We performed the same calculation for the management occupations staff 
members (1 manager at $65.39/hour for 40 hours) and management analysts 
(1 analyst at $45.88/hour for 80 hours). We summed the labor cost for 
all three occupational categories ($7,596) and multiplied the result by 
the number of States (57) to estimate a one-time cost of $432,949, 
resulting in an annual cost of $43,295.
    At the local level, the Department estimated this cost by first 
multiplying the estimated average number of database administrators per 
ETP (1); the time needed to establish criteria, information 
requirements, and procedures for training provider eligibility (3 
hours); and the hourly compensation rate ($59.60/hour). We summed the 
labor cost ($179) and multiplied the result by the number of ETPs 
(11,400) to estimate a one-time cost of $2.0 million ($2,038,320), 
resulting in an annual cost of $203,832.
    The sum of these amounts yields a one-time cost of $2.5 million 
($2,471,269), which results in an average annual cost of $247,127 for 
individuals from the State and local levels to establish criteria, 
information requirements, and procedures for training provider 
eligibility.
s. Determining Initial Eligibility of New and Previously Eligible 
Training Providers
    Under the requirements of WIOA sec. 122, the Governor, after 
consultation with the State WDB, establishes the procedures for 
determining eligibility of training providers, which include 
application and renewal procedures, eligibility criteria, and 
information requirements. The Governor was permitted to establish a 
transition procedure under which WIA-ETPs could continue to be eligible 
through June 30, 2016 (or such earlier date determined appropriate by 
the Governor).\44\ Under Sec.  680.450, all providers that previously 
have not been eligible under either WIA sec. 122 or WIOA sec. 122, 
except for registered apprenticeship programs, must submit required 
information to be considered for initial eligibility in accordance with 
the Governor's procedures. Under WIOA sec. 122(b)(4)(B), providers 
receive initial eligibility for only 1 fiscal year and after the 
initial eligibility expires, providers are subject to the Governor's 
application procedures for continued eligibility, described in Sec.  
680.460, to remain eligible (see provision (t) Biennial Review of 
Training Provider Eligibility below).
---------------------------------------------------------------------------

    \44\ In the NPRM, the Department stated that the Governor may 
establish a transition procedure under which WIA-ETPs may continue 
to be eligible through December 31, 2015. The Department extended 
the time for the implementation of continued eligibility 
requirements for training providers eligible under WIA by 6 months, 
unless the Governor determined that an earlier date was possible.
---------------------------------------------------------------------------

Costs
    At the State level for DOL programs (see Exhibit 24), the 
Department estimated this labor cost by first multiplying the estimated 
average number of management occupations staff members per State (1), 
the time needed to determine provider eligibility (40 hours), and the 
hourly compensation rate ($65.39/hour). We performed the same 
calculation for the management analysts (2 analysts at $45.88/hour for 
110 hours each) and secretaries or administrative assistants (2 
assistants at $27.16/hour for 50 hours each). We summed the labor cost 
for all three occupational categories ($15,425) and multiplied the 
result by the number of States (57) to estimate a one-time cost of 
$879,236, resulting in an annual cost of $87,924.
t. Biennial Review of Training Provider Eligibility
    Under WIOA sec. 122(c)(2), the procedures established by the 
Governor must provide for biennial review and renewal of eligibility 
for providers of training services. Paragraph (h) of Sec.  680.460 
provides discretion for a State to establish eligibility criteria that 
require more frequent review but specifies that the review must be at 
least every 2 years. This biennial review process will require the 
submission of information from training providers and the evaluation of 
such information as specified in the Governor's eligibility criteria, 
information requirements, and procedures. Paragraph (j) of Sec.  
680.460 requires that the procedure for biennial review of training 
provider eligibility include verification of the registration status of 
registered apprenticeship programs.
    WIA required training providers to submit performance information 
and meet performance levels annually to remain eligible (WIA sec. 
122(c)(5) and Sec.  663.530). The WIA regulations at Sec.  663.540 
required the annual submission of the following information to allow 
the Local WDB to determine subsequent eligibility of training 
providers: Program-specific performance information, information on 
program costs, and any additional verifiable performance information 
that the Governor determines to be appropriate for obtaining subsequent 
eligibility.
Costs
    At the State level (see Exhibit 25), the Department estimated this 
labor cost by first multiplying the estimated average number of 
management occupations staff members per State (1), the time needed to 
perform the eligibility review (30 hours), and the hourly compensation 
rate ($65.39/hour). We performed the same calculation for the 
management analysts (2 analysts at $45.88/hour for 60 hours each) and 
secretaries or administrative assistants (2 assistants at $27.16/hour 
for 30 hours each). We summed the labor cost for all three occupational 
categories ($9,097) and multiplied the result by the number of States 
(57) to estimate a cost of $518,523 that occurs four times over the 10-
year analysis period (i.e., 2019, 2021, 2023, and 2025), that is, an 
average annual cost of $207,409. This is equal to a 10-year total cost 
of $2.1 million ($2,074,093).
u. Disseminating the Training Provider List With Accompanying 
Information
    To assist participants in choosing employment and training 
activities, the Governor or State agency must disseminate the State 
ETPL and accompanying performance and cost information to Local WDBs in 
the State and to members of the public online through Web sites and 
searchable databases and through whatever means the State uses to 
disseminate information to consumers, including the one-stop delivery 
system and its program partners throughout the State (WIOA sec. 122(d), 
Sec.  680.500). WIA also required the designated State agency to 
disseminate the State ETPL and accompanying performance and cost 
information to the one-stop delivery systems within the State but did 
not include specific requirements that the State ETPL be made 
electronically available online (see Sec.  663.555).
Costs
    At the State level (see Exhibit 26), the Department estimated this 
labor cost by first multiplying the estimated average number of 
management occupations staff members per State (1), the time needed to 
disseminate the ETPL with accompanying information (30 hours), and the 
hourly compensation rate

[[Page 56316]]

($65.39/hour). We performed the same calculation for the following 
occupational categories: Database administrators (2 administrators at 
$57.02/hour for 125 hours each), management analysts (2 analysts at 
$45.88/hour for 80 hours each), and secretaries or administrative 
assistants (2 assistants at $27.16/hour for 45 hours each). We summed 
the labor cost for all four occupational categories ($26,002) and 
multiplied the result by the number of States (57) to estimate a one-
time cost of $1.5 million ($1,482,108), resulting in an annual cost of 
$148,211.
    Relative to the baseline of current practice under WIA, the 21 
provisions of the WIOA Final Rule described above are expected to 
result in costs of $350.4 million ($350,375,401) over the total 10-year 
period. This is equivalent to an average annual cost of $35.0 million 
($35,037,540). See section V.A.7 (Summary of the Analysis) for a 
summary of these costs.
Quantifiable Transfer Payments
    This section describes the quantifiable transfer payments expected 
to result from the Final Rule. Transfer payments, as defined by 
Circular A-4, are payments from one group to another that do not affect 
total resources available to society. Because of data limitations, the 
Department relied on expert judgement for some of the transfer 
estimates.
a. Youth Funds Targeting Out-of-School Youth
    Under WIA, local areas were required to spend at least 30 percent 
of youth funds to assist eligible OSY. Under WIOA, States and local 
areas will be required to spend at least 75 percent of youth funds on 
OSY.
    In addition to several benefits, discussed below in section V.A.7 
(Summary of the Analysis), the Department's focus on OSY will result in 
transfers related to a larger tax base and reduced burdens on 
taxpayers. These programs are expected to help youth that are 
particularly vulnerable, such as those who are low-income, minorities, 
or high school dropouts. Unassisted OSY have a higher likelihood of 
imposing large costs on society. Based on the Current Population Survey 
(CPS) by the U.S. Census Bureau, there were 6 million ``disconnected 
youth'' between the ages of 16 and 24 (i.e., youth who are not enrolled 
in school and not employed) in 2015.
    Child Trends also found that due to their lack of education, youth 
without high school degrees are more likely to live in poverty and 
receive government assistance.\45\
---------------------------------------------------------------------------

    \45\ Child Trends Databank. (2015). High school dropout rates. 
Retrieved from: http://www.childtrends.org/?indicators=high-school-dropout-rates.
---------------------------------------------------------------------------

    Wald and Martinez (2002) found that dropouts were in prison at 
rates 10 to 20 times higher than youth who graduated from high 
school.\46\ Incarcerating these individuals represents an additional 
cost to taxpayers. Belfield and Levin (2012) found that each 
disconnected youth costs taxpayers approximately $236,000 over the 
youth's lifetime and imposes $704,000 in societal costs. The estimated 
fiscal burden accounts for lost tax payments, public crime expenditures 
(e.g., incarceration and legal system costs), higher public health and 
welfare expenditures, and reduced public education costs. The estimate 
of the societal cost includes lost earnings, crime costs (e.g., 
incarceration and reduced quality of life), increased health, welfare, 
and social services expenditures, lower workforce productivity, and 
lower education spending.\47\ In their report, Measure of America found 
that the cost of youth disconnection--including health care, public 
assistance, and incarceration--was $26.8 billion in 2013.\48\
---------------------------------------------------------------------------

    \46\ Wald, M., and Martinez, T. (2003). Connected by 25: 
Improving the life chances of the country's most vulnerable 14-24 
year olds (Working Paper). William and Flora Hewlett Foundation. 
Retrieved from: http://law.stanford.edu/wp-content/uploads/2015/07/Wald-and-Martinez-Connected-by-251.pdf.
    \47\ Belfield, C. R., Levin, H. M., and Rosen, R. (2012). The 
economic value of opportunity youth. Retrieved from: http://www.serve.gov/sites/default/files/ctools/econ_value_opportunity_youth.pdf?utm_source=5+Things+to+Know+about+Youth+not+Employed+or+in+School&utm_campaign=5+things+to+know+about+youth+not+employed+or+in+school&utm_medium=email.
    \48\ Lewis, K., and Burd-Sharps, S. (2015). Zeroing in on place 
and race: Youth disconnection in America's cities. Measure of 
America of the Social Science Research Council. Retrieved from: 
http://ssrc-static.s3.amazonaws.com/wp-content/uploads/2015/06/MOA-Zeroing-In-Final.pdf.
---------------------------------------------------------------------------

Transfers
    Under WIOA, individuals exiting the youth program will have an 
increased likelihood of gaining employment. According to ETA program 
data from FY 2015, 102,723 youth exit the youth program each year. The 
Department assumes that the increase in funding will result in a 15-
percent increase in youth exiting the program each year, resulting in 
118,132 youth exiting per year. Of the 15,409 additional youth exiting 
the youth program under WIOA due to the increased funding targeting 
youth, the Department assumed that 20 percent will gain employment due 
to the expertise they gained from the youth program. According to the 
Young Invincibles' report,\49\ on average, an unemployed 18- to 24-
year-old will cost Federal and State governments more than $4,100 each 
year \50\ in forgone tax revenue and safety-net benefits paid out, 
which is equal to $4,182 in 2015 dollars.\51\ The Department assumed 
that all youth obtaining full-time year-round jobs after exiting the 
youth program will be 24 years old, and will reduce the taxpayer burden 
by $4,182. The full benefits to youth unemployment will account for 
individuals who exited the program before they became 24 years old, and 
remained employed until becoming at least 25 years old.
---------------------------------------------------------------------------

    \49\ O'Sullivan, R., Mugglestone, K., and Allison, T. (2014). In 
this together: The hidden cost of young adult unemployment. Young 
Invincibles. Retrieved from: http://younginvincibles.org/wp-content/uploads/2014/01/In-This-Together-The-Hidden-Cost-of-Young-Adult-Unemployment.pdf.
    \50\ This is compared to a full-time year-round worker.
    \51\ Bureau of Labor Statistics. (2016). CPI Detailed Report 
Data for February 2016. Retrieved from: http://www.bls.gov/cpi/cpid1602.pdf. The Department calculated the inflation factor of 1.02 
using data from Table 24. ``Historical Consumer Price Index for All 
Urban Consumers (CPI-U): U.S. City Average, All Items.'' To 
calculate the inflation factor, the Department divided the average 
annual CPI-U for 2015 by the average annual CPI-U for 2013 
(=237.017/232.957).
---------------------------------------------------------------------------

    The Department multiplied the number of youth that will gain 
employment due to WIOA (3,082) by the annual cost to taxpayers ($4,182) 
to estimate an annual benefit of $12.9 million ($12,887,628). Over the 
10-year analysis period, this calculation results in a total benefit of 
$128.9 million ($128,876,276) to Federal and State governments.
7. Summary of the Analysis
    Exhibit 28 summarizes the estimated average annual costs for each 
provision of the Final Rule. The exhibit also presents a high-level 
qualitative description of the benefits resulting from full WIOA 
implementation of each regulatory provision in this DOL WIOA Final 
Rule. These qualitative forecasts are predicated on program experience 
and are outcomes for which data will become available only after 
implementation. The Department estimates the average annual cost of the 
Final Rule over the 10-year analysis period at $35.0 million. The 
largest contributor to this cost is the provision related to the 
development and continuous improvement of the workforce development 
system, which is $6.6 million per year. The next largest cost results 
from the Local WDB career pathways development, which is an estimated 
$6.5 million per year, followed by the colocation of ES

[[Page 56317]]

services at an estimated $5.8 million per year.

                           Exhibit 28--Estimated Costs of the Final Rule by Provision
                                                 [2015 dollars]
----------------------------------------------------------------------------------------------------------------
                                             Average annual
                                                  costs        Percent of
                 Provision                  ----------------   total costs      Qualitative benefit highlights
                                             (undiscounted)
----------------------------------------------------------------------------------------------------------------
(a) New State WDB Membership Requirements..         $27,174           0.08%  Policy implementation efficiencies
                                                                              from reduced size and
                                                                              maneuverability.
(b) Development and Continuous Improvement        6,641,946           18.96  Mission clarification and ongoing
 of the Workforce Development System.                                         commitment should foster future
                                                                              envisioned benefits continuing to
                                                                              accrue; Enhanced employer and
                                                                              employee services as a result of
                                                                              recognition of real labor markets
                                                                              (without artificial jurisdictional
                                                                              boundaries).
(c) Identification and Dissemination of             314,720            0.90  Mission clarification and system
 Best Practices.                                                              building.
(d) Development of Statewide Policies               136,227            0.39  Mission clarification for State
 Affecting the State's One-Stop Delivery                                      WDBs and overall system building
 System.                                                                      capacity.
(e) Development of Strategies for                   202,612            0.58  Recognition of the efficiencies
 Technological Improvements.                                                  generated by technology and
                                                                              enhanced management capabilities
                                                                              especially using outcome data.
(f) Appoint New Local WDB and Appropriate           448,153            1.28  Efficient use of Local WDB time;
 Firewalls.                                                                   avoids conflicts of interest and
                                                                              negative publicity; administrative
                                                                              savings.
(g) Local WDB Career Pathways Development..       6,537,876           18.66  Improved educational and employment
                                                                              outcomes; potential employees are
                                                                              better prepared for jobs.
(h) Local WDB Development of Proven and           2,144,028            6.12  Improved job placements and
 Promising Practices.                                                         customer service.
(i) Local WDB Development of Technology           2,147,740            6.13  Improved customer service; better
 Strategies for Public Workforce System                                       decision-making from improved
 Accessibility and Effectiveness.                                             service level data; reduced paper
                                                                              costs, improved collaboration
                                                                              across service partners; improved
                                                                              customer service planning.
(j) Competitive Process for Selection of          1,422,300            4.06  Improved public confidence in the
 the One-Stop Operator.                                                       process; avoided conflicts of
                                                                              interest.
(k) Local WDB Coordination with Education         2,144,028            6.12  Improved preparation of workers and
 Providers.                                                                   youth for future jobs; enhanced
                                                                              placements and outcomes.
(l) Regional Plans.........................         954,197            2.72  Savings from expanded
                                                                              collaboration; increased services
                                                                              to customers; reduced
                                                                              administrative overhead.
(m) Local and Regional Plan Modification...         379,881            1.08  Increased coordination of services
                                                                              leading to resource efficiencies;
                                                                              transparency.
(n) Improved Information about Potential            452,334            1.29  Improved customer decision-making;
 Eligible Training Program Providers.                                         linkage of resources to outcomes
                                                                              and accountability for training
                                                                              and improved placement outcomes.
(o) Sanctions on Under-Performing States...          40,822            0.12  Improved services; better use of
                                                                              WIOA funds; enhanced recognition
                                                                              of performance imperatives by
                                                                              States and local areas; more
                                                                              accountability.
(p) Colocation of ES Services..............       5,788,902           16.52  Reduced administrative overhead;
                                                                              improved service delivery and
                                                                              customer service; more efficient
                                                                              and effective public
                                                                              administration.
(q) Partners Required to Pay their Share          4,563,929           13.03  Expanded system cohesion; improved
 for Proportionate Use of One-Stop Delivery                                   service delivery; avoidance of
 System.                                                                      fragmented or duplication of
                                                                              services.
(r) Establishing Training Provider                  247,127            0.71  Increased training opportunities,
 Eligibility Procedures, Including                                            especially for youth; effective
 Procedures for Adding Registered                                             administration linking to
 Apprenticeship Programs to the State                                         accountability and outcomes.
 Eligible Training Provider List.
(s) Determining Initial Eligibility of New           87,924            0.25  Increased transparency; uniform
 and Previously Eligible Providers.                                           treatment of ETPs; reduced
                                                                              incidents of non-meritorious
                                                                              performance.
(t) Biennial Review of Training Provider            207,409            0.59  Increased competition leading to
 Eligibility.                                                                 more and better placements.
(u) Disseminating the Training Provider             148,211            0.42  More informed customer choice;
 List with Accompanying Information.                                          clearer link of training resources
                                                                              to desired outcomes; more
                                                                              transparency.
                                            --------------------------------
    Total Costs............................      35,037,540          100.00  ...................................
----------------------------------------------------------------------------------------------------------------
Note: Totals might not sum due to rounding.

    Exhibit 29 summarizes the estimated transfers related to the Final 
Rule. The Department estimates the total average annual transfer of the 
Final Rule to be $12.9 million.

[[Page 56318]]



     Exhibit 29--Estimated Transfers of the Final Rule by Provision
                              [2015 dollar]
------------------------------------------------------------------------
                                                              Average
                                                              annual
                        Provision                            transfer
                                                          (undiscounted)
------------------------------------------------------------------------
(a) Youth Funds Targeting Out-of-School Youth...........     $12,887,628
                                                         ---------------
    Total Transfers.....................................      12,887,628
------------------------------------------------------------------------

    Exhibit 30 summarizes the estimated first-year costs for each 
provision of this Final Rule. The Department estimates the total first-
year cost of this Final Rule to be $89.9 million. The largest 
contributor to the first-year cost is the provision related to the 
colocation of ES services at an estimated $57.9 million. The next 
largest first-year cost results from the development and continuous 
improvement of the workforce development system at an estimated $7.0 
million, followed by the Local WDB career pathways development at an 
estimated $6.5 million.

  Exhibit 30--Estimated First-Year Costs of the Final Rule by Provision
                             [2015 dollars]
------------------------------------------------------------------------
                                                            Percent of
                Provision                  Total first-    total first-
                                            year costs      year costs
------------------------------------------------------------------------
(a) New State WDB Membership                    $271,742            0.30
 Requirements...........................
(b) Development and Continuous                 7,029,820            7.82
 Improvement of the Workforce
 Development System.....................
(c) Identification and Dissemination of          314,720            0.35
 Best Practices.........................
(d) Development of Statewide Policies          1,362,268            1.52
 Affecting the State's One-Stop Delivery
 System.................................
(e) Development of Strategies for                202,612            0.23
 Technological Improvements.............
(f) Appoint New Local WDB and                  4,481,532            4.99
 Appropriate Firewalls..................
(g) Local WDB Career Pathways                  6,537,876            7.28
 Development............................
(h) Local WDB Development of Proven and        2,144,028            2.39
 Promising Practices....................
(i) Local WDB Development of Technology        2,147,740            2.39
 Strategies for Public Workforce System
 Accessibility and Effectiveness........
(j) Competitive Process for Selection of               0            0.00
 the One-Stop Operator..................
(k) Local WDB Coordination with                2,144,028            2.39
 Education Providers....................
(l) Regional Plans......................               0            0.00
(m) Local and Regional Plan Modification               0            0.00
(n) Improved Information about Eligible          452,334            0.50
 Training Program Providers.............
(o) Sanctions on Under-Performing States          40,822            0.05
(p) Colocation of ES Services...........      57,889,020           64.43
(q) Partners Required to Pay their Share               0            0.00
 for Proportionate Use of One-Stop
 Delivery System........................
(r) Establishing Training Provider             2,471,269            2.75
 Eligibility Procedures, Including
 Procedures for Adding Registered
 Apprenticeship Programs to the State
 Eligible Training Provider List........
(s) Determining Initial Eligibility of           879,236            0.98
 New and Previously Eligible Providers..
(t) Biennial Review of Training Provider               0            0.00
 Eligibility............................
(u) Disseminating the Training Provider        1,482,108            1.65
 List with Accompanying Information.....
                                         -------------------------------
    Total cost..........................      89,851,156          100.00
------------------------------------------------------------------------
Note: Totals might not sum due to rounding.

    Exhibit 31 summarizes the estimated first-year transfers of this 
Final Rule. The Department estimates the total first-year transfer of 
this Final Rule to be $12.9 million.

     Exhibit 31--Estimated First-Year Transfers of the Final Rule by
                                Provision
                             [2015 dollars]
------------------------------------------------------------------------
                                                           Total first-
                        Provision                         year transfers
------------------------------------------------------------------------
(a) Youth Funds Targeting Out-of-School Youth...........     $12,887,628
                                                         ---------------
    Total transfer......................................      12,887,628
------------------------------------------------------------------------

    Exhibit 32 summarizes the estimated annual and total costs and 
transfers of this DOL WIOA Final Rule. The estimated total 
(undiscounted) cost of the rule sums to $350.4 million over the 10-year 
analysis period, which is equal to an average annual cost of $35.0 
million per year. In total, the estimated 10-year discounted costs of 
the Final Rule range from $278.8 million to $314.9 million (with 7- and 
3-percent discounting, respectively).
    The estimated total (undiscounted) transfers of the rule sum to 
$128.9 million over the 10-year analysis period, for an average annual 
transfer of $12.9 million per year. In total, the estimated 10-year 
discounted transfers of the Final Rule range from $96.9 million to 
$113.2 million (with 7- and 3-percent discounting, respectively).
    To contextualize the cost of the Final Rule, the Department's 
average annual budget for WIA over the FY 2012-2014 was $3.5 
billion.\52\ Thus, the annual

[[Page 56319]]

additional cost of implementing the Final Rule is 1.1 percent of the 
average annual cost of implementing WIA over the FY 2012-2014 (with 
either 3-percent or 7-percent discounting). In response to public 
comments, we also contextualize the cost of the Final Rule relative to 
the amount of administrative and transition funds available to States, 
which averaged $200.1 million between PY 2014 and PY 2015.\53\ The 
annual additional cost of implementing the Final Rule is between 18.5 
percent and 19.8 percent of the average annual administrative and 
transition funds budget (with 3-percent and 7-percent discounting, 
respectively).
---------------------------------------------------------------------------

    \52\ U.S. Department of Labor, Employment and Training 
Administration. (2015). Archive of State Statutory Formula Funding. 
Retrieved from: https://www.doleta.gov/budget/py01_py09_arra_archive.cfm. The Department used data from the 
following files to estimate the average annual WIA budget: WIA Adult 
Activities Program (PYs 2011, 2012, 2013, and 2014); WIA Dislocated 
Worker Activities Program (PYs 2011, 2012, 2013, and 2014); and WIA 
Youth Activities (PYs 2012, 2013, and 2014). Note that for the adult 
and dislocated worker activities programs, each fiscal year's 
funding is calculated as the sum of the program year's July funding 
and the previous program year's October funding. The youth 
activities funding is obligated to States in April and therefore 
corresponds to the fiscal year in which it is obligated. The 
Department inflated the funding for each fiscal year, so that the 
average annual WIA budget is in 2015 dollars.
    U.S. Department of Labor, Employment and Training 
Administration. (2015) State Statutory Formula Funding. Retrieved 
from: https://www.doleta.gov/budget/statfund.cfm. The Department 
also used data from the following files to estimate the average 
annual WIA budget: Employment Services Program Dollar Tables (PYs 
2012, 2013, and 2014). Note that Wagner-Peyser Act funds for a 
program year are obligated to States in July; therefore, these funds 
correspond to the fiscal year in which they are obligated. The 
Department inflated the funding for each fiscal year, so that the 
average annual WIA budget is in 2015 dollars.
    \53\ TEGL No. 34-14, TEGL No. 12-14, and TEGL No. 24-14. Funds 
from PY 2014 were inflated to 2015 dollars.

  Exhibit 32--Estimated Monetized Costs and Transfers of the Final Rule
                             [2015 dollars]
------------------------------------------------------------------------
                  Year                      Total costs      Transfers
------------------------------------------------------------------------
2016....................................     $89,851,156     $12,887,628
2017....................................      30,471,554      12,887,628
2018....................................      35,688,517      12,887,628
2019....................................      23,550,089      12,887,628
2020....................................      20,475,421      12,887,628
2021....................................      46,203,174      12,887,628
2022....................................      20,475,421      12,887,628
2023....................................      22,236,610      12,887,628
2024....................................      35,688,517      12,887,628
2025....................................      25,734,944      12,887,628
Undiscounted 10-Year Total..............     350,375,401     128,876,276
10-Year Total with 3% Discounting.......     314,911,219     113,232,100
10-Year Total with 7% Discounting.......     278,750,652      96,853,514
10-Year Average.........................      35,037,540      12,887,628
Annualized with 3% Discounting..........      36,917,202      13,274,256
Annualized with 7% Discounting..........      39,687,822      13,789,762
------------------------------------------------------------------------

Qualitative Benefits
    The Department was unable to quantify the important benefits to 
society due to data limitations and a lack of existing data or 
evaluation findings on the particular items. These include benefits 
from increased competition for all one-stop operators, the increased 
employment opportunities for unemployed or underemployed U.S. workers, 
benefits of colocation of ES services, enhanced ETP process, regional 
planning, and evaluation of State programs. Below, the Department 
describes qualitatively these benefits in qualitative terms. These 
qualitative forecasts are predicated on program experience and are 
outcomes for which data will become available only after 
implementation. Although these studies are largely based on programs 
and their existing requirements under WIA, they capture the essence of 
the societal benefits that can be expected from this Final Rule.

                    Exhibit 33--Cost Savings by Study
------------------------------------------------------------------------
                                              Cost savings (percent)
                  Study                  -------------------------------
                                           Low estimate    High estimate
------------------------------------------------------------------------
Segal (2005) \54\.......................               5              50
Hodge (2000) \55\.......................               6              12
Hilke (1993) \56\.......................               5              20
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Cohen (1997) \57\.......................                31
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Burt and Boyett (1979) \58\.............              11              18
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    State evaluation research. In support of a State's strategic plan 
and goals, State-conducted evaluations and other forms of research will 
enable each State to test various interventions geared toward State 
conditions and opportunities. Results from such evaluation and 
research, if used by States, could improve service quality and 
effectiveness, potentially leading to higher employment rates and 
earnings among participants. Implementing various innovations that have 
been tested and found effective also could lead to lower unit costs and 
increased numbers of individuals served within a State. Sharing the 
findings nationally could lead to new service or management practices 
that other States could adopt to improve participant

[[Page 56320]]

results, lower unit costs, or increase the number served.
---------------------------------------------------------------------------

    \54\ Segal, G. (2005). Making Florida's government competitive. 
Backgrounder. (44). The James Madison Institute. Retrieved from: 
http://reason.org/files/fb2c24752ac451b648c88d99b262dcfe.pdf.
    \55\ Hodge, G. A. (2000). Privatization: An International Review 
of Performance. Boulder, CO: Westview Press.
    \56\ Hilke, J. (1993). Cost Savings from Privatization: A 
Compilation of Study Findings (How to Guide No. 6). Reason 
Foundation. Retrieved from: http://reason.org/files/b987e7bd89f4c4e21c8a73857b7001e8.pdf.
    \57\ Cohen, W. S. (1997). Defense Reform Initiative Report. 
Washington, DC: Department of Defense.
    \58\ Burt, N. D., and Boyett, J. E. (1979). Reduction in selling 
price after the introduction of competition. Journal of Marketing 
Research, 16(2), 275-279.
---------------------------------------------------------------------------

    Training's impact on placement. A recent study found that flexible 
and innovative training that is closely related to a real and in-demand 
occupation is associated with better labor market outcomes for training 
participants. Youth disconnected from work and school can benefit from 
comprehensive and integrated models of training that combine education, 
occupational skills, and support services.\59\ The study noted, 
however, that evidence for effective employment and training-related 
programs for youth is less extensive than for adults, and that there 
are fewer positive findings from evaluations.\60\ The WIA youth program 
remains largely untested.\61\ One study found that WIA training 
services increase placement rates by 4.4 percent among adults and by 
5.9 percent among dislocated workers,\62\ while another study concluded 
that placement rates are 3 to 5 percent higher among all training 
recipients.\63\
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    \59\ U.S. Department of Labor, U.S. Department of Commerce, U.S. 
Department of Education, and U.S. Department of Health and Human 
Services. (2014). What Works In Job Training: A Synthesis of the 
Evidence. Retrieved from: http://www.dol.gov/asp/evaluation/jdt/jdt.pdf.
    \60\ Ibid.
    \61\ Decker, P. T., and Berk, J. A. (2011.) Ten years of the 
Workforce Investment Act (WIA): Interpreting the research on WIA and 
related programs. Journal of Policy Analysis and Management, 30(4), 
906-926.
    \62\ Hollenbeck, K., Schroeder, D., King, C. T., and Huang, W.-
J. (2005). Net impact estimates for services provided through the 
Workforce Investment Act (Occasional Paper 2005-06). Washington, DC: 
U.S. Department of Labor, Employment and Training Administration, 
Office of Policy and Research, Division of Research and 
Demonstration. Retrieved from: http://wdr.doleta.gov/research/FullText_Documents/Net%20Impact%20Estimates%20for%20Services%20Provided%20through%20the%20Workforce%20Investment%20Act-%20Final%20Report.pdf.
    \63\ Heinrich, C. J., Mueser, P. R., and Troske, K. R. (2009). 
Workforce Investment Act non-experimental net impact evaluation. 
Columbia, MD: IMPAQ International, LLC. Retrieved from: http://wdr.doleta.gov/research/FullText_Documents/Workforce%20Investment%20Act%20Non-Experimental%20Net%20Impact%20Evaluation%20-%20Final%20Report.pdf.
---------------------------------------------------------------------------

    Participants in occupational training had a 5 percentage points 
higher reemployment rate than those who received no training, and 
reemployment rates were highest among recipients of on-the-job 
training, a difference of 10 to 11 percentage points.\64\ The study 
found that training, however, did not correspond to higher employment 
retention or earnings.\65\ A Youth Opportunity Grant Initiative study 
found that Youth Opportunity was successful at improving outcomes for 
high-poverty youth. Youth Opportunity also increased the labor-force 
participation rate overall and for subgroups, including 16- to 19-year-
old adolescents, women, African Americans, and in-school youth.\66\ 
Department-sponsored research found that participants who received core 
services (often funded by ES) and other services in one-stop centers 
were more likely to enter and retain employment.\67\
---------------------------------------------------------------------------

    \64\ Park, J. (2011). Does occupational training by the Trade 
Adjustment Assistance Program really help reemployment?: Success 
measured as matching. Washington, DC: U.S. Department of Labor, 
Employment and Training Administration. Retrieved from: https://wdr.doleta.gov/research/FullText_Documents/ETAOP_2011-09.pdf.
    \65\ Ibid.
    \66\ Jackson, R. H., Malen[eacute] Dixon, R., McCoy, A., 
Pistorino, C., Zador, P., Lopdell, J, Bruno, L. (2007). Youth 
Opportunity Grant Initiative: Impact and synthesis report. Prepared 
by Decision Information Resources, Inc. for U.S. Department of 
Labor, Employment and Training Administration. Retrieved from: 
http://wdr.doleta.gov/research/FullText_Documents/YO%20Impact%20and%20Synthesis%20Report.pdf.
    \67\ U.S. Department of Labor, Employment and Training 
Administration, Office of Policy Development and Research. (2013). 
Five-Year research and evaluation strategic plan program years 2012-
2017. Retrieved from: http://wdr.doleta.gov/research/FullText_Documents/ETAOP_2013_21.pdf.
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    Training's impact on wages. Before enactment of WIA, Job Training 
Partnership Act services had a modest but statistically significant 
impact on the earnings of adult participants.\68\ WIA training 
increased participants' quarterly earnings by $660; these impacts 
persisted beyond 2 years and were largest among women.\69\ WIA adult 
program participants who received core services (e.g., skill 
assessment, labor market information) or intensive services (e.g., 
specialized assessments, counseling) earned up to $200 more per quarter 
than non-WIA participants did. Earnings of participants who received 
training services in addition to core and intensive services initially 
were less but caught up within 10 quarters with the earnings of 
participants who received only core or intensive services; marginal 
benefits of training could exceed $400 per quarter. Earnings 
progressions were similar for WIA adult program participants and users 
of the labor exchange only.\70\ WIA training services also improved 
participants' long-term wage rates, doubling earnings after 10 quarters 
over those not receiving training services.\71\ WIA participants who 
did not receive training, however, earned $550 to $700 more in the 
first quarter after placement. The study also noted that individuals 
who did not receive training received effective short-term counseling 
that enabled them to gain an immediate advantage in the labor 
market.\72\
---------------------------------------------------------------------------

    \68\ Barnow, B., and Gubits, D. (2003). Review of recent pilot, 
demonstration, research, and evaluation initiatives to assist in the 
implementation of programs under the Workforce Investment Act 
(Occasional Paper 2003-10). U.S. Department of Labor, Employment and 
Training Administration. Retrieved from: http://wdr.doleta.gov/research/FullText_Documents/ETAOP%202003-10%20Review%20of%20Recent%20Pilot%2C%20Demonostration%2C%20Research%2C%20and%20Evaluation%20Initiatives.pdf.
    \69\ Ibid.
    \70\ Chrisinger, C. K. (2011). Earnings progression among 
workforce development participants: Evidence from Washington State. 
U.S. Department of Labor, Employment and Training Administration. 
Retrieved from: http://wdr.doleta.gov/research/FullText_Documents/ETAOP_2011-11.pdf.
    \71\ Heinrich, C. J., Mueser, P. R., and Troske, K. R. (2009). 
Workforce Investment Act non-experimental net impact evaluation. 
Columbia, MD: IMPAQ International, LLC. Retrieved from: http://wdr.doleta.gov/research/FullText_Documents/Workforce%20Investment%20Act%20Non-Experimental%20Net%20Impact%20Evaluation%20-%20Final%20Report.pdf.
    \72\ Ibid.
---------------------------------------------------------------------------

    Another Department program, the Job Corps program for disadvantaged 
youth and young adults, produced sustained increases in earnings for 
participants in their early twenties. Students who completed Job Corps 
vocational training experienced average earnings increases by the 
fourth follow-up year over the comparison group, whereas those who did 
not complete training experienced no increase.\73\ Another publication 
also noted that, on average, adults experienced a $743 quarterly post-
exit earnings boost.\74\
---------------------------------------------------------------------------

    \73\ Gritz, M., and Johnson, T. (2001). National Job Corps 
Study: Assessing program effects on earnings for students achieving 
key program milestones. Prepared by Battelle Memorial Institute for 
U.S. Department of Labor, Employment and Training Administration, 
Office of Policy and Research. Retrieved from: http://wdr.doleta.gov/research/FullText_Documents/MilestoneImpactReport-Final.pdf.
    \74\ Hollenbeck, K., Schroeder, D., C.T. King, C. T., and Huang, 
W.-J. (2005). Net impact estimates for services provided through the 
Workforce Investment Act (Occasional Paper 2005-06). Washington, DC: 
U.S. Department of Labor, Employment and Training Administration, 
Office of Policy and Research, Division of Research and 
Demonstration. Retrieved from: http://wdr.doleta.gov/research/FullText_Documents/Net%20Impact%20Estimates%20for%20Services%20Provided%20through%20the%20Workforce%20Investment%20Act-%20Final%20Report.pdf.
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    Those who completed training experienced a 15-percent increase in 
employment rates and an increase in hourly wages of $1.21 relative to 
participants without training.\75\

[[Page 56321]]

Participation in WIA training also had a distinct positive, but 
smaller, effect on employment and earnings, with employment 4.4 
percentage points higher and quarterly earnings $660 higher than for 
comparison group members.
---------------------------------------------------------------------------

    \75\ Needels, K., Bellotti, J., Dadgar, M., and Nicholson, W. 
(2006). Evaluation of the Military Base National Emergency Grants: 
Final report (Occasional Paper 2007-02). Prepared by Mathematica 
Policy Research for U.S. Department of Labor, Employment and 
Training Administration, Office of Policy Development and Research. 
Retrieved from: https://wdr.doleta.gov/research/FullText_Documents/Evaluation%20of%20the%20Military%20Base%20National 
%20Emergency%20Grants%20Final%20Report.pdf.
---------------------------------------------------------------------------

    The following are channels through which these benefits might be 
achieved:
    Better information for workers. The accountability measures will 
provide workers with higher-quality information about potential 
training program providers and enable them to make better-informed 
choices about which programs to pursue. The information analyzed and 
published by the State and Local WDBs about local labor markets also 
will help trainees and providers target their efforts and develop 
reasonable expectations about outcomes.
    Consumers of educational services, including disadvantaged and 
displaced workers, require reliable information on the value of 
different training options to make informed choices. Displaced workers 
tend to be farther removed from schooling and lack information about 
available courses and the fields with the highest economic return.\76\ 
Given these information gaps and financial pressures, that displaced 
workers learn of the economic returns to various training plans is 
important.\77\ Nevertheless, one study determined that the cost-
effectiveness of WIA job training for disadvantaged workers is 
``modestly positive'' due to the limited sample of States on which the 
research was based.\78\
---------------------------------------------------------------------------

    \76\ Greenstone, M., and Looney, A. (2011). Building America's 
job skills with effective workforce programs: A training strategy to 
raise wages and increase work opportunities. Washington, DC: The 
Hamilton Project. Retrieved from: http://www.brookings.edu/~/media/
research/files/papers/2011/11/training-greenstone-looney/
11_training_greenstone_looney.pdf.
    \77\ Jacobson, L. S., LaLonde, R. J., and Sullivan, D. G. 
(2011). Policies to reduce high-tenured displaced workers' earnings 
losses through retraining (Discussion Paper 2011-11). Washington, 
DC: The Hamilton Project. Retrieved from: http://www.brookings.edu/
~/media/research/files/papers/2011/11/displaced-jacobson-lalaonde-
sullivan/11_displaced_jls_paper.pdf.
    \78\ Heinrich, C. J., Mueser, P. R., Troske, K. R., Jeon, K.-S., 
and Kahvecioglu, D. C. (2009). New estimates of public employment 
and training program net impacts: A nonexperimental evaluation of 
the Workforce Investment Act program (Discussion Paper 4569). Bonn, 
Germany: Institute for the Study of Labor (IZA). Retrieved from: 
http://ftp.iza.org/dp4569.pdf.
---------------------------------------------------------------------------

    Sanctions to under-performing States. WIOA requires the Department 
to place sanctions on States that underperform for 2 consecutive years. 
The sanction will be 5 percent of set-aside funding. Having a clear and 
credible sanction will serve as an incentive for States and local 
entities to monitor performance more effectively and to intervene early 
to avoid the loss of funding.
    Evaluations of WIA indicate that sanctions have a larger influence 
on programs than incentives do. Two-thirds of local areas have 
indicated that the possibility of sanctions influenced their programs, 
whereas only slightly more than half indicated that incentives had an 
influence.\79\ Further, several Job Centers consider student placement 
outcomes in staff performance evaluations and pay for vocational 
instructors.\80\ This practice has significantly increased staff 
interest in successful student placement following program 
completion.\81\
---------------------------------------------------------------------------

    \79\ Dunham, K., Mack, M., Salzman, J., and Wiegand, A. (2005). 
Evaluation of the WIA performance measurement system: Survey report. 
Prepared by Social Policy Research Associates for U.S. Department of 
Labor, Employment and Training Administration. Retrieved from: 
http://wdr.doleta.gov/research/FullText_Documents/Evaluation%20of%20the%20WIA%20Performance%20Measurement%20System%20-%20Survey%20Report.pdf.
    \80\ Johnson, T., Gritz, M., Jackson, R., Burghardt, J., Boussy, 
C., Leonard, J., and Orians, C. (1999). National Job Corps study: 
Report on the process analysis. Prepared by Mathematica Policy 
Research, Inc. for U.S. Department of Labor, Employment and Training 
Administration. Retrieved from: http://wdr.doleta.gov/research/FullText_Documents/99-jc_analysis.pdf.
    \81\ Ibid.
---------------------------------------------------------------------------

    State performance accountability measures. This requirement will 
include significant data collection for Local WDBs to address 
performance indicators for the core programs in their jurisdictions. 
This data collection will enable the State WDBs to assess performance 
across each State. Training providers will be required to provide data 
to Local WDBs, which will represent a cost in the form of increased 
data collection and processing. Employers and employees also will have 
to provide information to the training providers, which will take time. 
This provision, in combination with the State and Local WDB membership 
provisions requiring employer/business representation, is expected to 
improve the quality of local training and, ultimately, the number and 
caliber of job placements.
    Implementation of follow-up measures, rather than termination-based 
measures, might improve long-term labor market outcomes, although some 
could divert resources from training activities.\82\
---------------------------------------------------------------------------

    \82\ Courty, P., and Marschke, G. (2007). Making government 
accountable: Lessons from a federal job training program. Public 
Administration Review, 67(5), 904-916.
---------------------------------------------------------------------------

    Before-after earning metrics capture the contribution of training 
to earnings potential and minimize incentives to select only training 
participants with high initial earnings.\83\ With the exception of 
programs in a few States, current incentives do not reward enrollment 
of the least advantaged.\84\ In addition, the study noted evidence that 
the performance standards can be ``gamed'' in an attempt to maximize 
their centers' measured performance.\85\
---------------------------------------------------------------------------

    \83\ Heckman, J. J., Heinrich, C., and Smith, J. A. (1997). 
Assessing the performance of performance standards in public 
bureaucracies. The American Economic Review, 87(2), 389-395.
    \84\ Ibid.
    \85\ Ibid.
---------------------------------------------------------------------------

    Pressure to meet performance levels could lead providers to focus 
on offering services to participants most likely to succeed. For 
example, current accountability measures might create incentives for 
training providers to screen participants for motivation, delay 
participation for those needing significant improvement, or discourage 
participation by those with high existing wages.\86\
---------------------------------------------------------------------------

    \86\ Dunham, K., Mack, M., Salzman, J., and Wiegand, A. (2005). 
Evaluation of the WIA performance measurement system: Survey report. 
Prepared by Social Policy Research Associates for U.S. Department of 
Labor, Employment and Training Administration. Retrieved from: 
http://wdr.doleta.gov/research/FullText_Documents/Evaluation%20of%20the%20WIA%20Performance%20Measurement%20System%20-%20Survey%20Report.pdf.
---------------------------------------------------------------------------

    The following subsections present additional channels by which 
economic benefits might be associated with various aspects of the Final 
Rule:
    Dislocated workers. A study found that, for dislocated workers, 
receiving WIA services significantly increased employment rates by 13.5 
percent and boosted post-exit quarterly earnings by $951.\87\ Another 
study found, however, that training in the WIA dislocated worker 
program had a net benefit close to zero or even below zero.\88\
---------------------------------------------------------------------------

    \87\ Hollenbeck, K., Schroeder, D., King, C.T., and Huang., W.-
J. (2005). Net Impact Estimates for Services Provided through the 
Workforce Investment Act (Occasional Paper 2005-06). Washington, DC: 
U.S. Department of Labor, Employment and Training Administration, 
Office of Policy and Research, Division of Research and 
Demonstration. Retrieved from: http://wdr.doleta.gov/research/FullText_Documents/Net%20Impact%20Estimates%20for%20Services%20Provided%20through%20the%20Workforce%20Investment%20Act-%20Final%20Report.pdf.
    \88\ Heinrich, C.J., Mueser, P.R., and Troske, K.R. (2009). 
Workforce Investment Act non-experimental net impact evaluation. 
Columbia, MD: IMPAQ International, LLC. Retrieved from: http://wdr.doleta.gov/research/FullText_Documents/Workforce%20Investment%20Act%20Non-Experimental%20Net%20Impact%20Evaluation%20-%20Final%20Report.pdf.
---------------------------------------------------------------------------

    Self-employed individuals. Job seekers who received self-employment

[[Page 56322]]

services started businesses sooner and had longer-lasting businesses 
than nonparticipants. Self-employment assistance participants were 19 
times more likely to be self-employed than nonparticipants and 
expressed high levels of satisfaction with self-employment. A study of 
Maine, New Jersey, and New York programs found that participants were 
four times more likely to obtain employment of any kind than 
nonparticipants were.\89\
---------------------------------------------------------------------------

    \89\ Kosanovich, W.T., Fleck, H., Yost, B., Armon, W. and 
Siliezar, S. (2001). Comprehensive assessment of self-employment 
assistance programs. Prepared by DTI Associates for U.S. Department 
of Labor, Office of Workforce Security. Retrieved from: http://wdr.doleta.gov/research/FullText_Documents/Comprehensive%20Assessment%20of%20Self-Employment%20Assistance%20Programs.pdf.
---------------------------------------------------------------------------

    Workers with disabilities. A study of individuals with disabilities 
enrolled in training for a broad array of occupations found that the 
mean hourly wage and hours worked per quarter for program graduates 
were higher than for individuals who did not complete the program.
    Out-of-school youth. Several benefits are expected to result from 
the Department's increased funding for OSY--especially those from 
vulnerable groups such as low-income youth, minorities, and high school 
dropouts. According to Lerman (2005), that youth who have left school 
recently develop skills directing them toward having productive careers 
is critical.\90\ As discussed above in the transfer subsection of the 
section V.A.6 (Subject-by-Subject Analysis), increased investment in 
programs that target OSY is expected to result in higher youth 
employment, higher incomes, reduced crime, and a reduction in the waste 
of human potential. As a note of caution, however, Lerman (2005) found 
that only a few of the programs sponsored by the Department, other 
Federal and State government agencies, and private foundations aimed at 
helping at-risk, OSY have resulted in concrete benefits that have 
exceeded each program's costs.\91\
---------------------------------------------------------------------------

    \90\ Lerman, R.I. (2005). Programs to support out-of-school 
youth (Occasional Paper 2005-14). Washington, DC: U.S. Department of 
Labor, Employment and Training Administration. Retrieved from: 
http://wdr.doleta.gov/research/FullText_Documents/Programs%20to%20Support%20Out-of-School%20Youth%20Report.pdf.
    \91\ Ibid.
---------------------------------------------------------------------------

    In conclusion, after a review of the quantitative and qualitative 
analysis of the impacts of this Final Rule, the Department has 
determined that the societal benefits justify the anticipated costs.
Qualitative Transfers
    In addition, there is an important transfer payment that the 
Department was unable to quantify. Below, the Department describes 
qualitatively the transfer payment that is expected to result from 
layoff aversion due to rapid response activities.
    Layoff Aversion Due to Rapid Response Activities. Under the WIA 
Regulations, rapid response operators could use the funds to assess the 
potential for averting layoffs. Under WIOA, the regulations at Sec.  
682.330 require rapid response to include layoff aversion strategies 
and activities, but only as applicable. The Final Rule includes several 
broad strategies and specific activities that are critical to gathering 
information, maintaining readiness, and ensuring the ability to 
capitalize on opportunities that will prevent, or minimize the duration 
of, unemployment.
    Although adding layoff aversion to a State's portfolio of rapid 
response services will not necessarily change the rapid response costs 
for States because States take resources from other rapid response 
activities to do so, layoff aversion is economically valuable in many 
ways. Saving jobs keeps people working and earning income to be spent 
in the economy and prevents the costs associated with unemployment, 
including unemployment insurance and retraining. Businesses sell goods 
and services, make profits, and pay taxes, while maintaining a skilled 
workforce. Communities thrive when residents are working and actively 
participating in the economy. Preventing job loss, and minimizing the 
duration of unemployment, ensures that the public workforce system is a 
critically important player in creating and maintaining a successful 
economy, and layoff aversion can deliver meaningful, positive benefits 
such as retaining wages, maintaining economic activity, expanding tax 
bases, minimizing the costs of retraining, and increasing employee 
morale.
    This benefit is difficult to quantify because it is not possible to 
measure the number of individuals who would have been unemployed or the 
duration of their unemployment if layoff aversion services were not 
available.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 603, requires 
agencies to prepare a regulatory flexibility analysis to determine 
whether a regulation will have a significant economic impact on a 
substantial number of small entities. Section 605 of the RFA allows an 
agency to certify a rule in lieu of preparing an analysis if the 
regulation is not expected to have a significant economic impact on a 
substantial number of small entities. Further, under the Small Business 
Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 801 (SBREFA), an 
agency is required to produce compliance guidance for small entities if 
the rule has a significant economic impact.
    The Small Business Administration (SBA) defines a small business as 
one that is ``independently owned and operated and which is not 
dominant in its field of operation.'' The definition of small business 
varies from industry to industry to the extent necessary to reflect 
industry size differences properly. An agency must either use the SBA 
definition for a small entity or establish an alternative definition, 
in this instance, for the workforce industry. The Department has 
adopted the SBA definition for the purposes of this certification.
    The Department has notified the Chief Counsel for Advocacy, SBA, 
under the RFA at 5 U.S.C. 605(b), and certifies that this rule will not 
have a significant economic impact on a substantial number of small 
entities. This finding is supported, in large measure, by the fact that 
small entities are already receiving financial assistance under the WIA 
program and will likely continue to do so under the WIOA program as 
articulated in this Final Rule.
Affected Small Entities
    This Final Rule can be expected to impact small one-stop center 
operators. One-stop operators can be a single entity (public, private, 
or nonprofit) or a consortium of entities. The types of entities that 
might be a one-stop operator include: (1) An institution of higher 
education; (2) an ES SWA established under the Wagner-Peyser Act; (3) a 
community-based organization, nonprofit organization, or workforce 
intermediary; (4) a private for-profit entity; (5) a government agency; 
(6) a Local WDB, with the approval of the local CEO and the Governor; 
or (7) another interested organization or entity that can carry out the 
duties of the one-stop operator. Examples include a local chamber of 
commerce or other business organization, or a labor organization.
Impact on Small Entities
    The Department indicates that transfer payments are a significant 
aspect of this analysis in that the majority of WIOA program cost 
burdens on State and Local WDBs will be fully financed through Federal 
transfer

[[Page 56323]]

payments to States. The Department has highlighted costs that are new 
to WIOA implementation and this Final Rule. Therefore, the Department 
expects that the DOL WIOA Final Rule will have no cost impact on small 
entities.

C. Small Business Regulatory Enforcement Fairness Act of 1996

    The Department has determined that this Final Rule does not impose 
a significant impact on a substantial number of small entities under 
the RFA; therefore, the Department is not required to produce any 
Compliance Guides for Small Entities as mandated by the SBREFA.

D. Paperwork Reduction Act

    The purposes of the Paperwork Reduction Act of 1995 (PRA), 44 
U.S.C. 3501 et seq., include minimizing the paperwork burden on 
affected entities. The PRA requires certain actions before an agency 
can adopt or revise a collection of information, including publishing 
for public comment a summary of the collection of information and a 
brief description of the need for and proposed use of the information.
    As part of its continuing effort to reduce paperwork and respondent 
burden, the Department conducts a preclearance consultation program to 
provide the public and Federal agencies with an opportunity to comment 
on proposed and continuing collections of information in accordance 
with the PRA. See 44 U.S.C. 3506(c)(2)(A). This activity helps to 
ensure that the public understands the Department's collection 
instructions, respondents can provide the requested data in the desired 
format, reporting burden (time and financial resources) is minimized, 
collection instruments are clearly understood, and the Department can 
properly assess the impact of collection requirements on respondents.
    A Federal agency may not conduct or sponsor a collection of 
information unless it is approved by OMB under the PRA and displays a 
currently valid OMB control number. The public is also not required to 
respond to a collection of information unless it displays a currently 
valid OMB control number. In addition, notwithstanding any other 
provisions of law, no person will be subject to penalty for failing to 
comply with a collection of information if the collection of 
information does not display a currently valid OMB control number (44 
U.S.C. 3512).
    In accordance with the PRA, the Department submitted a series of 
ICRs to OMB when the NPRM was published. The NPRM provided an 
opportunity for the public to comment on the information collections 
directly to the Department; commenters also were advised that comments 
under the PRA could be submitted directly to OMB. OMB issued a notice 
of action for each request asking the Department to resubmit the ICRs 
at the final rule stage and after considering public comments. Where 
information collection instruments were not ready at the time the NPRM 
published, the Department provided additional opportunities for the 
public to comment on the information collections through notices in the 
Federal Register that provided additional comment periods on the 
associated forms and instructions. These comment periods provided at 
least 60 days for comments to be submitted to the agency. Each of these 
ICRs was then submitted for OMB approval, and the Department published 
notices in the Federal Register that invited comments to be sent to OMB 
for a period lasting at least 30 days. The Department also submitted 
each ICR for further approval to incorporate the provisions of this 
Final Rule; these Final Rule ICRs were not subject to further public 
comment. The Department provides a status of the each ICR in the 
summary section that immediately follows in this portion of the 
preamble. Where a review remained pending, when this preamble was 
drafted, the Department will publish an additional notice to announce 
OMB's final action on the ICR.
    It should be noted that the ICR review status reported in this 
section only relates to requests related directly to this Final Rule. 
Certain ICR packages that were previously approved are being updated to 
change references to those in the Final Rule. As has been the practice 
throughout WIOA implementation, the Department will continue to update 
stakeholders on the status of the ICRs through other means.
    For some packages, substantive requirements were approved via a 
notice of action and as of the date of the drafting of this preamble, 
the information collection is being updated to reflect references in 
the WIOA Final Regulations. We note that the ETA Workforce Innovation 
and Opportunity Act Performance Accountability, Information, and 
Reporting System review is pending as of the date this preamble was 
drafted. The substantive requirements will be approved through a notice 
of action by OMB, and will take effect as of that date. The Department 
will announce this approval.
    The information collections in this Final Rule are summarized as 
follows.
State Training Provider Eligibility Collection
    Agency: DOL-ETA.
    Title of Collection: State Training Provider Eligibility 
Collection.
    Type of Review: New collection.
    OMB Control Number: 1205-0523.
    Affected Public: State, Local, and Tribal Governments, and Private 
Sector.
    Obligation to Respond: Required to obtain or retain a benefit (WIOA 
sec. 122).
    Total Estimated Number of Respondents Annually: 11,457.
    Total Estimated Number of Annual Responses: 11,457.
    Frequency of Responses: On Occasion.
    Total Estimated Annual Time Burden: 8,835 hours.
    Total Estimated Annual Other Costs Burden: $0.
    Regulations Sections: Sec.  680.450, Sec.  680.460, Sec.  680.490, 
Sec.  680.500.
    ICR Approval Status: Not yet approved.
Overview and Response to Comments Received
    Overview: Under WIOA sec. 122, the Governor, after consultation 
with the State WDB, must establish criteria, information requirements, 
and procedures regarding the eligibility of providers of training 
services to receive funds under WIOA for the provision of training 
services in local areas in the State. The Final Rule describes the 
process for adding ``new''' providers to the ETPL, explains the 
detailed application process for previously WIA-eligible providers to 
remain eligible under WIOA, describes the performance information that 
providers are required to submit to the State in order to establish or 
renew eligibility, and explains the requirements for distributing the 
ETPL and accompanying information about the programs and providers on 
the list.
    The Department received no comments concerning this information 
collection.
ETA Workforce Innovation and Opportunity Act Performance 
Accountability, Information, and Reporting System
    Agency: DOL-ETA.
    Title of Collection: ETA Workforce Innovation and Opportunity Act 
Performance Accountability, Information, and Reporting System.
    Type of Review: New collection.
    OMB Control Number: 1205-0521.
    Affected Public: State, Local, and Tribal Governments; Individuals 
or Households.

[[Page 56324]]

    Obligation to Respond: Required to Obtain or Retain Benefits.
    Total Estimated Number of Respondents Annually: 17,262,375.
    Total Estimated Number of Annual Responses: 34,526,494.
    Total Estimated Annual Time Burden: 8,881,228 hours.
    Total Estimated Annual Other Costs Burden: $6,791,395.
    Regulations Sections: Sec.  684.420, Sec.  684.610, Sec.  684.700, 
Sec.  684.800, Sec.  685.210, Sec.  685.400, Sec.  688.420, Sec.  
688.610.
    ICR Approval Status: Not yet approved.
Overview and Response to Comments Received
    Overview: This new information collection will consolidate the 
existing information collections for YouthBuild, National Farmworkers 
Jobs Program, Indian, and Native Americans Program participants. These 
information collections are currently approved under OMB Control 
Numbers 1205-0422, 1205-0425, and 1205-0464. The WIOA Performance 
Management and Information and Reporting System would standardize the 
initial application, quarterly, and annual reporting processes for 
program participants.
    Comments: The Department received comments in specific areas (e.g., 
performance indicators, ICR documents) and general topics (e.g., burden 
estimates).
    The Department received comments expressing concern that the 
proposed Participant Individual Record Layout (PIRL) did not identify 
which data elements are optional, required, or only required for a 
specific program or for specific participant characteristics. 
Similarly, four commenters requested that the final version of the PIRL 
contain information indicating which programs are required to report 
each data element and under which conditions each data element must be 
reported to help States determine how to modify their systems to 
capture the data properly. Two commenters assumed that, except where 
clearly indicated otherwise, all data elements are required for all 
participants, even those receiving minimal staff involvement, and 
commented that this would be a significant change from existing 
reporting requirements. One commenter requested that, if the intent is 
that all data elements before section E be gathered for all programs, 
the Department consider limiting the required data elements to those 
really needed for each program. Particularly for title III, this 
commenter expressed concern that participants would drop out if asked 
to provide large amounts of information not directly related to 
matching them with a job.
    Department Response: The PIRL consists of required and optional 
data elements for multiple programs and partners. Therefore, it is not 
expected that every data element will apply to every individual in 
every program. As noted above, the Department has extended the PIRL by 
identifying the reporting requirements for each program. For instance, 
as indicated by one of the commenters, it would not be realistic to 
collect the same depth and breadth of information from individual 
accessing ES services relative to individual receiving training 
services under a different program. Additional guidance and technical 
assistance will be provided on data collection and reporting 
requirements specific for each program.
    Comments: Several commenters stated that the proposed information 
collection is not clear regarding the Indian and Native American (INA) 
program's reporting obligations and suggested that WIOA sec. 166 
grantees have their own reporting systems, performance indicators, and 
a separate DOL-only PIRL. Two commenters also asked if all of the 
proposed reporting forms are required in order to begin programming a 
management information system.
    Department Response: The Department notes that the performance 
indicators for the INA program are statutorily required by WIOA; the 
Department does not have the discretion to deviate from the indicators 
required in sec. 166(h)(1)(A) of WIOA. The Department has included INA 
programs in these comprehensive performance reporting requirements for 
the workforce programs. Section 166(h)(1)(A) requires the Secretary of 
Labor, in consultation with the Native American Employment and Training 
Council (NAETC), to develop additional performance indicators and 
standards. Different programs will be subject to different data element 
reporting requirements; in other words, INA program grantees only will 
be reporting on data elements in the DOL-only PIRL that are 
specifically related to the INA program. Additionally, the reporting 
template/form included in this ICR will be the required form for each 
program mentioned in the PIRL. In other words, while there is only one 
common form to be used, there will be one report form required for each 
grantee within the various programs included in this ICR.
    Comments: A commenter expressed concerns regarding the burden of 
increased reporting requirements on the INA program, including the need 
for technical experts to design reporting systems to capture all new 
requirements and the re-training of employees on reporting procedures. 
Two different commenters recommended that the Department fund the 
development of a robust, flexible, and secure Web-based system that 
will meet the needs of both the grantees and the Federal system. One of 
the commenters stated that a Web-based reporting system would address 
many of the problems associated with the current Bear Tracks management 
information system, which lacks support for grantees' internal 
management and reporting requirements and is difficult to support and 
upgrade, particularly for non-Windows users.
    Department Response: The Department urges the commenters to review 
the program additional matrix added to the PIRL, which designates which 
data elements need to be collected by each program. All data elements 
listed in the PIRL are not required to be collected by the INA program; 
therefore, the burden is not as heavy as anticipated.
    The Department has worked on an appropriate balance between 
stewardship of Federal funds through tracking and reporting outcomes 
and not over-burdening recipients of those Federal funds with excessive 
reporting and other administrative requirements. However, reporting is 
essential for tracking participant outcomes and the overall 
effectiveness of all programs, including the INA program. Although the 
performance indicators require additional follow-up and longer tracking 
periods for participants, the Department does not consider this to be a 
significant increase in reporting burden.
    The Department concurs with the commenter on the need for training 
on the new performance indicators and reporting requirements and will 
provide on-going technical assistance to grantees as the system 
transitions to the new performance indicators and reporting 
requirements under WIOA. The Department also agrees with the commenter 
that it will require technical experts to develop a reporting system 
for INA program grantees and will be working in collaboration with the 
NAETC and with INA program grantees to develop a management information 
system that will allow grantees to track and report on INA 
participants. The Department will provide guidance and technical 
assistance at subsequent NAETC meetings to include the reporting 
process and system.
    The Department will consider a transition period for grantees so 
that

[[Page 56325]]

consultation and training is provided on the final reporting 
requirements for WIOA and to allow the development of a new reporting 
system. The Department commits to working with the NAETC on developing 
the revised reporting system and will consider web-based reporting as a 
means to reduce the maintenance of the system.
    Comments: Referencing PIRL section E.04 (Indian and Native American 
Program), a commenter requested clarification on whether the Bear 
Tracks management information system is mandated for the INA program 
and, if so, who would fund the costly system enhancements to meet WIOA 
reporting requirements. The commenter asserted that disaggregation is a 
concern for tribal affiliation in California because many California 
tribes are small and data elements such as date of birth, zip code, 
barriers to employment, and tribal affiliation may reveal personally 
identifiable information (PII). The commenter asked if the Department 
has completed and evaluated a privacy impact study for California 
Indian Manpower Consortium and requested confidentiality assurances for 
California tribes.
    Department Response: The Bear Tracks management information system 
is not a DOL-mandated system for INA program grantees. It was developed 
in collaboration with the NAETC and INA grantee community to increase 
reporting efficiency and accuracy and to allow for the transmission of 
individual participant records to the Department. Although the Bear 
Tracks management information system is not mandatory, INA program 
grantees will be required to use a system that transmits participant 
data in a manner that meets the Department's reporting requirements. 
The Department has taken several steps to manage the secure transfer of 
individual participant records. These steps include: A page for the 
file upload (for grantees) that is Secure Socket Layer (SSL) enabled; a 
Secure File Transfer protocol (S-FTP) used to transfer files from the 
Employment and Training Administration (ETA) to the State of Kansas for 
UI wage matching (Kansas has an S-FTP server and DOL has the S-FTP 
client) and lastly, only aggregate data are returned to the Department 
with data suppressed on grantees with fewer than 4 records. The 
Department has completed a Privacy Impact Assessment (PIA) for the 
Enterprise Business Support System (EBSS), which is the system that 
collects and stores data for the INA program (See the PIA located at: 
http://www.dol.gov/oasam/ocio/programs/PIA/ETA/ETA-EBSS.htm) DOL has 
determined that the safeguards and controls for this system adequately 
protect the information as indicated in EBSS System Security Plan, 
dated March 5, 2013.
    Comments: Other commenters asserted that the gathering of 
information required for the PIRL would have significant costs, a few 
commenters urged the Department to evaluate each data element and 
require only those that are either mandated by statute or that truly 
have meaning and add value. One of these commenters stated that, while 
there are costs to modify information technology (IT) systems, 
including increased time spent gathering the data, it is ultimately the 
customers who pay these costs because more resources spent gathering 
data means less resources spent assisting customers and longer waits to 
see staff.
    Department Response: Although the PIRL consists of several data 
elements not previously collected by the Department's workforce 
programs, most of the data elements were previously required under the 
WIA ``WIASRD,'' which is the precursor to the PIRL. In general, data 
elements were added only if required by WIOA either directly or 
indirectly (i.e., if required for one or more performance calculations, 
or required for eligibility determinations). As noted previously, the 
Department has taken every effort to strike a balance between its 
fiduciary responsibilities pertaining to stewardship of Federal funds 
and the desire to not impose undue administrative burden.
    The intent of this ICR is to streamline reporting across the 
Department's workforce programs, and this is reflected in the PIRL 
through the inclusion all data elements necessary for each of the 
programs included in the collection to meet their individual program 
reporting requirements. Programs are required only to collect and 
report on those elements that are statutorily required and/or necessary 
to determine performance outcomes for those individuals to whom they 
provide services. The Department has minimized, to the extent possible, 
the burden placed on customers and service providers through the 
implementation of this new reporting system and will provide further 
support to ease this transition through future guidance and technical 
assistance.
    Comments: Two commenters expressed concern that there are common 
data elements in both the Joint WIOA PIRL and the DOL-only PIRL that 
have different definitions and recommended that the Department ensure 
the definitions of common data elements remain consistent. One 
commenter recommended that the Department align the numbering between 
the Joint WIOA PIRL and the DOL-only PIRL data elements and correct 
situations in which some numbers are used more than once. Another 
commenter expressed concern that some data elements in the proposed 
DOL-only PIRL relating to participant characteristics are defined 
differently than in the VR Report 911.
    Department Response: The Departments have worked to eliminate 
inconsistencies and align reporting requirements and the specific data 
elements, including using the exact same definitions for both versions 
of the PIRL, and aligning all element numbers. In addition, the 
Rehabilitation Services Administration (RSA) has added additional 911 
elements to be consistent with the PIRL. Both DOL and RSA are revising 
existing data collection instruments. The increase in burden required 
to reorganize and renumber all of the data elements would exceed any 
burden removed by having consistent fields numbered across programs. 
RSA is also revising instructions to eliminate any duplicate numbers. 
Where appropriate, for reporting purposes, RSA also plans to aggregate 
some of the more detailed 911 data elements to be consistent with the 
PIRL.
    Comments: A commenter asked how data conflicts would be addressed 
if multiple PIRLs are submitted for the same individual by different 
agencies that have the individual on a different participation 
timeline. This commenter also expressed concern about integrating data 
from programs that are not part of the State system but are 
administered through grants to local areas and organizations throughout 
the State (e.g., YouthBuild and INA programs). If the information 
reported by these programs is to end up in an integrated PIRL, this 
commenter asserted that it will take time and effort for the State to 
establish a way to obtain and report the data from these additional 
programs to incorporate with ES, WIOA, and TAA.
    Department Response: The Department notes that States have the 
flexibility to submit a separate PIRL for each program, or a PIRL for 
each participant, including services received from all programs. The 
Department will perform any integration that takes place using multiple 
PIRL data elements to link individual records in the case where a 
unique identifier across programs is not available. There will also be 
an upload option for the entire PIRL layout, for those States who wish 
to integrate their programs into one data file submission. Regarding 
grantee programs outside of the State, the

[[Page 56326]]

Department agrees that this level of data integration may be difficult 
or in some cases not appropriate. The Department will continue to 
evaluate which programs should be integrated, and the most efficient 
methods to do so.
    Comments: A commenter inquired if one PIRL file will be integrated 
for all programs (title I subtitle B, title I subtitle D, title II, ES 
program, trade, and other non-WIOA programs noted) or whether each 
program will have its own file. If each program provides its own file, 
the commenter requested clarification regarding whether Trade would 
need to collect data elements that are not Trade-specific (e.g., low-
income, low levels of literacy, and other data elements not currently 
reported in TAPR). A commenter expressed support for requiring Trade 
programs to use the PIRL as its program reporting layout, but requested 
clarification on the specific reporting requirements for TAA. For 
example, the commenter asked if quarterly Unemployment Insurance (UI) 
benefit information, as currently required on the TAPR, is still 
required and, if so, where these data will be collected on the PIRL. A 
commenter also expressed the understanding that each State can select 
if TAA will be included in the PIRL or reported in a separate program 
report.
    Department Response: Although the PIRL will be used for multiple 
DOL programs (both formula and discretionary), not all data elements 
will apply to every program, for example, data on cultural barriers is 
required by the WIOA statute for title I programs but there is no 
similar requirement for TAA programs. Therefore, data elements 
pertaining to cultural barriers would not be collected for individuals 
participating in the TAA program only. All data elements of the TAPR 
are included in the PIRL. UI benefit information is to be reported 
collected in PIRL 401. Each program will be made aware of which 
elements are required data elements; the additional data elements in 
the PIRL will be considered optional for States and grantees to report 
on.
    Comments: Regarding section B (One-Stop Center Program 
Participation Information), a commenter said that because National 
Farmworker Jobs Program (NFJP) grantees operate their own case 
management and data management programs, they only can be expected to 
report participation in other WIOA programs for individuals for whom 
they arrange co-enrollment. The commenter expressed concern that there 
is not consistency among one-stop operators from service area to 
service area or State-to-State relating to the amount of cooperation 
and data sharing that States are willing or legally able to do with 
non-State agencies.
    Department Response: NFJP grantees are a required one-stop partner 
and must enter into a memorandum of understanding (MOU) with Local WDBs 
as described in WIOA sec. 121(c). As part of this MOU, Local WDBs and 
the required partners must describe the manner in which the services 
will be coordinated and delivered through the one-stop delivery system, 
including the methods of individual referrals between the one-stop 
operator and the one-stop partners for appropriate services and 
activities. WIOA sec. 121(c)(2)(B) also provides that other provisions 
consistent with WIOA may be included in the MOU, and the Department 
encourages required one-stop partners, such as NFJP grantees, to 
include language that can facilitate sharing of co-enrollment data for 
reporting purposes. The Department will issue additional guidance 
regarding the development of MOUs between Local WDBs and required one-
stop partners. No revision to the data element text has been made.
    Comments: Regarding section D (Program Outcomes Information), a 
commenter expressed support for maintaining the ability of grantees to 
use supplemental data sources to track performance outcomes for all 
participants who are not found in wage records, reasoning that it 
provides certain program operators with the necessary flexibility to 
obtain performance outcome data without having access to wage records 
(e.g., community-based organizations). If such grantees use 
supplemental data sources but are unable to calculate performance 
outcomes for participants who choose not to provide their social 
security number, the commenter urged the Department to provide 
flexibility so there is no disincentive for serving these individuals 
(e.g., allow grantees to exclude these participants from performance 
outcome calculations but still include them in service counts, i.e., 
the participant served and exited column).
    Department Response: For individuals that do not have or choose not 
to provide a Social Security Number (SSN), the Department will allow 
for supplemental data to be used to track employment rates and wages of 
the participants. The Department notes that employment and wages must 
be collected and verified for a participant through either wage record 
matching or through supplemental wage information, in order for the 
participant to be included as being in unsubsidized employment during 
the second quarter and in the fourth quarters after exit; this 
requirement allows such participants without disclosed SSNs to be 
included in performance outcomes. States should report SSN matched data 
without reporting the SSN as the unique identifier, except to the 
extent permitted under the H-1B grant program. The data provided by UI 
is the most reliable and least burdensome data available for reporting 
employment rates and wages; however, the Department will allow data 
from the other sources listed in the PIRL to be used when UI data are 
unavailable. In other words, participants who identify as having a SSN 
and those who do not will all be accountable for performance outcomes 
as well as overall participant and exiter counts. Both the Departments 
of Education and Labor continue to work to find solutions that will 
allow States to access the data needed to comply with these 
requirements under WIOA.
    Comments: A commenter asked, concerning section E.02 (H-1B), 
whether only agencies that operate the H-1B program are responsible for 
completing this section, or whether programs under WIOA are required to 
confirm whether a person is an H-1B participant and, if so, whether 
WIOA is required to report these data elements. Similarly, noting that 
the PIRL has additional program data elements, e.g., H-1B (section 
E.02), Reintegration of Ex-Offenders (sections E.05 and E.06), and 
Office of Disability Employment Policy (ODEP) (section E.08), another 
commenter asked if States are now required to gather the data from the 
organizations that have been awarded these grants or whether grantees 
are expected to submit their own files. If the State is required to 
report on these programs, the commenter asked for additional guidance 
relating to how States will learn the identity of these grantees and 
expressed concern about sufficient lead time for State IT departments 
to make system modifications.
    Department Response: The Department is implementing the PIRL format 
across multiple programs, but not all programs will require the same 
data elements. For instance, H-1B grantees will be responsible for the 
collection and reporting of the required data elements under the H-1B 
section of the PIRL. Similarly, other discretionary grant programs will 
report only on those sections of the PIRL (i.e., those data elements 
that pertain to their respective program). In other words, the PIRL 
file for a participant in one program may look quite different from the 
PIRL file for a participant in a different program.

[[Page 56327]]

States will not be responsible for the submission of discretionary 
grant programs--the grantees themselves will have the responsibility of 
submitting data on their participants.
    Comments: Three commenters expressed confusion concerning PIRL 
408--Highest School Grad Completed (WIOA), on what to report for this 
data element. If an individual completes a full-time technical or 
vocational school, noting that although this data element no longer 
includes an option for vocational school, the Program Performance 
Scorecard lists vocational school under Educational Level. The 
commenters also asked whether it was a mistake that ``Other 
Postsecondary Degree or Certification'' is no longer included as an 
option under this data element. A commenter suggested that either the 
Department should further define this data element for consistent use 
and to avoid user error, or this data element should be removed. An 
advocacy organization recommended that the Department revise this data 
element to include educational attainment completed in foreign 
countries in the data element specification, reasoning that it would 
aid service providers in determining the appropriate services a 
participant requires.
    Department Response: The Department has revised this data element 
for better clarity. If an individual has attained a postsecondary 
technical or vocational degree, the participant would be coded as a `5' 
as per the element instructions. The option of ``other postsecondary 
degree or certification'' is not included here as the Department urges 
States and grantees to best choose one of the eight options for this 
element. Additionally, to reduce reporting burden, the Department did 
not add a separate option for completing an education program or 
attaining a degree or certificate. If this is the scenario, this 
participant's degree would be treated as one earned domestically and 
also be coded as such.
    Comments: In discussing the measurable skill gains, a commenter 
expressed concern that the specifications include individuals who have 
an Exclusionary Reasons (PIRL 923) code of ``01.'' Although 
acknowledging that this is to allow title II adult education providers 
to report on their corrections education/education of other 
institutionalized individuals, this commenter asserted that not 
excluding these individuals from title I performance is of concern 
because most participants who have been excluded from performance due 
to being institutionalized or incarcerated are waiting adjudication in 
a jail and are unable to secure bond; they are not in a prison where 
adult education providers are providing services. The commenter stated 
that there should be a better way to calculate and report this measure 
specific to each program. Another commenter expressed concerns 
regarding the burden of reporting on measurable skill gains as well as 
the accuracy of the measure. The commenter asserted that gathering and 
documenting information such as transcripts, report cards, progress 
reports, and exams would pose a hardship to States because schools will 
not provide student information, citing FERPA laws. Further, the 
commenter said that testing individuals for educational functional 
levels is costly, time consuming, and unrealistic.
    A commenter suggested there should be a minimum threshold of 
participation for a customer to reach (to be defined by Local WDBs) 
before that customer is counted towards this performance indicator 
(e.g., number of hours completed). This commenter also recommended that 
customers who start an education or training program in the last 
quarter of the program year should be subject to measure in the 
following program year given that they may not be able to demonstrate 
measurable gains so quickly. Moreover, given the diversity of possible 
education and training programs, this commenter recommended that 
requirements for documentation should be clear and simple, offer 
maximum flexibility as to what can demonstrate a skill gains, and 
stipulate that documentation is necessary only as back-up in the event 
of an audit, but not necessary to report on an outcome.
    Department Response: In the final ICR, the Department excludes 
those who become institutionalized, as defined in PIRL 923, option 
``01.'' Although the Department understands the concerns around data 
gathering, the measure is required by statute; therefore, programs 
should form the necessary partnerships to obtain the information. 
Further, the Department has determined that, given the diversity of 
participant needs and program services, imposing a time threshold by 
which progress may be documented would be somewhat arbitrary and make 
the measure more complex. Such practice could result in excluding a 
number of participants from performance accountability reporting 
requirements, even if those participants would achieve a gain under one 
of the measures of progress. The Department recognizes that 
participants enrolling late in the program year may not have enough 
time to achieve a measurable skill gains prior to the end of the first 
program year, and the Department recognized this could be perceived to 
negatively impact performance. However, the negotiation process and the 
statistical adjustment model may take into account enrollment patterns 
and lower baseline data when setting targets for the measurable skill 
gains indicator. The Department is concerned about incentivizing 
behavior that discourages service providers from enrolling individuals, 
such as disconnected youth, when they first approach programs. The 
Department emphasizes that programs must not delay enrollment in a 
program or prohibit participants from entering a program late in the 
program year. All participant outcomes, regardless if achieved at the 
end of the reporting period in which they enrolled or in the next 
reporting period count as positive outcomes for the program as they are 
not exit-based measures.
    Comments: A commenter sought clarification on what data elements by 
program need to be recorded and when, asserting that there is no clear 
definition of what is required to be reported and at what stage of 
participation. Commenting that many data elements in the PIRL are 
unlikely to apply to all program and participant circumstances, an 
advocacy organization recommended that the Department develop an 
intelligent reporting system that uses logic models to streamline 
questions so they are only relevant to each program's and participant's 
circumstances. A commenter asked how the NFJP grantees will report on 
the elements that are not currently required for NFJP grants and only 
required for the main WIOA programs and asked whether such data 
elements would be ``blocked'' for the NJFP grantees.
    Department Response: The Department notes that the PIRL is expected 
to be utilized by multiple programs. Not all data elements will be 
required for all programs. Some data elements are program-specific and, 
as noted by commenters, will not apply to their programs. In addition, 
data elements pertaining to characteristics are expected to be captured 
at the point of participation. The data reporting solution will be 
flexible enough to accommodate only NFJP variables, or additional 
variables if the grantee choses to report on those.
    Comments: Regarding burden estimates, a commenter recommended that 
workforce agencies that will be submitting data to the Department 
should determine a governance structure before moving forward with data 
projects. The commenter explained

[[Page 56328]]

that data governance refers to the operating discipline for managing 
data and information as a key enterprise asset, asserting that a data 
governance plan should consider: Decision-making authority, compliance 
monitoring, policies and standards, data inventories, full lifecycle 
management, preservation, data quality, data classification, data 
security and access, data risk management, and data validation. As an 
initial step in developing a data governance plan, this commenter 
recommended that workforce agencies determine the value and sensitivity 
of the information they seek to collect. Also, the commenter asserted 
that training on data quality, roles and responsibilities, prevention 
of mistakes, and correction of data quality should be offered and 
required for those with data input responsibilities. Finally, to enable 
government information sharing and to enhance the utility of collected 
data, this commenter recommended that workforce agencies begin 
exploring the National Information Exchange Model (NIEM).
    Department Response: The Department agrees on the importance of the 
items mentioned in the comment. For purposes of the Paperwork Reduction 
Act, associated burden is limited to the data collection and data 
submission components. Additionally, it would be very difficult to 
assign specific burden estimates on each element listed above.
Work Application and Job Order Recordkeeping
    Agency: DOL-ETA.
    Title of Collection: Work Application and Job Order Recordkeeping.
    Type of Review: Revision.
    OMB Control Number: 1205-0001.
    Affected Public: State Governments.
    Obligation to Respond: Required to obtain or retain a benefit (WIOA 
sec. 121).
    Total Estimated Number of Respondents Annually: 52.
    Total Estimated Number of Annual Responses: 52.
    Frequency of Responses: Quarterly.
    Total Estimated Annual Time Burden: 417 hours.
    Total Estimated Annual Other Costs Burden: $0.
    Regulations Sections: Sec.  652.8.
    ICR Approval Status: Not yet approved.
Overview and Response to Comments Received
    Overview: The Final Rule would not affect the burden hours 
associated with creating work application and job order records. 
However, the rule would change the record retention requirements for 
work applications and job orders from 1 year to 3 years in order to 
align with other Wagner-Peyser Act record retention requirements.
    The Department received no comments concerning this information 
collection.
Migrant and Seasonal Farmworker Monitoring Report and Complaint/
Apparent Violation Form
    Agency: DOL-ETA.
    Title of Collection: Migrant and Seasonal Farmworker Monitoring 
Report and Complaint/Apparent Violation Form.
    Type of Review: Revision.
    OMB Control Number: 1205-0039.
    Affected Public: State and Local Governments; Individuals or 
Households.
    Obligation to Respond: Required to obtain or retain a benefit (WIOA 
sec. 167).
    Total Estimated Number of Respondents Annually: 3,552.
    Total Estimated Number of Annual Responses: 7,416.
    Frequency of Responses: On Occasion.
    Total Estimated Annual Time Burden: 9,706 hours.
    Total Estimated Annual Other Costs Burden: $0.
    Regulations Sections: Sec. Sec.  653.107, 653.108(g)(6), (s), (i), 
and (m), 653.109, 658.601.
    ICR Approval Status: Not yet approved.
Overview and Response to Comments Received
    Overview: This information collection package includes the ETA Form 
5148 (Services to Migrant and Seasonal Farmworkers Report) and the ETA 
Form 8429 (Complaint/Apparent Violation Form). SWAs must submit 
(pursuant to Sec.  653.109) ETA Form 5148 quarterly to report the level 
of services provided to MSFWs through the one-stop centers and through 
outreach staff to demonstrate the degree to which MSFWs are serviced 
and to ensure that such services are provided on a basis that is 
``qualitatively equivalent and quantitatively proportionate'' to the 
services provided to non-MSFWs, as required in the Judge Richey Court 
Order. The Department requires SWAs to use ETA Form 8429 when logging 
and referring complaints and/or apparent violations pursuant to part 
658, subpart E.
    ETA Forms 5148 and 8429 were updated to reflect the new 
requirements in the Wagner-Peyser Act regulations. Additionally, the 
Department modified Form 5148 by eliminating parts 3 and 4 and 
replacing part 3 with the Annual Summary that the SWAs will now need to 
submit at the end of the fourth quarter. Form 8429 was modified to 
include the submission of apparent violations.
    The Department anticipates there will be no changes in the 
estimated total number of burden hours with the changes to these forms.
    Comments: During the NPRM, the Department received comments on the 
data collection section (Sec.  653.109, Data Collection and Performance 
Accountability Measures). A few commenters recommended the Department 
revise the references to the pre-WIOA performance indicators. Another 
commenter noted that some of the proposed performance indicators in 
Sec.  653.109 are not in line with the WIOA measures to track 
participants in unsubsidized employment in the second quarter after 
exit, participants in unsubsidized employment in the fourth quarter 
after exit, and median earnings. Therefore, this commenter recommended 
the Department bring those measures in line with WIOA to ensure 
consistency across all programs.
    Department Response: The Department agrees and has changed Sec.  
653.109(b)(5), (6) & (7) to be consistent with the WIOA performance 
indicators listed in WIOA sec. 116.
Standard Job Corps Contractor Gathering Information
    Agency: DOL-ETA.
    Title of Collection: Standard Job Corps Contractor Gathering 
Information.
    Type of Review: Revision.
    OMB Control Number: 1205-0219.
    Affected Public: Private Sector.
    Obligation to Respond: Required to obtain or retain a benefit (WIOA 
sec. 147).
    Total Estimated Number of Respondents Annually: 2,543.
    Total Estimated Number of Annual Responses: 197,459.
    Frequency of Responses: Weekly.
    Total Estimated Annual Time Burden: 54,442 hours.
    Total Estimated Annual Other Costs Burden: $0.
    Regulations Sections: Sec.  686.945.
    ICR Approval Status: Not yet approved.
Overview and Response to Comments Received
    Overview: The Final Rule retains the same information collection 
requirements as those previously found at 20 CFR 670.960, but relocated 
the requirements to 20 CFR 686.945. Consistent with the WIA 
regulations,

[[Page 56329]]

the DOL WIOA Final Rule requires the Department to provide guidelines 
for maintaining records for each student during enrollment and for 
disposition of records after separation. As a result, the Department 
does not anticipate any changes in the information collection.
    Comments: The Department received no comments concerning this 
information collection.
Placement Verification and Follow-up of Job Corps Participants
    Agency: DOL-ETA.
    Title of Collection: Placement Verification and Follow-up of Job 
Corps Participants.
    Type of Review: Revision.
    OMB Control Number: 1205-0426.
    Affected Public: Individuals or Households; Private Sector.
    Obligation to Respond: Voluntary.
    Total Estimated Number of Respondents Annually: 49,200.
    Total Estimated Number of Annual Responses: 93,400.
    Frequency of Responses: On occasion.
    Total Estimated Annual Time Burden: 21,700.
    Total Estimated Annual Other Costs Burden: $0.
    Regulations Sections: Sec. Sec.  686.945, 686.955, 686.1000, 
686.1010, 686.1020, 686.1030, 686.1040.
    ICR Approval Status: Not yet approved.
Overview and Response to Comments Received
    Overview: Job Corps' performance management system, which includes 
the OMS, is a well-established measurement system the Job Corps 
community has been using to track performance of centers and service 
providers for many years. It will be updated to reflect the new 
requirements of WIOA, including the new primary indicators of 
performance, but may also include breakouts of data that will help 
program managers target interventions in order to achieve the primary 
indicators. As a result, additional information would be collected from 
respondents.
    Comments: The Department received two comments in response to the 
ICR. Both comments concerned the use of administrative data, such as UI 
wage data, and surveys to collect performance information under the 
WIOA.
    Commenters stated that, as WIOA requires wage records be used as a 
primary source of information for performance reporting, the proposal 
to continue relying on surveys through the Post Enrollment Data 
Collection System (PEDCS) is unnecessary and inefficient. The 
commenters recommended that the Department utilize UI wage data through 
the WRIS, and consider the use of State longitudinal data systems to 
augment credential attainment. One commenter, however, clearly pointed 
out the various limitations of the currently available administrative 
data.
    Department Response: The Department notes that, currently, no 
source of administrative data exists that can meet the specific data 
reporting requirements of WIOA. Such records, in their current form, do 
not include information sufficient to support reporting at this time on 
all the different indicators required. For example, the data available 
from records collected by UI do not include individual information 
about wage rates, hours worked, or earnings at the individual student 
level. In addition, UI wage records do not provide any information 
about enrollment in school or training programs or attainment of 
secondary or postsecondary credentials, which are key program outcomes, 
and needed for accurately calculating several of the six primary WIOA 
measures. Finally, UI wage record information available to Job Corps 
through national data bases such as the Common Reporting Information 
System (CRIS) on employer identification number are not consistently 
available across States, which would lead Job Corps to underreport on 
the proposed effectiveness in serving employers measure.
    Job Corps has revised the PEDCS to collect data and information 
about post-enrollment placements to align with specific WIOA reporting 
requirements. The revised PEDC will collect information to report on 
five of the six WIOA required primary performance indicators,
    Ultimately, Job Corps intends to incorporate the use of 
administrative data (State wage records) to track student outcomes 
under WIOA. Adding administrative data to its current methods will 
allow Job Corps to correlate information in a more efficient, accurate, 
and repeatable manner. Enhanced data collection and reporting process 
will be highly useful for program operators and program leadership in 
understanding the outcomes of all youth who interact with the Job Corps 
program.
National Dislocated Workers Emergency Grant Application and Reporting 
Procedures
    Agency: DOL-ETA.
    Title of Collection: National Dislocated Workers Emergency Grant 
Application and Reporting Procedures.
    Type of Review: Revision.
    OMB Control Number: 1205-0439.
    Affected Public: State, Local, and Tribal Governments.
    Obligation to Respond: Required to obtain or retain a benefit (WIOA 
sec. 170).
    Total Estimated Number of Respondents Annually: 159.
    Total Estimated Number of Annual Responses: 1,587.
    Frequency of Responses: On Occasion.
    Total Estimated Annual Time Burden: 1,086 hours.
    Total Estimated Annual Other Costs Burden: $0.
    Regulations Sections: Sec.  687.150.
    ICR Approval Status: Not yet approved.
Overview and Response to Comments Received
    Overview: Specified activities must be conducted before an 
application for a NDWG is submitted. The NPRM required that a project 
implementation plan, which is already required for all NEGs under WIA, 
be submitted post-NDWG award. However, the Final Rule requires that a 
project implementation plan be submitted after receiving a DWG unless 
otherwise specified. The Department has retained the essence of 
proposed Sec.  687.150, but made changes to the Final Rule that better 
allow the Department to appraise the variety of needs and services 
under the new statute and tailor application requirements accordingly. 
The Department has added a sentence to this section reflecting that the 
application requirements may vary based on the category of DWG. The 
project implementation plan requirement may not apply to all DWGs at 
all times. Requirements will be noted in grant terms and conditions.
    Comments: The Department received no comments concerning this 
information collection.
Employment and Training Administration Financial Reporting Form ETA-
9130
    Agency: DOL-ETA.
    Title of Collection: Employment and Training Administration 
Financial Reporting Form ETA-9130.
    Type of Review: Revision.
    OMB Control Number: 1205-0461.
    Affected Public: State, Local, and Tribal Governments.
    Obligation to Respond: Required to obtain or retain a benefit (2 
CFR 200.327).
    Total Estimated Number of Respondents Annually: 1,000.
    Total Estimated Number of Annual Responses: 20,000.
    Frequency of Responses: Quarterly.

[[Page 56330]]

    Total Estimated Annual Time Burden: 15,001 hours.
    Total Estimated Annual Other Costs Burden: $0.
    Regulations Sections: secs. 184(c), 184(d), and 185 of WIOA, 2 CFR 
parts 200 and 2900 and Sec. Sec.  681.430, 683.150, 683.200, 683.300, 
683.730, 683.740, 683.750.
    ICR Approval Status: Not yet approved.
Overview and Response to Comments Received
    Overview: DOL-ETA awards approximately $8 billion in formula and 
discretionary grants each year to an average of 1,000 recipients. 
Financial reports for each of these grants must be submitted quarterly 
on the financial report form ETA-9130. Recipients include but are not 
limited to: State Employment Security Agencies which are comprised of 
three components: Wagner-Peyser Act ES, Unemployment Insurance program, 
and Trade Program Grant Agreements; as well as WIOA Youth, Adult, and 
Dislocated Worker programs; National Dislocated Worker Grants; National 
Farmworker Jobs Program (NFJP); Indian and Native American programs; 
the Senior Community Service Employment Program; WIOA discretionary 
grants; and H-1B Job Training Grants. The Final Rule reflects OMB's 
Uniform Guidance, which standardizes the administrative, cost, and 
audit provisions for all grants and cooperative agreements provided 
under part 683. The Final Rule establishes consistent and uniform 
guidance that increases accountability and transparency, promotes 
fiscal integrity, and reduces duplication in the quarterly financial 
reports. This information collection supports secs. 184(c), 184(d), and 
185 of WIOA and 2 CFR parts 200 and 2900.
    Changes in the time and burden were made from the NPRM to the Final 
Rule. There was a significant increase since this information 
collection package covers all of the grant programs that ETA 
administers and not simply WIOA ETA-9130 forms.
    Comments: On August 4, 2015, a request for comment for the 
Employment and Training Administration Financial Report Form #9130 (OMB 
Control No. 1205-0461) published in the Federal Register (Vol. 80, p. 
46337). This provided a 60-day period, ending on October 5, 2015, for 
the public to submit comments to DOL on the proposed change to the 
collection of information. A total of eight comments were received from 
four commenters.
    One commenter suggested breaking out the activities that make up 
statewide administrative funds and having a separate report for each. 
The same commenter requested viewing access to the e-Grants Federal 
Reporting System for entities to review the reports. The commenter 
described only having access to scans of the proposed submissions to 
review for approval.
    Department Response: The Department made no changes to the report 
in response to the comment. The Statewide Youth, Statewide Adult, and 
Statewide Dislocated Worker ETA-9130 reports break out administrative 
expenditures in line 10f (Total Administrative Expenditures). To 
minimize the burden on grantees, a separate report solely for 
administrative expenditures (as one expenditure line item) is not 
required.
    Regarding the second comment, for internal control reasons, only 
one password and one PIN are assigned to each grantee. The password is 
needed to enter data into the e-Grants Federal Reporting System. The 
PIN takes the place of the authorized signature and is needed to 
certify data. Only one person can sign and submit financial reports. It 
is at the grantees' discretion which staff members are tasked with 
these responsibilities. Once the reporting quarter is locked from 
further modification, WIA/WIOA summary obligation and expenditure 
reports are published at http://www.doleta.gov/budget/. These sites are 
available to the public.
    Comments: A commenter further commented that, for WIOA alone, there 
are over 15 reports. The commenter asked why the Adult and Dislocated 
Worker first and second increments cannot be merged into one report.
    Department Response: The yearly base and advance funds in each 
individual funding stream are considered separate appropriations. To be 
in compliance with generally accepted accounting principles, the 
Department must assign a separate accounting code to each 
appropriation. Therefore, the Department must require a separate 
financial report for each accounting line on a grant. Additionally, 
auditors must be able to determine whether an entity has over or 
underspent funds available, which is not possible if awards made under 
different appropriations are merged.
    Comments: A commenter noted that the instructions for reporting/
line item 10j (Total Recipient Share Required) for Statewide Rapid 
Response and other WIOA reports indicate that this line item must 
include the amount of non-Federal share that employers are required to 
provide, based on incumbent worker training contracts. The commenter 
stated that, although grantees implemented reporting and programming 
changes to accommodate the implementation of WIOA, not all grantees are 
obtaining this information, as it was not required in the past and that 
obtaining this information would require programming and accounting 
changes at both the State and local area levels. The commenter 
indicated that there is no match requirement listed in the 2015 WIOA 
grant agreements and thinks this requirement should be eliminated or 
made voluntary until the start of the next program year.
    Department Response: The Department explains that the 2015 grant 
agreement outlines that funds must be expended in accordance with all 
applicable Federal statutes, regulations, and policies. Per WIOA sec. 
134(d)(4)(C), employers participating in a local area incumbent worker 
training (IWT) program shall be required to pay for the non-Federal 
share of the cost of providing the training to incumbent workers of the 
employers. WIOA sec. 134(d)(4)(D)(ii) specifies that such contributions 
shall not be less than 10 percent of the cost, for employers with not 
more than 50 employees; 25 percent of the cost, for employers with more 
than 50 employees but not more than 100 employees; and 50 percent of 
the cost, for employers with more than 100 employees. The Department 
noted that in the 60-day public comment notice (80 FR 46337), this 
requirement was mistakenly included in the National Dislocated Worker 
Grants ETA-9130 (G) and the Statewide Rapid Response ETA-9130 (H). 
Consequentially, the condition to report employers' non-Federal share 
of the cost of providing IWT was eliminated in these two reports.
    Comments: The same commenter noted that throughout the reporting 
instructions for WIOA grants and also in the supporting statement made 
available with the notice published at 80 FR 46337, there were numerous 
references to WIOA cost limitations or baselines that apply on a fiscal 
year basis. The regulations stated that they apply on a program year 
basis. The commenter requested that this be corrected or clarified.
    Department Response: The numbers cited in the supporting statement, 
including the corresponding time frames, are solely to demonstrate 
grantee reporting cost and time burden calculations. They are not 
related to the statutory cost limitations and baselines. The fiscal 
year references within the

[[Page 56331]]

instructions are changed to program year, where applicable.
    Comments: Some commenters noted that the proposed Indirect 
Expenditures reporting/line item instructions only refer to an indirect 
cost rate and asked for further instructions for States using a cost 
allocation plan.
    Department Response: It is allowable for States to continue to use 
Statewide Cost Allocation Plans (SWCAP). For States using SWCAPs, it 
will not be required to report indirect expenditures. The instructions 
are modified and also, will be included in ETA's financial reporting 
training.
    Comments: A commenter questioned whether the reporting/line item 
11b (Transitional Jobs Expenditures) was intentionally included on the 
National Dislocated Worker Grants (ETA-9130 (G)) or not. It was further 
suggested that ETA-9130 (G) capture the temporary employment wages to 
align with the ETA-9104 Quarterly Progress Report.
    Department Response: Transitional jobs are intentionally included 
because an NDWG grantee may choose to use this strategy to serve a 
dislocated worker who has been separated for a long period of time or 
has inconsistent work history. The Department concludes that including 
this resource ensures that NDWG grantees have the flexibility and 
available tools necessary to provide people with the services they need 
to return to work. It is not related to wages for temporary jobs in 
disaster grants.
    Comments: Another commenter requested additional guidance for 
single-area States where WIOA is administered by a single agency and 
functions as both the State and local levels with no subrecipients. The 
commenter specifically requested guidance about the Indirect 
Expenditures reporting/line items required for the State level WIOA 
reporting, but not for local level reporting.
    Department Response: Single-area States report indirect 
expenditures for the statewide reports only, and only if they have an 
indirect cost rate. If using a SWCAP, no indirect cost reporting is 
required. This information also will be included in ETA's financial 
reporting training.

E. Executive Order 13132 (Federalism)

    E.O. 13132 requires Federal agencies to ensure that the principles 
of Federalism established by the Framers of our Constitution guide the 
executive departments and agencies in the formulation and 
implementation of policies and to further the policies of the Unfunded 
Mandates Reform Act. Further, agencies must strictly adhere to 
constitutional principles. Agencies must closely examine the 
constitutional and statutory authority supporting any action that would 
limit the policy-making discretion of the States and they must 
carefully assess the necessity for any such action. To the extent 
practicable, State and local officials must be consulted before any 
such action is implemented. Section 3(b) of the E.O. further provides 
that Federal agencies must implement regulations that have a 
substantial direct effect only if statutory authority permits the 
regulation and it is of national significance. The Department has 
reviewed this Final Rule in light of these requirements and has 
determined that, with the enactment of WIOA and its clear requirement 
to publish national implementing regulations, E.O. sec. 3(b) has been 
reviewed fully and its requirement satisfied.
    Accordingly, the Department has reviewed this WIOA-required Final 
Rule and has determined that the rulemaking has no Federalism 
implications. The DOL WIOA Final Rule, as noted above, has no 
substantial direct effects on States, on the relationships between the 
States, or on the distribution of power and responsibilities among the 
various levels of government as described by E.O. 13132. The Department 
has determined that this Final Rule does not have a sufficient 
Federalism implication to warrant the preparation of a summary impact 
statement.

F. Unfunded Mandates Reform Act of 1995

    This Act directs agencies to assess the effects of Federal 
regulatory actions on State, local, and tribal governments, and the 
private sector. A Federal mandate is any provision in a regulation that 
imposes an enforceable duty upon State, local, or tribal governments, 
or imposes a duty on the private sector that is not voluntary.
    Comments: In response to the NPRM, the Department received some 
comments that addressed unfunded mandates. One commenter said that the 
Department usually establishes a set funding level regardless of the 
level of services performed and that providing insufficient funding for 
a required program without an option for increasing the funding 
essentially creates an unfunded mandate. Another commenter asserted 
that because WIOA did not mandate a shared performance tracking system, 
the required collaboration across agencies represents an unfunded 
mandate. This commenter said that most of the reason that systems are 
not already in place is due to financial constraints. Another commenter 
asserted that WIOA implementation costs are an unfunded mandate for 
many States due to an actual decrease in funding for some States, and 
because the costs used in the NPRM's cost-benefit analysis looked only 
at incremental implementation costs, and were significantly below 
actual costs. This commenter urged the Department to grant waivers from 
required tasks to match the States' allotments, and to provide 
additional funding and technical assistance for States to develop 
sustainable systems for meeting the requirements. One commenter 
similarly asserted that the new requirements are a de facto unfunded 
mandate, and provided a policy paper that concluded that Federal funds 
are insufficient to cover required activities. The commenter suggested 
that unless additional funds are provided, waivers would be needed to 
give States flexibility to prioritize activities. Another commenter 
also expressed concern that new WIOA requirements are not accompanied 
by implementation funding.
    Department Response: The Department acknowledges the commenters' 
concerns and has detailed the cost burden associated with this Final 
Rule in section VI.A (Executive Orders 12866 and 13563: Regulatory 
Planning and Review). Grant funding is provided annually to all 
programs authorized under WIOA and that funding will be used to cover 
the costs of implementing this rule.
    As noted above, under the Unfunded Mandates Reform Act of 1995, a 
Federal mandate is any provision in a regulation that imposes an 
enforceable duty upon State, local, or tribal governments, or imposes a 
duty upon the private sector that is not voluntary. WIOA contains 
specific language supporting employment and training activities for 
Indian, Alaska Natives, and Native Hawaiian individuals. These program 
requirements are supported, as is the WIOA workforce development system 
generally, by Federal formula grant funds, and, accordingly, are not 
considered unfunded mandates. Similarly, Migrant and Seasonal 
Farmworker activities are authorized and funded under the WIOA program 
as is currently done under the WIA program. The States are mandated to 
perform certain activities for the Federal government under WIOA and 
will be reimbursed (grant funding) for the resources required to 
perform those activities. The same process and grant relationship 
exists between States and Local WDBs under the WIA program and must 
continue under the WIOA program as identified in this NPRM.

[[Page 56332]]

    WIOA contains language establishing procedures regarding the 
eligibility of training providers to receive funds under the WIOA 
program and contains clear State information collection requirements 
for eligible training providers (e.g., submission of appropriate, 
accurate, and timely information). A decision by a private training 
entity to participate as a provider under the WIOA program is purely 
voluntary and, therefore, information collection burdens do not impose 
a duty on the private sector that is not voluntarily assumed.
    Following consideration of these factors, the Department has 
determined that the DOL WIOA Final Rule contains no unfunded Federal 
mandates, which are defined in 2 U.S.C. 658(6) to include either a 
``Federal intergovernmental mandate'' or a ``Federal private sector 
mandate.''

G. Plain Language

    E.O. 12866 and E.O. 13563 require regulations to be written in a 
manner that is easy to understand.
    Comments: One commenter stated that the NPRM's commitment that the 
Department has included the relevant WIOA provisions in the proposed 
regulations for completeness was not fulfilled and cited examples of 
missing statutory language. While acknowledging that adding the 
statutory text would extend the length of the rules, this commenter 
said that it would help the reader in not having to flip back and forth 
between two documents to understand what is required.
    Department Response: To the extent practicable, the Department has 
attempted to address this commenter's concern in the Final Rule. In 
particular, many of the regulations in this Final Rule are verbatim 
implementations of WIOA's directives. However, because in some places 
it would be confusing, distracting, and excessive to add all of the 
relevant WIOA statutory language, some references to WIOA remain. The 
overall format of these WIOA regulations reflects the Department's 
commitment to writing regulations that are reader-friendly. The 
Department has attempted to make this Final Rule easy to understand. 
For example, the regulatory text is presented in a ``question and 
answer'' format and organized consistent with WIOA. In consideration of 
the foregoing, the Department has concluded that it has drafted this 
Final Rule in plain language.

H. Assessment of Federal Regulations and Policies on Families

    Section 654 of the Treasury and General Government Appropriations 
Act, enacted as part of the Omnibus Consolidated and Emergency 
Supplemental Appropriations Act of 1999 (Pub. L. 105-277, 112 Stat. 
2681) requires the assessment of the impact of this rule on family 
well-being. A rule that is determined to have a negative effect on 
families must be supported with an adequate rationale. The Department 
has assessed this Final Rule in light of this requirement and 
determined that the DOL WIOA Final Rule will not have a negative effect 
on families.

I. Executive Order 13175 (Indian Tribal Governments)

    The Department reviewed this Final Rule under the terms of E.O. 
13175 and the Department's Tribal Consultation Policy and has 
determined that the rule will have tribal implications as the final 
regulations have substantial direct effects on one or more Indian 
tribes, the relationship between the Federal government and Indian 
tribes, or the distribution of power and responsibilities between the 
Federal government and Indian tribes. As described in the preamble to 
the NPRM, the Department carried out several consultations with tribal 
institutions, including tribal officials, that allowed the tribal 
officials to provide meaningful and timely input into the Department's 
proposal. Additionally, through the notice and comment rulemaking 
process, the Department received comments on the programs and 
provisions in WIOA that have tribal implications and we have responded 
to these comments in the section-by-section discussions in this Final 
Rule and in the Joint WIOA Final Rule.
    In addition to the comments received through its notice and comment 
rulemaking process, the Department received feedback from the Indian 
and Native American (INA) community and the public prior to the 
publication of the NPRM. This feedback was summarized in the NPRM at 80 
FR 20832-20833.

J. Executive Order 12630 (Government Actions and Interference With 
Constitutionally Protected Property Rights)

    The Department has determined that this Final Rule is not subject 
to E.O. 12630, Governmental Actions and Interference with 
Constitutionally Protected Property Rights, because it does not involve 
implementation of a policy with takings implications.

K. Executive Order 12988 (Civil Justice Reform)

    This DOL WIOA Final Rule was drafted and reviewed in accordance 
with E.O. 12988, Civil Justice Reform, and the Department has 
determined that the Final Rule will not unduly burden the Federal court 
system. The WIOA regulations were written to minimize litigation and, 
to the extent feasible, provide a clear legal standard for affected 
conduct. In addition, the WIOA regulations have been reviewed carefully 
to eliminate drafting errors and ambiguities.

L. Executive Order 13211 (Energy Supply)

    This DOL WIOA Final Rule was drafted and reviewed in accordance 
with E.O. 13211, Energy Supply. The Department has determined that this 
Final Rule will not have a significant adverse effect on the supply, 
distribution, or use of energy and is not subject to E.O. 13211.

List of Subjects

20 CFR Part 603

    Grant programs--labor, Privacy, Reporting and recordkeeping 
requirements, Unemployment compensation, Wages.

20 CFR Part 651

    Employment, Grant programs--labor.

20 CFR Part 652

    Employment, Grant programs--labor, Reporting and recordkeeping 
requirements.

20 CFR Part 653

    Agriculture, Employment, Equal employment opportunity, Grant 
programs--labor, Migrant labor, Reporting and recordkeeping 
requirements.

20 CFR Part 654

    Employment, Government procurement, Housing standards, Manpower, 
Migrant labor, Reporting and recordkeeping requirements.

20 CFR Part 658

    Administrative practice and procedure, Employment, Grant programs--
labor, Reporting and recordkeeping requirements.

20 CFR Part 675

    Employment, Grant programs--labor.

20 CFR Parts 679 and 680

    Employment, Grant programs--labor.

[[Page 56333]]

20 CFR Part 681

    Employment, Grant programs--labor, Youth.

20 CFR Part 682

    Employment, Grant programs--labor.

20 CFR Part 683

    Employment, Grant programs--labor, Reporting and recordkeeping 
requirements.

20 CFR Part 684

    Employment, Grant programs--labor, Indians, Reporting and 
recordkeeping requirements.

20 CFR Part 685

    Employment, Grant programs--labor, Migrant labor, Reporting and 
recordkeeping requirements.

20 CFR Part 686

    Employment, Grant programs--labor, Job Corps.

20 CFR Part 687

    Employment, Grant programs--labor.

20 CFR Part 688

    Employment, Grant programs--labor, Youth, YouthBuild.

    For the reasons stated in the preamble, ETA amends title 20 CFR, 
chapter V, as follows:

PART 603--FEDERAL-STATE UNEMPLOYMENT COMPENSATION (UC) PROGRAM; 
CONFIDENTIALITY AND DISCLOSURE OF STATE UC INFORMATION

0
1. Revise the authority citation for part 603 to read as follows:

    Authority:  Secs. 116, 189, 503, Pub. L. 113-128, 128 Stat. 1425 
(Jul. 22, 2014); 20 U.S.C 1232g.


0
2. Amend Sec.  603.2 by revising paragraph (d) to read as follows:


Sec.  603.2  What definitions apply to this part?

* * * * *
    (d) Public official means:
    (1) An official, agency, or public entity within the executive 
branch of Federal, State, or local government who (or which) has 
responsibility for administering or enforcing a law, or an elected 
official in the Federal, State, or local government.
    (2) Public postsecondary educational institutions established and 
governed under the laws of the State. These include the following:
    (i) Institutions that are part of the State's executive branch. 
This means the head of the institution must derive his or her authority 
from the Governor, either directly or through a State WDB, commission, 
or similar entity established in the executive branch under the laws of 
the State.
    (ii) Institutions which are independent of the executive branch. 
This means the head of the institution derives his or her authority 
from the State's chief executive officer for the State education 
authority or agency when such officer is elected or appointed 
independently of the Governor.
    (iii) Publicly governed, publicly funded community and technical 
colleges.
    (3) Performance accountability and customer information agencies 
designated by the Governor of a State to be responsible for 
coordinating the assessment of State and local education or workforce 
training program performance and/or evaluating education or workforce 
training provider performance.
    (4) The chief elected official of a local area as defined in WIOA 
sec. 3(9).
    (5) A State educational authority, agency, or institution as those 
terms are used in the Family Educational Rights and Privacy Act, to the 
extent they are public entities.
* * * * *

0
3. Amend Sec.  603.5 by revising paragraph (e) to read as follows:


Sec.   603.5 What are the exceptions to the confidentiality 
requirement?

* * * * *
    (e) Public official. Disclosure of confidential UC information to a 
public official for use in the performance of his or her official 
duties is permissible.
    (1) ``Performance of official duties'' means administration or 
enforcement of law or the execution of the official responsibilities of 
a Federal, State, or local elected official. Administration of law 
includes research related to the law administered by the public 
official. Execution of official responsibilities does not include 
solicitation of contributions or expenditures to or on behalf of a 
candidate for public or political office or a political party.
    (2) For purposes of Sec.  603.2(d)(2) through (5), ``performance of 
official duties'' includes, in addition to the activities set out in 
paragraph (e)(1) of this section, use of the confidential UC 
information for the following limited purposes:
    (i) State and local performance accountability under WIOA sec. 116, 
including eligible training provider performance accountability under 
WIOA secs. 116(d) and 122;
    (ii) The requirements of discretionary Federal grants awarded under 
WIOA; or
    (iii) As otherwise required for education or workforce training 
program performance accountability and reporting under Federal or State 
law.
* * * * *

0
4. Amend Sec.  603.6 by adding paragraph (b)(8) to read as follows:


Sec.   603.6 What disclosures are required by this subpart?

* * * * *
    (b) * * *
    (8) To comply with WIOA sec. 116(e)(4), States must, to the extent 
practicable, cooperate in the conduct of evaluations (including related 
research projects) provided for by the Secretary of Labor or the 
Secretary of Education under the provisions of Federal law identified 
in WIOA sec. 116(e)(1); WIOA secs. 169 and 242(c)(2)(D); sec. 12(a)(5), 
14, and 107 of the Rehabilitation Act of 1973 (29 U.S.C. 709(a)(5), 
711, 727) (applied with respect to programs carried out under title I 
of that Act (29 U.S.C. 720 et seq.)); and the investigations provided 
for by the Secretary of Labor under sec. 10(b) of the Wagner-Peyser Act 
(29 U.S.C. 49i(b)). For purposes of this part, States must disclose 
confidential UC information to a Federal official (or an agent or 
contractor of a Federal official) requesting such information in the 
course of such evaluations. This disclosure must be done in accordance 
with appropriate privacy and confidentiality protections established in 
this part. This disclosure must be made to the ``extent practicable'', 
which means that the disclosure would not interfere with the efficient 
administration of the State UC law, as required by Sec.  603.5.
* * * * *

0
5. Revise part 651 to read as follows:

PART 651--GENERAL PROVISIONS GOVERNING THE WAGNER-PEYSER ACT 
EMPLOYMENT SERVICE

Sec.
651.10 Definitions of terms used in this part and parts 652, 653, 
654, and 658 of this chapter.


    Authority:  29 U.S.C. 49a; 38 U.S.C. part III, 4101, 4211; Secs. 
503, 3, 189, Pub. L. 113-128, 128 Stat. 1425 (Jul. 22, 2014).


Sec.  651.10  Definitions of terms used in this part and parts 652, 
653, 654, and 658 of this chapter.

    In addition to the definitions set forth in sec. 3 of WIOA, the 
following definitions apply to the regulations in parts 652, 653, 654, 
and 658 of this chapter:
    Act means the Wagner-Peyser Act (codified at 29 U.S.C. 49 et seq.).

[[Page 56334]]

    Administrator, Office of Workforce Investment (OWI Administrator) 
means the chief official of the Office of Workforce Investment (OWI) or 
the Administrator's designee.
    Affirmative action means positive, result-oriented action imposed 
on or assumed by an employer pursuant to legislation, court order, 
consent decree, directive of a fair employment practice authority, 
government contract, grant or loan, or voluntary affirmative action 
plan adopted pursuant to the affirmative action guidelines of the Equal 
Employment Opportunity Commission (see 29 CFR part 1608) to provide 
equal employment opportunities for members of a specified group which 
for reasons of past custom, historical practice, or other non-
occupationally valid purposes has been discouraged from entering 
certain occupational fields.
    Agricultural employer means any employer as defined in this part 
who owns or operates a farm, ranch, processing establishment, cannery, 
gin, packing shed or nursery, or who produces or conditions seed, and 
who either recruits, solicits, hires, employs, furnishes, or transports 
any migrant or seasonal farmworker or any agricultural employer as 
described in 29 U.S.C. 1802(2).
    Agricultural worker see Farmworker.
    Applicant holding office means a Wagner-Peyser Act Employment 
Service (ES) office that is in receipt of a clearance order and has 
access to U.S. workers who may be willing and available to perform 
farmwork on a less than year-round basis.
    Applicant Holding State means a State Workforce Agency that is in 
receipt of a clearance order from another State and potentially has 
U.S. workers who may be willing and available to perform farmwork on a 
less than year-round basis.
    Bona fide occupational qualification (BFOQ) means that an 
employment decision or request based on age, sex, national origin or 
religion is based on a finding that such characteristic is necessary to 
the individual's ability to perform the job in question. Since a BFOQ 
is an exception to the general prohibition against discrimination on 
the basis of age, sex, national origin, or religion, it must be 
interpreted narrowly in accordance with the Equal Employment 
Opportunity Commission regulations set forth at 29 CFR parts 1604, 
1605, and 1627.
    Career services means the services described in sec. 134(c)(2) of 
the Workforce Innovation and Opportunity Act (WIOA) and Sec.  678.430 
of this chapter.
    Clearance order means a job order that is processed through the 
clearance system under the Agricultural Recruitment System (ARS).
    Clearance system means the orderly movement of U.S. job seekers as 
they are referred through the employment placement process by an ES 
office. This includes joint action of local ES offices in different 
labor market areas and/or States.
    Complainant means the individual, employer, organization, 
association, or other entity filing a complaint.
    Complaint means a representation made or referred to a State or ES 
office of an alleged violation of the ES regulations and/or other 
Federal laws enforced by the Department's Wage and Hour Division (WHD) 
or Occupational Safety and Health Administration (OSHA), as well as 
other Federal, State, or local agencies enforcing employment-related 
law.
    Decertification means the rescission by the Secretary of the year-
end certification made under sec. 7 of the Wagner-Peyser Act to the 
Secretary of the Treasury that the State agency may receive funds 
authorized by the Wagner-Peyser Act.
    Department means the United States Department of Labor, including 
its agencies and organizational units.
    Employer means a person, firm, corporation, or other association or 
organization which currently has a location within the United States to 
which U.S. workers may be referred for employment, and which proposes 
to employ a worker at a place within the United States and which has an 
employer relationship with respect to employees under this subpart as 
indicated by the fact that it hires, pays, fires, supervises, and 
otherwise controls the work of such employees. An association of 
employers is considered an employer if it has all of the indicia of an 
employer set forth in this definition. Such an association, however, is 
considered as a joint employer with the employer member if either 
shares in exercising one or more of the definitional indicia.
    Employment and Training Administration (ETA) means the component of 
the Department of Labor that administers Federal government job 
training and worker dislocation programs, Federal grants to States for 
public ES programs, and unemployment insurance benefits. These services 
are provided primarily through State and local workforce development 
systems.
    Employment-related laws means those laws that relate to the 
employment relationship, such as those enforced by the Department's 
WHD, OSHA, or by other Federal, State, or local agencies.
    Employment Service (ES) office means a site in a local WDB where 
staff of the State Workforce Agency, consistent with the requirements 
of Sec.  652.215 of this chapter, provide Wagner-Peyser Act services as 
a one-stop partner program. A site must be colocated with a one-stop 
center consistent with the requirements of Sec. Sec.  678.305 through 
678.315 of this chapter.
    Employment Service (ES) regulations means the Federal regulations 
at this part and parts 652, 653, 654, 658 of this chapter, and 29 CFR 
part 75.
    Establishment means a public or private economic employing unit 
generally at a single physical location which produces and/or sells 
goods or services, for example, a mine, factory, store, farm, orchard 
or ranch. It is usually engaged in one, or predominantly one, type of 
commercial or governmental activity. Each branch or subsidiary unit of 
a large employer in a geographical area or community must be considered 
an individual establishment, except that all such units in the same 
physical location is considered a single establishment. A component of 
an establishment which may not be located in the same physical 
structure (such as the warehouse of a department store) also must be 
considered as part of the parent establishment. For the purpose of the 
``seasonal farmworker'' definition, farm labor contractors and crew 
leaders are not considered establishments; it is the organizations to 
which they supply the workers that are the establishments.
    Farmwork means the cultivation and tillage of the soil, dairying, 
the production, cultivation, growing, and harvesting of any 
agricultural or horticultural commodities. This includes the raising of 
livestock, bees, fur-bearing animals, or poultry, the farming of fish, 
and any practices (including any forestry or lumbering operations) 
performed by a farmer or on a farm as an incident to or in conjunction 
with such farming operations, including preparation for market, 
delivery to storage or to market or to carriers for transportation to 
market. It also includes the handling, planting, drying, packing, 
packaging, processing, freezing, or grading prior to delivery for 
storage of any agricultural or horticultural commodity in its 
unmanufactured state. For the purposes of this definition, agricultural 
commodities means all commodities produced on a farm including crude 
gum (oleoresin) from a living tree products processed by the original 
producer of the crude gum (oleoresin) from which they are derived, 
including

[[Page 56335]]

gum spirits of turpentine and gum rosin. Farmwork also means any 
service or activity covered under Sec.  655.103(c) of this chapter and/
or 29 CFR 500.20(e) and any service or activity so identified through 
official Department guidance such as a Training and Employment Guidance 
Letter.
    Farmworker means an individual employed in farmwork, as defined in 
this section.
    Field checks means random, unannounced appearances by State 
Workforce Agency personnel at agricultural worksites to which ES 
placements have been made through the intrastate or interstate 
clearance system to ensure that conditions are as stated on the job 
order and that the employer is not violating an employment-related law.
    Field visits means appearances by Monitor Advocates or State 
Workforce Agency outreach personnel to the working and living areas of 
migrant and seasonal farmworkers (MSFWs), to discuss employment 
services and other employment-related programs with MSFWs, crew 
leaders, and employers. Monitor Advocates or outreach personnel must 
keep records of each such visit.
    Governor means the chief executive of a State or an outlying area.
    Hearing Officer means a Department of Labor Administrative Law 
Judge, designated to preside at Department administrative hearings.
    Individual with a disability means an individual with a disability 
as defined in sec. 3 of the Americans with Disabilities Act of 1990 (42 
U.S.C. 12102).
    Interstate clearance order means an agricultural job order for 
temporary employment (employment on a less than year-round basis) 
describing one or more hard-to-fill job openings, which an ES office 
uses to request recruitment assistance from other ES offices in a 
different State.
    Intrastate clearance order means an agricultural job order for 
temporary employment (employment on a less than year-round basis) 
describing one or more hard-to-fill job openings, which an ES office 
uses to request recruitment assistance from other ES offices within the 
State.
    Job development means the process of securing a job interview with 
a public or private employer for a specific participant for whom the ES 
office has no suitable opening on file.
    Job information means information derived from data compiled in the 
normal course of ES activities from reports, job orders, applications, 
and the like.
    Job opening means a single job opportunity for which the ES office 
has on file a request to select and refer participants.
    Job order means the document containing the material terms and 
conditions of employment relating to wages, hours, working conditions, 
worksite and other benefits, submitted by an employer.
    Job referral means:
    (1) The act of bringing to the attention of an employer a 
participant or group of participants who are available for specific job 
openings or for a potential job; and
    (2) The record of such referral. ``Job referral'' means the same as 
``referral to a job.''
    Labor market area means 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 an area must be identified in accordance 
with criteria used by the Department's Bureau of Labor Statistics in 
defining such areas or similar criteria established by a Governor.
    Local Office Manager means the official in charge of all ES 
activities in a one-stop center.
    Local Workforce Development Board or Local WDB means a Local 
Workforce Development Board established under sec. 107 of WIOA.
    Migrant farmworker means a seasonal farmworker (as defined in this 
section) who travels to the job site so that the farmworker is not 
reasonably able to return to his/her permanent residence within the 
same day. Full-time students traveling in organized groups rather than 
with their families are excluded.
    Migrant food processing worker see Migrant Farmworker.
    MSFW means a migrant farmworker or a seasonal farmworker.
    Occupational Information Network (O*NET) system means the online 
reference database which contains detailed descriptions of U.S. 
occupations, distinguishing characteristics, classification codes, and 
information on tasks, knowledge, skills, abilities, and work activities 
as well as information on interests, work styles, and work values.
    One-stop center means a physical center within the one-stop 
delivery system, as described in sec. 121(e)(2)(A) of WIOA.
    One-stop delivery system means a one-stop delivery system described 
in sec. 121(e) of WIOA.
    One-stop partner means an entity described in sec. 121(b) of WIOA 
and Sec.  678.400 of this chapter that is participating in the 
operation of a one-stop delivery system.
    O*NET-SOC means the occupational codes and titles used in the O*NET 
system, based on and grounded in the Standard Occupational 
Classification (SOC), which are the titles and codes utilized by 
Federal statistical agencies to classify workers into occupational 
categories for the purpose of collecting, calculating, and 
disseminating data. The SOC system is issued by the Office of 
Management and Budget and the Department of Labor is authorized to 
develop additional detailed O*NET occupations within existing SOC 
categories. The Department uses O*NET-SOC titles and codes for the 
purposes of collecting descriptive occupational information and for 
State reporting of data on training, credential attainment, and 
placement in employment by occupation.
    Onsite review means an appearance by the State Monitor Advocate 
and/or Federal staff at an ES office to monitor the delivery of 
services and protections afforded by ES regulations to MSFWs by the 
State Workforce Agency and local ES offices.
    Order holding office means an ES office that has accepted a 
clearance order from an employer seeking U.S. workers to perform 
farmwork on a less than year-round basis through the Agricultural 
Recruitment System.
    Outreach contact means each MSFW that receives the presentation of 
information, offering of assistance, or follow-up activity from an 
outreach worker.
    Participant means a reportable individual who has received services 
other than the services described in Sec.  677.150(a)(3) of this 
chapter, after satisfying all applicable programmatic requirements for 
the provision of services, such as eligibility determination. (See 
Sec.  677.150(a) of this chapter.)
    (1) The following individuals are not Participants, subject to 
Sec.  677.150(a)(3)(ii) and(iii) of this chapter:
    (i) Individuals who only use the self-service system; and
    (ii) Individuals who receive information-only services or 
activities.
    (2) Wagner-Peyser Act participants must be included in the 
program's performance calculations
    Placement means the hiring by a public or private employer of an 
individual referred by the ES office for a job or an interview, 
provided that the employment office completed all of the following 
steps:

[[Page 56336]]

    (1) Prepared a job order form prior to referral, except in the case 
of a job development contact on behalf of a specific participant;
    (2) Made prior arrangements with the employer for the referral of 
an individual or individuals;
    (3) Referred an individual who had not been specifically designated 
by the employer, except for referrals on agricultural job orders for a 
specific crew leader or worker;
    (4) Verified from a reliable source, preferably the employer, that 
the individual had entered on a job; and
    (5) Appropriately recorded the placement.
    Public housing means housing operated by or on behalf of any public 
agency.
    Regional Administrator (RA) means the chief Department of Labor 
Employment and Training Administration (ETA) official in each 
Department regional office.
    Reportable individual means an individual who has taken action that 
demonstrates an intent to use Wagner-Peyser Act services and who meets 
specific reporting criteria of the Wagner-Peyser Act (see Sec.  
677.150(b) of this chapter), including:
    (1) Individuals who provide identifying information;
    (2) Individuals who only use the self-service system; or
    (3) Individuals who only receive information-only services or 
activities.
    Respondent means the employer, individual, or State agency 
(including a State agency official) who is alleged to have committed 
the violation described in a complaint.
    Seasonal farmworker means an individual who is employed, or was 
employed in the past 12 months, in farmwork (as defined in this 
section) of a seasonal or other temporary nature and is not required to 
be absent overnight from his/her permanent place of residence. Non-
migrant individuals who are full-time students are excluded. Labor is 
performed on a seasonal basis where, ordinarily, the employment 
pertains to or is of the kind exclusively performed at certain seasons 
or periods of the year and which, from its nature, may not be 
continuous or carried on throughout the year. A worker who moves from 
one seasonal activity to another, while employed in farmwork, is 
employed on a seasonal basis even though he/she may continue to be 
employed during a major portion of the year. A worker is employed on 
other temporary basis where he/she is employed for a limited time only 
or his/her performance is contemplated for a particular piece of work, 
usually of short duration. Generally, employment which is contemplated 
to continue indefinitely is not temporary.
    Secretary means the Secretary of the U.S. Department of Labor or 
the Secretary's designee.
    Significant MSFW one-stop centers are those designated annually by 
the Department and include those ES offices where MSFWs account for 10 
percent or more of annual participants in employment services and those 
local ES offices which the administrator determines must be included 
due to special circumstances such as an estimated large number of MSFWs 
in the service area. In no event may the number of significant MSFW 
one-stop centers be less than 100 centers on a nationwide basis.
    Significant MSFW States are those States designated annually by the 
Department and must include the 20 States with the highest number of 
MSFW participants.
    Significant multilingual MSFW one-stop centers are those designated 
annually by the Department and include those significant MSFW ES 
offices where 10 percent or more of MSFW participants are estimated to 
require service provisions in a language(s) other than English unless 
the administrator determines other one-stop centers also must be 
included due to special circumstances.
    Solicitor means the chief legal officer of the U.S. Department of 
Labor or the Solicitor's designee.
    Standard Metropolitan Statistical Area (SMSA) means a metropolitan 
area designated by the Bureau of Census which contains:
    (1) At least 1city of 50,000 inhabitants or more; or
    (2) Twin cities with a combined population of at least 50,000.
    State means any of the 50 States, the District of Columbia, Guam, 
Puerto Rico, and the Virgin Islands.
    State Administrator means the chief official of the SWA.
    State agency or State Workforce Agency (SWA) means the State ES 
agency designated under sec. 4 of the Wagner-Peyser Act.
    State hearing official means a State official designated to preside 
at State administrative hearings convened to resolve complaints 
involving ES regulations pursuant to subpart E of part 658 of this 
chapter.
    State Workforce Development Board or State WDB means the entity 
within a State appointed by the Governor under sec. 101 of WIOA.
    Supply State(s) means a State that potentially has U.S. workers who 
may be recruited for referral through the Agricultural Recruitment 
System to the area of intended employment in a different State.
    Supportive services means services that are necessary to enable an 
individual to participate in activities authorized under WIOA or the 
Wagner-Peyser Act. These services may include, but are not limited to, 
the following:
    (1) Linkages to community services;
    (2) Assistance with transportation;
    (3) Assistance with child care and dependent care;
    (4) Assistance with housing;
    (5) Needs-related payments;
    (6) Assistance with educational testing;
    (7) Reasonable accommodations for individuals with disabilities;
    (8) Referrals to health care;
    (9) Assistance with uniforms or other appropriate work attire and 
work-related tools, including such items as eyeglasses and protective 
eye gear;
    (10) Assistance with books, fees, school supplies, and other 
necessary items for students enrolled in postsecondary education 
classes; and
    (11) Payments and fees for employment and training-related 
applications, tests, and certifications.
    Tests means a standardized method of measuring an individual's 
possession of, interest in, or ability to acquire, job skills and 
knowledge. Use of tests by one-stop staff must be in accordance with 
the provisions of:
    (1) Title 41 CFR part 60-3, Uniform Guidelines on Employee 
Selection Procedures;
    (2) Title 29 CFR part 1627, Records To Be Made or Kept Relating to 
Age; Notices To Be Posted; Administrative Exemptions; and
    (3) The Department of Labor's regulations on Nondiscrimination on 
the Basis of Handicap in Programs and Activities Receiving or 
Benefiting from Federal Financial Assistance, which have been published 
as 29 CFR part 32.
    Training services means services described in sec. 134(c)(3) of 
WIOA.
    Unemployment insurance claimant means a person who files a claim 
for benefits under any State or Federal unemployment compensation law.
    Veteran means a person who served in the active military, naval, or 
air service, and who was discharged or released therefrom under 
conditions other than dishonorable, as defined under 38 U.S.C. 101 and 
sec. 3(63)(A) of WIOA.
    Wagner-Peyser Act Employment Service (ES) also known as Employment 
Service (ES) means the national system of public ES offices described 
under the Wagner-Peyser Act. Employment services are delivered through 
a

[[Page 56337]]

nationwide system of one-stop centers, and are managed by State 
Workforce Agencies and the various local offices of the State Workforce 
Agencies, and funded by the United States Department of Labor.
    WIOA means the Workforce Innovation and Opportunity Act (codified 
at 29 U.S.C. 3101 et seq.).
    Workforce and Labor Market Information (WLMI) means the body of 
knowledge that describes the relationship between labor demand and 
supply. This includes identification and analysis of the socio-economic 
factors that influence employment, training, and business decisions, 
such as worker preparation, educational program offerings and related 
policy decisions within national, State, Substate, and local labor 
market areas. WLMI includes, but is not limited to:
    (1) Employment numbers by occupation and industry;
    (2) Unemployment numbers and rates;
    (3) Short- and long-term industry and occupational employment 
projections;
    (4) Information on business employment dynamics, including the 
number and nature of business establishments, and share and location of 
industrial production;
    (5) Local employment dynamics, including business turnover rates; 
new hires, job separations, net job losses;
    (6) Job vacancy counts;
    (7) Job seeker and job posting data from the public labor exchange 
system;
    (8) Identification of high growth and high demand industries, 
occupations, and jobs;
    (9) Information on employment and earnings for wage and salary 
workers and for the self-employed;
    (10) Information on work hours, benefits, unionization, trade 
disputes, conditions of employment, and retirement;
    (11) Information on occupation-specific requirements regarding 
education, training, skills, knowledge, and experience;
    WLMI also may include, as either source data or as outputs of 
analysis of source data:
    (12) Population and workforce growth and decline, classified by 
age, sex, race, and other demographic characteristics;
    (13) Identification of emerging occupations and evolving skill 
demands;
    (14) Business skill and hiring requirements;
    (15) Workforce characteristics, which may include skills, 
experience, education, credential attainment, competencies, etc.;
    (16) Workforce available in geographic areas;
    (17) Information on regional and local economic development 
activity, including job creation through business start-ups and 
expansions;
    (18) Enrollments in and completers from educational programs, 
training and registered apprenticeship;
    (19) Trends in industrial and occupational restructuring;
    (20) Shifts in consumer demands;
    (21) Data contained in governmental or administrative reporting 
including wage records as identified in Sec.  652.301 of this chapter;
    (22) Labor market intelligence gained from interaction with 
businesses, industry or trade associations, education agencies, 
government entities, and the public; and
    (23) Other economic factors.
    Workforce and Labor Market Information System (WLMIS) means the 
system that collects, analyzes, interprets, and disseminates workforce 
characteristics and employment-related data, statistics, and 
information at national, State, and local labor market areas and makes 
that information available to the public, workforce development system, 
one-stop partner programs, and the education and economic development 
communities.
    Workforce development activity means an activity carried out 
through a workforce development program as defined in sec. 3 of WIOA.
    Working days or business days means those days that the order-
holding ES office is open for public business, for purposes of the 
Agricultural Recruitment System.
    Work test means activities designed to ensure that an individual 
whom a State determines to be eligible for unemployment insurance 
benefits is able to work, available for work, and actively seeking work 
in accordance with the State's unemployment compensation law.

0
6. Revise part 652 to read as follows:

PART 652--ESTABLISHMENT AND FUNCTIONING OF STATE EMPLOYMENT SERVICE

Subpart A--Employment Service Operations
Sec.
652.1 Introduction.
652.2 Scope and purpose of the Wagner-Peyser Act Employment Service.
652.3 Public labor exchange services system.
652.4 Allotment of funds and grant agreement.
652.5 Services authorized.
652.6-652.7 [Reserved]
652.8 Administrative provisions.
652.9 Labor disputes.
Subpart B--Services for Veterans
Sec.
652.100 Services for veterans.
Subpart C--Wagner-Peyser Act Services in a One-Stop Delivery System 
Environment
Sec.
652.200 What is the purpose of this subpart?
652.201 What is the role of the State Workforce Agency in the one-
stop delivery system?
652.202 May local Employment Service offices exist outside of the 
one-stop delivery system?
652.203 Who is responsible for funds authorized under the Wagner-
Peyser Act in the workforce development system?
652.204 Must funds authorized under section 7(b) of the Wagner-
Peyser Act (the Governor's Reserve) flow through the one-stop 
delivery system?
652.205 May funds authorized under the Wagner-Peyser Act be used to 
supplement funding for labor exchange programs authorized under 
separate legislation?
652.206 May a State use funds authorized under the Wagner-Peyser Act 
to provide applicable ``career services,'' as defined in the 
Workforce Innovation and Opportunity Act?
652.207 How does a State meet the requirement for universal access 
to services provided under the Wagner-Peyser Act?
652.208 How are applicable career services related to the methods of 
service delivery described in this part?
652.209 What are the requirements under the Wagner-Peyser Act for 
providing reemployment services and other activities to referred 
unemployment insurance claimants?
652.210 What are the Wagner-Peyser Act's requirements for 
administration of the work test, including eligibility assessments, 
as appropriate, and assistance to unemployment insurance claimants?
652.211 What are State planning requirements under the Wagner-Peyser 
Act?
652.215 Do any provisions in the Workforce Innovation and 
Opportunity Act change the requirement that State merit staff 
employees must deliver services provided under the Wagner-Peyser 
Act?
652.216 May the one-stop operator provide guidance to State merit 
staff employees in accordance with the Wagner-Peyser Act?
Subpart D--Workforce and Labor Market Information
Sec.
652.300 What role does the Secretary of Labor have concerning the 
Workforce and Labor Market Information System?
652.301 What are wage records for purposes of the Wagner-Peyser Act?
652.302 How do the Secretary of Labor's responsibilities described 
in this part apply to State wage records?
652.303 How do the requirements of part 603 of this chapter apply to 
wage records?



[[Page 56338]]


    Authority:  29 U.S.C. 49l-2; Secs. 189 and 503, Public Law 113-
128, 128 Stat. 1425 (Jul. 22, 2014).

Subpart A--Employment Service Operations


Sec.  652.1  Introduction.

    These regulations implement the provisions of the Wagner-Peyser 
Act, known hereafter as the Wagner-Peyser Act, as amended by title III 
of the Workforce Innovation and Opportunity Act (WIOA), Public Law 113-
128. The Wagner-Peyser Act Employment Service (ES) is a core program 
under the WIOA, and an integral component of the one-stop delivery 
system. Congress intended that the States exercise broad authority in 
implementing provisions of the Wagner-Peyser Act.


Sec.  652.2  Scope and purpose of the Wagner-Peyser Act Employment 
Service.

    The basic purpose of the ES is to improve the functioning of the 
nation's labor markets by bringing together individuals who are seeking 
employment and employers who are seeking workers.


Sec.  652.3  Public labor exchange services system.

    At a minimum, each State must administer a labor exchange system 
which has the capacity, to:
    (a) Assist job seekers in finding employment, including promoting 
their familiarity with the Department's electronic tools;
    (b) Assist employers in filling jobs;
    (c) Facilitate the match between job seekers and employers;
    (d) Participate in a system for clearing labor among the States, 
including the use of standardized classification systems issued by the 
Secretary, under sec. 15 of the Wagner-Peyser Act;
    (e) Meet the work test requirements of the State unemployment 
compensation system; and
    (f) Provide labor exchange services as identified in Sec.  
678.430(a) of this chapter, sec. 7(a) of the Wagner-Peyser Act, and 
sec. 134(c)(2)(A)(iv) of WIOA.


Sec.  652.4  Allotment of funds and grant agreement.

    (a) Allotments. The Secretary must provide planning estimates in 
accordance with sec. 6(b)(5) of the Wagner-Peyser Act. Within 30 days 
of receipt of planning estimates from the Secretary, the State must 
make public the sub-State resource distributions, and describe the 
process and schedule under which these resources will be issued, 
planned, and committed. This notification must include a description of 
the procedures by which the public may review and comment on the sub-
State distributions, including a process by which the State will 
resolve any complaints.
    (b) Grant agreement. To establish a continuing relationship under 
the Wagner-Peyser Act, the Governor and the Secretary must sign a grant 
agreement, including a statement assuring that the State must comply 
with the Wagner-Peyser Act and all applicable rules and regulations. 
Consistent with this agreement and sec. 6 of the Wagner-Peyser Act, 
State allotments will be obligated through a notification of 
obligation.


Sec.  652.5  Services authorized.

    The funds allotted to each State under sec. 6 of the Wagner-Peyser 
Act must be expended consistent with an approved plan under Sec. Sec.  
676.100 through 676.145 of this chapter and Sec.  652.211. At a 
minimum, each State must provide the minimum labor exchange elements 
listed at Sec.  652.3.


Sec. Sec.  652.6-652.7  [Reserved]


Sec.  652.8  Administrative provisions.

    (a) Administrative requirements. The Employment Security Manual is 
not applicable to funds appropriated under the Wagner-Peyser Act. 
Except as provided for in paragraph (f) of this section, administrative 
requirements and cost principles applicable to grants under this part 
are as specified in 2 CFR parts 200 and 2900 which govern the Uniform 
Guidelines, cost principles, and audit requirements for Federal awards.
    (b) Management systems, reporting, and recordkeeping. (1) The State 
must ensure that a financial system provides fiscal control and 
accounting procedures sufficient to permit preparation of required 
reports, and the tracing of funds to a level of expenditure adequate to 
establish that funds have not been expended in violation of the 
restrictions on the use of such funds. (sec. 10(a) of the Wagner-Peyser 
Act)
    (2) The financial management system and the program information 
system must provide Federally-required records and reports that are 
uniform in definition, accessible to authorized Federal and State 
staff, and verifiable for monitoring, reporting, audit and evaluation 
purposes. (sec. 10(c) of the Wagner-Peyser Act)
    (c) Reports required. (1) Each State must make reports pursuant to 
instructions issued by the Secretary and in such format as the 
Secretary prescribes.
    (2) The Secretary is authorized to monitor and investigate pursuant 
to sec. 10 of the Wagner-Peyser Act.
    (d) Special administrative and cost provisions. (1) Neither the 
Department nor the State is a guarantor of the accuracy or truthfulness 
of information obtained from employers or applicants in the process of 
operating a labor exchange activity.
    (2) Prior approval authority--as described in various sections of 
29 CFR part 97, Uniform Administrative Requirements for Grants and 
Cooperative Agreements to State and Local Governments, and Office of 
Management and Budget Circular A-87 (Revised)--is delegated to the 
State except that the Secretary reserves the right to require transfer 
of title on nonexpendable Automated Data Processing Equipment (ADPE), 
in accordance with provisions contained in 2 CFR parts 200 and 2900. 
The Secretary reserves the right to exercise prior approval authority 
in other areas, after providing advance notice to the State.
    (3) Application for financial assistance and modification 
requirements must be as specified under this part.
    (4) Cost of promotional and informational activities consistent 
with the provisions of the Wagner-Peyser Act, describing services 
offered by employment security agencies, job openings, labor market 
information, and similar items are allowable.
    (5) Each State must retain basic documents for the minimum period 
specified below, consistent with 2 CFR parts 200 and 2900:
    (i) Work application: 3 years.
    (ii) Job order: 3 years.
    (6) Payments from the State's Wagner-Peyser Act allotment made into 
a State's account in the Unemployment Trust Fund for the purpose of 
reducing charges against Reed Act funds (sec. 903(c) of the Social 
Security Act, as amended (42 U.S.C. 1103(c)) are allowable costs, 
provided that:
    (i) The charges against Reed Act funds were for amounts 
appropriated, obligated, and expended for the acquisition of automatic 
data processing installations or for the acquisition or major 
renovation of State-owned office building; and
    (ii) With respect to each acquisition of improvement of property 
pursuant to paragraph (d)(6)(i) of this section, the payments are 
accounted for in the State's records as credits against equivalent 
amounts of Reed Act funds used for administrative expenditures.
    (e) Disclosure of information. (1) The State must assure the proper 
disclosure of information pursuant to sec. 3(b) of the Wagner-Peyser 
Act.

[[Page 56339]]

    (2) The information specified in sec. 3(b) and other sections of 
the Wagner-Peyser Act, also must be provided to officers or any 
employee of the Federal government or of a State government lawfully 
charged with administration of unemployment compensation laws, ES 
activities under the Wagner-Peyser Act or other related legislation, 
but only for purposes reasonably necessary for the proper 
administration of such laws.
    (f) Audits. (1) The State must follow the audit requirements found 
at Sec.  683.210 of this chapter, except that funds expended pursuant 
to sec. 7(b) of the Wagner-Peyser Act must be audited annually.
    (2) The Comptroller General and the Inspector General of the 
Department have the authority to conduct audits, evaluations or 
investigations necessary to meet their responsibilities under sec. 
9(b)(1) and 9(b)(2), respectively, of the Wagner-Peyser Act.
    (3) The audit, conducted pursuant to paragraph (f)(1) or (2) of 
this section, must be submitted to the Secretary who will follow the 
resolution process specified in Sec. Sec.  683.420 through 683.440 of 
this chapter.
    (g) Sanctions for violation of the Wagner-Peyser Act. (1) The 
Secretary may impose appropriate sanctions and corrective actions for 
violation of the Wagner-Peyser Act, regulations, or State Plan, 
including the following:
    (i) Requiring repayment, for debts owed the government under the 
grant, from non-Federal funds;
    (ii) Offsetting debts arising from the misexpenditure of grant 
funds, against amounts to which the State is or may be entitled under 
the Wagner-Peyser Act, provided that debts arising from gross 
negligence or willful misuse of funds may not be offset against future 
grants. When the Secretary reduces amounts allotted to the State by the 
amount of the misexpenditure, the debt must be fully satisfied;
    (iii) Determining the amount of Federal cash maintained by the 
State or a subrecipient in excess of reasonable grant needs, 
establishing a debt for the amount of such excessive cash, and charging 
interest on that debt; and
    (iv) Imposing other appropriate sanctions or corrective actions, 
except where specifically prohibited by the Wagner-Peyser Act or 
regulations.
    (2) To impose a sanction or corrective action, the Secretary must 
utilize the initial and final determination procedures outlined in 
paragraph (f)(3) of this section and specified in the administrative 
provisions at Sec. Sec.  683.420 through 683.440 of this chapter.
    (h) Other violations. Violations or alleged violations of the 
Wagner-Peyser Act, regulations, or grant terms and conditions except 
those pertaining to audits or discrimination must be determined and 
handled in accordance with part 658, subpart H, of this chapter.
    (i) Fraud and abuse. Any persons having knowledge of fraud, 
criminal activity or other abuse must report such information directly 
and immediately to the Secretary, including all complaints involving 
such matters.
    (j) Nondiscrimination and affirmative action requirements. States 
must:
    (1) Assure that no individual be excluded from participation in, 
denied the benefits of, subjected to discrimination under, or denied 
employment in the administration or in connection with any services or 
activities authorized under the Wagner-Peyser Act in violation of any 
applicable nondiscrimination law. All complaints alleging 
discrimination must be filed and processed according to the procedures 
in the applicable Department of Labor nondiscrimination regulations.
    (2) Assure that discriminatory job orders will not be accepted, 
except where the stated requirement is a bona fide occupational 
qualification (BFOQ). See, generally, 42 U.S.C. 2000(e)-2(e), 29 CFR 
parts 1604, 1606, and 1625.
    (3) Assure that employers' valid affirmative action requests will 
be accepted and a significant number of qualified applicants from the 
target group(s) will be included to enable the employer to meet its 
affirmative action obligations.
    (4) Assure that employment testing programs will comply with 41 CFR 
part 60-3 and 29 CFR part 32 and 29 CFR 1627.3(b)(1)(iv).
    (5) Nondiscrimination and equal opportunity requirements and 
procedures, including complaint processing and compliance reviews, will 
be governed by the applicable Department of Labor nondiscrimination 
regulations.


Sec.  652.9  Labor disputes.

    (a) State agencies may not make a job referral on job orders which 
will aid directly or indirectly in the filling of a job opening which 
is vacant because the former occupant is on strike, or is being locked 
out in the course of a labor dispute, or the filling of which is 
otherwise an issue in a labor dispute involving a work stoppage.
    (b) Written notification must be provided to all applicants 
referred to jobs not at issue in the labor dispute that a labor dispute 
exists in the employing establishment and that the job to which the 
applicant is being referred is not at issue in the dispute.
    (c) When a job order is received from an employer reportedly 
involved in a labor dispute involving a work stoppage, State agencies 
must:
    (1) Verify the existence of the labor dispute and determine its 
significance with respect to each vacancy involved in the job order; 
and
    (2) Notify all potentially affected staff concerning the labor 
dispute.
    (d) State agencies must resume full referral services when they 
have been notified of, and verified with the employer and workers' 
representative(s), that the labor dispute has been terminated.
    (e) State agencies must notify the regional office in writing of 
the existence of labor disputes which:
    (1) Result in a work stoppage at an establishment involving a 
significant number of workers; or
    (2) Involve multi-establishment employers with other establishments 
outside the reporting State.

Subpart B--Services for Veterans


Sec.  652.100  Services for veterans.

    Veterans receive priority of service for all Department-funded 
employment and training programs as described in 20 CFR part 1010. The 
Department's Veterans' Employment and Training Service (VETS) 
administers the Jobs for Veterans State Grants (JVSG) program under 
chapter 41 of title 38 of the U.S. Code and other activities and 
training programs which provide services to specific populations of 
eligible veterans. VETS' general regulations are located in parts 1001, 
1002, and 1010 of this title.

Subpart C--Wagner-Peyser Act Services in a One-Stop Delivery System 
Environment


Sec.  652.200  What is the purpose of this subpart?

    (a) This subpart provides guidance to States to implement the 
services provided under the Wagner-Peyser Act, as amended by WIOA, in a 
one-stop delivery system environment.
    (b) Except as otherwise provided, the definitions contained in part 
651 of this chapter and sec. 2 of the Wagner-Peyser Act apply to this 
subpart.


Sec.   652.201 What is the role of the State Workforce Agency in the 
one-stop delivery system?

    (a) The role of the State Workforce Agency (SWA) in the one-stop 
delivery system is to ensure the delivery of services authorized under 
sec. 7(a) of the Wagner-Peyser Act. The SWA is a required one-stop 
partner in each local one-stop delivery system and is subject to the 
provisions relating to such

[[Page 56340]]

partners that are described at part 678 of this chapter.
    (b) Consistent with those provisions, the State agency must:
    (1) Participate in the one-stop delivery system in accordance with 
sec. 7(e) of the Wagner-Peyser Act;
    (2) Be represented on the Workforce Development Boards (WDBs) that 
oversee the local and State one-stop delivery system and be a party to 
the Memorandum of Understanding, described at Sec.  678.500 of this 
chapter, addressing the operation of the one-stop delivery system; and
    (3) Provide these services as part of the one-stop delivery system.


Sec.  652.202  May local Employment Service offices exist outside of 
the one-stop delivery system?

    No. Local ES offices may not exist outside of the one-stop service 
delivery system. A State must colocate ES, as provided in Sec. Sec.  
678.310 through 678.315 of this chapter.


Sec.  652.203  Who is responsible for funds authorized under the 
Wagner-Peyser Act in the workforce development system?

    The SWA retains responsibility for all funds authorized under the 
Wagner-Peyser Act, including those funds authorized under sec. 7(a) 
required for providing the services and activities delivered as part of 
the one-stop delivery system.


Sec.  652.204  Must funds authorized under the Wagner-Peyser Act (the 
Governor's Reserve) flow through the one-stop delivery system?

    No, sec. 7(b) of the Wagner-Peyser Act provides that 10 percent of 
the State's allotment under the Wagner-Peyser Act is reserved for use 
by the Governor for performance incentives, supporting exemplary models 
of service delivery, professional development and career advancement of 
SWA staff, and services for groups with special needs. However, these 
funds may flow through the one-stop delivery system.


Sec.  652.205  May funds authorized under the Wagner-Peyser Act be used 
to supplement funding for labor exchange programs authorized under 
separate legislation?

    (a) Section 7(c) of the Wagner-Peyser Act enables States to use 
funds authorized under sec. 7(a) or 7(b) of the Wagner-Peyser Act to 
supplement funding of any workforce activity carried out under WIOA.
    (b) Funds authorized under the Wagner-Peyser Act may be used under 
sec. 7(c) to provide additional funding to other activities authorized 
under WIOA if:
    (1) The activity meets the requirements of the Wagner-Peyser Act, 
and its own requirements;
    (2) The activity serves the same individuals as are served under 
the Wagner-Peyser Act;
    (3) The activity provides services that are coordinated with 
services under the Wagner-Peyser Act; and
    (4) The funds supplement, rather than supplant, funds provided from 
non-Federal sources.


Sec.  652.206  May a State use funds authorized under the Wagner-Peyser 
Act to provide applicable ``career services,'' as defined in the 
Workforce Innovation and Opportunity Act?

    Yes, funds authorized under sec. 7(a) of the Wagner-Peyser Act must 
be used to provide basic career services as identified in Sec.  
678.430(a) of this chapter and secs. 134(c)(2)(A)(i)-(xi) of WIOA, and 
may be used to provide individualized career services as identified in 
Sec.  678.430(b) of this chapter and sec. 134(c)(2)(A)(xii) of WIOA. 
Funds authorized under sec. 7(b) of the Wagner-Peyser Act may be used 
to provide career services. Career services must be provided consistent 
with the requirements of the Wagner-Peyser Act.


Sec.  652.207  How does a State meet the requirement for universal 
access to services provided under the Wagner-Peyser Act?

    (a) A State has discretion in how it meets the requirement for 
universal access to services provided under the Wagner-Peyser Act. In 
exercising this discretion, a State must meet the Wagner-Peyser Act's 
requirements.
    (b) These requirements are:
    (1) Labor exchange services must be available to all employers and 
job seekers, including unemployment insurance (UI) claimants, veterans, 
migrant and seasonal farmworkers, and individuals with disabilities;
    (2) The State must have the capacity to deliver labor exchange 
services to employers and job seekers, as described in the Wagner-
Peyser Act, on a statewide basis through:
    (i) Self-service, including virtual services;
    (ii) Facilitated self-help service; and
    (iii) Staff-assisted service;
    (3) In each local area, in at least one comprehensive physical 
center, staff funded under the Wagner-Peyser Act must provide labor 
exchange services (including staff-assisted labor exchange services) 
and career services as described in Sec.  652.206; and
    (4) Those labor exchange services provided under the Wagner-Peyser 
Act in a local area must be described in the Memorandum of 
Understanding (MOU) described in Sec.  678.500 of this chapter.


Sec.  652.208  How are applicable career services related to the 
methods of service delivery described in in this part?

    Career services may be delivered through any of the applicable 
three methods of service delivery described in Sec.  652.207(b)(2). 
These methods are:
    (a) Self-service, including virtual services;
    (b) Facilitated self-help service; and
    (c) Staff-assisted service.


Sec.  652.209  What are the requirements under the Wagner-Peyser Act 
for providing reemployment services and other activities to referred 
unemployment insurance claimants?

    (a) In accordance with sec. 3(c)(3) of the Wagner-Peyser Act, the 
SWA, as part of the one-stop delivery system, must provide reemployment 
services to UI claimants for whom such services are required as a 
condition for receipt of UI benefits. Services must be appropriate to 
the needs of UI claimants who are referred to reemployment services 
under any Federal or State UI law.
    (b) The SWA also must provide other activities, including:
    (1) Coordination of labor exchange services with the provision of 
UI eligibility services as required by sec. 5(b)(2) of the Wagner-
Peyser Act;
    (2) Administration of the work test, conducting eligibility 
assessments, and registering UI claimants for employment services in 
accordance with a State's unemployment compensation law, and provision 
of job finding and placement services as required by sec. 3(c)(3) and 
described in sec. 7(a)(3)(F) of the Wagner-Peyser Act; and
    (3) Referring UI claimants to, and providing application assistance 
for, training and education resources and programs, including Federal 
Pell grants and other student assistance under title IV of the Higher 
Education Act, the Montgomery GI Bill, Post-9/11 GI Bill, and other 
Veterans Educational Assistance, training provided for youth, and adult 
and dislocated workers, as well as other employment training programs 
under WIOA, and for Vocational Rehabilitation Services under title I of 
the Rehabilitation Act of 1973.


Sec.  652.210  What are the Wagner-Peyser Act's requirements for 
administration of the work test, including eligibility assessments, as 
appropriate, and assistance to unemployment insurance claimants?

    (a) State UI law or rules establish the requirements under which UI 
claimants must register and search for work in order to fulfill the UI 
work test requirements.

[[Page 56341]]

    (b) Staff funded under the Wagner-Peyser Act must assure that:
    (1) UI claimants receive the full range of labor exchange services 
available under the Wagner-Peyser Act that are necessary and 
appropriate to facilitate their earliest return to work, including 
career services specified in Sec.  652.206 and listed in sec. 
134(c)(2)A) of WIOA;
    (2) UI claimants requiring assistance in seeking work receive the 
necessary guidance and counseling to ensure they make a meaningful and 
realistic work search; and
    (3) ES staff will provide UI program staff with information about 
UI claimants' ability or availability for work, or the suitability of 
work offered to them.


Sec.  652.211  What are State planning requirements under the Wagner-
Peyser Act?

    The ES is a core program identified in WIOA and must be included as 
part of each State's Unified or Combined State Plans. See Sec. Sec.  
676.105 through 676.125 of this chapter for planning requirements for 
the core programs.


Sec.  652.215  Do any provisions in the Workforce Innovation and 
Opportunity Act change the requirement that State merit staff employees 
must deliver services provided under the Wagner-Peyser Act?

    No, the Secretary requires that labor exchange services provided 
under the authority of the Wagner-Peyser Act, including services to 
veterans, be provided by State merit-staff employees. This 
interpretation is authorized by and consistent with the provisions in 
secs. 3(a) and 5(b) of the Wagner-Peyser Act and the Intergovernmental 
Personnel Act (42 U.S.C 4701 et seq.). The Secretary has and has 
exercised the legal authority under sec. 3(a) of the Wagner-Peyser Act 
to set additional staffing standards and requirements and to conduct 
demonstrations to ensure the effective delivery of services provided 
under the Wagner-Peyser Act. No additional exemptions, other than the 
ones previously authorized under the Wagner-Peyser Act as amended by 
WIA, will be authorized.


Sec.  652.216  May the one-stop operator provide guidance to State 
merit staff employees in accordance with the Wagner-Peyser Act?

    Yes, the one-stop delivery system envisions a partnership in which 
Wagner-Peyser Act labor exchange services are coordinated with other 
activities provided by other partners in a one-stop setting. As part of 
the local Memorandum of Understanding described in Sec.  678.500 of 
this chapter, the SWA, as a one-stop partner, may agree to have staff 
receive guidance from the one-stop operator regarding the provision of 
labor exchange services. Personnel matters, including compensation, 
personnel actions, terms and conditions of employment, performance 
appraisals, and accountability of State merit staff employees funded 
under the Wagner-Peyser Act, remain under the authority of the SWA. The 
guidance given to employees must be consistent with the provisions of 
the Wagner-Peyser Act, the local Memorandum of Understanding, and 
applicable collective bargaining agreements.

Subpart D--Workforce and Labor Market Information


Sec.  652.300  What role does the Secretary of Labor have concerning 
the Workforce and Labor Market Information System?

    (a) The Secretary of Labor must oversee the development, 
maintenance, and continuous improvement of the workforce and labor 
market information system defined in Wagner-Peyser Act sec. 15 and 
Sec.  651.10 of this chapter. The Department also will identify 
parameters of continuous improvement. The Secretary will consult with 
the Workforce Information Advisory Council on these matters and 
consider the council's recommendations.
    (b) With respect to data collection, analysis, and dissemination of 
workforce and labor market information as defined in Wagner-Peyser Act 
sec. 15 and Sec.  651.10 of this chapter, the Secretary must:
    (1) Assign responsibilities within the Department of Labor for 
elements of the workforce and labor market information system described 
in sec. 15(a) of the Wagner-Peyser Act to ensure that the statistical 
and administrative data collected are consistent with appropriate 
Bureau of Labor Statistics standards and definitions, and that the 
information is accessible and understandable to users of such data;
    (2) Actively seek the cooperation of heads of other Federal 
agencies to establish and maintain mechanisms for ensuring 
complementarity and non-duplication in the development and operation of 
statistical and administrative data collection activities;
    (3) Solicit, receive, and evaluate the recommendations of the 
Workforce Information Advisory Council established by Wagner-Peyser Act 
sec. 15(d);
    (4) Eliminate gaps and duplication in statistical undertakings;
    (5) Through the Bureau of Labor Statistics and the Employment and 
Training Administration, and in collaboration with States, develop and 
maintain the elements of the workforce and labor market information 
system, including the development of consistent procedures and 
definitions for use by States in collecting and reporting the workforce 
and labor market information data described in Wagner-Peyser Act sec. 
15 and defined in Sec.  651.10 of this chapter;
    (6) Establish procedures for the system to ensure that the data and 
information are timely, and paperwork and reporting for the system are 
reduced to a minimum; and
    (7) Prepare a 2-year plan for the workforce and labor market 
information system, as described in the Wagner-Peyser Act sec. 15(c), 
as amended by WIOA sec. 308(d).


Sec.  652.301  What are wage records for purposes of the Wagner-Peyser 
Act?

    Wage records, for purposes of the Wagner-Peyser Act, are records 
that contain ``wage information'' as defined in Sec.  603.2(k) of this 
chapter. In this part, ``State wage records'' refers to wage records 
produced or maintained by a State.


Sec.  652.302  How do the Secretary of Labor's responsibilities 
described in this part apply to State wage records?

    (a) A significant portion of the workforce and labor market 
information--defined in Sec.  651.10 of this chapter--are developed 
using State wage records.
    (b) Based on the Secretary of Labor's responsibilities described in 
Wagner-Peyser Act sec. 15 and Sec.  652.300, the Secretary of Labor 
will, in consultation with Federal agencies, and States, and 
considering recommendations from the Workforce Information Advisory 
Council described in Wagner-Peyser Act sec. 15(d), develop:
    (1) Standardized definitions for the data elements comprising 
``wage records'' as defined in Sec.  652.301; and
    (2) Improved processes and systems for the collection and reporting 
of wage records.
    (c) In carrying out these activities, the Secretary also may 
consult with other stakeholders, such as employers.


Sec.  652.303  How do the requirements of part 603 of this chapter 
apply to wage records?

    All information collected by the State in wage records referred to 
in Sec.  652.302 is subject to the confidentiality regulations at part 
603 of this chapter.

0
7. Revise part 653 to read as follows:

[[Page 56342]]

PART 653--SERVICES OF THE WAGNER-PEYSER ACT EMPLOYMENT SERVICE 
SYSTEM

Subpart A--[Reserved]
Subpart B--Services for Migrant and Seasonal Farmworkers (MSFWs)
Sec.
653.100 Purpose and scope of subpart.
653.101 Provision of services to migrant and seasonal farmworkers.
653.102 Job information.
653.103 Process for migrant and seasonal farmworkers to participate 
in workforce development activities.
653.104-653.106 [Reserved]
653.107 Outreach and Agricultural Outreach Plan.
653.108 State Workforce Agency and State Monitor Advocate 
responsibilities.
653.109 Data collection and performance accountability measures.
653.110 Disclosure of data.
653.111 State Workforce Agency staffing requirements.
Subparts C-E--[Reserved]
Subpart F--Agricultural Recruitment System for U.S. Workers (ARS)
Sec.
653.500 Purpose and scope of subpart.
653.501 Requirements for processing clearance orders.
653.502 Conditional access to the Agricultural Recruitment System.
653.503 Field checks.

    Authority:  Secs. 167, 189, 503, Public Law 113-128, 128 Stat. 
1425 (Jul. 22, 2014); 29 U.S.C. chapter 4B; 38 U.S.C. part III, 
chapters 41 and 42.

Subpart A--[Reserved]

Subpart B--Services for Migrant and Seasonal Farmworkers (MSFWs)


Sec.  653.100  Purpose and scope of subpart.

    (a) This subpart sets forth the principal regulations of the 
Wagner-Peyser Act Employment Service (ES) concerning the provision of 
services for MSFWs consistent with the requirement that all services of 
the workforce development system be available to all job seekers in an 
equitable fashion. This includes ensuring MSFWs have access to these 
services in a way that meets their unique needs. MSFWs must receive 
services on a basis which is qualitatively equivalent and 
quantitatively proportionate to services provided to non-MSFWs.
    (b) This subpart contains requirements that State Workforce 
Agencies (SWAs) establish a system to monitor their own compliance with 
ES regulations governing services to MSFWs.
    (c) Established under this subpart are special services to ensure 
MSFWs receive the full range of career services as defined in WIOA sec. 
134(c)(2).


Sec.  653.101  Provision of services to migrant and seasonal 
farmworkers.

    Each one-stop center must offer MSFWs the full range of career and 
supportive services, benefits and protections, and job and training 
referral services as are provided to non-MSFWs. In providing such 
services, the one-stop centers must consider and be sensitive to the 
preferences, needs, and skills of individual MSFWs and the availability 
of job and training opportunities.


Sec.   653.102 Job information.

    All SWAs must make job order information conspicuous and available 
to MSFWs by all reasonable means. Such information must, at minimum, be 
available through internet labor exchange systems and through the one-
stop centers. One-stop centers must provide adequate staff assistance 
to MSFWs to access job order information easily and efficiently. In 
designated significant MSFW multilingual offices, such assistance must 
be provided to MSFWs in their native language, whenever requested or 
necessary.


Sec.  653.103  Process for migrant and seasonal farmworkers to 
participate in workforce development activities.

    (a) Each one-stop center must determine whether participants are 
MSFWs as defined at Sec.  651.10 of this chapter.
    (b) All SWAs will ensure that MSFWs who are English Language 
Learners (ELLs) receive, free of charge, the language assistance 
necessary to afford them meaningful access to the programs, services, 
and information offered by the one-stop centers.
    (c) One-stop center staff must provide MSFWs a list of available 
career and supportive services in their native language.
    (d) One-stop center staff must refer and/or register MSFWs for 
services, as appropriate, if the MSFW is interested in obtaining such 
services.


Sec. Sec.  653.104-653.106  [Reserved]


Sec.  653.107  Outreach and Agricultural Outreach Plan.

    (a) State Workforce Agency (SWA) outreach responsibilities. (1) 
Each SWA must employ an adequate number of outreach workers to conduct 
MSFW outreach in their service areas. SWA Administrators must ensure 
State Monitor Advocates and outreach workers coordinate their outreach 
efforts with WIOA title I sec. 167 grantees as well as with public and 
private community service agencies and MSFW groups.
    (2) As part of their outreach, SWAs must:
    (i) Communicate the full range of workforce development services to 
MSFWs.
    (ii) Conduct thorough outreach efforts with extensive follow-up 
activities in supply States.
    (3) For purposes of hiring and assigning staff to conduct outreach 
duties, and to maintain compliance with SWAs' Affirmative Action 
programs, SWAs must seek, through merit system procedures, qualified 
candidates who:
    (i) Are from MSFW backgrounds;
    (ii) Speak a language common among MSFWs in the State; or
    (iii) Are racially or ethnically representative of the MSFWs in the 
service area.
    (4) The 20 States with the highest estimated year-round MSFW 
activity, as identified in guidance issued by the Secretary, must 
assign, in accordance with State merit staff requirements, full-time, 
year-round staff to conduct outreach duties. The remainder of the 
States must hire year-round part-time outreach staff and, during 
periods of the highest MSFW activity must hire full-time outreach 
staff. All outreach staff must be multilingual if warranted by the 
characteristics of the MSFW population in the State, and must spend a 
majority of their time in the field.
    (5) The SWA must publicize the availability of employment services 
through such means as newspaper and electronic media publicity. 
Contacts with public and private community agencies, employers and/or 
employer organizations, and MSFW groups also must be utilized to 
facilitate the widest possible distribution of information concerning 
employment services.
    (b) Outreach worker's responsibilities. Outreach workers must 
locate and contact MSFWs who are not being reached by the normal intake 
activities conducted by the ES offices. Outreach workers' 
responsibilities include:
    (1) Explaining to MSFWs at their working, living, or gathering 
areas (including day-haul sites), by means of written and oral 
presentations either spontaneous or recorded, in a language readily 
understood by them, the following:
    (i) The services available at the local one-stop center (which 
includes the availability of referrals to training, supportive 
services, and career services, as well as specific employment 
opportunities), and other related services;
    (ii) Information on the Employment Service and Employment-related 
Law Complaint System;
    (iii) Information on the other organizations serving MSFWs in the 
area; and

[[Page 56343]]

    (iv) A basic summary of farmworker rights, including farmworker 
rights with respect to the terms and conditions of employment.
    (2) Outreach workers must not enter work areas to perform outreach 
duties described in this section on an employer's property without 
permission of the employer unless otherwise authorized to enter by law; 
must not enter workers' living areas without the permission of the 
workers; and must comply with appropriate State laws regarding access.
    (3) After making the presentation, outreach workers must urge the 
MSFWs to go to the local one-stop center to obtain the full range of 
employment and training services.
    (4) If an MSFW cannot or does not wish to visit the local one-stop 
center, the outreach worker must offer to provide on-site the 
following:
    (i) Assistance in the preparation of applications for employment 
services;
    (ii) Assistance in obtaining referral(s) to current and future 
employment opportunities;
    (iii) Assistance in the preparation of either ES or employment-
related law complaints;
    (iv) Referral of complaints to the ES office Complaint Specialist 
or ES office manager;
    (v) Referral to supportive services and/or career services in which 
the individual or a family member may be interested; and
    (vi) As needed, assistance in making appointments and arranging 
transportation for individual MSFW(s) or members of his/her family to 
and from local one-stop centers or other appropriate agencies.
    (5) Outreach workers must make follow-up contacts as necessary and 
appropriate to provide the assistance specified in paragraphs (b)(1) 
through (4) of this section.
    (6) Outreach workers must be alert to observe the working and 
living conditions of MSFWs and, upon observation or upon receipt of 
information regarding a suspected violation of Federal or State 
employment-related law, document and refer information to the ES office 
manager for processing in accordance with Sec.  658.411 of this 
chapter. Additionally, if an outreach worker observes or receives 
information about apparent violations (as described in Sec.  658.419 of 
this chapter), the outreach worker must document and refer the 
information to the appropriate ES office manager.
    (7) Outreach workers must be trained in local office procedures and 
in the services, benefits, and protections afforded MSFWs by the ES, 
including training on protecting farmworkers against sexual harassment. 
While sexual harassment is the primary requirement, training also may 
include similar issues such as sexual coercion, assault, and human 
trafficking. Such trainings are intended to help outreach workers 
identify when such issues may be occurring in the fields and how to 
document and refer the cases to the appropriate enforcement agencies. 
They also must be trained in the procedure for informal resolution of 
complaints. The program for such training must be formulated by the 
State Administrator, pursuant to uniform guidelines developed by the 
Employment and Training Administration (ETA). The SMA must be given an 
opportunity to review and comment on the State's program.
    (8) Outreach workers must maintain complete records of their 
contacts with MSFWs and the services they perform. These records must 
include a daily log, a copy of which must be sent monthly to the ES 
office manager and maintained on file for at least 2 years. These 
records must include the number of contacts, the names of contacts (if 
available), and the services provided (e.g., whether a complaint was 
received, whether a request for career services was received, and 
whether a referral was made). Outreach workers also must maintain 
records of each possible violation or complaint of which they have 
knowledge, and their actions in ascertaining the facts and referring 
the matters as provided herein. These records must include a 
description of the circumstances and names of any employers who have 
refused outreach workers access to MSFWs pursuant to paragraph (b)(2) 
of this section.
    (9) Outreach workers must not engage in political, unionization, or 
anti-unionization activities during the performance of their duties.
    (10) Outreach workers must be provided with, carry and display, 
upon request, identification cards or other material identifying them 
as employees of the SWA.
    (11) Outreach workers in significant MSFW local offices must 
conduct especially vigorous outreach in their service areas.
    (c) ES office outreach responsibilities. Each ES office manager 
must file with the SMA a monthly summary report of outreach efforts. 
These reports must summarize information collected, pursuant to 
paragraph (b)(8) of this section. The ES office manager and/or other 
appropriate State office staff must assess the performance of outreach 
workers by examining the overall quality and productivity of their 
work, including the services provided and the methods and tools used to 
offer services. Performance must not be judged solely by the number of 
contacts made by the outreach worker. The monthly reports and daily 
outreach logs must be made available to the SMA and Federal on-site 
review teams.
    (d) State Agricultural Outreach Plan (AOP). (1) Each SWA must 
develop an AOP every 4 years as part of the Unified or Combined State 
Plans required under sec. 102 or 103 of WIOA.
    (2) The AOP must:
    (i) Provide an assessment of the unique needs of MSFWs in the area 
based on past and projected agricultural and MSFW activity in the 
State;
    (ii) Provide an assessment of available resources for outreach;
    (iii) Describe the SWA's proposed outreach activities including 
strategies on how to contact MSFWs who are not being reached by the 
normal intake activities conducted by the one-stop center;
    (iv) Describe the activities planned for providing the full range 
of employment and training services to the agricultural community, 
including both MSFWs and agricultural employers, through the one-stop 
centers; and
    (v) Provide an assurance that the SWA is complying with the 
requirements under Sec.  653.111 if the State has significant MSFW one-
stop centers.
    (3) In developing the AOP, the SWA must solicit information and 
suggestions from WIOA sec. 167 National Farmworker Jobs Program (NFJP) 
grantees, other appropriate MSFW groups, public agencies, agricultural 
employer organizations, and other interested organizations. In 
addition, at least 45 calendar days before submitting its final AOP to 
the Department, the SWA must provide the proposed AOP to NFJP grantees, 
public agencies, agricultural employer organizations, and other 
organizations expressing an interest and allow at least 30 calendar 
days for review and comment. The SWA must:
    (i) Consider any comments received in formulating its final 
proposed AOP.
    (ii) Inform all commenting parties in writing whether their 
comments have been incorporated and, if not, the reasons therefore.
    (iii) Transmit the comments and recommendations received and its 
responses to the Department with the submission of the AOP. (If the 
comments are received after the submission of the AOP, they may be sent 
separately to the Department.)
    (4) The AOP must be submitted in accordance with paragraph (d) of 
this

[[Page 56344]]

section and planning guidance issued by the Department.
    (5) The Annual Summaries required at Sec.  653.108(s) must update 
the Department on the SWA's progress toward meetings its goals set 
forth in the AOP.


Sec.  653.108  State Workforce Agency and State Monitor Advocate 
responsibilities.

    (a) State Administrators must ensure their SWAs monitor their own 
compliance with ES regulations in serving MSFWs on an ongoing basis. 
The State Administrator has overall responsibility for SWA self-
monitoring.
    (b) The State Administrator must appoint a State Monitor Advocate. 
The State Administrator must inform farmworker organizations and other 
organizations with expertise concerning MSFWs of the opening and 
encourage them to refer qualified applicants to apply through the State 
merit system prior to appointing a State Monitor Advocate. Among 
qualified candidates determined through State merit system procedures, 
the SWAs must seek persons:
    (1) Who are from MSFW backgrounds; or
    (2) Who speak Spanish or other languages of a significant 
proportion of the State MSFW population; or
    (3) Who have substantial work experience in farmworker activities.
    (c) The SMA must have direct, personal access, when necessary, to 
the State Administrator. The SMA must have status and compensation as 
approved by the civil service classification system and be comparable 
to other State positions assigned similar levels of tasks, complexity, 
and responsibility.
    (d) The SMA must be assigned staff necessary to fulfill effectively 
all of the duties set forth in this subpart. The number of staff 
positions must be determined by reference to the number of MSFWs in the 
State, as measured at the time of the peak MSFW population, and the 
need for monitoring activity in the State. The SMA must devote full-
time to Monitor Advocate functions. Any State that proposes less than 
full-time dedication must demonstrate to its Regional Administrator 
that the SMA function can be effectively performed with part-time 
staffing.
    (e) All SMAs and their staff must attend, within the first 3 months 
of their tenure, a training session conducted by the Regional Monitor 
Advocate. They also must attend whatever additional training sessions 
are required by the Regional or National Monitor Advocate.
    (f) The SMA must provide any relevant documentation requested from 
the SWA by the Regional Monitor Advocate or the National Monitor 
Advocate.
    (g) The SMA must:
    (1) Conduct an ongoing review of the delivery of services and 
protections afforded by the ES regulations to MSFWs by the SWA and ES 
offices (including progress made in achieving affirmative action 
staffing goals). The SMA, without delay, must advise the SWA and local 
offices of problems, deficiencies, or improper practices in the 
delivery of services and protections afforded by these regulations and 
may request a corrective action plan to address these deficiencies. The 
SMA must advise the SWA on means to improve the delivery of services.
    (2) Participate in on-site reviews on a regular basis, using the 
following procedures:
    (i) Before beginning an onsite review, the SMA or review staff must 
study:
    (A) Program performance data;
    (B) Reports of previous reviews;
    (C) Corrective action plans developed as a result of previous 
reviews;
    (D) Complaint logs; and
    (E) Complaints elevated from the office or concerning the office.
    (ii) Ensure that the onsite review format, developed by ETA, is 
used as a guideline for onsite reviews.
    (iii) Upon completion of an onsite monitoring review, the SMA must 
hold one or more wrap-up sessions with the ES office manager and staff 
to discuss any findings and offer initial recommendations and 
appropriate technical assistance.
    (iv) After each review the SMA must conduct an in-depth analysis of 
the review data. The conclusions and recommendations of the SMA must be 
put in writing and must be sent to the State Administrator, to the 
official of the SWA with authority over the ES office, and other 
appropriate SWA officials.
    (v) If the review results in any findings of noncompliance with the 
regulations under this chapter, the ES office manager must develop and 
propose a written corrective action plan. The plan must be approved or 
revised by appropriate superior officials and the SMA. The plan must 
include actions required to correct or to take major steps to correct 
any compliance issues within 30 business days, and if the plan allows 
for more than 30 business days for full compliance, the length of, and 
the reasons for, the extended period must be specifically stated. SWAs 
are responsible for assuring and documenting that the ES office is in 
compliance within the time period designated in the plan.
    (vi) SWAs must submit to the appropriate ETA regional office copies 
of the onsite review reports and corrective action plans for ES 
offices.
    (vii) The SMA may recommend that the review described in paragraph 
(g)(2) of this section be delegated to a responsible, professional 
member of the administrative staff of the SWA, if and when the State 
Administrator finds such delegation necessary. In such event, the SMA 
is responsible for and must approve the written report of the review.
    (3) Ensure all significant MSFW one-stop centers not reviewed 
onsite by Federal staff, are reviewed at least once per year by State 
staff, and that, if necessary, those ES offices in which significant 
problems are revealed by required reports, management information, the 
Complaint System, or other means are reviewed as soon as possible.
    (4) Review and approve the SWA's Agricultural Outreach Plan (AOP).
    (5) On a random basis, review outreach workers' daily logs and 
other reports including those showing or reflecting the workers' 
activities.
    (6) Write and submit annual summaries to the State Administrator 
with a copy to the Regional Administrator as described in paragraph (s) 
of this section.
    (h) The SMA must participate in Federal reviews conducted pursuant 
to part 658, subpart G, of this chapter.
    (i) At the discretion of the State Administrator, the SMA may be 
assigned the responsibility as the Complaint Specialist. The SMA must 
participate in and monitor the performance of the Complaint System, as 
set forth at Sec. Sec.  658.400 and 658.401 of this chapter. The SMA 
must review the ES office's informal resolution of complaints relating 
to MSFWs and must ensure that the ES office manager transmits copies of 
the Complaint System logs pursuant to part 658, subpart E, of this 
chapter to the SWA.
    (j) The SMA must serve as an advocate to improve services for 
MSFWs.
    (k) The SMA must establish an ongoing liaison with WIOA sec. 167 
National Farmworker Jobs Program (NFJP) grantees and other 
organizations serving farmworkers, employers, and employer 
organizations in the State.
    (l) The SMA must meet (either in person or by alternative means), 
at minimum, quarterly, with representatives of the organizations 
pursuant to paragraph (k) of this section, to receive complaints, 
assist in referrals of alleged violations to enforcement agencies, 
receive input on improving coordination with ES offices or

[[Page 56345]]

improving the coordination of services to MSFWs. To foster such 
collaboration, the SMAs must establish Memorandums of Understanding 
(MOUs) with the NFJP grantees and may establish MOUs with other 
organizations serving farm workers as appropriate.
    (m) The SMA must conduct frequent field visits to the working, 
living, and gathering areas of MSFWs, and must discuss employment 
services and other employment-related programs with MSFWs, crew 
leaders, and employers. Records must be kept of each such field visit.
    (n) The SMA must participate in the appropriate regional public 
meeting(s) held by the Department of Labor Regional Farm Labor 
Coordinated Enforcement Committee, other Occupational Safety and Health 
Administration and Wage and Hour Division task forces, and other 
committees as appropriate.
    (o) The SMA must ensure that outreach efforts in all significant 
MSFW ES offices are reviewed at least yearly. This review will include 
accompanying at least one outreach worker from each significant MSFW ES 
office on field visits to MSFWs' working, living, and/or gathering 
areas. The SMA must review findings from these reviews with the ES 
office managers.
    (p) The SMA must review on at least a quarterly basis all 
statistical and other MSFW-related data reported by ES offices in 
order:
    (1) To determine the extent to which the SWA has complied with the 
ES regulations; and
    (2) To identify the areas of non-compliance.
    (q) The SMA must have full access to all statistical and other 
MSFW-related information gathered by SWAs and ES offices, and may 
interview SWA and ES office staff with respect to reporting methods. 
Subsequent to each review, the SMA must consult, as necessary, with the 
SWA and ES offices and provide technical assistance to ensure accurate 
reporting.
    (r) The SMA must review and comment on proposed State ES 
directives, manuals, and operating instructions relating to MSFWs and 
must ensure:
    (1) That they accurately reflect the requirements of the 
regulations; and
    (2) That they are clear and workable. The SMA also must explain and 
make available at the requestor's cost, pertinent directives and 
procedures to employers, employer organizations, farmworkers, 
farmworker organizations, and other parties expressing an interest in a 
readily identifiable directive or procedure issued and receive 
suggestions on how these documents can be improved.
    (s) The SMA must prepare for the State Administrator, the Regional 
Monitor Advocate, and the National Monitor Advocate an Annual Summary 
describing how the State provided employment services to MSFWs within 
the State based on statistical data, reviews, and other activities as 
required in this chapter. The summary must include:
    (1) A description of the activities undertaken during the program 
year by the SMA pertaining to his/her responsibilities set forth in 
this section and other applicable regulations in this chapter.
    (2) An assurance that the SMA has direct, personal access, whenever 
he/she finds it necessary, to the State Administrator and that the SMA 
has status and compensation approved by the civil service 
classification system, and is comparable to other State positions 
assigned similar levels of tasks, complexity, and responsibility.
    (3) An assurance the SMA devotes all of his/her time to monitor 
advocate functions. Or, if the SWA proposed the SMA conducts his/her 
functions on a part-time basis, an explanation of how the SMA functions 
are effectively performed with part-time staffing.
    (4) A summary of the monitoring reviews conducted by the SMA, 
including:
    (i) A description of any problems, deficiencies, or improper 
practices the SMA identified in the delivery of services;
    (ii) A summary of the actions taken by the SWA to resolve the 
problems, deficiencies, or improper practices described in its service 
delivery; and
    (iii) A summary of any technical assistance the SMA provided for 
the SWA and the ES offices.
    (5) A summary of the outreach efforts undertaken by all significant 
and non-significant MSFW ES offices.
    (6) A summary of the State's actions taken under the Complaint 
System described in part 658, subpart E, of this chapter, identifying 
any challenges, complaint trends, findings from reviews of the 
Complaint System, trainings offered throughout the year, and steps 
taken to inform MSFWs and employers, and farmworker advocacy groups 
about the Complaint System.
    (7) A summary of how the SMA is working with WIOA sec. 167 NFJP 
grantees and other organizations serving farmworkers, employers and 
employer organizations, in the State, and an assurance that the SMA is 
meeting at least quarterly with representatives of these organizations.
    (8) A summary of the statistical and other MSFW-related data and 
reports gathered by SWAs and ES offices for the year, including an 
overview of the SMA's involvement in the SWA's reporting systems.
    (9) A summary of the training conducted for SWA personnel, 
including ES office personnel, on techniques for accurately reporting 
data.
    (10) A summary of activities related to the AOP and an explanation 
of how those activities helped the State reach the goals and objectives 
described in the AOP. At the end of the 4-year AOP cycle, the summary 
must include a synopsis of the SWA's achievements over the previous 4 
years to accomplish the goals set forth in the AOP, and a description 
of the goals which were not achieved and the steps the SWA will take to 
address those deficiencies.
    (11) For significant MSFW ES offices, a summary of the functioning 
of the State's affirmative action staffing program under Sec.  653.111.


Sec.  653.109  Data collection and performance accountability measures.

    SWAs must:
    (a) Collect career service indicator data for the career services 
specified in WIOA sec. 134(c)(2)(A)(xii).
    (b) Collect data, in accordance with applicable ETA Reports and 
Guidance, on:
    (1) The number of MSFWs contacted through outreach activities;
    (2) The number of MSFWs and non-MSFWs registered for career 
services;
    (3) The number of MSFWs referred to and placed in agricultural 
jobs;
    (4) The number of MSFWs referred to and placed in non-agricultural 
jobs;
    (5) The percentage of MSFW program participants who are in 
unsubsidized employment during the second quarter after exit from the 
program;
    (6) The median earnings of MSFW program participants who are in 
unsubsidized employment during the second quarter after exit from the 
program;
    (7) The percentage of MSFW program participants who are in 
unsubsidized employment during the fourth quarter after exit from the 
program;
    (8) The number of MSFWs served who identified themselves as male, 
female, Hispanic or Latino, Black or African-American, American Indian 
or Alaska Native, Asian, Native Hawaiian or Pacific Islander, or White;
    (9) Agricultural clearance orders (including field checks), MSFW 
complaints and apparent violations, and monitoring activities; and
    (10) Any other data required by the Department.

[[Page 56346]]

    (c) Provide necessary training to SWA personnel, including ES 
office personnel, on techniques for accurately reporting data.
    (d) Collect and submit data on MSFWs required by the Unified or 
Combined State Plan, as directed by the Department.
    (e) Periodically verify data required to be collected under this 
section, take necessary steps to ensure its validity, and submit the 
data for verification to the Department, as directed by the Department.
    (f) Submit additional reports to the Department as directed.
    (g) Meet equity indicators that address ES controllable services 
and include, at a minimum, individuals referred to a job, receiving job 
development, and referred to supportive or career services.
    (h) Meet minimum levels of service in significant MSFW States. That 
is, only significant MSFW SWAs will be required to meet minimum levels 
of service to MSFWs. Minimum level of service indicators must include, 
at a minimum, individuals placed in a job, individuals placed long-term 
(150 days or more) in a non-agricultural job, a review of significant 
MSFW ES offices, field checks conducted, outreach contacts per week, 
and processing of complaints. The determination of the minimum service 
levels required of significant MSFW States for each year must be based 
on the following:
    (1) Past SWA performance in serving MSFWs, as reflected in on-site 
reviews and data collected under paragraph (b) of this section.
    (2) The need for services to MSFWs in the upcoming year, comparing 
prior and projected levels of MSFW activity.


Sec.  653.110  Disclosure of data.

    (a) SWAs must disclose to the public, on written request, in 
conformance with applicable State and Federal law, the data collected 
by SWAs and ES offices pursuant to Sec.  653.109, if possible within 10 
business days after receipt of the request.
    (b) If a request for data held by a SWA is made to the ETA national 
or regional office, the ETA must forward the request to the SWA for 
response.
    (c) If the SWA cannot supply the requested data within 10 business 
days after receipt of the request, the SWA must respond to the 
requestor in writing, giving the reason for the delay and specifying 
the date by which it expects to be able to comply.
    (d) SWA intra-agency memoranda and reports (or parts thereof) and 
memoranda and reports (or parts thereof) between the SWA and the ETA, 
to the extent that they contain statements of opinion rather than 
facts, may be withheld from public disclosure provided the reason for 
withholding is given to the requestor in writing. Similarly, documents 
or parts thereof, which, if disclosed, would constitute an unwarranted 
invasion of personal or employer privacy, also may be withheld provided 
the reason is given to the requestor in writing.


Sec.  653.111  State Workforce Agency staffing requirements.

    (a) The SWA must implement and maintain an affirmative action 
program for staffing in significant MSFW one-stop centers, and must 
employ ES staff in a manner facilitating the delivery of employment 
services tailored to the special needs of MSFWs, including:
    (1) The positioning of multilingual staff in offices serving a 
significant number of Spanish-speaking or ELL participants; and
    (2) The hiring of staff members from the MSFW community or members 
of community-based migrant programs.
    (b) The SWA must hire sufficient numbers of qualified, permanent 
minority staff in significant MSFW ES offices. SWAs will determine 
whether a ``sufficient number'' of staff have been hired by conducting 
a comparison between the characteristics of the staff and the workforce 
and determining if the composition of the local office staff(s) is 
representative of the racial and ethnic characteristics of the 
workforce in the ES office service area(s). SWAs with significant MSFW 
ES offices, must undertake special efforts to recruit MSFWs and persons 
from MSFW backgrounds for its staff.
    (1) Where qualified minority applicants are not available to be 
hired as permanent staff, qualified minority part-time, provisional, or 
temporary staff must be hired in accordance with State merit system 
procedures, where applicable.
    (2) If an ES office does not have a sufficient number of qualified 
minority staff, the SWA must establish a goal to achieve sufficient 
staffing at the ES office. The SWA also must establish a reasonable 
timetable for achieving the staffing goal by hiring or promoting 
available, qualified staff in the under-represented categories. In 
establishing timetables, the SWA must consider the vacancies 
anticipated through expansion, contraction, and turnover in the 
office(s) and available funds. All affirmative action programs must 
establish timetables that are designed to achieve the staffing goal no 
later than 1year after the submission of the Unified or Combined State 
Plan or Annual Summary, whichever is sooner. Once such goals have been 
achieved, the SWA must submit a State Plan modification request to the 
Department with the assurance that the requirements of paragraph (b) of 
this section have been achieved.
    (3) The SMA, Regional Monitor Advocate, or the National Monitor 
Advocate, as part of his/her regular reviews of SWA compliance with 
these regulations, must monitor the extent to which the SWA has 
complied with its affirmative action program.

Subparts C-E--[Reserved]

Subpart F--Agricultural Recruitment System for U.S. Workers (ARS)


Sec.  653.500  Purpose and scope of subpart.

    This subpart includes the requirements for the acceptance of 
intrastate and interstate job clearance orders which seek U.S. workers 
to perform farmwork on a temporary, less than year-round basis. Orders 
seeking workers to perform farmwork on a year-round basis are not 
subject to the requirements of this subpart. This subpart affects all 
job orders for workers who are recruited through the ES intrastate and 
interstate clearance systems for less than year-round farmwork, 
including both MSFWs and non-MSFW job seekers.


Sec.  653.501  Requirements for processing clearance orders.

    (a) Assessment of need. No ES office or SWA may place a job order 
seeking workers to perform farmwork into intrastate or interstate 
clearance unless:
    (1) The ES office and employer have attempted and have not been 
able to obtain sufficient workers within the local labor market area; 
or
    (2) The ES office anticipates a shortage of local workers.
    (b) ES office responsibilities. (1) Each ES office must ensure the 
agricultural clearance form prescribed by the Department (ETA Form 790 
or its subsequently issued form), and its attachments are complete when 
placing intrastate or interstate clearance orders seeking workers.
    (2) All clearance orders must be posted in accordance with 
applicable ETA guidance. If the job order for the ES office 
incorporates offices beyond the local office commuting area, the ES 
office must suppress the employer information in order to facilitate 
the orderly movement of workers within the ES.
    (3) ES staff must determine, through a preoccupancy housing 
inspection performed by ES staff or an appropriate public agency, that 
the housing assured

[[Page 56347]]

by the employer is either available and meets the applicable housing 
standards or has been approved for conditional access to the clearance 
system as set forth in Sec.  653.502; except that mobile range housing 
for sheepherders and goatherders must meet existing Departmental 
guidelines and/or applicable regulations.
    (c) SWA responsibilities. (1) SWAs must ensure intrastate and 
interstate clearance orders:
    (i) Include the following language: ``In view of the statutorily 
established basic function of the ES as a no-fee labor exchange, that 
is, as a forum for bringing together employers and job seekers, neither 
the ETA nor the SWAs are guarantors of the accuracy or truthfulness of 
information contained on job orders submitted by employers. Nor does 
any job order accepted or recruited upon by the ES constitute a 
contractual job offer to which the ETA or a SWA is in any way a 
party;''
    (ii) Do not contain an unlawful discriminatory specification 
including, for beneficiaries (as defined in 29 CFR 38.4) only, on the 
basis of citizenship status or participant status;
    (iii) Are signed by the employer; and
    (iv) State all the material terms and conditions of the employment, 
including:
    (A) The crop;
    (B) The nature of the work;
    (C) The anticipated period and hours of employment;
    (D) The anticipated starting and ending date of employment and the 
anticipated number of days and hours per week for which work will be 
available;
    (E) The hourly wage rate or the piece rate estimated in hourly wage 
rate equivalents for each activity and unit size;
    (F) Any deductions to be made from wages;
    (G) A specification of any non-monetary benefits to be provided by 
the employer;
    (H) Any hours, days, or weeks for which work is guaranteed, and, 
for each guaranteed week of work except as provided in paragraph 
(c)(3)(i) of this section, the exclusive manner in which the guarantee 
may be abated due to weather conditions or other acts of God beyond the 
employer's control; and
    (I) Any bonus or work incentive payments or other expenses which 
will be paid by the employer in addition to the basic wage rate, 
including the anticipated time period(s) within which such payments 
will be made.
    (2) SWAs must ensure:
    (i) The wages and working conditions offered are not less than the 
prevailing wages and working conditions among similarly employed 
farmworkers in the area of intended employment or the applicable 
Federal or State minimum wage, whichever is higher. If the wages 
offered are expressed as piece rates or as base rates and bonuses, the 
employer must make the method of calculating the wage and supporting 
materials available to ES staff who must check if the employer's 
calculation of the estimated hourly wage rate is reasonably accurate 
and is not less than the prevailing wage rate or applicable Federal or 
State minimum wage, whichever is higher; and
    (ii) The employer has agreed to provide or pay for the 
transportation of the workers and their families at or before the end 
of the period of employment specified in the job order on at least the 
same terms as transportation is commonly provided by employers in the 
area of intended employment to farmworkers and their families recruited 
from the same area of supply. Under no circumstances may the payment or 
provision of transportation occur later than the departure time needed 
to return home to begin the school year, in the case of any worker with 
children 18 years old or younger, or be conditioned on the farmworker 
performing work after the period of employment specified in the job 
order.
    (3) SWAs must ensure the clearance order includes the following 
assurances:
    (i) The employer will provide to workers referred through the 
clearance system the number of hours of work cited in paragraph 
(c)(1)(iv)(D) of this section for the week beginning with the 
anticipated date of need, unless the employer has amended the date of 
need at least 10 business days prior to the original date of need 
(pursuant to paragraph (c)(3)(iv) of this section) by so notifying the 
order-holding office in writing (email notification may be acceptable). 
The SWA must make a record of this notification and must attempt to 
inform referred workers of the change expeditiously.
    (ii) No extension of employment beyond the period of employment 
specified in the clearance order may relieve the employer from paying 
the wages already earned, or if specified in the clearance order as a 
term of employment, providing transportation or paying transportation 
expenses to the worker's home.
    (iii) The working conditions comply with applicable Federal and 
State minimum wage, child labor, social security, health and safety, 
farm labor contractor registration and other employment-related laws.
    (iv) The employer will expeditiously notify the order-holding 
office or SWA by emailing and telephoning immediately upon learning 
that a crop is maturing earlier or later, or that weather conditions, 
over-recruitment or other factors have changed the terms and conditions 
of employment.
    (v) The employer, if acting as a farm labor contractor (``FLC'') or 
farm labor contractor employee (``FLCE'') on the order, has a valid 
Federal FLC certificate or Federal FLCE identification card and when 
appropriate, any required State farm labor contractor certificate.
    (vi) The availability of no cost or public housing which meets the 
Federal standards and which is sufficient to house the specified number 
of workers requested through the clearance system. This assurance must 
cover the availability of housing for only those workers, and when 
applicable, family members who are not reasonably able to return to 
their residence in the same day.
    (vii) Outreach workers must have reasonable access to the workers 
in the conduct of outreach activities pursuant to Sec.  653.107.
    (viii) The job order contains all the material terms and conditions 
of the job. The employer must assure this by signing the following 
statement in the clearance order: ``This clearance order describes the 
actual terms and conditions of the employment being offered by me and 
contains all the material terms and conditions of the job.''
    (4) If a SWA discovers that an employer's clearance order contains 
a material misrepresentation, the SWA may initiate the Discontinuation 
of Services as set forth in part 658, subpart F of this chapter.
    (5) If there is a change to the anticipated date of need and the 
employer fails to notify the order-holding office at least 10 business 
days prior to the original date of need the employer must pay eligible 
(pursuant to paragraph (d)(4) of this section) workers referred through 
the clearance system the specified hourly rate of pay, or if the pay is 
piece-rate, the higher of the Federal or State minimum wage for the 
first week starting with the originally anticipated date of need or 
provide alternative work if such alternative work is stated on the 
clearance order. If an employer fails to comply under this section the 
order holding office may notify the Department's Wage and Hour Division 
for possible enforcement.
    (d) Processing clearance orders. (1) The order-holding office must 
transmit an electronic copy of the approved clearance order to its SWA. 
The SWA

[[Page 56348]]

must distribute additional electronic copies of the form with all 
attachments (except that the SWA may, at its discretion, delegate this 
distribution to the local office) as follows:
    (i) At least one copy of the clearance order must be sent to each 
of the SWAs selected for recruitment (areas of supply);
    (ii) At least one copy of the clearance order must be sent to each 
applicant-holding ETA regional office;
    (iii) At least one copy of the clearance order must be sent to the 
order-holding ETA regional office; and
    (iv) At least one copy of the clearance order must be sent to the 
Regional Farm Labor Coordinated Enforcement Committee and/or other 
Occupational Safety and Health Administration and Wage and Hour 
Division regional agricultural coordinators, and/or other committees as 
appropriate in the area of employment.
    (2) The ES office may place an intrastate or interstate order 
seeking workers to perform farmwork for a specific farm labor 
contractor or for a worker preferred by an employer provided the order 
meets ES nondiscrimination criteria. The order would not meet such 
criteria, for example, if it requested a ``white male crew leader'' or 
``any white male crew leader.''
    (3) The approval process described in paragraph (d)(3) of this 
section does not apply to clearance orders that are attached to 
applications for foreign temporary agricultural workers pursuant to 
part 655, subpart B, of this chapter; such clearance orders must be 
sent to the processing center as directed by ETA in guidance. For non-
criteria clearance orders (orders that are not attached to applications 
under part 655, subpart B, of this chapter), the ETA regional office 
must review and approve the order within 10 business days of its 
receipt of the order, and the Regional Administrator or his/her 
designee must approve the areas of supply to which the order will be 
extended. Any denial by the Regional Administrator or his/her designee 
must be in writing and state the reasons for the denial.
    (4) The applicant holding office must notify all referred 
farmworkers, farm labor contractors on behalf of farmworkers, or family 
heads on behalf of farmworker family members, to contact an ES office, 
preferably the order-holding office, to verify the date of need cited 
in the clearance order between 9 and 5 business days prior to the 
original date of need cited in the clearance order; and that failure to 
do so will disqualify the referred farmworker from the first weeks' pay 
as described in paragraph (c)(3)(i) of this section. The SWA must make 
a record of this notification.
    (5) If the worker referred through the clearance system contacts an 
ES office (in any State) other than the order holding office, that ES 
office must assist the referred worker in contacting the order holding 
office on a timely basis. Such assistance must include, if necessary, 
contacting the order holding office by telephone or other timely means 
on behalf of the worker referred through the clearance system.
    (6) ES office staff must assist all farmworkers, upon request in 
their native language, to understand the terms and conditions of 
employment set forth in intrastate and interstate clearance orders and 
must provide such workers with checklists in their native language 
showing wage payment schedules, working conditions, and other material 
specifications of the clearance order.
    (7) If an order holding office learns that a crop is maturing 
earlier than expected or that other material factors, including weather 
conditions and recruitment levels have changed since the date the 
clearance order was accepted, the SWA must contact immediately the 
applicant holding office which must inform immediately crews and 
families scheduled to report to the job site of the changed 
circumstances and must adjust arrangements on behalf of such crews and 
families.
    (8) When there is a delay in the date of need, SWAs must document 
notifications by employers and contacts by individual farmworkers or 
crew leaders on behalf of farmworkers or family heads on behalf of 
farmworker family members to verify the date of need.
    (9) If weather conditions, over-recruitment, or other conditions 
have eliminated the scheduled job opportunities, the SWAs involved must 
make every effort to place the workers in alternate job opportunities 
as soon as possible, especially if the worker(s) is/(are) already en-
route or at the job site. ES office staff must keep records of actions 
under this section.
    (10) Applicant-holding offices must provide workers referred on 
clearance orders with a checklist summarizing wages, working conditions 
and other material specifications in the clearance order. Such 
checklists, where necessary, must be in the workers' native language. 
The checklist must include language notifying the worker that a copy of 
the original clearance order is available upon request. SWAs must use a 
standard checklist format provided by the Department (such as in Form 
WH516 or a successor form).
    (11) The applicant-holding office must give each referred worker a 
copy of the list of worker's rights described in the Department's ARS 
Handbook.
    (12) If the labor supply SWA accepts a clearance order, the SWA 
must actively recruit workers for referral. In the event a potential 
labor supply SWA rejects a clearance order, the reasons for rejection 
must be documented and submitted to the Regional Administrator having 
jurisdiction over the SWA. The Regional Administrator will examine the 
reasons for rejection, and, if the Regional Administrator agrees, will 
inform the Regional Administrator with jurisdiction over the order-
holding SWA of the rejection and the reasons. If the Regional 
Administrator who receives the notification of rejection does not 
concur with the reasons for rejection, that Regional Administrator will 
inform the National Monitor Advocate, who, in consultation with the 
appropriate ETA higher authority, will make a final determination on 
the acceptance or rejection of the order.


Sec.  653.502  Conditional access to the Agricultural Recruitment 
System.

    (a) Filing requests for conditional access--(1) ``Noncriteria'' 
employers. Except as provided in paragraph (a)(2) of this section, an 
employer whose housing does not meet applicable standards may file with 
the ES office serving the area in which its housing is located, a 
written request for its clearance orders to be conditionally allowed 
into the intrastate or interstate clearance system, provided that the 
employer's request assures its housing will be in full compliance with 
the requirements of the applicable housing standards at least 20 
calendar days (giving the specific date) before the housing is to be 
occupied.
    (2) ``Criteria'' employers. If the request for conditional access 
described in paragraph (a)(1) of this section is from an employer 
filing a clearance order pursuant to an application for temporary alien 
agricultural labor certification for H-2A workers under subpart B of 
part 655 of this chapter, the request must be filed with the Certifying 
Officer (CO) at the processing center designated by ETA in guidance to 
make determinations on applications for temporary employment 
certification under the H-2A program.
    (3) Assurance. The employer's request pursuant to paragraph (a)(1) 
or (2) of this section must contain an assurance that the housing will 
be in full compliance with the applicable housing standards at least 20 
calendar days

[[Page 56349]]

(stating the specific date) before the housing is to be occupied.
    (b) Processing requests--(1) SWA processing. Upon receipt of a 
written request for conditional access to the intrastate or interstate 
clearance system under paragraph (a)(1) of this section, the ES office 
must send the request to the SWA, which, in turn, must forward it to 
the Regional Administrator.
    (2) Regional office processing and determination. Upon receipt of a 
request for conditional access pursuant to paragraph (b)(1) of this 
section, the Regional Administrator must review the matter and, as 
appropriate, must either grant or deny the request.
    (c) Authorization. The authorization for conditional access to the 
intrastate or interstate clearance system must be in writing, and must 
state that although the housing does not comply with the applicable 
standards, the employer's job order may be placed into intrastate or 
interstate clearance until a specified date. The Regional Administrator 
must send the authorization to the employer and must send copies (hard 
copy or electronic) to the appropriate SWA and ES office. The employer 
must submit and the ES office must attach copies of the authorization 
to each of the employer's clearance orders which is placed into 
intrastate or interstate clearance.
    (d) Notice of denial. If the Regional Administrator denies the 
request for conditional access to the intrastate or interstate 
clearance system he/she must provide written notice to the employer, 
the appropriate SWA, and the ES office, stating the reasons for the 
denial.
    (e) Inspection. The ES office serving the area containing the 
housing of any employer granted conditional access to the intrastate or 
interstate clearance system must assure that the housing is inspected 
no later than the date by which the employer has promised to have its 
housing in compliance with the applicable housing standards. An 
employer however, may request an earlier preliminary inspection. If, on 
the date set forth in the authorization, the housing is not in full 
compliance with the applicable housing standards as assured in the 
request for conditional access, the ES office must afford the employer 
5 calendar days to bring the housing into full compliance. After the 5-
calendar-day period, if the housing is not in full compliance with the 
applicable housing standards as assured in the request for conditional 
access, the ES office must immediately:
    (1) Notify the RA or the NPC designated by the Regional 
Administrator;
    (2) Remove the employer's clearance orders from intrastate and 
interstate clearance; and
    (3) If workers have been recruited against these orders, in 
cooperation with the ES agencies in other States, make every reasonable 
attempt to locate and notify the appropriate crew leaders or workers, 
and to find alternative and comparable employment for the workers.


Sec.  653.503  Field checks.

    (a) If a worker is placed on a clearance order, the SWA must notify 
the employer in writing that the SWA, through its ES offices, and/or 
Federal staff, must conduct random, unannounced field checks to 
determine and document whether wages, hours, and working and housing 
conditions are being provided as specified in the clearance order.
    (b) Where the SWA has made placements on 10 or more agricultural 
clearance orders (pursuant to this subpart) during the quarter, the SWA 
must conduct field checks on at least 25 percent of the total of such 
orders. Where the SWA has made placements on nine or fewer job orders 
during the quarter (but at least one job order), the SWA must conduct 
field checks on 100 percent of all such orders. This requirement must 
be met on a quarterly basis.
    (c) Field checks must include visit(s) to the worksite at a time 
when workers are present. When conducting field checks, ES staff must 
consult both the employees and the employer to ensure compliance with 
the full terms and conditions of employment.
    (d) If SWA or Federal personnel observe or receive information, or 
otherwise have reason to believe that conditions are not as stated in 
the clearance order or that an employer is violating an employment-
related law, the SWA must document the finding and attempt informal 
resolution where appropriate (for example, informal resolution must not 
be attempted in certain cases, such as E.O. related issues and others 
identified by the Department through guidance.) If the matter has not 
been resolved within 5 business days, the SWA must initiate the 
Discontinuation of Services as set forth at part 658, subpart F, of 
this chapter and must refer apparent violations of employment-related 
laws to appropriate enforcement agencies in writing.
    (e) SWAs may enter into formal or informal arrangements with 
appropriate State and Federal enforcement agencies where the 
enforcement agency staff may conduct field checks instead of and on 
behalf of SWA personnel. The agreement may include the sharing of 
information and any actions taken regarding violations of the terms and 
conditions of the employment as stated in the clearance order and any 
other violations of employment-related laws. An enforcement agency 
field check must satisfy the requirement for SWA field checks where all 
aspects of wages, hours, working and housing conditions have been 
reviewed by the enforcement agency. The SWA must supplement enforcement 
agency efforts with field checks focusing on areas not addressed by 
enforcement agencies.
    (f) ES staff must keep records of all field checks.

PART 654--SPECIAL RESPONSIBILITIES OF THE EMPLOYMENT SERVICE SYSTEM

0
8. Revise the authority citation for part 654 to read as follows:

    Authority:  29 U.S.C. 49k; 8 U.S.C. 1188(c)(4); 41 Op.A.G. 406 
(1959).


0
9. Revise subpart E of part 654 to read as follows:
Subpart E--Housing for Farmworkers

Purpose and Applicability

Sec.
654.400 Scope and purpose.
654.401 Applicability.
654.402 Variances.
654.403 [Reserved]

Housing Standards

Sec.
654.404 Housing site.
654.405 Water supply.
654.406 Excreta and liquid waste disposal.
654.407 Housing.
654.408 Screening.
654.409 Heating.
654.410 Electricity and lighting.
654.411 Toilets.
654.412 Bathing, laundry, and hand washing.
654.413 Cooking and eating facilities.
654.414 Garbage and other refuse.
654.415 Insect and rodent control.
654.416 Sleeping facilities.
654.417 Fire, safety, and first aid.

Subpart E--Housing for Farmworkers

Purpose and Applicability


Sec.  654.400  Scope and purpose.

    (a) This subpart sets forth the Department's Employment and 
Training Administration (ETA) standards for agricultural housing and 
variances. Local Wagner-Peyser Act Employment Service (ES) offices, as 
part of the State ES agencies and in cooperation with the ES program, 
assist employers in recruiting farmworkers from places outside the area 
of intended employment. The experiences of the ES agencies indicate 
that employees so

[[Page 56350]]

referred have on many occasions been provided with inadequate, unsafe, 
and unsanitary housing conditions. To discourage this practice, it is 
the policy of the Federal-State ES system to deny its intrastate and 
interstate recruitment services to employers until the State ES agency 
has ascertained that the employer's housing meets certain standards.
    (b) To implement this policy, Sec.  653.501 of this chapter 
provides that recruitment services must be denied unless the employer 
has signed an assurance that if the workers are to be housed, a 
preoccupancy inspection has been conducted, and the ES staff has 
ascertained that, with respect to intrastate or interstate clearance 
orders, the employer's housing meets the full set of standards set 
forth at 29 CFR 1910.142 or this subpart, except that mobile range 
housing for sheepherders or goatherders must meet existing Departmental 
guidelines and/or applicable regulations.


Sec.  654.401  Applicability.

    (a) Employers whose housing was completed or under construction 
prior to April 3, 1980, or was under a signed contract for construction 
prior to March 4, 1980, may continue to follow the full set of the 
Department's ETA standards set forth in this subpart.
    (b) The Department will consider agricultural housing which 
complies with ETA transitional standards set forth in this subpart also 
to comply with the Occupational Safety and Health Administration (OSHA) 
temporary labor camp standards at 29 CFR 1910.142.


Sec.  654.402  Variances.

    (a) An employer may apply for a structural variance from a specific 
standard(s) in this subpart by filing a written application for such a 
variance with the local ES office serving the area in which the housing 
is located. This application must:
    (1) Clearly specify the standard(s) from which the variance is 
desired;
    (2) Adequately justify that the variance is necessary to obtain a 
beneficial use of an existing facility, and to prevent a practical 
difficulty or unnecessary hardship; and
    (3) Clearly set forth the specific alternative measures which the 
employer has taken to protect the health and safety of workers and 
adequately show that such alternative measures have achieved the same 
result as the standard(s) from which the employer desires the variance.
    (b) Upon receipt of a written request for a variance under 
paragraph (a) of this section, the local ES office must send the 
request to the State office which, in turn, must forward it to the ETA 
Regional Administrator (RA). The RA must review the matter and, after 
consultation with OSHA, must either grant or deny the request for a 
variance.
    (c) The variance granted by the RA must be in writing, must state 
the particular standard(s) involved, and must state as conditions of 
the variance the specific alternative measures which have been taken to 
protect the health and safety of the workers. The RA must send the 
approved variance to the employer and must send copies to OSHA's 
Regional Administrator, the Regional Administrator of the Wage and Hour 
Division (WHD), and the appropriate State Workforce Agency (SWA) and 
the local ES office. The employer must submit and the local ES office 
must attach copies of the approved variance to each of the employer's 
job orders which is placed into intrastate or interstate clearance.
    (d) If the RA denies the request for a variance, the RA must 
provide written notice stating the reasons for the denial to the 
employer, the appropriate SWA, and the local ES office. The notice also 
must offer the employer an opportunity to request a hearing before a 
Department of Labor Hearing Officer, provided the employer requests 
such a hearing from the RA within 30 calendar days of the date of the 
notice. The request for a hearing must be handled in accordance with 
the complaint procedures set forth at Sec. Sec.  658.424 and 658.425 of 
this chapter.
    (e) The procedures of paragraphs (a) through (d) of this section 
only apply to an employer who has chosen, as evidenced by its written 
request for a variance, to comply with the ETA housing standards at 
Sec. Sec.  654.404 through 654.417.


Sec.  654.403  [Reserved]

Housing Standards


Sec.  654.404  Housing site.

    (a) Housing sites must be well drained and free from depressions in 
which water may stagnate. They must be located where the disposal of 
sewage is provided in a manner which neither creates nor is likely to 
create a nuisance, or a hazard to health.
    (b) Housing must not be subject to, or in proximity to, conditions 
that create or are likely to create offensive odors, flies, noise, 
traffic, or any similar hazards.
    (c) Grounds within the housing site must be free from debris, 
noxious plants (poison ivy, etc.) and uncontrolled weeds or brush.
    (d) The housing site must provide a space for recreation reasonably 
related to the size of the facility and the type of occupancy.


Sec.  654.405  Water supply.

    (a) An adequate and convenient supply of water that meets the 
standards of the State health authority must be provided.
    (b) A cold water tap must be available within 100 feet of each 
individual living unit when water is not provided in the unit. Adequate 
drainage facilities must be provided for overflow and spillage.
    (c) Common drinking cups are not permitted.


Sec.  654.406  Excreta and liquid waste disposal.

    (a) Facilities must be provided and maintained for effective 
disposal of excreta and liquid waste. Raw or treated liquid waste may 
not be discharged or allowed to accumulate on the ground surface.
    (b) Where public sewer systems are available, all facilities for 
disposal of excreta and liquid wastes must be connected thereto.
    (c) Where public sewers are not available, a subsurface septic 
tank-seepage system or other type of liquid waste treatment and 
disposal system, privies or portable toilets must be provided. Any 
requirements of the State health authority must be complied with.


Sec.  654.407  Housing.

    (a) Housing must be structurally sound, in good repair, in a 
sanitary condition and must provide protection to the occupants against 
the elements.
    (b) Housing must have flooring constructed of rigid materials, 
smooth finished, readily cleanable, and so located as to prevent the 
entrance of ground and surface water.
    (c) The following space requirements must be provided:
    (1) For sleeping purposes only in family units and in dormitory 
accommodations using single beds, not less than 50 square feet of floor 
space per occupant;
    (2) For sleeping purposes in dormitory accommodations using double 
bunk beds only, not less than 40 square feet per occupant; and
    (3) For combined cooking, eating, and sleeping purposes not less 
than 60 square feet of floor space per occupant.
    (d) Housing used for families with one or more children over 6 
years of age must have a room or partitioned sleeping area for the 
husband and wife. The partition must be of rigid materials and 
installed so as to provide reasonable privacy.
    (e) Separate sleeping accommodations must be provided for each sex 
or each family.

[[Page 56351]]

    (f) Adequate and separate arrangements for hanging clothing and 
storing personal effects for each person or family must be provided.
    (g) At least one-half of the floor area in each living unit must 
have a minimum ceiling height of 7 feet. No floor space may be counted 
toward minimum requirements where the ceiling height is less than 5 
feet.
    (h) Each habitable room (not including partitioned areas) must have 
at least one window or skylight opening directly to the out-of-doors. 
The minimum total window or skylight area, including windows in doors, 
must equal at least 10 percent of the usable floor area. The total 
openable area must equal at least 45 percent of the minimum window or 
skylight area required, except where comparably adequate ventilation is 
supplied by mechanical or some other method.


Sec.  654.408  Screening.

    (a) All outside openings must be protected with screening of not 
less than 16 mesh.
    (b) All screen doors must be tight fitting, in good repair, and 
equipped with self-closing devices.


Sec.  654.409  Heating.

    (a) All living quarters and service rooms must be provided with 
properly installed, operable heating equipment capable of maintaining a 
temperature of at least 68 degrees Fahrenheit ([deg]F) if during the 
period of normal occupancy the temperature in such quarters falls below 
68 [deg]F.
    (b) Any stoves or other sources of heat utilizing combustible fuel 
must be installed and vented in such a manner as to prevent fire 
hazards and a dangerous concentration of gases. No portable heaters 
other than those operated by electricity may be provided. If a solid or 
liquid fuel stove is used in a room with wooden or other combustible 
flooring, there must be a concrete slab, insulated metal sheet, or 
other fireproof material on the floor under each stove, extending at 
least 18 inches beyond the perimeter of the base of the stove.
    (c) Any wall or ceiling within 18 inches of a solid or liquid fuel 
stove or a stovepipe must be of fireproof material. A vented metal 
collar must be installed around a stovepipe, or vent passing through a 
wall, ceiling, floor, or roof.
    (d) When a heating system has automatic controls, the controls must 
be of the type which cut off the fuel supply upon the failure or 
interruption of the flame or ignition, or whenever a predetermined safe 
temperature or pressure is exceeded.


Sec.  654.410  Electricity and lighting.

    (a) All housing sites must be provided with electric service.
    (b) Each habitable room and all common use rooms, and areas such 
as: laundry rooms, toilets, privies, hallways, stairways, etc., must 
contain adequate ceiling or wall-type light fixtures. At least one 
wall-type electrical convenience outlet must be provided in each 
individual living room.
    (c) Adequate lighting must be provided for the yard area, and 
pathways to common use facilities.
    (d) All wiring and lighting fixtures must be installed and 
maintained in a safe condition.


Sec.  654.411  Toilets.

    (a) Toilets must be constructed, located, and maintained so as to 
prevent any nuisance or public health hazard.
    (b) Water closets or privy seats for each sex must be in the ratio 
of not less than one such unit for each 15 occupants, with a minimum of 
one unit for each sex in common use facilities.
    (c) Urinals, constructed of nonabsorbent materials, may be 
substituted for men's toilet seats on the basis of one urinal or 24 
inches of trough-type urinal for one toilet seat up to a maximum of 
one-third of the required toilet seats.
    (d) Except in individual family units, separate toilet 
accommodations for men and women must be provided. If toilet facilities 
for men and women are in the same building, they must be separated by a 
solid wall from floor to roof or ceiling. Toilets must be distinctly 
marked ``men'' and ``women'' in English and in the native language of 
the persons expected to occupy the housing.
    (e) Where common use toilet facilities are provided, an adequate 
and accessible supply of toilet tissue, with holders, must be 
furnished.
    (f) Common use toilets and privies must be well lighted and 
ventilated and must be clean and sanitary.
    (g) Toilet facilities must be located within 200 feet of each 
living unit.
    (h) Privies may not be located closer than 50 feet from any living 
unit or any facility where food is prepared or served.
    (i) Privy structures and pits must be fly-tight. Privy pits must 
have adequate capacity for the required seats.


Sec.  654.412  Bathing, laundry, and hand washing.

    (a) Bathing and hand washing facilities, supplied with hot and cold 
water under pressure, must be provided for the use of all occupants. 
These facilities must be clean and sanitary and located within 200 feet 
of each living unit.
    (b) There must be a minimum of 1 showerhead per 15 persons. 
Showerheads must be spaced at least 3 feet apart, with a minimum of 9 
square feet of floor space per unit. Adequate, dry dressing space must 
be provided in common use facilities. Shower floors must be constructed 
of nonabsorbent nonskid materials and sloped to properly constructed 
floor drains. Except in individual family units, separate shower 
facilities must be provided each sex. When common use shower facilities 
for both sexes are in the same building they must be separated by a 
solid nonabsorbent wall extending from the floor to ceiling, or roof, 
and must be plainly designated ``men'' or ``women'' in English and in 
the native language of the persons expected to occupy the housing.
    (c) Lavatories or equivalent units must be provided in a ratio of 1 
per 15 persons.
    (d) Laundry facilities, supplied with hot and cold water under 
pressure, must be provided for the use of all occupants. Laundry trays 
or tubs must be provided in the ratio of 1 per 25 persons. Mechanical 
washers may be provided in the ratio of 1 per 50 persons in lieu of 
laundry trays, although a minimum of 1 laundry tray per 100 persons 
must be provided in addition to the mechanical washers.


Sec.  654.413  Cooking and eating facilities.

    (a) When workers or their families are permitted or required to 
cook in their individual unit, a space must be provided and equipped 
for cooking and eating. Such space must be provided with:
    (1) A cookstove or hot plate with a minimum of two burners;
    (2) Adequate food storage shelves and a counter for food 
preparation;
    (3) Provisions for mechanical refrigeration of food at a 
temperature of not more than 45 [deg]F;
    (4) A table and chairs or equivalent seating and eating 
arrangements, all commensurate with the capacity of the unit; and
    (5) Adequate lighting and ventilation.
    (b) When workers or their families are permitted or required to 
cook and eat in a common facility, a room or building separate from the 
sleeping facilities must be provided for cooking and eating. Such room 
or building must be provided with:
    (1) Stoves or hot plates, with a minimum equivalent of 2 burners, 
in a ratio of 1 stove or hot plate to 10

[[Page 56352]]

persons, or 1 stove or hot plate to 2 families;
    (2) Adequate food storage shelves and a counter for food 
preparation;
    (3) Mechanical refrigeration for food at a temperature of not more 
than 45 [deg]F;
    (4) Tables and chairs or equivalent seating adequate for the 
intended use of the facility;
    (5) Adequate sinks with hot and cold water under pressure;
    (6) Adequate lighting and ventilation; and
    (7) Floors must be of nonabsorbent, easily cleaned materials.
    (c) When central mess facilities are provided, the kitchen and mess 
hall must be in proper proportion to the capacity of the housing and 
must be separate from the sleeping quarters. The physical facilities, 
equipment, and operation must be in accordance with provisions of 
applicable State codes.
    (d) Wall surface adjacent to all food preparation and cooking areas 
must be of nonabsorbent, easily cleaned material. In addition, the wall 
surface adjacent to cooking areas must be of fire-resistant material.


Sec.  654.414  Garbage and other refuse.

    (a) Durable, fly-tight, clean containers in good condition of a 
minimum capacity of 20 gallons, must be provided adjacent to each 
housing unit for the storage of garbage and other refuse. Such 
containers must be provided in a minimum ratio of 1 per 15 persons.
    (b) Provisions must be made for collection of refuse at least twice 
a week, or more often if necessary. The disposal of refuse, which 
includes garbage, must be in accordance with State and local law.


Sec.  654.415  Insect and rodent control.

    Housing and facilities must be free of insects, rodents, and other 
vermin.


Sec.  654.416  Sleeping facilities.

    (a) Sleeping facilities must be provided for each person. Such 
facilities must consist of comfortable beds, cots, or bunks, provided 
with clean mattresses.
    (b) Any bedding provided by the housing operator must be clean and 
sanitary.
    (c) Triple deck bunks may not be provided.
    (d) The clear space above the top of the lower mattress of a double 
deck bunk and the bottom of the upper bunk must be a minimum of 27 
inches. The distance from the top of the upper mattress to the ceiling 
must be a minimum of 36 inches.
    (e) Beds used for double occupancy may be provided only in family 
accommodations.


Sec.  654.417  Fire, safety, and first aid.

    (a) All buildings in which people sleep or eat must be constructed 
and maintained in accordance with applicable State or local fire and 
safety laws.
    (b) In family housing and housing units for less than 10 persons, 
of one story construction, two means of escape must be provided. One of 
the two required means of escape may be a readily accessible window 
with an openable space of not less than 24 x 24 inches.
    (c) All sleeping quarters intended for use by 10 or more persons, 
central dining facilities, and common assembly rooms must have at least 
two doors remotely separated so as to provide alternate means of escape 
to the outside or to an interior hall.
    (d) Sleeping quarters and common assembly rooms on the second story 
must have a stairway, and a permanent, affixed exterior ladder or a 
second stairway.
    (e) Sleeping and common assembly rooms located above the second 
story must comply with the State and local fire and building codes 
relative to multiple story dwellings.
    (f) Fire extinguishing equipment must be provided in a readily 
accessible place located not more than 100 feet from each housing unit. 
Such equipment must provide protection equal to a 2\1/2\ gallon stored 
pressure or 5-gallon pump-type water extinguisher.
    (g) First aid facilities must be provided and readily accessible 
for use at all time. Such facilities must be equivalent to the 16 unit 
first aid kit recommended by the American Red Cross, and provided in a 
ratio of 1 per 50 persons.
    (h) No flammable or volatile liquids or materials must be stored in 
or adjacent to rooms used for living purposes, except for those needed 
for current household use.
    (i) Agricultural pesticides and toxic chemicals may not be stored 
in the housing area.

0
10. Revise part 658 to read as follows:

PART 658--ADMINISTRATIVE PROVISIONS GOVERNING THE WAGNER-PEYSER ACT 
EMPLOYMENT SERVICE

Subpart A-D--[Reserved]
Subpart E--Employment Service and Employment-Related Law Complaint 
System (Complaint System)
Sec.
658.400 Purpose and scope of subpart.

Complaints Filed at the Local and State Level

Sec.
658.410 Establishment of local and State complaint systems.
658.411 Action on complaints.
658.417 State hearings.
658.418 Decision of the State hearing official.
658.419 Apparent violations.

When a Complaint Rises to the Federal Level

Sec.
658.420 Responsibilities of the Employment and Training 
Administration regional office.
658.421 Handling of Wagner-Peyser Act Employment Service regulation-
related complaints.
658.422 Handling of employment-related law complaints by the 
Regional Administrator.
658.424 Proceedings before the Office of Administrative Law Judges.
658.425 Decision of Department of Labor Administrative Law Judge.
658.426 Complaints against the United States Employment Service.
Subpart F--Discontinuation of Services to Employers by the Wagner-
Peyser Act Employment Service
Sec.
658.500 Scope and purpose of subpart.
658.501 Basis for discontinuation of services.
658.502 Notification to employers.
658.503 Discontinuation of services.
658.504 Reinstatement of services.
Subpart G--Review and Assessment of State Workforce Agency Compliance 
With Employment Service Regulations
Sec.
658.600 Scope and purpose of subpart.
658.601 State Workforce Agency responsibility.
658.602 Employment and Training Administration National Office 
responsibility.
658.603 Employment and Training Administration Regional Office 
responsibility.
658.604 Assessment and evaluation of program performance data.
658.605 Communication of findings to State agencies.
Subpart H--Federal Application of Remedial Action to State Workforce 
Agencies
Sec.
658.700 Scope and purpose of subpart.
658.701 Statements of policy.
658.702 Initial action by the Regional Administrator.
658.703 Emergency corrective action.
658.704 Remedial actions.
658.705 Decision to decertify.
658.706 Notice of decertification.
658.707 Requests for hearings.
658.708 Hearings.
658.709 Conduct of hearings.
658.710 Decision of the Administrative Law Judge.
658.711 Decision of the Administrative Review Board.

    Authority:  Secs. 189, 503, Pub. L. 113-128, 128 Stat. 1425 
(Jul. 22, 2014); 29 U.S.C. chapter 4B.

[[Page 56353]]

Subpart A-D--[Reserved]

Subpart E--Employment Service and Employment-Related Law Complaint 
System (Complaint System)


Sec.  658.400  Purpose and scope of subpart.

    (a) This subpart sets forth the regulations governing the Complaint 
System for the Wagner-Peyser Act Employment Service (ES) at the State 
and Federal levels. Specifically, the Complaint System handles 
complaints against an employer about the specific job to which the 
applicant was referred through the ES and complaints involving the 
failure to comply with the ES regulations under parts 651, 652, 653, 
and 654 of this chapter and this part. As noted in Sec.  658.411(d)(6), 
this subpart only covers ES-related complaints made within 2 years of 
the alleged violation.
    (b) Any complaints alleging violations under the Unemployment 
Insurance program, under Workforce Innovation and Opportunity Act 
(WIOA) title I programs, or complaints by veterans alleging employer 
violations of the mandatory listing requirements under 38 U.S.C. 4212 
are not covered by this subpart and must be referred to the appropriate 
administering agency which would follow the procedures set forth in the 
respective regulations.
    (c) The Complaint System also accepts, refers, and, under certain 
circumstances, tracks complaints involving employment-related laws as 
defined in Sec.  651.10 of this chapter.
    (d) A complainant may designate an individual to act as his/her 
representative.

Complaints Filed at the Local and State Level


Sec.  658.410  Establishment of local and State complaint systems.

    (a) Each State Workforce Agency (SWA) must establish and maintain a 
Complaint System pursuant to this subpart.
    (b) The State Administrator must have overall responsibility for 
the operation of the Complaint System. At the ES office level the 
manager must be responsible for the operation of the Complaint System.
    (c) SWAs must ensure centralized control procedures are established 
for the processing of complaints. The manager of the ES office and the 
SWA Administrator must ensure a central complaint log is maintained, 
listing all complaints taken by the ES office or the SWA, and 
specifying for each complaint:
    (1) The name of the complainant;
    (2) The name of the respondent (employer or State agency);
    (3) The date the complaint is filed;
    (4) Whether the complaint is by or on behalf of a migrant and 
seasonal farmworker (MSFW);
    (5) Whether the complaint concerns an employment-related law or the 
ES regulations; and
    (6) The action taken and whether the complaint has been resolved.
    (d) State agencies must ensure information pertaining to the use of 
the Complaint System is publicized, which must include, but is not 
limited to, the prominent display of an Employment and Training 
Administration (ETA)-approved Complaint System poster in each one-stop 
center.
    (e) Each one-stop center must ensure there is appropriate staff 
available during regular office hours to take complaints.
    (f) Complaints may be accepted in any one-stop center, or by a 
State Workforce Agency, or elsewhere by an outreach worker.
    (g) All complaints filed through the local ES office must be 
handled by a trained Complaint System representative.
    (h) All complaints received by a SWA must be assigned to a State 
agency official designated by the State Administrator, provided that 
the State agency official designated to handle MSFW complaints must be 
the State Monitor Advocate (SMA).
    (i) State agencies must ensure any action taken by the Complaint 
System representative, including referral on a complaint from an MSFW 
is fully documented containing all relevant information, including a 
notation of the type of each complaint pursuant to Department guidance, 
a copy of the original complaint form, a copy of any ES-related 
reports, any relevant correspondence, a list of actions taken, a record 
of pertinent telephone calls and all correspondence relating thereto.
    (j) Within 1 month after the end of the calendar quarter, the ES 
office manager must transmit an electronic copy of the quarterly 
Complaint System log described in paragraph (c) of this section to the 
SMA. These logs must be made available to the Department upon request.
    (k) The appropriate SWA or ES office representative handling a 
complaint must offer to assist the complainant through the provision of 
appropriate services.
    (l) The State Administrator must establish a referral system for 
cases where a complaint is filed alleging a violation that occurred in 
the same State but through a different ES office.
    (m) Follow-up on unresolved complaints. When a complaint is 
submitted or referred to a SWA, the Complaint System representative 
(where the complainant is an MSFW, the Complaint System representative 
will be the SMA), must follow-up monthly regarding MSFW complaints, and 
must inform the complainant of the status of the complaint. No follow-
up with the complainant is required for non-MSFW complaints.
    (n) When a complainant is an English Language Learner (ELL), all 
written correspondence with the complainant under part 658, subpart E 
must include a translation into the complainant's native language.
    (o) A complainant may designate an individual to act as his/her 
representative throughout the filing and processing of a complaint.


Sec.  658.411  Action on complaints.

    (a) Filing complaints. (1) Whenever an individual indicates an 
interest in filing a complaint under this subpart with an ES office or 
SWA representative, or an outreach worker, the individual receiving the 
complaint must offer to explain the operation of the Complaint System 
and must offer to take the complaint in writing.
    (2) During the initial discussion with the complainant, the staff 
taking the complaint must:
    (i) Make every effort to obtain all the information he/she 
perceives to be necessary to investigate the complaint;
    (ii) Request that the complainant indicate all of the physical 
addresses, email, and telephone numbers through which he/she might be 
contacted during the investigation of the complaint; and
    (iii) Request that the complainant contact the Complaint System 
representative before leaving the area if possible, and explain the 
need to maintain contact during the investigation.
    (3) The staff must ensure the complainant (or his/her 
representative) submits the complaint on the Complaint/Referral Form or 
another complaint form prescribed or approved by the Department or 
submits complaint information which satisfies paragraph (a)(4) of this 
section. The Complaint/Referral Form must be used for all complaints, 
including complaints about unlawful discrimination, except as provided 
in paragraph (a)(4) of this section. The staff must offer to assist the 
complainant in filling out the form and submitting all necessary 
information, and must do so if the complainant desires such assistance. 
If the complainant also represents several other complainants, all such

[[Page 56354]]

complainants must be named. The complainant, or his/her representative, 
must sign the completed form in writing or electronically. The identity 
of the complainant(s) and any persons who furnish information relating 
to, or assisting in, an investigation of a complaint must be kept 
confidential to the maximum extent possible, consistent with applicable 
law and a fair determination of the complaint. A copy of the completed 
complaint submission must be given to the complainant(s), and the 
complaint form must be given to the appropriate Complaint System 
representative described in Sec.  658.410(g).
    (4) Any complaint in a reasonable form (letter or email) which is 
signed by the complainant, or his/her representative, and includes 
sufficient information to initiate an investigation must be treated as 
if it were a properly completed Complaint/Referral Form filed in 
person. A letter (via hard copy or email) confirming the complaint was 
received must be sent to the complainant and the document must be sent 
to the appropriate Complaint System representative. The Complaint 
System representative must request additional information from the 
complainant if the complainant has not provided sufficient information 
to investigate the matter expeditiously.
    (b) Complaints regarding an employment-related law. (1) When a 
complaint is filed regarding an employment-related law with a ES office 
or a SWA the office must determine if the complainant is an MSFW.
    (i) If the complainant is a non-MSFW, the office must immediately 
refer the complainant to the appropriate enforcement agency, another 
public agency, a legal aid organization, and/or a consumer advocate 
organization, as appropriate, for assistance. Upon completing the 
referral the local or State representative is not required to follow-up 
with the complainant.
    (ii) If the complainant is a MSFW, the ES office or SWA Complaint 
System representative must:
    (A) Take from the MSFW or his/her representative, in writing (hard 
copy or electronic), the complaint(s) describing the alleged 
violation(s) of the employment-related law(s); and
    (B) Attempt to resolve the issue informally at the local level, 
except in cases where the complaint was submitted to the SWA and the 
SMA determines that he/she must take immediate action and except in 
cases where informal resolution at the local level would be detrimental 
to the complainant(s). In cases where informal resolution at the local 
level would be detrimental to the complainant(s), the Complaint System 
Representative or SMA (depending on where the complaint was filed) must 
immediately refer the complaint to the appropriate enforcement agency. 
Concurrently, the Complaint System representative must offer to refer 
the MSFW to other employment services should the MSFW be interested.
    (C) If the issue is not resolved within 5 business days, the 
Complaint System representative must refer the complaint to the 
appropriate enforcement agency (or another public agency, a legal aid 
organization, or a consumer advocate organization, as appropriate) for 
further assistance.
    (D) If the ES office or SWA Complaint System representative 
determines that the complaint must be referred to a State or Federal 
agency, he/she must refer the complaint to the SMA who must immediately 
refer the complaint to the appropriate enforcement agency for prompt 
action.
    (E) If the complaint was referred to the SMA under paragraph 
(b)(1)(ii)(D) of this section, the representative must provide the 
SMA's contact information to the complainant. The SMA must notify the 
complainant of the enforcement agency to which the complaint was 
referred.
    (2) If an enforcement agency makes a final determination that the 
employer violated an employment-related law and the complaint is 
connected to a job order, the SWA must initiate procedures for 
discontinuation of services immediately in accordance with subpart F of 
this part. If this occurs, the SWA must notify the complainant and the 
employer of this action.
    (c) Complaints alleging a violation of rights under the Equal 
Employment Opportunity Commission (EEOC) regulations or enforced by the 
Department of Labor's Civil Rights Center (CRC). (1) All complaints 
received by a ES office or a SWA alleging unlawful discrimination, as 
well as reprisal for protected activity, in violation of EEOC 
regulations, must be logged and immediately referred to either a local 
Equal Opportunity (EO) representative, the State EO representative, or 
the EEOC. The Complaint System representative must notify the 
complainant of the referral in writing.
    (2) Any complaints received either at the local and State level or 
at the ETA regional office, that allege violations of civil rights laws 
and regulations such as those under title VI of the Civil Rights Act or 
sec. 188 of WIOA, including for beneficiaries (as defined in 29 CFR 
38.4) only, on the basis of citizenship status or participant status, 
as well as reprisal for protected activity, must immediately be logged 
and directed or forwarded to the recipient's Equal Opportunity Officer 
or the CRC.
    (d) Complaints regarding the ES regulations (ES complaints). (1) 
When an ES complaint is filed with a ES office or a SWA the following 
procedures apply:
    (i) When an ES complaint is filed against an employer, the proper 
office to handle the complaint is the ES office serving the area in 
which the employer is located.
    (ii) When a complaint is against an employer in another State or 
against another SWA:
    (A) The ES office or SWA receiving the complaint must send, after 
ensuring that the Complaint/Referral Form is adequately completed, a 
copy of the Complaint/Referral Form and copies of any relevant 
documents to the SWA in the other State. Copies of the referral letter 
must be sent to the complainant, and copies of the complaint and 
referral letter must be sent to the ETA Regional Office(s) with 
jurisdiction over the transferring and receiving State agencies. All 
such copies must be sent via hard copy or electronic mail.
    (B) The SWA receiving the complaint must handle the complaint as if 
it had been initially filed with that SWA.
    (C) The ETA regional office with jurisdiction over the receiving 
SWA must follow-up with it to ensure the complaint is handled in 
accordance with these regulations.
    (D) If the complaint is against more than one SWA, the complaint 
must so clearly state. Additionally, the complaints must be processed 
as separate complaints and must be handled according to procedures in 
this paragraph (d).
    (iii) When an ES complaint is filed against a ES office, the proper 
office to handle the complaint is the ES office serving the area in 
which the alleged violation occurred.
    (iv) When an ES complaint is filed against more than one ES offices 
and is in regard to an alleged agency-wide violation the SWA 
representative or his/her designee must process the complaint.
    (v) When a complaint is filed alleging a violation that occurred in 
the same State but through a different ES office, the ES office where 
the complaint is filed must ensure that the Complaint/Referral Form is 
adequately completed and send the form to the appropriate local ES 
office for tracking, further referral if necessary, and follow-up. A 
copy of the referral letter must be sent

[[Page 56355]]

to the complainant via hard copy or electronic mail.
    (2)(i) If a complaint regarding an alleged violation of the ES 
regulations is filed in a ES office by either a non-MSFW or MSFW, or 
their representative(s) (or if all necessary information has been 
submitted to the office pursuant to paragraph (a)(4) of this section), 
the appropriate ES office Complaint System representative must 
investigate and attempt to resolve the complaint immediately upon 
receipt.
    (ii) If resolution has not been achieved to the satisfaction of the 
complainant within 15 working days after receipt of the complaint, or 5 
working days with respect to complaints filed by or on behalf of MSFWs, 
(or after all necessary information has been submitted to the ES office 
pursuant to paragraph (a)(4) of this section), the Complaint System 
representative must send the complaint to the SWA for resolution or 
further action.
    (iii) The ES office must notify the complainant and the respondent, 
in writing (via hard copy or electronic mail), of the determination 
(pursuant to paragraph (d)(5) of this section) of its investigation 
under paragraph (d)(2)(i) of this section, or of the referral to the 
SWA (if referred).
    (3) When a non-MSFW or his/her representative files a complaint 
regarding the ES regulations with a SWA, or when a non-MSFW complaint 
is referred from a ES office the following procedures apply:
    (i) If the complaint is not transferred to an enforcement agency 
under paragraph (b)(1)(i) of this section the Complaint System 
representative must investigate and attempt to resolve the complaint 
immediately upon receipt.
    (ii) If resolution at the SWA level has not been accomplished 
within 30 working days after the complaint was received by the SWA (or 
after all necessary information has been submitted to the SWA pursuant 
to paragraph (a)(4) of this section), whether the complaint was 
received directly or from a ES office pursuant to paragraph (d)(2)(ii) 
of this section, the SWA must make a written determination regarding 
the complaint and must send electronic copies to the complainant and 
the respondent. The determination must follow the procedures set forth 
in paragraph (d)(5) of this section.
    (4)(i) When a MSFW or his/her representative files a complaint 
regarding the ES regulations directly with a SWA, or when a MSFW 
complaint is referred from a ES office, the SMA must investigate and 
attempt to resolve the complaint immediately upon receipt and may, if 
necessary, conduct a further investigation.
    (ii) If resolution at the SWA level has not been accomplished 
within 20 business days after the complaint was received by the SWA (or 
after all necessary information has been submitted to the SWA pursuant 
to paragraph (a)(4) of this section), the SMA must make a written 
determination regarding the complaint and must send electronic copies 
to the complainant and the respondent. The determination must follow 
the procedures set forth in paragraph (d)(5) of this section.
    (5)(i) All written determinations by ES or SWA officials on 
complaints under the ES regulations must be sent by certified mail (or 
another legally viable method) and a copy of the determination may be 
sent via electronic mail. The determination must include all of the 
following:
    (A) The results of any SWA investigation;
    (B) The conclusions reached on the allegations of the complaint;
    (C) If a resolution was not reached, an explanation of why the 
complaint was not resolved; and
    (D) If the complaint is against the SWA, an offer to the 
complainant of the opportunity to request, in writing, a hearing within 
20 business days after the certified date of receipt of the 
notification.
    (ii) If the SWA determines that the employer has not violated the 
ES regulations, the SWA must offer to the complainant the opportunity 
to request a hearing within 20 working days after the certified date of 
receipt of the notification.
    (iii) If the SWA, within 20 business days from the certified date 
of receipt of the notification provided for in paragraph (d)(5) of this 
section, receives a written request (via hard copy or electronic mail) 
for a hearing, the SWA must refer the complaint to a State hearing 
official for hearing. The SWA must, in writing (via hard copy or 
electronic mail), notify the respective parties to whom the 
determination was sent that:
    (A) The parties will be notified of the date, time, and place of 
the hearing;
    (B) The parties may be represented at the hearing by an attorney or 
other representative;
    (C) The parties may bring witnesses and/or documentary evidence to 
the hearing;
    (D) The parties may cross-examine opposing witnesses at the 
hearing;
    (E) The decision on the complaint will be based on the evidence 
presented at the hearing;
    (F) The State hearing official may reschedule the hearing at the 
request of a party or its representative; and
    (G) With the consent of the SWA's representative and of the State 
hearing official, the party who requested the hearing may withdraw the 
request for hearing in writing before the hearing.
    (iv) If the State agency makes a final determination that the 
employer who has or is currently using the ES has violated the ES 
regulations, the determination, pursuant to paragraph (d)(5) of this 
section, must state that the State will initiate procedures for 
discontinuation of services to the employer in accordance with subpart 
F of this part.
    (6) A complaint regarding the ES regulations must be handled to 
resolution by these regulations only if it is made within 2 years of 
the alleged occurrence.
    (e) Resolution of complaints. A complaint is considered resolved 
when:
    (1) The complainant indicates satisfaction with the outcome via 
written correspondence;
    (2) The complainant chooses not to elevate the complaint to the 
next level of review;
    (3) The complainant or the complainant's authorized representative 
fails to respond to a request for information under paragraph (a)(4) of 
this section within 20 working days or, in cases where the complainant 
is an MSFW, 40 working days of a written request by the appropriate ES 
office or State agency;
    (4) The complainant exhausts all available options for review; or
    (5) A final determination has been made by the enforcement agency 
to which the complaint was referred.
    (f) Reopening of case after resolution. If the complainant or the 
complainant's authorized representative fails to respond pursuant to 
paragraph (e)(3) of this section, the complainant or the complainant's 
authorized representative may reopen the case within 1 year after the 
SWA has closed the case.


Sec.  658.417  State hearings.

    (a) The hearing described in Sec.  658.411(d)(5) must be held by 
State hearing officials. A State hearing official may be any State 
official authorized to hold hearings under State law. Examples of 
hearing officials are referees in State unemployment compensation 
hearings and officials of the State agency authorized to preside at 
State administrative hearings.
    (b) The State hearing official may decide to conduct hearings on 
more than one complaint concurrently if he/she determines that the 
issues are

[[Page 56356]]

related or that the complaints will be handled more expeditiously if 
conducted together.
    (c) The State hearing official, upon the referral of a case for a 
hearing, must:
    (1) Notify all involved parties of the date, time, and place of the 
hearing; and
    (2) Reschedule the hearing, as appropriate.
    (d) In conducting a hearing, the State hearing official must:
    (1) Regulate the course of the hearing;
    (2) Issue subpoenas if necessary, provided the official has the 
authority to do so under State law;
    (3) Ensure that all relevant issues are considered;
    (4) Rule on the introduction of evidence and testimony; and
    (5) Take all actions necessary to ensure an orderly proceeding.
    (e) All testimony at the hearing must be recorded and may be 
transcribed when appropriate.
    (f) The parties must be afforded the opportunity to present, 
examine, and cross-examine witnesses.
    (g) The State hearing official may elicit testimony from witnesses, 
but may not act as advocate for any party.
    (h) The State hearing official must receive and include in the 
record, documentary evidence offered by any party and accepted at the 
hearing. Copies thereof must be made available by the party submitting 
the document to other parties to the hearing upon request.
    (i) Federal and State rules of evidence do not apply to hearings 
conducted pursuant to this section; however rules or principles 
designed to assure production of the most credible evidence available 
and to subject testimony to test by cross-examination, must be applied 
where reasonably necessary by the State hearing official. The State 
hearing official may exclude irrelevant, immaterial, or unduly 
repetitious evidence.
    (j) The case record, or any portion thereof, must be available for 
inspection and copying by any party at, prior to, or subsequent to the 
hearing upon request. Special procedures may be used for disclosure of 
medical and psychological records such as disclosure to a physician 
designated by the individual.
    (k) The State hearing official must, if feasible, resolve the 
dispute at any time prior to the conclusion of the hearing.
    (l) At the State hearing official's discretion, other appropriate 
individuals, organizations, or associations may be permitted to 
participate in the hearing as amicus curiae (friends of the court) with 
respect to any legal or factual issues relevant to the complaint. Any 
documents submitted by the amicus curiae must be included in the 
record.
    (m) If the parties to the hearing are located in more than one 
State or are located in the same State but access to the hearing 
location is extremely inconvenient for one or more parties as 
determined by the State hearing official, the hearing official must:
    (1) Whenever possible, hold a single hearing at a location 
convenient to all parties or their representatives wishing to appear 
and present evidence, with all such parties and/or their 
representatives present.
    (2) If a hearing location cannot be established by the State 
hearing official under paragraph (m)(1) of this section, the State 
hearing official may conduct, with the consent of the parties, the 
hearing by a telephone conference call from a State agency office. If 
the hearing is conducted via telephone conference call the parties and 
their representatives must have the option to participate in person or 
via telephone.
    (3) Where the State agency is not able, for any reason, to conduct 
a telephonic hearing under paragraph (m)(2) of this section, the State 
agencies in the States where the parties are located must take evidence 
and hold the hearing in the same manner as used for appealed interstate 
unemployment claims in those States, to the extent that such procedures 
are consistent with this section.


Sec.  658.418  Decision of the State hearing official.

    (a) The State hearing official may:
    (1) Rule that it lacks jurisdiction over the case;
    (2) Rule that the complaint has been withdrawn properly in writing;
    (3) Rule that reasonable cause exists to believe that the request 
has been abandoned; or
    (4) Render such other rulings as are appropriate to resolve the 
issues in question.
    However, the State hearing official does not have authority or 
jurisdiction to consider the validity or constitutionality of the ES 
regulations or of the Federal statutes under which they are 
promulgated.
    (b) Based on the entire record, including the investigations and 
determinations of the ES offices and State agencies and any evidence 
provided at the hearing, the State hearing official must prepare a 
written decision. The State hearing official must send a copy of the 
decision stating the findings of fact and conclusions of law, and the 
reasons therefor to the complainant, the respondent, entities serving 
as amicus capacity (if any), the State agency, the Regional 
Administrator, and the Solicitor of Labor, Attn: Associate Solicitor 
for Employment and Training Legal Services, Department of Labor, Room 
N2101, 200 Constitution Avenue NW., Washington, DC 20210. The 
notification to the complainant and respondent must be sent by 
certified mail or by other legally viable means.
    (c) All decisions of a State hearing official must be accompanied 
by a written notice informing the parties (not including the Regional 
Administrator, the Solicitor of Labor, or entities serving in an amicus 
capacity) that they may appeal the judge's decision within 20 working 
days of the certified date of receipt of the decision, and they may 
file an appeal in writing with the Regional Administrator. The notice 
must give the address of the Regional Administrator.


Sec.  658.419  Apparent violations.

    (a) If a SWA, ES office employee, or outreach worker, observes, has 
reason to believe, or is in receipt of information regarding a 
suspected violation of employment-related laws or ES regulations by an 
employer, except as provided at Sec.  653.503 of this chapter (field 
checks) or Sec.  658.411 (complaints), the employee must document the 
suspected violation and refer this information to the ES office 
manager.
    (b) If the employer has filed a job order with the ES office within 
the past 12 months, the ES office must attempt informal resolution 
provided at Sec.  658.411.
    (c) If the employer has not filed a job order with the ES office 
during the past 12 months, the suspected violation of an employment-
related law must be referred to the appropriate enforcement agency in 
writing.

When a Complaint Rises to the Federal Level


Sec.  658.420  Responsibilities of the Employment and Training 
Administration regional office.

    (a) Each Regional Administrator must establish and maintain a 
Complaint System within each ETA regional office.
    (b) The Regional Administrator must designate Department of Labor 
officials to handle ES regulation-related complaints as follows:
    (1) Any complaints received either at the local and State level or 
at the ETA regional office, that allege violations of civil rights laws 
and regulations such as those under Title VI of the Civil Rights Act or 
sec. 188 of WIOA, including for beneficiaries (as defined in 29 CFR 
38.4) only, on the basis of citizenship status or participant status, 
as well as reprisal

[[Page 56357]]

for protected activity, must immediately be logged and directed or 
forwarded to the recipient's Equal Opportunity Officer or the CRC.
    (2) All complaints alleging discrimination on the basis of genetic 
information must be assigned to a Regional Director for Equal 
Opportunity and Special Review and, where appropriate, handled in 
accordance with procedures Coordinated Enforcement at 29 CFR part 31.
    (3) All complaints other than those described in paragraphs (b)(1) 
and (2) of this section, must be assigned to a regional office official 
designated by the Regional Administrator, provided that the regional 
office official designated to handle MSFW complaints must be the 
Regional Monitor Advocate (RMA).
    (c) Except for those complaints under paragraphs (b)(1) and (2) of 
this section, the Regional Administrator must designate Department of 
Labor officials to handle employment-related law complaints in 
accordance with Sec.  658.411, provided that the regional official 
designated to handle MSFW employment-related law complaints must be the 
RMA. The RMA must follow up monthly on all complaints filed by MSFWs 
including complaints under paragraphs (b)(1) and (2) of this section.
    (d) The Regional Administrator must ensure that all complaints and 
all related documents and correspondence are logged with a notation of 
the nature of each item.


Sec.  658.421  Handling of Wagner-Peyser Act Employment Service 
regulation-related complaints.

    (a)(1) Except as provided below in paragraph (a)(2) of this 
section, no complaint alleging a violation of the ES regulations may be 
handled at the ETA regional office level until the complainant has 
exhausted the SWA administrative remedies set forth at Sec. Sec.  
658.411 through 658.418. If the Regional Administrator determines that 
a complaint has been prematurely filed with an ETA regional office, the 
Regional Administrator must inform the complainant within 10 working 
days in writing that the complainant must first exhaust those remedies 
before the complaint may be filed in the regional office. A copy of 
this letter and a copy of the complaint also must be sent to the State 
Administrator.
    (2) If a complaint is submitted directly to the Regional 
Administrator and if he/she determines that the nature and scope of a 
complaint described in paragraph (a) of this section is such that the 
time required to exhaust the administrative procedures at the SWA level 
would adversely affect a significant number of individuals, the RA must 
accept the complaint and take the following action:
    (i) If the complaint is filed against an employer, the regional 
office must handle the complaint in a manner consistent with the 
requirements imposed upon State agencies by Sec. Sec.  658.411 and 
658.418. A hearing must be offered to the parties once the Regional 
Administrator makes a determination on the complaint.
    (ii) If the complaint is filed against a SWA, the regional office 
must follow procedures established at Sec.  658.411(d).
    (b) The ETA regional office is responsible for handling appeals of 
determinations made on complaints at the SWA level. An appeal includes 
any letter or other writing which the Regional Administrator reasonably 
understands to be requesting review if it is received by the regional 
office and signed by a party to the complaint.
    (c)(1) Once the Regional Administrator receives a timely appeal, 
he/she must request the complete SWA file, including the original 
Complaint/Referral Form from the appropriate SWA.
    (2) The Regional Administrator must review the file in the case and 
must determine within 10 business days whether any further 
investigation or action is appropriate; however if the Regional 
Administrator determines that he/she needs to request legal advice from 
the Office of the Solicitor at the U.S. Department of Labor then the 
Regional Administrator is allowed 20 business days to make this 
determination.
    (d) If the Regional Administrator determines that no further action 
is warranted, the Regional Administrator will send his/her 
determination in writing to the appellant within 5 days of the 
determination, with a notification that the appellant may request a 
hearing before a Department of Labor Administrative Law Judge (ALJ) by 
filing a hearing request in writing with the Regional Administrator 
within 20 working days of the appellant's receipt of the notification.
    (e) If the Regional Administrator determines that further 
investigation or other action is warranted, the Regional Administrator 
must undertake such an investigation or other action necessary to 
resolve the complaint.
    (f) After taking the actions described in paragraph (e) of this 
section, the Regional Administrator must either affirm, reverse, or 
modify the decision of the State hearing official, and must notify each 
party to the State hearing official's hearing or to whom the State 
office determination was sent, notice of the determination and notify 
the parties that they may appeal the determination to the Department of 
Labor's Office of Administrative Law Judges within 20 business days of 
the party's receipt of the notice.
    (g) If the Regional Administrator finds reason to believe that a 
SWA or one of its ES offices has violated ES regulations, the Regional 
Administrator must follow the procedures set forth at subpart H of this 
part.


Sec.  658.422  Handling of employment-related law complaints by the 
Regional Administrator.

    (a) This section applies to all complaints submitted directly to 
the Regional Administrator or his/her representative.
    (b) Each complaint filed by an MSFW alleging violation(s) of 
employment-related laws must be taken in writing, logged, and referred 
to the appropriate enforcement agency for prompt action.
    (c) Each complaint submitted by a non-MSFW alleging violation(s) of 
employment-related laws must be logged and referred to the appropriate 
enforcement agency for prompt action.
    (d) Upon referring the complaint in accordance with paragraphs (b) 
and (c) of this section, the regional official must inform the 
complainant of the enforcement agency (and individual, if known) to 
which the complaint was referred.


Sec.  658.424  Proceedings before the Office of Administrative Law 
Judges.

    (a) If a party requests a hearing pursuant to Sec.  658.421 or 
Sec.  658.707, the Regional Administrator must:
    (1) Send the party requesting the hearing, and all other parties to 
the prior State level hearing, a written notice (hard copy or 
electronic) that the matter will be referred to the Office of 
Administrative Law Judges for a hearing;
    (2) Compile four hearing files (hard copy or electronic) containing 
copies of all documents relevant to the case, indexed and compiled 
chronologically; and
    (3) Send simultaneously one hearing file to the Department of Labor 
Chief Administrative Law Judge, 800 K Street NW., Suite 400N, 
Washington, DC 20001-8002, one hearing file to the OWI Administrator, 
and one hearing file to the Solicitor of Labor, Attn: Associate 
Solicitor for Employment and Training Legal Services, and retain one 
hearing file.
    (b) Proceedings under this section are governed by the rules of 
practice and procedure at subpart A of 29 CFR part

[[Page 56358]]

18, Rule of Practice and Procedure for Administrative Hearings before 
the Office of Administrative Law Judges, except where otherwise 
specified in this section or at Sec.  658.425.
    (c) Upon receipt of a hearing file, the ALJ designated to the case 
must notify the party requesting the hearing, all parties to the prior 
State hearing official hearing (if any), the State agency, the Regional 
Administrator, the OWI Administrator, and the Solicitor of Labor of the 
receipt of the case. After conferring all the parties, the ALJ may 
decide to make a determination on the record in lieu of scheduling a 
hearing.
    (d) The ALJ may decide to consolidate cases and conduct hearings on 
more than one complaint concurrently if he/she determines that the 
issues are related or that the complaints will be handled more 
expeditiously.
    (e) If the parties to the hearing are located in more than one 
State or are located in the same State but access to the hearing 
location is extremely inconvenient for one or more parties as 
determined by the ALJ, the ALJ must:
    (1) Whenever possible, hold a single hearing, at a location 
convenient to all parties or their representatives wishing to appear 
and present evidence, with all such parties and/or their 
representatives present.
    (2) If a hearing location cannot be established by the ALJ at a 
location pursuant to paragraph (e)(1) of this section, the ALJ may 
conduct, with the consent of the parties, the hearing by a telephone 
conference call. If the hearing is conducted via telephone conference 
call the parties and their representatives must have the option to 
participate in person or via telephone.
    (3) Where the ALJ is unable, for any reason, to conduct a 
telephonic hearing under paragraph (e)(2) of this section, the ALJ must 
confer with the parties on how to proceed.
    (f) Upon deciding to hold a hearing, the ALJ must notify all 
involved parties of the date, time, and place of the hearing.
    (g) The parties to the hearing must be afforded the opportunity to 
present, examine, and cross-examine witnesses. The ALJ may elicit 
testimony from witnesses, but may not act as advocate for any party. 
The ALJ has the authority to issue subpoenas.
    (h) The ALJ must receive, and make part of the record, documentary 
evidence offered by any party and accepted at the hearing, provided 
that copies of such evidence is provided to the other parties to the 
proceeding prior to the hearing at the time required by the ALJ.
    (i) Technical rules of evidence do not apply to hearings conducted 
pursuant to this part, but rules or principles designed to assure 
production of the most credible evidence available and to subject 
testimony to test by cross-examination must be applied where reasonably 
necessary by the ALJ conducting the hearing. The ALJ may exclude 
irrelevant, immaterial, or unduly repetitious evidence.
    (j) The case record, or any portion thereof, must be available for 
inspection and copying by any party to the hearing at, prior to, or 
subsequent to the hearing upon request. Special procedures may be used 
for disclosure of medical and psychological records such as disclosure 
to a physician designated by the individual concerned.
    (k) The ALJ must, if feasible, encourage resolution of the dispute 
by conciliation at any time prior to the conclusion of the hearing.


Sec.  658.425  Decision of Department of Labor Administrative Law 
Judge.

    (a) The ALJ may:
    (1) Rule that he/she lacks jurisdiction over the case;
    (2) Rule that the appeal has been withdrawn, with the written 
consent of all parties;
    (3) Rule that reasonable cause exists to believe that the appeal 
has been abandoned; or
    (4) Render such other rulings as are appropriate to the issues in 
question. However, the ALJ does not have jurisdiction to consider the 
validity or constitutionality of the ES regulations or of the Federal 
statutes under which they are promulgated.
    (b) Based on the entire record, including any legal briefs, the 
record before the State agency, the investigation (if any) and 
determination of the Regional Administrator, and evidence provided at 
the hearing, the ALJ must prepare a written decision. The ALJ must send 
a copy of the decision stating the findings of fact and conclusions of 
law to the parties to the hearing, including the State agency, the 
Regional Administrator, the OWI Administrator, and the Solicitor, and 
to entities filing amicus briefs (if any).
    (c) The decision of the ALJ serves as the final decision of the 
Secretary.


Sec.  658.426  Complaints against the United States Employment Service.

    (a) Complaints alleging that an ETA regional office or the National 
Office has violated ES regulations must be mailed to the Assistant 
Secretary for Employment and Training, U.S. Department of Labor, 
Washington, DC 20210. Such complaints must include:
    (1) A specific allegation of the violation;
    (2) The date of the incident;
    (3) Location of the incident;
    (4) The individual alleged to have committed the violation; and
    (5) Any other relevant information available to the complainant.
    (b) The Assistant Secretary or the Regional Administrator as 
designated must make a determination and respond to the complainant 
after investigation of the complaint.

Subpart F--Discontinuation of Services to Employers by the Wagner-
Peyser Act Employment Service


Sec.  658.500  Scope and purpose of subpart.

    This subpart contains the regulations governing the discontinuation 
of services provided pursuant part 653 of this chapter to employers by 
the ETA, including SWAs.


Sec.  658.501  Basis for discontinuation of services.

    (a) The SWA must initiate procedures for discontinuation of 
services to employers who:
    (1) Submit and refuse to alter or withdraw job orders containing 
specifications which are contrary to employment-related laws;
    (2) Submit job orders and refuse to provide assurances, in 
accordance with the Agricultural Recruitment System for U.S. Workers at 
part 653, subpart F, of this chapter, that the jobs offered are in 
compliance with employment-related laws, or to withdraw such job 
orders;
    (3) Are found through field checks or otherwise to have either 
misrepresented the terms or conditions of employment specified on job 
orders or failed to comply fully with assurances made on job orders;
    (4) Are found by a final determination by an appropriate 
enforcement agency to have violated any employment-related laws and 
notification of this final determination has been provided to the 
Department or the SWA by that enforcement agency;
    (5) Are found to have violated ES regulations pursuant to Sec.  
658.411;
    (6) Refuse to accept qualified workers referred through the 
clearance system;
    (7) Refuse to cooperate in the conduct of field checks conducted 
pursuant to Sec.  653.503 of this chapter; or
    (8) Repeatedly cause the initiation of the procedures for 
discontinuation of services pursuant to paragraphs (a)(1) through (7) 
of this section.
    (b) The SWA may discontinue services immediately if, in the 
judgment of the State Administrator, exhaustion of the administrative 
procedures set

[[Page 56359]]

forth in this subpart in paragraphs (a)(1) through (7) of this section 
would cause substantial harm to a significant number of workers. In 
such instances, procedures at Sec. Sec.  658.503 and 658.504 must be 
followed.
    (c) If it comes to the attention of a ES office or SWA that an 
employer participating in the ES may not have complied with the terms 
of its temporary labor certification, under, for example the H-2A and 
H-2B visa programs, State agencies must engage in the procedures for 
discontinuation of services to employers pursuant to paragraphs (a)(1) 
through (8) of this section and simultaneously notify the Chicago 
National Processing Center (CNPC) of the alleged non-compliance for 
investigation and consideration of ineligibility pursuant to Sec.  
655.184 or Sec.  655.73 of this chapter respectively for subsequent 
temporary labor certification.


Sec.  658.502  Notification to employers.

    (a) The SWA must notify the employer in writing that it intends to 
discontinue the provision of employment services pursuant to this part 
and parts 652, 653, and 654 of this chapter, and the reason therefore.
    (1) Where the decision is based on submittal and refusal to alter 
or to withdraw job orders containing specifications contrary to 
employment-related laws, the SWA must specify the date the order was 
submitted, the job order involved, the specifications contrary to 
employment-related laws and the laws involved. The SWA must notify the 
employer in writing that all employment services will be terminated in 
20 working days unless the employer within that time:
    (i) Provides adequate evidence that the specifications are not 
contrary to employment-related laws; or
    (ii) Withdraws the specifications and resubmits the job order in 
compliance with all employment-related laws; or
    (iii) If the job is no longer available, makes assurances that all 
future job orders submitted will be in compliance with all employment-
related laws; or
    (iv) Requests a hearing from the SWA pursuant to Sec.  658.417.
    (2) Where the decision is based on the employer's submittal of an 
order and refusal to provide assurances that the job is in compliance 
with employment-related laws or to withdraw the order, the SWA must 
specify the date the order was submitted, the job order involved, and 
the assurances involved. The employer must be notified that all 
employment services will be terminated within 20 working days unless 
the employer within that time:
    (i) Resubmits the order with the appropriate assurances; or
    (ii) If the job is no longer available, make assurances that all 
future job orders submitted will contain all necessary assurances that 
the job offered is in compliance with employment-related laws; or
    (iii) Requests a hearing from the SWA pursuant to Sec.  658.417.
    (3) Where the decision is based on a finding that the employer has 
misrepresented the terms or conditions of employment specified on job 
orders or failed to comply fully with assurances made on job orders, 
the SWA must specify the basis for that determination. The employer 
must be notified that all employment services will be terminated in 20 
working days unless the employer within that time:
    (i) Provides adequate evidence that terms and conditions of 
employment were not misrepresented; or
    (ii) Provides adequate evidence that there was full compliance with 
the assurances made on the job orders; or
    (iii) Provides resolution of a complaint which is satisfactory to a 
complainant referred by the ES; and
    (iv) Provides adequate assurance that specifications on future 
orders will accurately represent the terms and conditions of employment 
and that there will be full compliance with all job order assurances; 
or
    (v) Requests a hearing from the SWA pursuant to Sec.  658.417.
    (4) Where the decision is based on a final determination by an 
enforcement agency, the SWA must specify the enforcement agency's 
findings of facts and conclusions of law. The employer must be notified 
that all employment services will be terminated in 20 working days 
unless the employer within that time:
    (i) Provides adequate evidence that the enforcement agency has 
reversed its ruling and that the employer did not violate employment-
related laws; or
    (ii) Provides adequate evidence that the appropriate fines have 
been paid and/or appropriate restitution has been made; and
    (iii) Provides assurances that any policies, procedures, or 
conditions responsible for the violation have been corrected and the 
same or similar violations are not likely to occur in the future.
    (5) Where the decision is based on a finding of a violation of ES 
regulations under Sec.  658.411, the SWA must specify the finding. The 
employer must be notified that all employment services will be 
terminated in 20 working days unless the employer within that time:
    (i) Provides adequate evidence that the employer did not violate ES 
regulations; or
    (ii) Provides adequate evidence that appropriate restitution has 
been made or remedial action taken; and
    (iii) Provides assurances that any policies, procedures, or 
conditions responsible for the violation have been corrected and the 
same or similar violations are not likely to occur in the future; or
    (iv) Requests a hearing from the SWA pursuant to Sec.  658.417.
    (6) Where the decision is based on an employer's failure to accept 
qualified workers referred through the clearance system, the SWA must 
specify the workers referred and not accepted. The employer must be 
notified that all employment services will be terminated in 20 working 
days unless the employer within that time:
    (i) Provides adequate evidence that the workers were accepted; or
    (ii) Provides adequate evidence that the workers were not available 
to accept the job; or
    (iii) Provides adequate evidence that the workers were not 
qualified; and
    (iv) Provides adequate assurances that qualified workers referred 
in the future will be accepted; or
    (v) Requests a hearing from the SWA pursuant to Sec.  658.417.
    (7) Where the decision is based on lack of cooperation in the 
conduct of field checks, the SWA must specify the lack of cooperation. 
The employer must be notified that all employment services will be 
terminated in 20 working days unless the employer within that time:
    (i) Provides adequate evidence that he/she did cooperate; or
    (ii) Cooperates immediately in the conduct of field checks; and
    (iii) Provides assurances that he/she will cooperate in future 
field checks in further activity; or
    (iv) Requests a hearing from the SWA pursuant to Sec.  658.417.
    (b) If the employer chooses to respond pursuant to this section by 
providing documentary evidence or assurances, he/she must at the same 
time request a hearing if such hearing is desired in the event that the 
SWA does not accept the documentary evidence or assurances as adequate.
    (c) Where the decision is based on repeated initiation of 
procedures for discontinuation of services, the employer must be 
notified that services have been terminated.
    (d) If the employer makes a timely request for a hearing, in 
accordance with this section, the SWA must follow procedures set forth 
at Sec.  658.411 and notify the complainant whenever the

[[Page 56360]]

discontinuation of services is based on a complaint pursuant to Sec.  
658.411.


Sec.  658.503  Discontinuation of services.

    (a) If the employer does not provide a satisfactory response in 
accordance with Sec.  658.502, within 20 working days, or has not 
requested a hearing, the SWA must immediately terminate services to the 
employer.
    (b) If services are discontinued to an employer subject to Federal 
Contractor Job Listing Requirements, the SWA must notify the ETA 
regional office immediately.


Sec.  658.504  Reinstatement of services.

    (a) Services may be reinstated to an employer after discontinuation 
under Sec.  658.503(a) and (b), if:
    (1) The State is ordered to do so by a Federal ALJ Judge or 
Regional Administrator; or
    (2)(i) The employer provides adequate evidence that any policies, 
procedures or conditions responsible for the previous discontinuation 
of services have been corrected and that the same or similar 
circumstances are not likely to occur in the future; and
    (ii) The employer provides adequate evidence that he/she has 
responded adequately to any findings of an enforcement agency, SWA, or 
ETA, including restitution to the complainant and the payment of any 
fines, which were the basis of the discontinuation of services.
    (b) The SWA must notify the employer requesting reinstatement 
within 20 working days whether his/her request has been granted. If the 
State denies the request for reinstatement, the basis for the denial 
must be specified and the employer must be notified that he/she may 
request a hearing within 20 working days.
    (c) If the employer makes a timely request for a hearing, the SWA 
must follow the procedures set forth at Sec.  658.417.
    (d) The SWA must reinstate services to an employer if ordered to do 
so by a State hearing official, Regional Administrator, or Federal ALJ 
as a result of a hearing offered pursuant to paragraph (c) of this 
section.

Subpart G--Review and Assessment of State Workforce Agency 
Compliance With Employment Service Regulations


Sec.  658.600  Scope and purpose of subpart.

    This subpart sets forth the regulations governing review and 
assessment of State Workforce Agency (SWA) compliance with the ES 
regulations at this part and parts 651, 652, 653, and 654 of this 
chapter. All recordkeeping and reporting requirements contained in this 
part and part 653 of this chapter have been approved by the Office of 
Management and Budget as required by the Paperwork Reduction Act of 
1980.


Sec.  658.601  State Workforce Agency responsibility.

    (a) Each SWA must establish and maintain a self-appraisal system 
for ES operations to determine success in reaching goals and to correct 
deficiencies in performance. The self-appraisal system must include 
numerical (quantitative) appraisal and non-numerical (qualitative) 
appraisal.
    (1) Numerical appraisal at the ES office level must be conducted as 
follows:
    (i) Performance must be measured on a quarterly-basis against 
planned service levels as stated in the Unified or Combined State Plan 
(``State Plan''). The State Plan must be consistent with numerical 
goals contained in ES office plans.
    (ii) To appraise numerical activities/indicators, actual results as 
shown on the Department's ETA 9002A report, or any successor report 
required by the Department must be compared to planned levels. 
Differences between achievement and plan levels must be identified.
    (iii) When the numerical appraisal of required activities/
indicators identifies significant differences from planned levels, 
additional analysis must be conducted to isolate possible contributing 
factors. This data analysis must include, as appropriate, comparisons 
to past performance, attainment of State Plan goals and consideration 
of pertinent non-numerical factors.
    (iv) Results of ES office numerical reviews must be documented and 
significant deficiencies identified. A corrective action plan as 
described in paragraph (a)(6) of this section must be developed to 
address these deficiencies.
    (v) The result of ES office appraisal, including corrective action 
plans, must be communicated in writing to the next higher level of 
authority for review. This review must cover adequacy of analysis, 
appropriateness of corrective actions, and need for higher level 
involvement. When this review is conducted at an area or district 
office, a report describing ES office performance within the area or 
district jurisdiction must be communicated to the SWA on a quarterly 
basis.
    (2) Numerical appraisal at the SWA level must be conducted as 
follows:
    (i) Performance must be measured on a quarterly basis against 
planned service levels as stated in the State Plan. The State Plan must 
be consistent with numerical goals contained in ES office plans.
    (ii) To appraise these key numerical activities/indicators, actual 
results as shown on the ETA 9002A report, or any successor report 
required by the Department must be compared to planned levels. 
Differences between achievement and plan levels must be identified.
    (iii) The SWA must review statewide data and performance against 
planned service levels as stated in the State Plan on at least a 
quarterly basis to identify significant statewide deficiencies and to 
determine the need for additional analysis, including identification of 
trends, comparisons to past performance, and attainment of State Plan 
goals.
    (iv) Results of numerical reviews must be documented and 
significant deficiencies identified. A corrective action plan as 
described in paragraph (a)(5) of this section must be developed to 
address these deficiencies. These plans must be submitted to the ETA 
Regional Office as part of the periodic performance process described 
at Sec.  658.603(d)(2).
    (3) Non-numerical (qualitative) appraisal of ES office activities 
must be conducted at least annually as follows:
    (i) Each ES office must assess the quality of its services to 
applicants, employers, and the community and its compliance with 
Federal regulations.
    (ii) At a minimum, non-numerical review must include an assessment 
of the following factors:
    (A) Appropriateness of services provided to participants and 
employers;
    (B) Timely delivery of services to participants and employers;
    (C) Staff responsiveness to individual participants and employer 
needs;
    (D) Thoroughness and accuracy of documents prepared in the course 
of service delivery; and
    (E) Effectiveness of ES interface with external organizations, such 
as other ETA-funded programs, community groups, etc.
    (iii) Non-numerical review methods must include:
    (A) Observation of processes;
    (B) Review of documents used in service provisions; and
    (C) Solicitation of input from applicants, employers, and the 
community.
    (iv) The result of non-numerical reviews must be documented and 
deficiencies identified. A corrective action plan addressing these 
deficiencies as described in paragraph (a)(6) of this section must be 
developed.

[[Page 56361]]

    (v) The result of ES office non-numerical appraisal, including 
corrective actions, must be communicated in writing to the next higher 
level of authority for review. This review must cover thoroughness and 
adequacy of ES office appraisal, appropriateness of corrective actions, 
and need for higher level involvement. When this review is conducted at 
an area or district level, a report summarizing local ES office 
performance within that jurisdiction must be communicated to the SWA on 
an annual basis.
    (4) As part of its oversight responsibilities, the SWA must conduct 
onsite reviews in those ES offices which show continuing internal 
problems or deficiencies in performance as indicated by such sources as 
data analysis, non-numerical appraisal, or other sources of 
information.
    (5) Non-numerical (qualitative) review of SWA ES activities must be 
conducted as follows:
    (i) SWA operations must be assessed annually to determine 
compliance with Federal regulations.
    (ii) Results of non-numerical reviews must be documented and 
deficiencies identified. A corrective action plan addressing these 
deficiencies must be developed.
    (6) Corrective action plans developed to address deficiencies 
uncovered at any administrative level within the State as a result of 
the self-appraisal process must include:
    (i) Specific descriptions of the type of action to be taken, the 
time frame involved, and the assignment of responsibility.
    (ii) Provision for the delivery of technical assistance as needed.
    (iii) A plan to conduct follow-up on a timely basis to determine if 
action taken to correct the deficiencies has been effective.
    (7)(i) The provisions of the ES regulations which require numerical 
and non-numerical assessment of service to special applicant groups 
(e.g., services to veterans at 20 CFR part 1001--Services for Veterans 
and services to MSFWs at this part and part 653 of this chapter), are 
supplementary to the provisions of this section.
    (ii) Each State Administrator and ES office manager must ensure 
their staff know and carry out ES regulations, including regulations on 
performance standards and program emphases, and any corrective action 
plans imposed by the SWA or by the Department.
    (iii) Each State Administrator must ensure the SWA complies with 
its approved State Plan.
    (iv) Each State Administrator must ensure to the maximum extent 
feasible the accuracy of data entered by the SWA into Department-
required management information systems. Each SWA must establish and 
maintain a data validation system pursuant to Department instructions. 
The system must review every local ES office at least once every 4 
years. The system must include the validation of time distribution 
reports and the review of data gathering procedures.
    (b) [Reserved]


Sec.  658.602  Employment and Training Administration National Office 
responsibility.

    The ETA National Office must:
    (a) Monitor ETA Regional Offices' operations under ES regulations;
    (b) From time to time, conduct such special reviews and audits as 
necessary to monitor ETA regional office and SWA compliance with ES 
regulations;
    (c) Offer technical assistance to the ETA regional offices and SWAs 
in carrying out ES regulations and programs;
    (d) Have report validation surveys conducted in support of resource 
allocations; and
    (e) Develop tools and techniques for reviewing and assessing SWA 
performance and compliance with ES regulations.
    (f) ETA must appoint a National Monitor Advocate (NMA), who must 
devote full time to the duties set forth in this subpart. The NMA must:
    (1) Review the effective functioning of the Regional Monitor 
Advocates (RMAs) and SMAs;
    (2) Review the performance of SWAs in providing the full range of 
employment services to MSFWs;
    (3) Take steps to resolve or refer ES-related problems of MSFWs 
which come to his/her attention;
    (4) Take steps to refer non ES-related problems of MSFWs which come 
to his/her attention;
    (5) Recommend to the Administrator changes in policy toward MSFWs; 
and
    (6) Serve as an advocate to improve services for MSFWs within the 
ES system. The NMA must be a member of the National Farm Labor 
Coordinated Enforcement Staff Level Working Committee and other 
Occupational Safety and Health Administration (OSHA) and Wage and Hour 
Division (WHD) task forces, and other committees as appropriate.
    (g) The NMA must be appointed by the Office of Workforce Investment 
Administrator (Administrator) after informing farmworker organizations 
and other organizations with expertise concerning MSFWs of the opening 
and encouraging them to refer qualified applicants to apply through the 
Federal merit system. Among qualified candidates, determined through 
merit systems procedures, individuals must be sought who meet the 
criteria used in the selection of the SMAs, as provided in SWA self-
monitoring requirements at Sec.  653.108(b) of this chapter.
    (h) The NMA must be assigned staff necessary to fulfill effectively 
all the responsibilities set forth in this subpart.
    (i) The NMA must submit the Annual Report to the OWI Administrator, 
the ETA Assistant Secretary, and the National Farm Labor Coordinated 
Enforcement Committee covering the matters set forth in this subpart.
    (j) The NMA must monitor and assess SWA compliance with ES 
regulations affecting MSFWs on a continuing basis. His/her assessment 
must consider:
    (1) Information from RMAs and SMAs;
    (2) Program performance data, including the service indicators;
    (3) Periodic reports from regional offices;
    (4) All Federal on-site reviews;
    (5) Selected State on-site reviews;
    (6) Other relevant reports prepared by the ES;
    (7) Information received from farmworker organizations and 
employers; and
    (8) His/her personal observations from visits to SWAs, ES offices, 
agricultural work sites, and migrant camps. In the Annual Report, the 
NMA must include both a quantitative and qualitative analysis of his/
her findings and the implementation of his/her recommendations by State 
and Federal officials, and must address the information obtained from 
all of the foregoing sources.
    (k) The NMA must review the activities of the State/Federal 
monitoring system as it applies to services to MSFWs and the Complaint 
System including the effectiveness of the regional monitoring function 
in each region and must recommend any appropriate changes in the 
operation of the system. The NMA's findings and recommendations must be 
fully set forth in the Annual Report.
    (l) If the NMA finds the effectiveness of any RMA has been 
substantially impeded by the Regional Administrator or other regional 
office official, he/she must, if unable to resolve such problems 
informally, report and recommend appropriate actions directly to the 
OWI Administrator. If the NMA receives information that the 
effectiveness of any SMA has been substantially impeded by the State 
Administrator or other State or

[[Page 56362]]

Federal ES official, he/she must, in the absence of a satisfactory 
informal resolution at the regional level, report and recommend 
appropriate actions directly to the OWI Administrator.
    (m) The NMA must be informed of all proposed changes in policy and 
practice within the ES, including ES regulations, which may affect the 
delivery of services to MSFWs. The NMA must advise the Administrator 
concerning all such proposed changes which may adversely affect MSFWs. 
The NMA must propose directly to the OWI Administrator changes in ES 
policy and administration which may substantially improve the delivery 
of services to MSFWs. He/she also must recommend changes in the funding 
of SWAs and/or adjustment or reallocation of the discretionary portions 
of funding formulae.
    (n) The NMA must participate in the review and assessment 
activities required in this section and Sec. Sec.  658.700 through 
658.711. As part of such participation, the NMA, or if he/she is unable 
to participate, a RMA must accompany the National Office review team on 
National Office on-site reviews. The NMA must engage in the following 
activities in the course of each State on-site review:
    (1) He/she must accompany selected outreach workers on their field 
visits.
    (2) He/she must participate in a random field check(s) of migrant 
camps or work site(s) where MSFWs have been placed on inter or 
intrastate clearance orders.
    (3) He/she must contact local WIOA sec. 167 National Farmworker 
Jobs Program grantees or other farmworker organizations as part of the 
on-site review, and, discuss with representatives of these 
organizations current trends and any other pertinent information 
concerning MSFWs.
    (4) He/she must meet with the SMA and discuss the full range of the 
employment services to MSFWs, including monitoring and the Complaint 
System.
    (o) In addition to the duties specified in paragraph (f)(8) of this 
section, the NMA each year during the harvest season must visit the 
four States with the highest level of MSFW activity during the prior 
fiscal year, if they are not scheduled for a National Office on-site 
review during the current fiscal year, and must:
    (1) Meet with the SMA and other SWA staff to discuss MSFW service 
delivery; and
    (2) Contact representatives of MSFW organizations and interested 
employer organizations to obtain information concerning ES delivery and 
coordination with other agencies.
    (p) The NMA must perform duties specified in Sec. Sec.  658.700 
through 765.711. As part of this function, he/she must monitor the 
performance of regional offices in imposing corrective action. The NMA 
must report any deficiencies in performance to the Administrator.
    (q) The NMA must establish routine and regular contacts with WIOA 
sec. 167 National Farmworker Jobs Program grantees, other farmworker 
organizations and agricultural employers and/or employer organizations. 
He/she must attend conferences or meetings of these groups wherever 
possible and must report to the Administrator and the National Farm 
Labor Coordinated Enforcement Committee on these contacts when 
appropriate. The NMA must include in the Annual Report recommendations 
about how the Department might better coordinate ES and WIOA sec. 167 
National Farmworker Jobs Program services as they pertain to MSFWs.
    (r) In the event that any SMA or RMA, enforcement agency, or MSFW 
group refers a matter to the NMA which requires emergency action, he/
she must assist them in obtaining action by appropriate agencies and 
staff, inform the originating party of the action taken, and, upon 
request, provide written confirmation.
    (s) Through all the mechanisms provided in this subpart, the NMA 
must aggressively seek to ascertain and remedy, if possible, systemic 
deficiencies in the provisions of employment services and protections 
afforded by these regulations to MSFWs. The NMA must:
    (1) Use the regular reports on complaints submitted by SWAs and ETA 
regional offices to assess the adequacy of these systems and to 
determine the existence of systemic deficiencies.
    (2) Provide technical assistance to ETA regional office and State 
Workforce Agency staff for administering the Complaint System, and any 
other employment services as appropriate.
    (3) Recommend to the Regional Administrator specific instructions 
for action by regional office staff to correct any ES-related systemic 
deficiencies. Prior to any ETA review of regional office operations 
concerning employment services to MSFWs, the NMA must provide to the 
Regional Administrator a brief summary of ES-related services to MSFWs 
in that region and his/her recommendations for incorporation in the 
regional review materials as the Regional Administrator and ETA 
reviewing organization deem appropriate.
    (4) Recommend to the National Farm Labor Coordinated Enforcement 
Committee specific instructions for action by WHD and OSHA regional 
office staff to correct any non-ES-related systemic deficiencies of 
which he/she is aware.


Sec.  658.603  Employment and Training Administration Regional Office 
responsibility.

    (a) The Regional Administrator must have responsibility for the 
regular review and assessment of SWA performance and compliance with ES 
regulations.
    (b) The Regional Administrator must participate with the National 
Office staff in reviewing and approving the State Plan for the SWAs 
within the region. In reviewing the State Plans the Regional 
Administrator and appropriate National Office staff must consider 
relevant factors including the following:
    (1) State Workforce Agency compliance with ES regulations;
    (2) State Workforce Agency performance against the goals and 
objectives established in the previous State Plan;
    (3) The effect which economic conditions and other external factors 
considered by the ETA in the resource allocation process may have had 
or are expected to have on the SWA's performance;
    (4) SWA adherence to national program emphasis; and
    (5) The adequacy and appropriateness of the State Plan for carrying 
out ES programs.
    (c) The Regional Administrator must assess the overall performance 
of SWAs on an ongoing basis through desk reviews and the use of 
required reporting systems and other available information.
    (d) As appropriate, Regional Administrators must conduct or have 
conducted:
    (1) Comprehensive on-site reviews of SWAs and their offices to 
review SWA organization, management, and program operations;
    (2) Periodic performance reviews of SWA operation of ES programs to 
measure actual performance against the State Plan, past performance, 
the performance of other SWAs, etc.;
    (3) Audits of SWA programs to review their program activity and to 
assess whether the expenditure of grant funds has been in accordance 
with the approved budget. Regional Administrators also may conduct 
audits through other agencies or organizations or may require the SWA 
to have audits conducted;

[[Page 56363]]

    (4) Validations of data entered into management information systems 
to assess:
    (i) The accuracy of data entered by the SWAs into the management 
information system;
    (ii) Whether the SWAs' data validating and reviewing procedures 
conform to Department instructions; and
    (iii) Whether SWAs have implemented any corrective action plans 
required by the Department to remedy deficiencies in their validation 
programs;
    (5) Technical assistance programs to assist SWAs in carrying out ES 
regulations and programs;
    (6) Reviews to assess whether the SWA has complied with corrective 
action plans imposed by the Department or by the SWA itself; and
    (7) Random, unannounced field checks of a sample of agricultural 
work sites to which ES placements have been made through the clearance 
system to determine and document whether wages, hours, working and 
housing conditions are as specified on the job order. If regional 
office staff find reason to believe that conditions vary from job order 
specifications, findings must be documented on the Complaint/Apparent 
Violation Referral Form and provided to the State Workforce Agency to 
be handled as an apparent violation under Sec.  658.419.
    (e) The Regional Administrator must provide technical assistance to 
SWAs to assist them in carrying out ES regulations and programs.
    (f) The Regional Administrator must appoint a RMA who must devote 
full time to the duties set forth in this subpart. The RMA must:
    (1) Review the effective functioning of the SMAs in his/her region;
    (2) Review the performance of SWAs in providing the full range of 
employment services to MSFWs;
    (3) Take steps to resolve ES-related problems of MSFWs which come 
to his/her attention;
    (4) Recommend to the Regional Administrator changes in policy 
towards MSFWs;
    (5) Review the operation of the Complaint System; and
    (6) Serve as an advocate to improve service for MSFWs within the 
ES. The RMA must be a member of the Regional Farm Labor Coordinated 
Enforcement Committee.
    (g) The RMA must be appointed by the Regional Administrator after 
informing farmworker organizations and other organizations in the 
region with expertise concerning MSFWs of the opening and encouraging 
them to refer qualified applicants to apply through the Federal merit 
system. The RMA must have direct personal access to the Regional 
Administrator wherever he/she finds it necessary. Among qualified 
candidates, individuals must be sought who meet the criteria used in 
the selection of the SMAs, as provided in Sec.  653.108(b) of this 
chapter.
    (h) The Regional Administrator must ensure that staff necessary to 
fulfill effectively all the regional office responsibilities set forth 
in this section are assigned. The RMA must notify the Regional 
Administrator of any staffing deficiencies and the Regional 
Administrator must take appropriate action.
    (i) The RMA within the first 3 months of his/her tenure must 
participate in a training session(s) approved by the National Office.
    (j) At the regional level, the RMA must have primary responsibility 
for:
    (1) Monitoring the effectiveness of the Complaint System set forth 
at subpart E of this part;
    (2) Apprising appropriate State and ETA officials of deficiencies 
in the Complaint System; and
    (3) Providing technical assistance to SMAs in the region.
    (k) At the ETA regional level, the RMA must have primary 
responsibility for ensuring SWA compliance with ES regulations as it 
pertains to services to MSFWs is monitored by the regional office. He/
she must independently assess on a continuing basis the provision of 
employment services to MSFWs, seeking out and using:
    (1) Information from SMAs, including all reports and other 
documents;
    (2) Program performance data;
    (3) The periodic and other required reports from SWAs;
    (4) Federal on-site reviews;
    (5) Other reports prepared by the National Office;
    (6) Information received from farmworker organizations and 
employers; and
    (7) Any other pertinent information which comes to his/her 
attention from any possible source.
    (8) In addition, the RMA must consider his/her personal 
observations from visits to ES offices, agricultural work sites, and 
migrant camps.
    (l) The RMA must assist the Regional Administrator and other line 
officials in applying appropriate corrective and remedial actions to 
State agencies.
    (m) The Regional Administrator's quarterly report to the National 
Office must include the RMA's summary of his/her independent assessment 
as required in paragraph (f)(5) of this section. The fourth quarter 
summary must include an annual summary from the region. The summary 
also must include both a quantitative and a qualitative analysis of 
his/her reviews and must address all the matters with respect to which 
he/she has responsibilities under these regulations.
    (n) The RMA must review the activities and performance of the SMAs 
and the State monitoring system in the region, and must recommend any 
appropriate changes in the operation of the system to the Regional 
Administrator. The RMA's review must include a determination whether 
the SMA:
    (1) Does not have adequate access to information;
    (2) Is being impeded in fulfilling his/her duties; or
    (3) Is making recommendations which are being consistently ignored 
by SWA officials. If the RMA believes that the effectiveness of any SMA 
has been substantially impeded by the State Administrator, other State 
agency officials, or any Federal officials, he/she must report and 
recommend appropriate actions to the Regional Administrator. Copies of 
the recommendations must be provided to the NMA electronically or in 
hard copy.
    (o) The RMA must be informed of all proposed changes in policy and 
practice within the ES, including ES regulations, which may affect the 
delivery of services to MSFWs. He/she must advise the Regional 
Administrator on all such proposed changes which, in his/her opinion, 
may adversely affect MSFWs or which may substantially improve the 
delivery of services to MSFWs.
    The RMA also may recommend changes in ES policy or regulations, as 
well as changes in the funding of State Workforce Agencies and/or 
adjustments of reallocation of the discretionary portions of funding 
formulae as they pertain to MSFWs.
    (p) The RMA must participate in the review and assessment 
activities required in this section and Sec. Sec.  658.700 through 
658.711. He/she, an assistant, or another RMA, must participate in 
National Office and regional office on-site statewide reviews of 
employment services to MSFWs in States in the region. The RMA must 
engage in the following activities in the course of participating in an 
on-site SWA review:
    (1) Accompany selected outreach workers on their field visits;
    (2) Participate in a random field check of migrant camps or work 
sites where MSFWs have been placed on intrastate or interstate 
clearance orders;
    (3) Contact local WIOA sec. 167 National Farmworker Jobs Program 
grantees or other farmworker

[[Page 56364]]

organizations as part of the on-site review, and must discuss with 
representatives of these organizations perceived trends, and/or other 
relevant information concerning MSFWs in the area; and
    (4) Meet with the SMA and discuss the full range of the employment 
services to MSFWs, including monitoring and the Complaint System.
    (q) During the calendar quarter preceding the time of peak MSFW 
activity in each State, the RMA must meet with the SMA and must review 
in detail the State Workforce Agency's capability for providing the 
full range of services to MSFWs as required by ES regulations, during 
the upcoming harvest season. The RMA must offer technical assistance 
and recommend to the SWA and/or the Regional Administrator any changes 
in State policy or practice that he/she finds necessary.
    (r) The RMA each year during the peak harvest season must visit 
each State in the region not scheduled for an on-site review during 
that fiscal year and must:
    (1) Meet with the SMA and other SWA staff to discuss MSFW service 
delivery; and
    (2) Contact representatives of MSFW organizations to obtain 
information concerning ES delivery and coordination with other agencies 
and interested employer organizations.
    (s) The RMA must initiate and maintain regular and personal 
contacts, including informal contacts in addition to those specifically 
required by these regulations, with SMAs in the region. In addition, 
the RMA must have personal and regular contact with the NMA. The RMA 
also must establish routine and regular contacts with WIOA sec. 167 
National Farmworker Jobs Program grantees, other farmworker 
organizations and agricultural employers and/or employer organizations 
in his/her region. He/she must attend conferences or meetings of these 
groups wherever possible and must report to the Regional Administrator 
and the Regional Farm Labor Coordinated Enforcement Committee on these 
contacts when appropriate. He/she also must make recommendations as to 
how the Department might better coordinate ES and WIOA sec. 167 
National Farmworker Jobs Program services to MSFWs.
    (t) The RMA must attend MSFW-related public meeting(s) conducted in 
the region. Following such meetings or hearings, the RMA must take such 
steps or make such recommendations to the Regional Administrator, as 
he/she deems necessary to remedy problem(s) or condition(s) identified 
or described therein.
    (u) The RMA must attempt to achieve regional solutions to any 
problems, deficiencies, or improper practices concerning services to 
MSFWs which are regional in scope. Further, he/she must recommend 
policies, offer technical assistance, or take any other necessary steps 
as he/she deems desirable or appropriate on a regional, rather than 
State-by-State basis, to promote region-wide improvement in the 
delivery of employment services to MSFWs. He/she must facilitate 
region-wide coordination and communication regarding provision of 
employment services to MSFWs among SMAs, State Administrators, and 
Federal ETA officials to the greatest extent possible. In the event 
that any SWA or other RMA, enforcement agency, or MSFW group refers a 
matter to the RMA which requires emergency action, he/she must assist 
them in obtaining action by appropriate agencies and staff, inform the 
originating party of the action taken, and, upon request, provide 
written confirmation.
    (v) The RMA must initiate and maintain such contacts as he/she 
deems necessary with RMAs in other regions to seek to resolve problems 
concerning MSFWs who work, live, or travel through the region. He/she 
must recommend to the Regional Administrator and/or the National Office 
inter-regional cooperation on any particular matter, problem, or policy 
with respect to which inter-regional action is desirable.
    (w) The RMA must establish regular contacts with the regional 
agricultural coordinators from WHD and OSHA and any other regional 
staff from other Federal enforcement agencies and must establish 
contacts with the staff of other Department agencies represented on the 
Regional Farm Labor Coordinated Enforcement Committee and to the extent 
necessary, on other pertinent task forces or committees.
    (x) The RMA must participate in the regional reviews of the State 
Plans, and must comment to the Regional Administrator as to the SWA 
compliance with the ES regulations as they pertain to services to 
MSFWs, including the staffing of ES offices.


Sec.  658.604  Assessment and evaluation of program performance data.

    (a) State Workforce Agencies must compile program performance data 
required by the Department, including statistical information on 
program operations.
    (b) The Department must use the program performance data in 
assessing and evaluating whether each SWA has complied with ES 
regulations and its State Plan.
    (c) In assessing and evaluating program performance data, the 
Department must act in accordance with the following general 
principles:
    (1) The fact that the program performance data from a SWA, whether 
overall or relative to a particular program activity, indicate poor 
program performance does not by itself constitute a violation of ES 
regulations or of the State Workforce Agency's responsibilities under 
its State Plan;
    (2) Program performance data, however, may so strongly indicate 
that a SWA's performance is so poor that the data may raise a 
presumption (prima facie case) that a SWA is violating ES regulations 
or the State Plan. A SWA's failure to meet the operational objectives 
set forth in the State Plan raises a presumption that the agency is 
violating ES regulations and/or obligations under its State Plan. In 
such cases, the Department must afford the SWA an opportunity to rebut 
the presumption of a violation pursuant to the procedures at subpart H 
of this part.
    (3) The Department must take into account that certain program 
performance data may measure items over which SWAs have direct or 
substantial control while other data may measure items over which the 
SWA has indirect or minimal control.
    (i) Generally, for example, a SWA has direct and substantial 
control over the delivery of employment services such as referrals to 
jobs, job development contacts, counseling, referrals to career and 
supportive services, and the conduct of field checks.
    (ii) State Workforce Agencies, however, have only indirect control 
over the outcome of services. For example, SWAs cannot guarantee that 
an employer will hire a referred applicant, nor can they guarantee that 
the terms and conditions of employment will be as stated on a job 
order.
    (iii) Outside forces, such as a sudden heavy increase in 
unemployment rates, a strike by SWA employees, or a severe drought or 
flood, may skew the results measured by program performance data.
    (4) The Department must consider a SWA's failure to keep accurate 
and complete program performance data required by ES regulations as a 
violation of the ES regulations.


Sec.  658.605  Communication of findings to State agencies.

    (a) The Regional Administrator must inform SWAs in writing of the 
results of

[[Page 56365]]

review and assessment activities and, as appropriate, must discuss with 
the State Administrator the impact or action required by the Department 
as a result of review and assessment activities.
    (b) The ETA National Office must transmit the results of any review 
and assessment activities it conducted to the Regional Administrator 
who must send the information to the SWA.
    (c) Whenever the review and assessment indicates a SWA violation of 
ES regulations or its State Plan, the Regional Administrator must 
follow the procedures set forth at subpart H of this part.
    (d) Regional Administrators must follow-up any corrective action 
plan imposed on a SWA under subpart H of this part by further review 
and assessment of the State Workforce Agency pursuant to this subpart.

Subpart H--Federal Application of Remedial Action to State 
Workforce Agencies


Sec.  658.700  Scope and purpose of subpart.

    This subpart sets forth the procedures which the Department must 
follow upon either discovering independently or receiving from other(s) 
information indicating that SWAs may not be adhering to ES regulations.


Sec.  658.701  Statements of policy.

    (a) It is the policy of the Department to take all necessary 
action, including the imposition of the full range of sanctions set 
forth in this subpart, to ensure State Workforce Agencies comply with 
all requirements established by ES regulations.
    (b) It is the policy of the Department to initiate decertification 
procedures against SWAs in instances of serious or continual violations 
of ES regulations if less stringent remedial actions taken in 
accordance with this subpart fail to resolve noncompliance.
    (c) It is the policy of the Department to act on information 
concerning alleged violations by SWAs of the ES regulations received 
from any person or organization.


Sec.  658.702  Initial action by the Regional Administrator.

    (a) The ETA Regional Administrator is responsible for ensuring that 
all SWAs in his/her region are in compliance with ES regulations.
    (b) Wherever a Regional Administrator discovers or is apprised of 
possible SWA violations of ES regulations by the review and assessment 
activities under subpart G of this part, or through required reports or 
written complaints from individuals, organizations, or employers which 
are elevated to the Department after the exhaustion of SWA 
administrative remedies, the Regional Administrator must conduct an 
investigation. Within 10 business days after receipt of the report or 
other information, the Regional Administrator must make a determination 
whether there is probable cause to believe that a SWA has violated ES 
regulations.
    (c) The Regional Administrator must accept complaints regarding 
possible SWA violations of ES regulations from employee organizations, 
employers or other groups, without exhaustion of the complaint process 
described at subpart E of this part, if the Regional Administrator 
determines that the nature and scope of the complaint are such that the 
time required to exhaust the administrative procedures at the State 
level would adversely affect a significant number of applicants. In 
such cases, the Regional Administrator must investigate the matter 
within 10 business days, may provide the SWA 10 business days for 
comment, and must make a determination within an additional 10 business 
days whether there is probable cause to believe that the SWA has 
violated ES regulations.
    (d) If the Regional Administrator determines that there is no 
probable cause to believe that a SWA has violated ES regulations, he/
she must retain all reports and supporting information in Department 
files. In all cases where the Regional Administrator has insufficient 
information to make a probable cause determination, he/she must so 
notify the Administrator in writing and the time for the investigation 
must be extended 20 additional business days.
    (e) If the Regional Administrator determines there is probable 
cause to believe a SWA has violated ES regulations, he/she must issue a 
Notice of Initial Findings of Non-compliance by registered mail (or 
other legally viable means) to the offending SWA. The notice will 
specify the nature of the violation, cite the regulations involved, and 
indicate corrective action which may be imposed in accordance with 
paragraphs (g) and (h) of this section. If the non-compliance involves 
services to MSFWs or the Complaint System, a copy of said notice must 
be sent to the NMA.
    (f)(1) The SWA may have 20 business days to comment on the 
findings, or up to 20 additional days, if the Regional Administrator 
determines a longer period is appropriate. The SWA's comments must 
include agreement or disagreement with the findings and suggested 
corrective actions, where appropriate.
    (2) After the period elapses, the Regional Administrator must 
prepare within 20 business days, written final findings which specify 
whether the SWA has violated ES regulations. If in the final findings 
the Regional Administrator determines the SWA has not violated ES 
regulations, the Regional Administrator must notify the State 
Administrator of this finding and retain supporting documents in his/
her files. If the final finding involves services to MSFWs or the 
Complaint System, the Regional Administrator also must notify the NMA. 
If the Regional Administrator determines a SWA has violated ES 
regulations, the Regional Administrator must prepare a Final Notice of 
Noncompliance which must specify the violation(s) and cite the 
regulations involved. The Final Notice of Noncompliance must be sent to 
the SWA by registered mail or other legally viable means. If the 
noncompliance involves services to MSFWs or the Complaint System, a 
copy of the Final Notice must be sent to the NMA.
    (g) If the violation involves the misspending of grant funds, the 
Regional Administrator may order in the Final Notice of Noncompliance a 
disallowance of the expenditure and may either demand repayment or 
withhold future funds in the amount in question. If the Regional 
Administrator disallows costs, the Regional Administrator must give the 
reasons for the disallowance, inform the SWA that the disallowance is 
effective immediately and that no more funds may be spent in the 
disallowed manner, and offer the SWA the opportunity to request a 
hearing pursuant to Sec.  658.707. The offer, or the acceptance of an 
offer of a hearing, however, does not stay the effectiveness of the 
disallowance. The Regional Administrator must keep complete records of 
the disallowance.
    (h) If the violation does not involve misspending of grant funds or 
the Regional Administrator determines that the circumstances warrant 
other action:
    (1) The Final Notice of Noncompliance must direct the SWA to 
implement a specific corrective action plan to correct all violations. 
If the SWA's comment demonstrates with supporting evidence (except 
where inappropriate) that all violations have already been corrected, 
the Regional Administrator need not impose a corrective action plan and 
instead may cite the violation(s) and accept the SWA's resolution, 
subject to follow-up review, if necessary. If the Regional 
Administrator determines that the violation(s) cited had been found 
previously and that the corrective action(s) taken had not corrected 
the

[[Page 56366]]

violation(s) contrary to the findings of previous follow-up reviews, 
the Regional Administrator must apply remedial actions to the SWA 
pursuant to Sec.  658.704.
    (2) The Final Notice of Noncompliance must specify the time by 
which each corrective action must be taken. This period may not exceed 
40 business days unless the Regional Administrator determines that 
exceptional circumstances necessitate corrective actions requiring a 
longer time period. In such cases, and if the violations involve 
services to MSFWs or the Complaint System, the Regional Administrator 
must notify the Administrator in writing of the exceptional 
circumstances which necessitate more time, and must specify the 
additional time period. The specified time must commence with the date 
of signature on the registered mail receipt.
    (3) When the time provided for in paragraph (h)(2) of this section 
elapses, Department staff must review the SWA's efforts as documented 
by the SWA to determine if the corrective action(s) has been taken and 
if the SWA has achieved compliance with ES regulations. If necessary, 
Department staff must conduct a follow-up visit as part of this review.
    (4) If, as a result of this review, the Regional Administrator 
determines the SWA has corrected the violation(s), the Regional 
Administrator must record the basis for this determination, notify the 
SWA, send a copy to the Administrator, and retain a copy in Department 
files.
    (5) If, as a result of this review, the Regional Administrator 
determines the SWA has taken corrective action but is unable to 
determine if the violation has been corrected due to seasonality or 
other factors, the Regional Administrator must notify in writing the 
SWA and the Administrator of his/her findings. The Regional 
Administrator must conduct further follow-up at an appropriate time to 
make a final determination if the violation has been corrected. If the 
Regional Administrator's follow-up reveals that violations have not 
been corrected, the Regional Administrator must apply remedial actions 
to the SWA pursuant to Sec.  658.704.
    (6) If, as a result of the review the Regional Administrator 
determines the SWA has not corrected the violations and has not made 
good faith efforts and adequate progress toward the correction of the 
violations, the Regional Administrator must apply remedial actions to 
the SWA pursuant to Sec.  658.704.
    (7) If, as a result of the review, the Regional Administrator 
determines the SWA has made good faith efforts and adequate progress 
toward the correction of the violation and it appears the violation 
will be fully corrected within a reasonable amount of time, the SWA 
must be advised by registered mail or other legally viable means (with 
a copy sent to the Administrator) of this conclusion, of remaining 
differences, of further needed corrective action, and that all 
deficiencies must be corrected within a specified time period. This 
period may not exceed 40 business days unless the Regional 
Administrator determines exceptional circumstances necessitate 
corrective action requiring more time. In such cases, the Regional 
Administrator must notify the Administrator in writing of the 
exceptional circumstances which necessitate more time, and must specify 
that time period. The specified time commences with the date of 
signature on the registered mail receipt.
    (8)(i) If the SWA has been given additional time pursuant to 
paragraph (h)(7) of this section, Department staff must review the 
SWA's efforts as documented by the SWA at the end of the time period. 
If necessary, the Department must conduct a follow-up visit as part of 
this review.
    (ii) If the SWA has corrected the violation(s), the Regional 
Administrator must document that finding, notify in writing the SWA and 
the Administrator, and retain supporting documents in Department files. 
If the SWA has not corrected the violation(s), the Regional 
Administrator must apply remedial actions pursuant to Sec.  658.704.


Sec.  658.703  Emergency corrective action.

    In critical situations as determined by the Regional Administrator, 
where it is necessary to protect the integrity of the funds, or ensure 
the proper operation of the program, the Regional Administrator may 
impose immediate corrective action. Where immediate corrective action 
is imposed, the Regional Administrator must notify the SWA of the 
reason for imposing the emergency corrective action prior to providing 
the SWA an opportunity to comment.


Sec.  658.704  Remedial actions.

    (a) If a SWA fails to correct violations as determined pursuant to 
Sec.  658.702, the Regional Administrator must apply one or more of the 
following remedial actions to the SWA:
    (1) Imposition of special reporting requirements for a specified 
time;
    (2) Restrictions of obligational authority within one or more 
expense classifications;
    (3) Implementation of specific operating systems or procedures for 
a specified time;
    (4) Requirement of special training for SWA personnel;
    (5) With the approval of the Assistant Secretary and after 
affording the State Administrator the opportunity to request a 
conference with the Assistant Secretary, the elevation of specific 
decision-making functions from the State Administrator to the Regional 
Administrator;
    (6) With the approval of the Assistant Secretary and after 
affording the State Administrator the opportunity to request a 
conference with the Assistant Secretary, the imposition of Federal 
staff in key SWA positions;
    (7) With the approval of the Assistant Secretary and after 
affording the State Administrator the opportunity to request a 
conference with the Assistant Secretary, funding of the SWA on a short-
term basis or partial withholding of funds for a specific function or 
for a specific geographical area;
    (8) Holding of public hearings in the State on the SWA's 
deficiencies;
    (9) Disallowance of funds pursuant to Sec.  658.702(g); or
    (10) If the matter involves a serious or continual violation, the 
initiation of decertification procedures against the State Workforce 
Agency, as set forth in paragraph (e) of this section.
    (b) The Regional Administrator must send, by registered mail, a 
Notice of Remedial Action to the SWA. The Notice of Remedial Action 
must set forth the reasons for the remedial action. When such a notice 
is the result of violations of regulations governing services to MSFWs 
(Sec. Sec.  653.100 through 653.113 of this chapter) or the Complaint 
System (Sec. Sec.  658.400 through 658.426), a copy of said notice must 
be sent to the Administrator, who must publish the notice promptly in 
the Federal Register.
    (c) If the remedial action is other than decertification, the 
notice must state the remedial action must take effect immediately. The 
notice also must state the SWA may request a hearing pursuant to Sec.  
658.707 by filing a request in writing with the Regional Administrator 
pursuant to Sec.  658.707 within 20 business days of the SWA's receipt 
of the notice. The offer of hearing, or the acceptance thereof, 
however, does not stay or otherwise delay the implementation of 
remedial action.
    (d) Within 60 business days after the initial application of 
remedial action, the Regional Administrator must conduct a review of 
the SWA's compliance with ES regulations unless

[[Page 56367]]

the Regional Administrator determines more time is necessary. In such 
cases, the Regional Administrator must notify the Administrator in 
writing of the circumstances which necessitate more time, and specify 
that time period. If necessary, Department staff must conduct a follow-
up visit as part of this review. If the SWA is in compliance with the 
ES regulations, the Regional Administrator must fully document these 
facts and must terminate the remedial actions. The Regional 
Administrator must notify the SWA of his/her findings. When the case 
involves violations of regulations governing services to MSFWs or the 
Complaint System, a copy of said notice must be sent to the 
Administrator, who must promptly publish the notice in the Federal 
Register. The Regional Administrator must conduct, within a reasonable 
time after terminating the remedial actions, a review of the SWA's 
compliance to determine whether any remedial actions must be reapplied.
    (e) If, upon conducting the on-site review referred to in paragraph 
(c) of this section, the Regional Administrator finds the SWA remains 
in noncompliance, the Regional Administrator must continue the remedial 
action and/or impose different additional remedial actions. The 
Regional Administrator must fully document all such decisions and, when 
the case involves violations of regulations governing services to MSFWs 
or the Complaint System, must send copies to the Administrator, who 
must promptly publish the notice in the Federal Register.
    (f)(1) If the SWA has not brought itself into compliance with ES 
regulations within 120 business days of the initial application of 
remedial action, the Regional Administrator must initiate 
decertification unless the Regional Administrator determines the 
circumstances necessitate continuing remedial action for more time. In 
such cases, the Regional Administrator must notify the Administrator in 
writing of the circumstances which necessitate the extended time, and 
specify the time period.
    (2) The Regional Administrator must notify the SWA by registered 
mail or by other legally viable means of the decertification 
proceedings, and must state the reasons therefor. Whenever such a 
notice is sent to a SWA, the Regional Administrator must prepare five 
copies (hard copies or electronic copies) containing, in chronological 
order, all the documents pertinent to the case along with a request for 
decertification stating the grounds therefor. One copy must be 
retained. Two must be sent to the ETA National Office, one must be sent 
to the Solicitor of Labor, Attention: Associate Solicitor for 
Employment and Training, and, if the case involves violations of 
regulations governing services to MSFWs or the Complaint System, one 
copy must be sent to the NMA. All copies also must be sent 
electronically to each respective party. The notice sent by the 
Regional Administrator must be published promptly in the Federal 
Register.


Sec.  658.705  Decision to decertify.

    (a) Within 30 business days of receiving a request for 
decertification, the ETA Assistant Secretary must review the case and 
must decide whether to proceed with decertification.
    (b) The Assistant Secretary must grant the request for 
decertification unless he/she makes a finding that:
    (1) The violations of ES regulations are neither serious nor 
continual;
    (2) The SWA is in compliance; or
    (3) The Assistant Secretary has reason to believe the SWA will 
achieve compliance within 80 business days unless exceptional 
circumstances necessitate more time, pursuant to the remedial action 
already applied or to be applied. (In the event the Assistant Secretary 
does not have sufficient information to act upon the request, he/she 
may postpone the determination for up to an additional 20 business days 
in order to obtain any available additional information.) In making a 
determination of whether violations are ``serious'' or ``continual,'' 
as required by paragraph (b)(1) of this section, the Assistant 
Secretary must consider:
    (i) Statewide or multiple deficiencies as shown by performance data 
and/or on-site reviews;
    (ii) Recurrent violations, even if they do not persist over 
consecutive reporting periods, and
    (iii) The good faith efforts of the State to achieve full 
compliance with ES regulations as shown by the record.
    (c) If the Assistant Secretary denies a request for 
decertification, he/she must write a complete report documenting his/
her findings and, if appropriate, instructing an alternate remedial 
action or actions be applied. Electronic copies of the report must be 
sent to the Regional Administrator. Notice of the Assistant Secretary's 
decision must be published promptly in the Federal Register and the 
report of the Assistant Secretary must be made available for public 
inspection and copying.
    (d) If the Assistant Secretary decides decertification is 
appropriate, he/she must submit the case to the Secretary providing 
written explanation for his/her recommendation of decertification.
    (e) Within 30 business days after receiving the Assistant 
Secretary's report, the Secretary must determine whether to decertify 
the SWA. The Secretary must grant the request for decertification 
unless he/she makes one of the three findings set forth in paragraph 
(b) of this section. If the Secretary decides not to decertify, he/she 
must then instruct that remedial action be continued or that alternate 
actions be applied. The Secretary must write a report explaining his/
her reasons for not decertifying the SWA and copies (hard copy and 
electronic) will be sent to the SWA. Notice of the Secretary's decision 
must be published promptly in the Federal Register, and the report of 
the Secretary must be made available for public inspection and copy.
    (f) Where either the Assistant Secretary or the Secretary denies a 
request for decertification and orders further remedial action, the 
Regional Administrator must continue to monitor the SWA's compliance. 
If the SWA achieves compliance within the time established pursuant to 
paragraph (b) of this section, the Regional Administrator must 
terminate the remedial actions. If the SWA fails to achieve full 
compliance within that time period after the Secretary's decision not 
to decertify, the Regional Administrator must submit a report of his/
her findings to the Assistant Secretary who must reconsider the request 
for decertification pursuant to the requirements of paragraph (b) of 
this section.


Sec.  658.706  Notice of decertification.

    If the Secretary decides to decertify a SWA, he/she must send a 
Notice of Decertification to the SWA stating the reasons for this 
action and providing a 10 business day period during which the SWA may 
request an administrative hearing in writing to the Secretary. The 
notice must be published promptly in the Federal Register.


Sec.  658.707  Requests for hearings.

    (a) Any SWA which received a Notice of Decertification under Sec.  
658.706 or a notice of disallowance under Sec.  658.702(g) may request 
a hearing on the issue by filing a written request for hearing with the 
Secretary within 10 business days of receipt of the notice. This 
request must state the reasons the SWA believes the basis of the 
decision to be wrong, and it must be signed by the State Administrator 
(electronic signatures may be accepted).
    (b) When the Secretary receives a request for a hearing from a SWA, 
he/she must send copies of a file containing

[[Page 56368]]

all materials and correspondence relevant to the case to the Assistant 
Secretary, the Regional Administrator, the Solicitor of Labor, and the 
Department of Labor Chief Administrative Law Judge. When the case 
involves violations of regulations governing services to MSFWs or the 
Complaint System, a copy must be sent to the NMA.
    (c) The Secretary must publish notice of hearing in the Federal 
Register. This notice must invite all interested parties to attend and 
to present evidence at the hearing. All interested parties who make 
written request to participate must thereafter receive copies (hard 
copy and/or electronic) of all documents filed in said proceedings.


Sec.  658.708  Hearings.

    (a) Upon receipt of a hearing file by the Chief Administrative Law 
Judge, the case must be docketed and notice sent by electronic mail, 
other means of electronic service, or registered mail, return receipt 
requested, to the Solicitor of Labor, Attention: Associate Solicitor 
for Employment and Training, the Administrator, the Regional 
Administrator and the State Administrator. The notice must set a time, 
place, and date for a hearing on the matter and must advise the parties 
that:
    (1) They may be represented at the hearing;
    (2) They may present oral and documentary evidence at the hearing;
    (3) They may cross-examine opposing witnesses at the hearing; and
    (4) They may request rescheduling of the hearing if the time, 
place, or date set are inconvenient.
    (b) The Solicitor of Labor or the Solicitor's designee will 
represent the Department at the hearing.


Sec.  658.709  Conduct of hearings.

    (a) Proceedings under this section are governed by secs. 5 through 
8 of the Administrative Procedure Act, 5 U.S.C. 553 et seq. and the 
rules of practice and procedure at subpart A of 29 CFR part 18, except 
as otherwise specified in this section.
    (b) Technical rules of evidence do not apply, but rules or 
principles designed to assure production of the most credible evidence 
available and to subject testimony to test by cross-examination, must 
be applied if necessary by the ALJ conducting the hearing. The ALJ may 
exclude irrelevant, immaterial, or unduly repetitious evidence. All 
documents and other evidence offered or taken for the record must be 
open to examination by the parties. Opportunity must be given to refute 
facts and arguments advanced on either side of the issue. A transcript 
must be made of the oral evidence except to the extent the substance 
thereof is stipulated for the record.
    (c) Discovery may be conducted as provided in the rules of practice 
and procedure at 29 CFR 18.50 through 18.65.
    (d) When a public officer is a respondent in a hearing in an 
official capacity and during its pendency dies, resigns, or otherwise 
ceases to hold office, the proceeding does not abate and the officer's 
successor is automatically substituted as a party. Proceedings 
following the substitution must be in the name of the substituted 
party, but any misnomer not affecting the substantive rights of the 
parties must be disregarded. An order of substitution may be entered at 
any time, but the omission to enter such an order may not affect the 
substitution.


Sec.  658.710  Decision of the Administrative Law Judge.

    (a) The ALJ has jurisdiction to decide all issues of fact and 
related issues of law and to grant or deny appropriate motions, but 
does not have jurisdiction to decide upon the validity of Federal 
statutes or regulations.
    (b) The decision of the ALJ must be based on the hearing record, 
must be in writing, and must state the factual and legal basis of the 
decision. The ALJ's decision must be available for public inspection 
and copying.
    (c) Except when the case involves the decertification of a SWA, the 
decision of the ALJ will be considered the final decision of the 
Secretary.
    (d) If the case involves the decertification of an appeal to the 
SWA, the decision of the ALJ must contain a notice stating that, within 
30 calendar days of the decision, the SWA or the Administrator may 
appeal to the Administrative Review Board, United States Department of 
Labor, by sending a written appeal to the Administrative Review Board.


Sec.  658.711  Decision of the Administrative Review Board.

    (a) Upon the receipt of an appeal to the Administrative Review 
Board, United States Department of Labor, the ALJ must certify the 
record in the case to the Administrative Review Board, which must make 
a decision to decertify or not on the basis of the hearing record.
    (b) The decision of the Administrative Review Board is the final 
decision of the Secretary on decertification appeals. It must be in 
writing, and must set forth the factual and legal basis for the 
decision. Notice of the Administrative Review Board's decision must be 
published in the Federal Register, and copies must be made available 
for public inspection and copying.

0
11. Add part 675 to read as follows:

PART 675--INTRODUCTION TO THE REGULATIONS FOR THE WORKFORCE 
DEVELOPMENT SYSTEMS UNDER TITLE I OF THE WORKFORCE INNOVATION AND 
OPPORTUNITY ACT

Sec.
675.100 What are the purposes of title I of the Workforce Innovation 
and Opportunity Act?
675.200 What do the regulations for workforce development systems 
under title I of the Workforce Innovation and Opportunity Act cover?
675.300 What definitions apply to these regulations?

    Authority:  Secs. 2, 3, 189, 503, Pub. L. 113-128, 128 Stat. 
1425 (Jul. 22, 2014).


Sec.  675.100  What are the purposes of title I of the Workforce 
Innovation and Opportunity Act?

    The purposes of title I of the Workforce Innovation and Opportunity 
Act (WIOA) include:
    (a) Increasing access to, and opportunities for individuals to 
receive, the employment, education, training, and support services 
necessary to succeed in the labor market, with a particular focus on 
those individuals with disabilities or other barriers to employment 
including out of school youth with the goal of improving their 
outcomes;
    (b) Enhancing the strategic role for States and elected officials, 
and Local Workforce Development Boards (WDBs) in the public workforce 
system by increasing flexibility to tailor services to meet employer 
and worker needs at State, regional, and local levels;
    (c) Streamlining service delivery across multiple programs by 
requiring colocation, coordination, and integration of activities and 
information to make the system understandable and accessible for 
individuals, including individuals with disabilities and those with 
other barriers to employment, and businesses.
    (d) Supporting the alignment of the workforce investment, 
education, and economic development systems in support of a 
comprehensive, accessible, and high-quality workforce development 
system at the Federal, State, and local and regional levels;
    (e) Improving the quality and labor market relevance of workforce 
investment, education, and economic development efforts by promoting 
the use of industry and sector partnerships,

[[Page 56369]]

career pathways, and regional service delivery strategies in order to 
both provide America's workers with the skills and credentials that 
will enable them to secure and advance in employment with family-
sustaining wages, and to provide America's employers with the skilled 
workers the employers need to succeed in a global economy;
    (f) Promoting accountability using core indicators of performance 
measured across all WIOA authorized programs, sanctions, and high 
quality evaluations to improve the structure and delivery of services 
through the workforce development system to address and improve the 
employment and skill needs of workers, job seekers, and employers;
    (g) Increasing the prosperity and economic growth of workers, 
employers, communities, regions, and States; and
    (h) Providing workforce development activities through statewide 
and local workforce development systems to increase employment, 
retention and earnings of participants and to increase industry-
recognized postsecondary credential attainment to improve the quality 
of the workforce, reduce welfare dependency, increase economic self-
sufficiency, meet skill requirements of employers, and enhance 
productivity and competitiveness of the nation.


Sec.  675.200  What do the regulations for workforce development 
systems under title I of the Workforce Innovation and Opportunity Act 
cover?

    (a) The regulations found in parts 675 through 688 of this chapter 
set forth the regulatory requirements that are applicable to programs 
operated with funds provided under title I of WIOA. This part describes 
the purpose of that Act, explains the format of these regulations, and 
sets forth definitions for terms that apply to each part. Parts 676, 
677 and 678 of this chapter contain regulations relating to Unified and 
Combined State Plans, performance accountability, and the one-stop 
delivery system and the roles of one-stop partners, respectively. Part 
679 of this chapter contains regulations relating to statewide and 
local governance of the workforce development system. Part 680 of this 
chapter sets forth requirements applicable to WIOA title I programs 
serving adults and dislocated workers. Part 681 of this chapter sets 
forth requirements applicable to WIOA title I programs serving youth. 
Part 682 of this chapter contains regulations relating to statewide 
activities. Part 683 of this chapter sets forth the administrative 
requirements applicable to programs funded under WIOA title I. Parts 
684 and 685 of this chapter contain the particular requirements 
applicable to programs serving Indians and Native Americans and Migrant 
and Seasonal Farmworkers, respectively. Parts 686 and 687 of this 
chapter describe the particular requirements applicable to the Job 
Corps and the national dislocated worker grant programs, respectively. 
Part 688 of this chapter contains the regulations governing the 
YouthBuild program. In addition, part 603 of this chapter provides the 
requirements regarding confidentiality and disclosure of State 
Unemployment Compensation program data under WIOA.
    (b) Finally, parts 651 through 658 of this chapter address 
provisions for the Wagner-Peyser Act Employment Service, as amended by 
WIOA title III. Specifically, part 651 of this chapter contains general 
provisions and definitions of terms used in parts 651 through 658 of 
this chapter; part 652 of this chapter establishes the State Employment 
Service and describes its operation and services; part 653 of this 
chapter describes employment services to migrant and seasonal 
farmworkers and the role of the State Monitor Advocate; part 654 of 
this chapter addresses the special responsibilities of the Employment 
Service regarding housing for farmworkers; and part 658 of this chapter 
contains the administrative provisions that apply to the Wagner-Peyser 
Act Employment Service.
    (c) Title 29 CFR part 38 contains the Department's 
nondiscrimination regulations implementing WIOA sec. 188.


Sec.  675.300  What definitions apply to these regulations?

    In addition to the definitions set forth in WIOA and those set 
forth in specific parts of this chapter, the following definitions 
apply to the regulations in parts 675 through 688 of this chapter:
    Consultation means the process by which State and/or local 
stakeholders convene to discuss changes to the public workforce system 
and constitutes a robust conversation in which all parties are given an 
opportunity to share their thoughts and opinions.
    Contract means a legal instrument by which a non-Federal entity 
purchases property or services needed to carry out the project or 
program under a Federal award. The term as used in this part does not 
include a legal instrument, even if the non-Federal entity considers it 
a contract, when the substance of the transaction meets the definition 
of a Federal award or subaward as defined in this section.
    Contractor means an entity that receives a contract as defined in 
this section.
    Cooperative agreement means a legal instrument of financial 
assistance between a Federal awarding agency or pass-through entity and 
a non-Federal entity that, consistent with 31 U.S.C. 6302-6305:
    (1) Is used to enter into a relationship the principal purpose of 
which is to transfer anything of value from the Federal awarding agency 
or pass-through entity to the non-Federal entity to carry out a public 
purpose authorized by a law of the United States (see 31 U.S.C. 
6101(3)); and not to acquire property or services for the Federal 
government or pass-through entity's direct benefit or use;
    (2) Is distinguished from a grant in that it provides for 
substantial involvement between the Federal awarding agency or pass-
through entity and the non-Federal entity in carrying out the activity 
contemplated by the Federal award.
    (3) The term does not include:
    (i) A cooperative research and development agreement as defined in 
15 U.S.C. 3710a; or
    (ii) An agreement that provides only:
    (A) Direct United States Government cash assistance to an 
individual;
    (B) A subsidy;
    (C) A loan;
    (D) A loan guarantee; or
    (E) Insurance.
    Department means the U.S. Department of Labor, including its 
agencies and organizational units.
    Employment and training activity means a workforce investment 
activity that is carried out for an adult or dislocated worker under 
part 678 of this chapter.
    Equal opportunity data or EO data means data on race and ethnicity, 
age, sex, and disability required by 29 CFR part 38 of the Department 
of Labor regulations implementing sec. 188 of WIOA, governing 
nondiscrimination.
    Employment and Training Administration or ETA means the Employment 
and Training Administration of the U.S. Department of Labor.
    Family means two or more persons related by blood, marriage, or 
decree of court, who are living in a single residence, and are included 
in one or more of the following categories:
    (1) A married couple and dependent children;
    (2) A parent or guardian and dependent children; or
    (3) A married couple.

[[Page 56370]]

    Federal award means:
    (1) The Federal financial assistance that a non-Federal entity 
receives directly from a Federal awarding agency or indirectly from a 
pass-through entity, as described in 2 CFR 200.101 (Applicability);
    (2) The cost-reimbursement contract under the Federal Acquisition 
Regulations that a non-Federal entity receives directly from a Federal 
awarding agency or indirectly from a pass-through entity, as described 
in 2 CFR 200.101 (Applicability); and
    (3) The instrument setting forth the terms and conditions. The 
instrument is the grant agreement, cooperative agreement, other 
agreement for assistance covered in paragraph (b) of 2 CFR 200.40 
(Federal financial assistance), or the cost-reimbursement contract 
awarded under the Federal Acquisition Regulations.
    (4) Federal award does not include other contracts that a Federal 
agency uses to buy goods or services from a contractor or a contract to 
operate Federal government owned, contractor operated facilities 
(GOCOs).
    Federal financial assistance means:
    (1) For grants and cooperative agreements, assistance in the form 
of:
    (i) Grants;
    (ii) Cooperative agreements;
    (iii) Non-cash contributions or donations of property (including 
donated surplus property);
    (iv) Direct appropriations;
    (v) Food commodities; and
    (vi) Other financial assistance, except assistance listed in 
paragraph (2) of this definition.
    (2) For purposes of the audit requirements at 2 CFR part 200, 
subpart F, Federal financial assistance includes assistance that non-
Federal entities receive or administer in the form of:
    (i) Loans;
    (ii) Loan Guarantees;
    (iii) Interest subsidies; and
    (iv) Insurance.
    (3) Federal financial assistance does not include amounts received 
as reimbursement for services rendered to individuals as described in 2 
CFR 200.502, which outlines the basis for determining Federal awards 
expended.
    Grant or grant agreement means a legal instrument of financial 
assistance between a Federal awarding agency and a non-Federal entity 
that, consistent with 31 U.S.C. 6302, 6304:
    (1) Is used to enter into a relationship the principal purpose of 
which is to transfer anything of value from the Federal awarding agency 
to carry out a public purpose authorized by a law of the United States 
(see 31 U.S.C. 6101(3)); and not to acquire property or services for 
the Federal awarding agency's direct benefit or use;
    (2) Is distinguished from a cooperative agreement in that it does 
not provide for substantial involvement between the Federal awarding 
agency or pass-through entity and the non-Federal entity in carrying 
out the activity contemplated by the Federal award.
    (3) Grant agreement does not include an agreement that provides 
only:
    (i) Direct United States Government cash assistance to an 
individual;
    (ii) A subsidy;
    (iii) A loan;
    (iv) A loan guarantee; or
    (v) Insurance.
    Grantee means the direct recipient of grant funds from the 
Department of Labor under a grant or grant agreement. A grantee also 
may be referred to as a recipient.
    Individual with a disability means an individual with any 
disability as defined in sec. 3 of the Americans with Disabilities Act 
of 1990 (42 U.S.C. 12102). For purposes of WIOA sec. 188, this term is 
defined at 29 CFR 38.4.
    Labor Federation means an alliance of two or more organized labor 
unions for the purpose of mutual support and action.
    Literacy means an individual's ability to read, write, and speak in 
English, and to compute, and solve problems, at levels of proficiency 
necessary to function on the job, in the family of the individual, and 
in society.
    Local WDB means a Local Workforce Development Board (WDB) 
established under WIOA sec. 107, to set policy for the local workforce 
development system.
    Non-Federal entity, as defined in 2 CFR 2900.2, means a State, 
local government, Indian tribe, institution of higher education (IHE), 
for-profit entity, foreign public entity, foreign organization or 
nonprofit organization that carries out a Federal award as a recipient 
or subrecipient.
    Obligations when used in connection with a non-Federal entity's 
utilization of funds under a Federal award, means orders placed for 
property and services, contracts and subawards made, and similar 
transactions during a given period that require payment by the non- 
Federal entity during the same or a future period.
    Outlying area means:
    (1) The United States Virgin Islands, Guam, American Samoa, the 
Commonwealth of the Northern Mariana Islands; and
    (2) The Republic of Palau, except during a period that the 
Secretaries determine both that a Compact of Free Association is in 
effect and that the Compact contains provisions for training and 
education assistance prohibiting the assistance provided under WIOA.
    Pass-through entity means a non-Federal entity that provides a 
subaward to a subrecipient to carry out part of a Federal program.
    Recipient means a non-Federal entity that receives a Federal award 
directly from a Federal awarding agency to carry out an activity under 
a Federal program. The term recipient does not include subrecipients.
    Register means the process for collecting information, including 
identifying information, to determine an individual's eligibility for 
services under WIOA title I. Individuals may be registered in a variety 
ways, as described in Sec.  680.110 of this chapter.
    Secretary means the Secretary of the U.S. Department of Labor, or 
their designee.
    Secretaries means the Secretaries of the U.S. Department Labor and 
the U.S. Department of Education, or their designees.
    Self-certification means an individual's signed attestation that 
the information they submit to demonstrate eligibility for a program 
under title I of WIOA is true and accurate.
    State means each of the several States of the United States, the 
District of Columbia, and the Commonwealth of Puerto Rico. The term 
``State'' does not include outlying areas.
    State WDB means a State Workforce Development Board (WDB) 
established under WIOA sec. 101.
    Subgrant or subaward means an award provided by a pass-through 
entity to a subrecipient for the subrecipient to carry out part of a 
Federal award received by the pass-through entity. It does not include 
payments to a contractor or payments to an individual that is a 
beneficiary of a Federal program. A subaward may be provided through 
any form of legal agreement, including an agreement that the pass-
through entity considers a contract.
    Subrecipient means a non-Federal entity that receives a subaward 
from a pass-through entity to carry out part of a Federal program, but 
does not include an individual that is a beneficiary of such program. A 
subrecipient also may be a recipient of other Federal awards directly 
from a Federal awarding agency.
    Unliquidated obligations means, for financial reports prepared on a 
cash basis, obligations incurred by the non-Federal entity that have 
not been paid (liquidated). For reports prepared on an accrual 
expenditure basis, these are obligations incurred by the non-Federal

[[Page 56371]]

entity for which an expenditure has not been recorded.
    Unobligated balance means the amount of funds under a Federal award 
that the non-Federal entity has not obligated. The amount is computed 
by subtracting the cumulative amount of the non-Federal entity's 
unliquidated obligations and expenditures of funds under the Federal 
award from the cumulative amount of the funds that the Federal awarding 
agency or pass- through entity authorized the non- Federal entity to 
obligate.
    Wagner-Peyser Act means the Act of June 6, 1933, as amended, 
codified at 29 U.S.C. 49 et seq.
    WIA regulations mean the regulations in parts 660 through 672 of 
this chapter, the Wagner-Peyser Act regulations in part 652, subpart C, 
of this chapter, and the regulations implementing WIA sec. 188 in 29 
CFR part 37.
    WIOA regulations mean the regulations in parts 675 through 687 of 
this chapter, the Wagner-Peyser Act regulations in part 652, subpart C, 
of this chapter, and the regulations implementing WIA sec. 188 in 29 
CFR part 38.
    Workforce investment activities mean the array of activities 
permitted under title I of WIOA, which include employment and training 
activities for adults and dislocated workers, as described in WIOA sec. 
134, and youth activities, as described in WIOA sec. 129.
    Youth workforce investment activity means a workforce investment 
activity that is carried out for eligible youth under part 679 of this 
chapter.

0
12. Add part 679 to read as follows:

PART 679--STATEWIDE AND LOCAL GOVERNANCE OF THE WORKFORCE 
DEVELOPMENT SYSTEM UNDER TITLE I OF THE WORKFORCE INNOVATION AND 
OPPORTUNITY ACT

Subpart A--State Workforce Development Board

Sec.
679.100 What is the purpose of the State Workforce Development 
Board?
679.110 What is the State Workforce Development Board?
679.120 What is meant by the terms ``optimum policy-making 
authority'' and ``demonstrated experience and expertise''?
679.130 What are the functions of the State Workforce Development 
Board?
679.140 How does the State Workforce Development Board meet its 
requirement to conduct business in an open manner under ``sunshine 
provision'' of the Workforce Innovation and Opportunity Act?
679.150 Under what circumstances may the Governor select an 
alternative entity in place of the State Workforce Development 
Board?
679.160 Under what circumstances may the State Workforce Development 
Board hire staff?
Subpart B--Workforce Innovation and Opportunity Act Local Governance 
(Workforce Development Areas)
Sec.
679.200 What is the purpose of requiring States to identify regions?
679.210 What are the requirements for identifying a region?
679.220 What is the purpose of the local area?
679.230 What are the general procedural requirements for designation 
of local areas?
679.240 What are the substantive requirements for designation of 
local areas that were not designated as local areas under the 
Workforce Investment Act of 1998?
679.250 What are the requirements for initial and subsequent 
designation of workforce development areas that had been designated 
as local areas under the Workforce Investment Act of 1998?
679.260 What do the terms ``performed successfully'' and ``sustained 
fiscal integrity'' mean for purposes of designating local areas?
679.270 What are the special designation provisions for single-area 
States?
679.280 How does the State fulfill the requirement to provide 
assistance to local areas within a planning region that wish to 
redesignate into a single local area?
679.290 What right does an entity have to appeal the Governor's 
decision rejecting a request for designation as a workforce 
development area?
Subpart C--Local Workforce Development Boards
Sec.
679.300 What is the vision and purpose of the Local Workforce 
Development Board?
679.310 What is the Local Workforce Development Board?
679.320 Who are the required members of the Local Workforce 
Development Board?
679.330 Who must chair a Local Workforce Development Board?
679.340 What is meant by the terms ``optimum policy-making 
authority'' and ``demonstrated experience and expertise''?
679.350 What criteria will be used to establish the membership of 
the Local Workforce Development Board?
679.360 What is a standing committee, and what is its relationship 
to the Local Workforce Development Board?
679.370 What are the functions of the Local Workforce Development 
Board?
679.380 How does the Local Workforce Development Board satisfy the 
consumer choice requirements for career services and training 
services?
679.390 How does the Local Workforce Development Board meet its 
requirement to conduct business in an open manner under the 
``sunshine provision'' of the Workforce Innovation and Opportunity 
Act?
679.400 Who are the staff to the Local Workforce Development Board 
and what is their role?
679.410 Under what conditions may a Local Workforce Development 
Board directly be a provider of career services, or training 
services, or act as a one-stop operator?
679.420 What are the functions of the local fiscal agent?
679.430 How do entities performing multiple functions in a local 
area demonstrate internal controls and prevent conflict of interest?
Subpart D--Regional and Local Plan
Sec.
679.500 What is the purpose of the regional and local plan?
679.510 What are the requirements for regional planning?
679.520 What are the requirements for approval of a regional plan?
679.530 When must the regional plan be modified?
679.540 How are local planning requirements reflected in a regional 
plan?
679.550 What are the requirements for the development of the local 
plan?
679.560 What are the contents of the local plan?
679.570 What are the requirements for approval of a local plan?
679.580 When must the local plan be modified?
Subpart E--Waivers/WorkFlex (Workforce Flexibility Plan)
Sec.
679.600 What is the purpose of the general statutory and regulatory 
waiver authority in the Workforce Innovation and Opportunity Act?
679.610 What provisions of the Workforce Innovation and Opportunity 
Act and the Wagner-Peyser Act may be waived, and what provisions may 
not be waived?
679.620 Under what conditions may a Governor request, and the 
Secretary approve, a general waiver of statutory or regulatory 
requirements under the Workforce Innovation and Opportunity Act?
679.630 Under what conditions may the Governor submit a workforce 
flexibility plan?
679.640 What limitations apply to the State's workforce flexibility 
plan authority under the Workforce Innovation and Opportunity Act?

    Authority: Secs. 101, 106, 107, 108, 189, 503, Public Law 113-
128, 128 Stat. 1425 (Jul. 22, 2014).

[[Page 56372]]

Subpart A--State Workforce Development Board


Sec.  679.100  What is the purpose of the State Workforce Development 
Board?

    The purpose of the State Workforce Development Board (WDB) is to 
convene State, regional, and local workforce system and partners, to--
    (a) Enhance the capacity and performance of the workforce 
development system;
    (b) Align and improve the outcomes and effectiveness of Federally-
funded and other workforce programs and investments; and
    (c) Through these efforts, promote economic growth.
    (d) Engage public workforce system representatives, including 
businesses, education providers, economic development, labor 
representatives, and other stakeholders to help the workforce 
development system achieve the purpose of the Workforce Innovation and 
Opportunity Act (WIOA); and
    (e) Assist to achieve the State's strategic and operational vision 
and goals as outlined in the State Plan.


Sec.  679.110   What is the State Workforce Development Board?

    (a) The State WDB is a board established by the Governor in 
accordance with the requirements of WIOA sec. 101 and this section.
    (b) The membership of the State WDB must meet the requirements of 
WIOA sec. 101(b) and must represent diverse geographic areas of the 
State, including urban, rural, and suburban areas. The WDB membership 
must include:
    (1) The Governor;
    (2) A member of each chamber of the State legislature, appointed by 
the appropriate presiding officers of such chamber, as appropriate 
under State law; and
    (3) Members appointed by the Governor, which must include:
    (i) A majority of representatives of businesses or organizations in 
the State who:
    (A) Are the owner or chief executive officer for the business or 
organization, or is an executive with the business or organization with 
optimum policy-making or hiring authority, and also may be members of a 
Local WDB as described in WIOA sec. 107(b)(2)(A)(i);
    (B) Represent businesses, or organizations that represent 
businesses described in paragraph (b)(3)(i) of this section, that, at a 
minimum, provide employment and training opportunities that include 
high-quality, work-relevant training and development in in-demand 
industry sectors or occupations in the State; and
    (C) Are appointed from a list of potential members nominated by 
State business organizations and business trade associations; and
    (D) At a minimum, one member representing small businesses as 
defined by the U.S. Small Business Administration.
    (ii) Not less than 20 percent who are representatives of the 
workforce within the State, which:
    (A) Must include two or more representatives of labor organizations 
nominated by State labor federations;
    (B) Must include one representative who must be a member of a labor 
organization or training director from a joint labor-management 
registered apprenticeship program, or, if no such joint program exists 
in the State, a member of a labor organization or training director who 
is a representative of an registered apprenticeship program;
    (C) May include one or more representatives of community-based 
organizations that have demonstrated experience and expertise in 
addressing the employment, training, or education needs of individuals 
with barriers to employment, including organizations that serve 
veterans or provide or support competitive, integrated employment for 
individuals with disabilities; and
    (D) May include one or more representatives of organizations that 
have demonstrated experience and expertise in addressing the 
employment, training, or education needs of eligible youth, including 
representatives of organizations that serve out-of-school youth.
    (iii) The balance of the members:
    (A) Must include representatives of the Government including:
    (1) The lead State officials with primary responsibility for the 
following core programs--
    (i) The adult, dislocated worker, and youth programs authorized 
under title I of WIOA and the Wagner-Peyser Act;
    (ii) The Adult Education and Family Literacy Act (AEFLA) program 
authorized under title II of WIOA; and
    (iii) The State Vocational Rehabilitation (VR) program authorized 
under the Rehabilitation Act of 1973, as amended by title IV of WIOA.
    (iv) Where the lead official represents more than one core program, 
that official must ensure adequate representation of the needs of all 
core programs under his or her jurisdiction.
    (2) Two or more chief elected officials (collectively representing 
both cities and counties, where appropriate).
    (B) May include other appropriate representatives and officials 
designated by the Governor, such as, but not limited to, State agency 
officials responsible for one-stop partner programs, economic 
development or juvenile justice programs in the State, individuals who 
represent an Indian tribe or tribal organization as defined in WIOA 
sec. 166(b), and State agency officials responsible for education 
programs in the State, including chief executive officers of community 
colleges and other institutions of higher education.
    (c) The Governor must select a chairperson for the State WDB from 
the business representatives on the WDB described in paragraph 
(b)(3)(i) of this section).
    (d) The Governor must establish by-laws that at a minimum address:
    (1) The nomination process used by the Governor to select the State 
WDB chair and members;
    (2) The term limitations and how the term appointments will be 
staggered to ensure only a portion of membership expire in a given 
year;
    (3) The process to notify the Governor of a WDB member vacancy to 
ensure a prompt nominee;
    (4) The proxy and alternative designee process that will be used 
when a WDB member is unable to attend a meeting and assigns a designee 
as per the following requirements:
    (i) If the alternative designee is a business representative, he or 
she must have optimum policy-making hiring authority.
    (ii) Other alternative designees must have demonstrated experience 
and expertise and optimum policy-making authority.
    (5) The use of technology, such as phone and Web-based meetings, 
that must be used to promote WDB member participation;
    (6) The process to ensure members actively participate in convening 
the workforce development system's stakeholders, brokering 
relationships with a diverse range of employers, and leveraging support 
for workforce development activities; and
    (7) Other conditions governing appointment or membership on the 
State WDB as deemed appropriate by the Governor.
    (e) Members who represent organizations, agencies or other entities 
described in paragraphs (b)(3)(ii) through (iii) of this section must 
be individuals who have optimum policy-making authority in the 
organization or for the core program that they represent.
    (f)(1) A State WDB member may not represent more than one of the 
categories described in:
    (i) Paragraph (b)(3)(i) of this section (business representatives);

[[Page 56373]]

    (ii) Paragraph (b)(3)(ii) of this section (workforce 
representatives); or
    (iii) Paragraph (b)(3)(iii) of this section (government 
representatives).
    (2) A State WDB member may not serve as a representative of more 
than one subcategory under paragraph (b)(3)(ii) of this section.
    (3) A State WDB member may not serve as a representative of more 
than one subcategory under paragraph (b)(3)(iii) of this section, 
except that where a single government agency is responsible for 
multiple required programs, the head of the agency may represent each 
of the required programs.
    (g) All required WDB members must have voting privileges. The 
Governor also may convey voting privileges to non-required members.


Sec.  679.120  What is meant by the terms ``optimum policy-making 
authority'' and ``demonstrated experience and expertise''?

    For purposes of Sec.  679.110:
    (a) A representative with ``optimum policy-making authority'' is an 
individual who can reasonably be expected to speak affirmatively on 
behalf of the entity he or she represents and to commit that entity to 
a chosen course of action.
    (b) A representative with ``demonstrated experience and expertise'' 
means an individual with documented leadership in developing or 
implementing workforce development, human resources, training and 
development, or a core program function. Demonstrated experience and 
expertise may include individuals with experience in education or 
training of job seekers with barriers to employment as described in 
Sec.  679.110(b)(3)(ii)(C) and (D).


Sec.  679.130  What are the functions of the State Workforce 
Development Board?

    Under WIOA sec. 101(d), the State WDB must assist the Governor in 
the:
    (a) Development, implementation, and modification of the 4-year 
State Plan;
    (b) Review of statewide policies, programs, and recommendations on 
actions that must be taken by the State to align workforce development 
programs to support a comprehensive and streamlined workforce 
development system. Such review of policies, programs, and 
recommendations must include a review and provision of comments on the 
State Plans, if any, for programs and activities of one-stop partners 
that are not core programs;
    (c) Development and continuous improvement of the workforce 
development system, including--
    (1) Identification of barriers and means for removing barriers to 
better coordinate, align, and avoid duplication among programs and 
activities;
    (2) Development of strategies to support career pathways for the 
purpose of providing individuals, including low-skilled adults, youth, 
and individuals with barriers to employment, including individuals with 
disabilities, with workforce investment activities, education, and 
supportive services to enter or retain employment;
    (3) Development of strategies to provide effective outreach to and 
improved access for individuals and employers who could benefit from 
workforce development system;
    (4) Development and expansion of strategies to meet the needs of 
employers, workers, and job seekers particularly through industry or 
sector partnerships related to in-demand industry sectors and 
occupations;
    (5) Identification of regions, including planning regions for the 
purposes of WIOA sec. 106(a), and the designation of local areas under 
WIOA sec. 106, after consultation with Local WDBs and chief elected 
officials;
    (6) Development and continuous improvement of the one-stop delivery 
system in local areas, including providing assistance to Local WDBs, 
one-stop operators, one-stop partners, and providers. Such assistance 
includes assistance with planning and delivering services, including 
training and supportive services, to support effective delivery of 
services to workers, job seekers, and employers; and
    (7) Development of strategies to support staff training and 
awareness across the workforce development system and its programs;
    (d) Development and updating of comprehensive State performance and 
accountability measures to assess core program effectiveness under WIOA 
sec. 116(b);
    (e) Identification and dissemination of information on best 
practices, including best practices for--
    (1) The effective operation of one-stop centers, relating to the 
use of business outreach, partnerships, and service delivery 
strategies, including strategies for serving individuals with barriers 
to employment;
    (2) The development of effective Local WDBs, which may include 
information on factors that contribute to enabling Local WDBs to exceed 
negotiated local levels of performance, sustain fiscal integrity, and 
achieve other measures of effectiveness; and
    (3) Effective training programs that respond to real-time labor 
market analysis, that effectively use direct assessment and prior 
learning assessment to measure an individual's prior knowledge, skills, 
competencies, and experiences for adaptability, to support efficient 
placement into employment or career pathways;
    (f) Development and review of statewide policies affecting the 
coordinated provision of services through the State's one-stop delivery 
system described in WIOA sec. 121(e), including the development of--
    (1) Objective criteria and procedures for use by Local WDBs in 
assessing the effectiveness, physical and programmatic accessibility 
and continuous improvement of one-stop centers. Where a Local WDB 
serves as the one-stop operator, the State WDB must use such criteria 
to assess and certify the one-stop center;
    (2) Guidance for the allocation of one-stop center infrastructure 
funds under WIOA sec. 121(h); and
    (3) Policies relating to the appropriate roles and contributions of 
entities carrying out one-stop partner programs within the one-stop 
delivery system, including approaches to facilitating equitable and 
efficient cost allocation in the system;
    (g) Development of strategies for technological improvements to 
facilitate access to, and improve the quality of services and 
activities provided through the one-stop delivery system, including 
such improvements to--
    (1) Enhance digital literacy skills (as defined in sec. 202 of the 
Museum and Library Service Act, 20 U.S.C. 9101);
    (2) Accelerate acquisition of skills and recognized postsecondary 
credentials by participants;
    (3) Strengthen professional development of providers and workforce 
professionals; and
    (4) Ensure technology is accessible to individuals with 
disabilities and individuals residing in remote areas;
    (h) Development of strategies for aligning technology and data 
systems across one-stop partner programs to enhance service delivery 
and improve efficiencies in reporting on performance accountability 
measures, including design implementation of common intake, data 
collection, case management information, and performance accountability 
measurement and reporting processes and the incorporation of local 
input into such design and implementation to improve coordination of 
services across one-stop partner programs;
    (i) Development of allocation formulas for the distribution of 
funds for employment and training activities for adults and youth 
workforce investment activities, to local areas as permitted under WIOA 
secs. 128(b)(3) and 133(b)(3);

[[Page 56374]]

    (j) Preparation of the annual reports described in paragraphs (1) 
and (2) of WIOA sec. 116(d);
    (k) Development of the statewide workforce and labor market 
information system described in sec. 15(e) of the Wagner-Peyser Act; 
and
    (l) Development of other policies as may promote statewide 
objectives for and enhance the performance of the workforce development 
system in the State.


Sec.  679.140  How does the State Workforce Development Board meet its 
requirement to conduct business in an open manner under the ``sunshine 
provision'' of the Workforce Innovation and Opportunity Act?

    (a) The State WDB must conduct business in an open manner as 
required by WIOA sec. 101(g).
    (b) The State WDB must make available to the public, on a regular 
basis through electronic means and open meetings, information about the 
activities and functions of the State WDB, including:
    (1) The State Plan, or modification to the State Plan, prior to 
submission of the State Plan or modification of the State Plan;
    (2) Information regarding membership;
    (3) Minutes of formal meetings of the State WDB upon request;
    (4) State WDB by-laws as described at Sec.  679.110(d).


Sec.  679.150  Under what circumstances may the Governor select an 
alternative entity in place of the State Workforce Development Board?

    (a) The State may use any State entity that meets the requirements 
of WIOA sec. 101(e) to perform the functions of the State WDB. This may 
include:
    (1) A State council;
    (2) A State WDB within the meaning of the Workforce Investment Act 
of 1998, as in effect on the day before the date of enactment of WIOA; 
or
    (3) A combination of regional WDBs or similar entity.
    (b) If the State uses an alternative entity, the State Plan must 
demonstrate that the alternative entity meets all three of the 
requirements of WIOA sec. 101(e)(1):
    (1) Was in existence on the day before the date of enactment of the 
Workforce Investment Act of 1998 (WIA);
    (2) Is substantially similar to the State WDB described in WIOA 
secs. 101(a)-(c) and Sec.  679.110; and
    (3) Includes representatives of business and labor organizations in 
the State.
    (c) If the alternative entity does not provide representatives for 
each of the categories required under WIOA sec. 101(b), the State Plan 
must explain the manner in which the State will ensure an ongoing role 
for any unrepresented membership group in the workforce development 
system. The State WDB must maintain an ongoing and meaningful role for 
an unrepresented membership group, including entities carrying out the 
core programs, by such methods as:
    (1) Regularly scheduled consultations with entities within the 
unrepresented membership groups;
    (2) Providing an opportunity for input into the State Plan or other 
policy development by unrepresented membership groups; and
    (3) Establishing an advisory committee of unrepresented membership 
groups.
    (d) In parts 675 through 687 of this chapter, all references to the 
State WDB also apply to an alternative entity used by a State.


Sec.  679.160  Under what circumstances may the State Workforce 
Development Board hire staff?

    (a) The State WDB may hire a director and other staff to assist in 
carrying out the functions described in WIOA sec. 101(d) and Sec.  
679.130 using funds described in WIOA sec. 129(b)(3) or sec. 
134(a)(3)(B)(i).
    (b) The State WDB must establish and apply a set of objective 
qualifications for the position of director that ensures the individual 
selected has the requisite knowledge, skills, and abilities to meet 
identified benchmarks and to assist in effectively carrying out the 
functions of the State WDB.
    (c) The director and staff must be subject to the limitations on 
the payment of salary and bonuses described in WIOA sec. 194(15).

Subpart B--Workforce Innovation and Opportunity Act Local 
Governance (Workforce Development Areas)


Sec.  679.200  What is the purpose of requiring States to identify 
regions?

    The purpose of identifying regions is to align workforce 
development activities and resources with larger regional economic 
development areas and available resources to provide coordinated and 
efficient services to both job seekers and employers.


Sec.  679.210  What are the requirements for identifying a region?

    (a) The Governor must assign local areas to a region prior to 
submission of the State Unified or Combined Plan, in order for the 
State to receive WIOA title I, subtitle B adult, dislocated worker, and 
youth allotments.
    (b) The Governor must develop a policy and process for identifying 
regions. Such policy must include:
    (1) Consultation with the Local WDBs and chief elected officials 
(CEOs) in the local area(s) as required in WIOA sec. 
102(b)(2)(D)(i)(II) and WIOA sec. 106(a)(1); and
    (2) Consideration of the extent to which the local areas in a 
proposed region:
    (i) Share a single labor market;
    (ii) Share a common economic development area; and
    (iii) Possess the Federal and non-Federal resources, including 
appropriate education and training institutions, to administer 
activities under WIOA subtitle B.
    (c) In addition to the required criteria described in paragraph 
(b)(2) of this section, other factors the Governor also may consider 
include:
    (1) Population centers;
    (2) Commuting patterns;
    (3) Land ownership;
    (4) Industrial composition;
    (5) Location quotients;
    (6) Labor force conditions;
    (7) Geographic boundaries; and
    (8) Additional factors as determined by the Secretary.
    (d) Regions must consist of:
    (1) One local area;
    (2) Two or more contiguous local areas in a single State; or
    (3) Two or more contiguous local areas in two or more States.
    (e) Planning regions are those regions described in paragraph 
(d)(2) or (3) of this section. Planning regions are subject to the 
regional planning requirements in Sec.  679.510.


Sec.  679.220  What is the purpose of the local area?

    (a) The purpose of a local area is to serve as a jurisdiction for 
the administration of workforce development activities and execution of 
adult, dislocated worker, and youth funds allocated by the State. Such 
areas may be aligned with a region identified in WIOA sec. 106(a)(1) or 
may be components of a planning region, each with its own Local WDB. 
Also, significantly, local areas are the areas within which Local WDBs 
oversee their functions, including strategic planning, operational 
alignment and service delivery design, and a jurisdiction where 
partners align resources at a sub-State level to design and implement 
overall service delivery strategies.
    (b) The Governor must designate local areas (local areas) in order 
for the State to receive adult, dislocated worker, and youth funding 
under title I, subtitle B of WIOA.

[[Page 56375]]

Sec.  679.230  What are the general procedural requirements for 
designation of local areas?

    As part of the process of designating or redesignating a local 
area, the Governor must develop a policy for designation of local areas 
that must include:
    (a) Consultation with the State WDB;
    (b) Consultation with the chief elected officials and affected 
Local WDBs; and
    (c) Consideration of comments received through a public comment 
process which must:
    (1) Offer adequate time for public comment prior to designation of 
the local area; and
    (2) Provide an opportunity for comment by representatives of Local 
WDBs, chief elected officials, businesses, institutions of higher 
education, labor organizations, other primary stakeholders, and the 
general public regarding the designation of the local area.


Sec.  679.240  What are the substantive requirements for designation of 
local areas that were not designated as local areas under the Workforce 
Investment Act of 1998?

    (a) Except as provided in Sec.  679.250, the Governor may designate 
or redesignate a local area in accordance with policies and procedures 
developed by the Governor, which must include at a minimum 
consideration of the extent to which the proposed area:
    (1) Is consistent with local labor market areas;
    (2) Has a common economic development area; and
    (3) Has the Federal and non-Federal resources, including 
appropriate education and training institutions, to administer 
activities under WIOA subtitle B.
    (b) The Governor may approve a request at any time for designation 
as a workforce development area from any unit of general local 
government, including a combination of such units, if the State WDB 
determines that the area meets the requirements of paragraph (a)(1) of 
this section and recommends designation.
    (c) Regardless of whether a local area has been designated under 
this section or Sec.  679.250, the Governor may redesignate a local 
area if the redesignation has been requested by a local area and the 
Governor approves the request.


Sec.  679.250  What are the requirements for initial and subsequent 
designation of workforce development areas that had been designated as 
local areas under the Workforce Investment Act of 1998?

    (a) If the chief elected official and Local WDB in a local area 
submits a request for initial designation, the Governor must approve 
the request if, for the 2 program years preceding the date of enactment 
of WIOA, the following criteria are met:
    (1) The local area was designated as a local area for purposes of 
WIA;
    (2) The local area performed successfully; and
    (3) The local area sustained fiscal integrity.
    (b) Subject to paragraph (c) of this section, after the period of 
initial designation, if the chief elected official and Local WDB in a 
local area submits a request for subsequent designation, the Governor 
must approve the request if the following criteria are met for the 2 
most recent program years of initial designation:
    (1) The local area performed successfully;
    (2) The local area sustained fiscal integrity; and
    (3) In the case of a local area in a planning region, the local 
area met the regional planning requirements described in WIOA sec. 
106(c)(1).
    (c) No determination of subsequent eligibility may be made before 
the conclusion of Program Year (PY) 2017.
    (d) The Governor:
    (1) May review a local area designated under paragraph (b) of this 
section at any time to evaluate whether that the area continues to meet 
the requirements for subsequent designation under that paragraph; and
    (2) Must review a local area designated under paragraph (b) of this 
section before submitting its State Plan during each 4-year State 
planning cycle to evaluate whether the area continues to meet the 
requirements for subsequent designation under that paragraph.
    (e) For purposes of subsequent designation under paragraphs (b) and 
(d) of this section, the local area and chief elected official must be 
considered to have requested continued designation unless the local 
area and chief elected official notify the Governor that they no longer 
seek designation.
    (f) Local areas designated under Sec.  679.240 or States designated 
as single-area States under Sec.  679.270 are not subject to the 
requirements described in paragraph (b) of this section related to the 
subsequent designation of a local area.
    (g) The Governor may approve, under paragraph (c) of this section, 
a request for designation as a local area from areas served by rural 
concentrated employment programs as described in WIOA sec. 
107(c)(1)(C).


Sec.  679.260  What do the terms ``performed successfully'' and 
``sustained fiscal integrity'' mean for purposes of designating local 
areas?

    (a) For the purpose of initial local area designation, the term 
``performed successfully'' means that the local area met or exceeded 
the levels of performance the Governor negotiated with the Local WDB 
and chief elected official under WIA sec. 136(c) for the last 2 full 
program years before the enactment of WIOA, and that the local area has 
not failed any individual measure for the last 2 consecutive program 
years before the enactment of WIOA.
    (b) For the purpose of determining subsequent local area 
designation, the term ``performed successfully'' means that the local 
area met or exceeded the levels of performance the Governor negotiated 
with the Local WDB and chief elected official for core indicators of 
performance as provided in paragraphs (b)(1) and (2) of this section as 
appropriate, and that the local area has not failed any individual 
measure for the last 2 consecutive program years in accordance with a 
State-established definition, provided in the State Plan, of met or 
exceeded performance.
    (1) For subsequent designation determinations made at the 
conclusion of PY 2017, a finding of whether a local area performed 
successfully must be limited to having met or exceeded the negotiated 
levels for the Employment Rate 2nd Quarter after Exit and the Median 
Earnings indicators of performance, as described at Sec.  
677.155(a)(1)(i) and (iii) of this chapter respectively, for PY 2016 
and PY 2017.
    (2) For subsequent designation determinations made at the 
conclusion of PY 2018, or at any point thereafter, a finding of whether 
a local area performed successfully must be based on all six of the 
WIOA indicators of performance as described at Sec.  677.155(a)(1)(i) 
through (vi) of this chapter for the 2 most recently completed program 
years.
    (c) For the purpose of determining initial and subsequent local 
area designation under Sec.  679.250(a) and (b), the term ``sustained 
fiscal integrity'' means that the Secretary has not made a formal 
determination that either the grant recipient or the administrative 
entity of the area misexpended funds due to willful disregard of the 
requirements of the provision involved, gross negligence, or failure to 
comply with accepted standards of administration for the 2-year period 
preceding the determination.

[[Page 56376]]

Sec.  679.270  What are the special designation provisions for single-
area States?

    (a) The Governor of any State that was a single-State local area 
under the WIA as in effect on July 1, 2013 may designate the State as a 
single-State local area under WIOA.
    (b) The Governor of a State local area under paragraph (a) of this 
section who seeks to designate the State as a single-State local area 
under WIOA must:
    (1) Identify the State as a single-area State in the Unified or 
Combined State Plan; and
    (2) Include the local plan for approval as part of the Unified or 
Combined State Plan.
    (c) The State WDB for a single-area State must act as the Local WDB 
and carry out the functions of the Local WDB in accordance with WIOA 
sec. 107 and Sec.  679.370, except that the State is not required to 
meet and report on a set of local performance accountability measures.
    (d) Single-area States must conduct the functions of the Local WDB 
as outlined in paragraph (c) of this section to achieve the 
incorporation of local interests but may do so in a manner that reduces 
unnecessary burden and duplication of processes.
    (e) States must carry out the duties of State and Local WDBs in 
accordance with guidance issued by the Secretary of Labor.


Sec.  679.280  How does the State fulfill the requirement to provide 
assistance to local areas within a planning region that wish to 
redesignate into a single local area?

    (a) When the chief elected officials and Local WDBs of each local 
area within a planning region make a request to the Governor to 
redesignate into a single local area, the State WDB must authorize 
statewide adult, dislocated worker, and youth program funds to 
facilitate such redesignation.
    (b) When statewide funds are not available, the State may provide 
funds for redesignation in the next available program year.
    (c) Redesignation activities that may be carried out by the local 
areas include:
    (1) Convening sessions and conferences;
    (2) Renegotiation of contracts and agreements; and
    (3) Other activities directly associated with the redesignation as 
deemed appropriate by the State WDB.


Sec.  679.290  What right does an entity have to appeal the Governor's 
decision rejecting a request for designation as a workforce development 
area?

    (a) A unit of local government (or combination of units) or a local 
area which has requested but has been denied its request for 
designation as a workforce development area under Sec.  679.250 may 
appeal the decision to the State WDB, in accordance with appeal 
procedures established in the State Plan and Sec.  683.630(a) of this 
chapter.
    (b) If a decision on the appeal is not rendered in a timely manner 
or if the appeal to the State WDB does not result in designation, the 
entity may request review by the Secretary of Labor, under the 
procedures set forth at Sec.  683.640 of this chapter.

Subpart C--Local Workforce Development Boards


Sec.  679.300  What is the vision and purpose of the Local Workforce 
Development Board?

    (a) The vision for the Local WDB is to serve as a strategic leader 
and convener of local workforce development system stakeholders. The 
Local WDB partners with employers and the workforce development system 
to develop policies and investments that support public workforce 
system strategies that support regional economies, the development of 
effective approaches including local and regional sector partnerships 
and career pathways, and high quality, customer centered service 
delivery and service delivery approaches;
    (b) The purpose of the Local WDB is to--
    (1) Provide strategic and operational oversight in collaboration 
with the required and additional partners and workforce stakeholders to 
help develop a comprehensive and high-quality workforce development 
system in the local area and larger planning region;
    (2) Assist in the achievement of the State's strategic and 
operational vision and goals as outlined in the Unified State Plan or 
Combined State Plan; and
    (3) Maximize and continue to improve the quality of services, 
customer satisfaction, effectiveness of the services provided.


Sec.  679.310  What is the Local Workforce Development Board?

    (a) The Local WDB is appointed by the chief elected official(s) in 
each local area in accordance with State criteria established under 
WIOA sec. 107(b), and is certified by the Governor every 2 years, in 
accordance with WIOA sec. 107(c)(2).
    (b) In partnership with the chief elected official(s), the Local 
WDB sets policy for the portion of the statewide workforce development 
system within the local area and consistent with State policies.
    (c) The Local WDB and the chief elected official(s) may enter into 
an agreement that describes the respective roles and responsibilities 
of the parties.
    (d) The Local WDB, in partnership with the chief elected 
official(s), develops the local plan and performs the functions 
described in WIOA sec. 107(d) and Sec.  679.370.
    (e) If a local area includes more than one unit of general local 
government in accordance with WIOA sec. 107(c)(1)(B), the chief elected 
officials of such units may execute an agreement to describe their 
responsibilities for carrying out the roles and responsibilities. If 
the chief elected officials are unable to reach agreement after a 
reasonable effort, the Governor may appoint the members of the Local 
WDB from individuals nominated or recommended as specified in WIOA sec. 
107(b).
    (f) If the State Plan indicates that the State will be treated as a 
local area under WIOA, the State WDB must carry out the roles of the 
Local WDB in accordance with WIOA sec. 107, except that the State is 
not required to meet and report on a set of local performance 
accountability measures.
    (g) The CEO must establish by-laws, consistent with State policy 
for Local WDB membership, that at a minimum address:
    (1) The nomination process used by the CEO to select the Local WDB 
chair and members;
    (2) The term limitations and how the term appointments will be 
staggered to ensure only a portion of membership expire in a given 
year;
    (3) The process to notify the CEO of a WDB member vacancy to ensure 
a prompt nominee;
    (4) The proxy and alternative designee process that will be used 
when a WDB member is unable to attend a meeting and assigns a designee 
as per the requirements at Sec.  679.110(d)(4);
    (5) The use of technology, such as phone and Web-based meetings, 
that will be used to promote WDB member participation;
    (6) The process to ensure WDB members actively participate in 
convening the workforce development system's stakeholders, brokering 
relationships with a diverse range of employers, and leveraging support 
for workforce development activities; and
    (7) A description of any other conditions governing appointment or 
membership on the Local WDB as deemed appropriate by the CEO.


Sec.  679.320  Who are the required members of the Local Workforce 
Development Board?

    (a) For each local area in the State, the members of Local WDB must 
be selected by the chief elected official consistent

[[Page 56377]]

with criteria established under WIOA sec. 107(b)(1) and criteria 
established by the Governor, and must meet the requirements of WIOA 
sec. 107(b)(2).
    (b) A majority of the members of the Local WDB must be 
representatives of business in the local area. At a minimum, two 
members must represent small business as defined by the U.S. Small 
Business Administration. Business representatives serving on Local WDBs 
also may serve on the State WDB. Each business representative must meet 
the following criteria:
    (1) Be an owner, chief executive officer, chief operating officer, 
or other individual with optimum policy-making or hiring authority; and
    (2) Provide employment opportunities in in-demand industry sectors 
or occupations, as those terms are defined in WIOA sec. 3(23).
    (c) At least 20 percent of the members of the Local WDB must be 
workforce representatives. These representatives:
    (1) Must include two or more representatives of labor 
organizations, where such organizations exist in the local area. Where 
labor organizations do not exist, representatives must be selected from 
other employee representatives;
    (2) Must include one or more representatives of a joint labor-
management, or union affiliated, registered apprenticeship program 
within the area who must be a training director or a member of a labor 
organization. If no union affiliated registered apprenticeship programs 
exist in the area, a representative of a registered apprenticeship 
program with no union affiliation must be appointed, if one exists;
    (3) May include one or more representatives of community-based 
organizations that have demonstrated experience and expertise in 
addressing the employment, training or education needs of individuals 
with barriers to employment, including organizations that serve 
veterans or provide or support competitive integrated employment for 
individuals with disabilities; and
    (4) May include one or more representatives of organizations that 
have demonstrated experience and expertise in addressing the 
employment, training, or education needs of eligible youth, including 
representatives of organizations that serve out-of-school youth.
    (d) The Local WDB also must include:
    (1) At least one eligible training provider administering adult 
education and literacy activities under WIOA title II;
    (2) At least one representative from an institution of higher 
education providing workforce investment activities, including 
community colleges; and
    (3) At least one representative from each of the following 
governmental and economic and community development entities:
    (i) Economic and community development entities;
    (ii) The State Employment Service office under the Wagner-Peyser 
Act (29 U.S.C. 49 et seq.) serving the local area; and
    (iii) The programs carried out under title I of the Rehabilitation 
Act of 1973, other than sec. 112 or part C of that title;
    (e) The membership of Local WDBs may include individuals or 
representatives of other appropriate entities in the local area, 
including:
    (1) Entities administering education and training activities who 
represent local educational agencies or community-based organizations 
with demonstrated expertise in addressing the education or training 
needs for individuals with barriers to employment;
    (2) Governmental and economic and community development entities 
who represent transportation, housing, and public assistance programs;
    (3) Philanthropic organizations serving the local area; and
    (4) Other appropriate individuals as determined by the chief 
elected official.
    (f) Members must be individuals with optimum policy-making 
authority within the entities they represent.
    (g) Chief elected officials must establish a formal nomination and 
appointment process, consistent with the criteria established by the 
Governor and State WDB under sec. 107(b)(1) of WIOA for appointment of 
members of the Local WDBs, that ensures:
    (1) Business representatives are appointed from among individuals 
who are nominated by local business organizations and business trade 
associations;
    (2) Labor representatives are appointed from among individuals who 
are nominated by local labor federations (or, for a local area in which 
no employees are represented by such organizations, other 
representatives of employees); and
    (3) When there is more than one local area provider of adult 
education and literacy activities under title II, or multiple 
institutions of higher education providing workforce investment 
activities as described in WIOA sec. 107(b)(2)(C)(i) or (ii), 
nominations are solicited from those particular entities.
    (h) An individual may be appointed as a representative of more than 
one entity if the individual meets all the criteria for representation, 
including the criteria described in paragraphs (c) through (g) of this 
section, for each entity.
    (i) All required WDB members must have voting privilege. The chief 
elected official may convey voting privileges to non-required members.


Sec.  679.330  Who must chair a Local Workforce Development Board?

    The Local WDB must elect a chairperson from among the business 
representatives on the WDB.


Sec.  679.340  What is meant by the terms ``optimum policy-making 
authority'' and ``demonstrated experience and expertise''?

    For purposes of selecting representatives to Local WDBs:
    (a) A representative with ``optimum policy-making authority'' is an 
individual who can reasonably be expected to speak affirmatively on 
behalf of the entity he or she represents and to commit that entity to 
a chosen course of action.
    (b) A representative with ``demonstrated experience and expertise'' 
means an individual who:
    (1) Is a workplace learning advisor as defined in WIOA sec. 3(70);
    (2) Contributes to the field of workforce development, human 
resources, training and development, or a core program function; or
    (3) The Local WDB recognizes for valuable contributions in 
education or workforce development related fields.


Sec.  679.350  What criteria will be used to establish the membership 
of the Local Workforce Development Board?

    The Local WDB is appointed by the chief elected official(s) in the 
local area in accordance with State criteria established under WIOA 
sec. 107(b), and is certified by the Governor every 2 years, in 
accordance with WIOA sec. 107(c)(2).


Sec.  679.360  What is a standing committee, and what is its 
relationship to the Local Workforce Development Board?

    (a) Standing committees may be established by the Local WDB to 
provide information and assist the Local WDB in carrying out its 
responsibilities under WIOA sec. 107. Standing committees must be 
chaired by a member of the Local WDB, may include other members of the 
Local WDB, and must include other individuals appointed by the Local 
WDB who are not members of the Local WDB and who have demonstrated 
experience and expertise in accordance with Sec.  679.340(b) and as 
determined by the Local WDB. Standing committees may include each of 
the following:

[[Page 56378]]

    (1) A standing committee to provide information and assist with 
operational and other issues relating to the one-stop delivery system, 
which may include representatives of the one-stop partners.
    (2) A standing committee to provide information and to assist with 
planning, operational, and other issues relating to the provision of 
services to youth, which must include community-based organizations 
with a demonstrated record of success in serving eligible youth.
    (3) A standing committee to provide information and to assist with 
operational and other issues relating to the provision of services to 
individuals with disabilities, including issues relating to compliance 
with WIOA sec. 188, if applicable, and applicable provisions of the 
Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) 
regarding providing programmatic and physical access to the services, 
programs, and activities of the one-stop delivery system, as well as 
appropriate training for staff on providing supports for or 
accommodations to, and finding employment opportunities for, 
individuals with disabilities.
    (b) The Local WDB may designate other standing committees in 
addition to those specified in paragraph (a) of this section.
    (c) Local WDBs may designate an entity in existence as of the date 
of the enactment of WIOA, such as an effective youth council, to serve 
as a standing committee as long as the entity meets the requirements of 
WIOA sec. 107(b)(4).


Sec.  679.370  What are the functions of the Local Workforce 
Development Board?

    As provided in WIOA sec. 107(d), the Local WDB must:
    (a) Develop and submit a 4-year local plan for the local area, in 
partnership with the chief elected official and consistent with WIOA 
sec. 108;
    (b) If the local area is part of a planning region that includes 
other local areas, develop and submit a regional plan in collaboration 
with other local areas. If the local area is part of a planning region, 
the local plan must be submitted as a part of the regional plan;
    (c) Conduct workforce research and regional labor market analysis 
to include:
    (1) Analyses and regular updates of economic conditions, needed 
knowledge and skills, workforce, and workforce development (including 
education and training) activities to include an analysis of the 
strengths and weaknesses (including the capacity to provide) of such 
services to address the identified education and skill needs of the 
workforce and the employment needs of employers;
    (2) Assistance to the Governor in developing the statewide 
workforce and labor market information system under the Wagner-Peyser 
Act for the region; and
    (3) Other research, data collection, and analysis related to the 
workforce needs of the regional economy as the WDB, after receiving 
input from a wide array of stakeholders, determines to be necessary to 
carry out its functions;
    (d) Convene local workforce development system stakeholders to 
assist in the development of the local plan under Sec.  679.550 and in 
identifying non-Federal expertise and resources to leverage support for 
workforce development activities. Such stakeholders may assist the 
Local WDB and standing committees in carrying out convening, brokering, 
and leveraging functions at the direction of the Local WDB;
    (e) Lead efforts to engage with a diverse range of employers and 
other entities in the region in order to:
    (1) Promote business representation (particularly representatives 
with optimum policy-making or hiring authority from employers whose 
employment opportunities reflect existing and emerging employment 
opportunities in the region) on the Local WDB;
    (2) Develop effective linkages (including the use of 
intermediaries) with employers in the region to support employer 
utilization of the local workforce development system and to support 
local workforce investment activities;
    (3) Ensure that workforce investment activities meet the needs of 
employers and support economic growth in the region by enhancing 
communication, coordination, and collaboration among employers, 
economic development entities, and service providers; and
    (4) Develop and implement proven or promising strategies for 
meeting the employment and skill needs of workers and employers (such 
as the establishment of industry and sector partnerships), that provide 
the skilled workforce needed by employers in the region, and that 
expand employment and career advancement opportunities for workforce 
development system participants in in-demand industry sectors or 
occupations;
    (f) With representatives of secondary and postsecondary education 
programs, lead efforts to develop and implement career pathways within 
the local area by aligning the employment, training, education, and 
supportive services that are needed by adults and youth, particularly 
individuals with barriers to employment;
    (g) Lead efforts in the local area to identify and promote proven 
and promising strategies and initiatives for meeting the needs of 
employers, workers and job seekers, and identify and disseminate 
information on proven and promising practices carried out in other 
local areas for meeting such needs;
    (h) Develop strategies for using technology to maximize the 
accessibility and effectiveness of the local workforce development 
system for employers, and workers and job seekers, by:
    (1) Facilitating connections among the intake and case management 
information systems of the one-stop partner programs to support a 
comprehensive workforce development system in the local area;
    (2) Facilitating access to services provided through the one-stop 
delivery system involved, including access in remote areas;
    (3) Identifying strategies for better meeting the needs of 
individuals with barriers to employment, including strategies that 
augment traditional service delivery, and increase access to services 
and programs of the one-stop delivery system, such as improving digital 
literacy skills; and
    (4) Leveraging resources and capacity within the local workforce 
development system, including resources and capacity for services for 
individuals with barriers to employment;
    (i) In partnership with the chief elected official for the local 
area:
    (1) Conduct oversight of youth workforce investment activities 
authorized under WIOA sec. 129(c), adult and dislocated worker 
employment and training activities under WIOA secs. 134(c) and (d), and 
the entire one-stop delivery system in the local area;
    (2) Ensure the appropriate use and management of the funds provided 
under WIOA subtitle B for the youth, adult, and dislocated worker 
activities and one-stop delivery system in the local area; and
    (3) Ensure the appropriate use management, and investment of funds 
to maximize performance outcomes under WIOA sec. 116;
    (j) Negotiate and reach agreement on local performance indicators 
with the chief elected official and the Governor;
    (k) Negotiate with CEO and required partners on the methods for 
funding the infrastructure costs of one-stop centers in the local area 
in accordance with Sec.  678.715 of this chapter or must notify the 
Governor if they fail to reach agreement at the local level and will 
use

[[Page 56379]]

a State infrastructure funding mechanism;
    (l) Select the following providers in the local area, and where 
appropriate terminate such providers in accordance with 2 CFR part 200:
    (1) Providers of youth workforce investment activities through 
competitive grants or contracts based on the recommendations of the 
youth standing committee (if such a committee is established); however, 
if the Local WDB determines there is an insufficient number of eligible 
training providers in a local area, the Local WDB may award contracts 
on a sole-source basis as per the provisions at WIOA sec. 123(b);
    (2) Providers of training services consistent with the criteria and 
information requirements established by the Governor and WIOA sec. 122;
    (3) Providers of career services through the award of contracts, if 
the one-stop operator does not provide such services; and
    (4) One-stop operators in accordance with Sec. Sec.  678.600 
through 678.635 of this chapter;
    (m) In accordance with WIOA sec. 107(d)(10)(E) work with the State 
to ensure there are sufficient numbers and types of providers of career 
services and training services serving the local area and providing the 
services in a manner that maximizes consumer choice, as well as 
providing opportunities that lead to competitive integrated employment 
for individuals with disabilities;
    (n) Coordinate activities with education and training providers in 
the local area, including:
    (1) Reviewing applications to provide adult education and literacy 
activities under WIOA title II for the local area to determine whether 
such applications are consistent with the local plan;
    (2) Making recommendations to the eligible agency to promote 
alignment with such plan; and
    (3) Replicating and implementing cooperative agreements to enhance 
the provision of services to individuals with disabilities and other 
individuals, such as cross training of staff, technical assistance, use 
and sharing of information, cooperative efforts with employers, and 
other efforts at cooperation, collaboration, and coordination;
    (o) Develop a budget for the activities of the Local WDB, with 
approval of the chief elected official and consistent with the local 
plan and the duties of the Local WDB;
    (p) Assess, on an annual basis, the physical and programmatic 
accessibility of all one-stop centers in the local area, in accordance 
with WIOA sec. 188, if applicable, and applicable provisions of the 
Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.); and
    (q) Certification of one-stop centers in accordance with Sec.  
678.800 of this chapter.


Sec.  679.380  How does the Local Workforce Development Board satisfy 
the consumer choice requirements for career services and training 
services?

    (a) In accordance with WIOA sec. 122 and in working with the State, 
the Local WDB satisfies the consumer choice requirement for training 
services by:
    (1) Determining the initial eligibility of entities providing a 
program of training services, renewing the eligibility of providers, 
and considering the possible termination of an eligible training 
provider due to the provider's submission of inaccurate eligibility and 
performance information or the provider's substantial violation of 
WIOA;
    (2) Working with the State to ensure there are sufficient numbers 
and types of providers of training services, including eligible 
training providers with expertise in assisting individuals with 
disabilities and eligible training providers with expertise in 
assisting adults in need of adult education and literacy activities 
described under WIOA sec. 107(d)(10)(E), serving the local area;
    (3) Ensuring the dissemination and appropriate use of the State 
list through the local one-stop delivery system;
    (4) Receiving performance and cost information from the State and 
disseminating this information through the one-stop delivery systems 
within the State; and
    (5) Providing adequate access to services for individuals with 
disabilities.
    (b) Working with the State, the Local WDB satisfies the consumer 
choice requirement for career services by:
    (1) Determining the career services that are best performed by the 
one-stop operator consistent with Sec. Sec.  678.620 and 678.625 of 
this chapter and career services that require contracting with a career 
service provider; and
    (2) Identifying a wide-array of potential career service providers 
and awarding contracts where appropriate including to providers to 
ensure:
    (i) Sufficient access to services for individuals with 
disabilities, including opportunities that lead to integrated, 
competitive employment for individuals with disabilities; and
    (ii) Sufficient access for adult education and literacy activities.


Sec.  679.390  How does the Local Workforce Development Board meet its 
requirement to conduct business in an open manner under the ``sunshine 
provision'' of the Workforce Innovation and Opportunity Act?

    The Local WDB must conduct its business in an open manner as 
required by WIOA sec. 107(e), by making available to the public, on a 
regular basis through electronic means and open meetings, information 
about the activities of the Local WDB. This includes:
    (a) Information about the Local Plan, or modification to the Local 
Plan, before submission of the plan;
    (b) List and affiliation of Local WDB members;
    (c) Selection of one-stop operators;
    (d) Award of grants or contracts to eligible training providers of 
workforce investment activities including providers of youth workforce 
investment activities;
    (e) Minutes of formal meetings of the Local WDB; and
    (f) Local WDB by-laws, consistent with Sec.  679.310(g).


Sec.  679.400  Who are the staff to the Local Workforce Development 
Board and what is their role?

    (a) WIOA sec. 107(f) grants Local WDBs authority to hire a director 
and other staff to assist in carrying out the functions of the Local 
WDB.
    (b) Local WDBs must establish and apply a set of qualifications for 
the position of director that ensures the individual selected has the 
requisite knowledge, skills, and abilities to meet identified 
benchmarks and to assist in carrying out the functions of the Local 
WDB.
    (c) The Local WDB director and staff must be subject to the 
limitations on the payment of salary and bonuses described in WIOA sec. 
194(15).
    (d) In general, Local WDB staff only may assist the Local WDB 
fulfill the required functions at WIOA sec. 107(d).
    (e) Should the WDB select an entity to staff the WDB that provides 
additional workforce functions beyond the functions described at WIOA 
sec. 107(d), such an entity is required to enter into a written 
agreement with the Local WDB and chief elected official(s) to clarify 
their roles and responsibilities as required by Sec.  679.430.


Sec.  679.410  Under what conditions may a Local Workforce Development 
Board directly be a provider of career services, or training services, 
or act as a one-stop operator?

    (a)(1) A Local WDB may be selected as a one-stop operator:
    (i) Through sole source procurement in accordance with Sec.  
678.610 of this chapter; or

[[Page 56380]]

    (ii) Through successful competition in accordance with Sec.  
678.615 of this chapter.
    (2) The chief elected official in the local area and the Governor 
must agree to the selection described in paragraph (a)(1) of this 
section.
    (3) Where a Local WDB acts as a one-stop operator, the State must 
ensure certification of one-stop centers in accordance with Sec.  
678.800 of this chapter.
    (b) A Local WDB may act as a provider of career services only with 
the agreement of the chief elected official in the local area and the 
Governor.
    (c) A Local WDB is prohibited from providing training services, 
unless the Governor grants a waiver in accordance with the provisions 
in WIOA sec. 107(g)(1).
    (1) The State must develop a procedure for approving waivers that 
includes the criteria at WIOA sec. 107(g)(1)(B)(i):
    (i) Satisfactory evidence that there is an insufficient number of 
eligible training providers of such a program of training services to 
meet local demand in the local area;
    (ii) Information demonstrating that the WDB meets the requirements 
for eligible training provider services under WIOA sec. 122; and
    (iii) Information demonstrating that the program of training 
services prepares participants for an in-demand industry sector or 
occupation in the local area.
    (2) The local area must make the proposed request for a waiver 
available to eligible training providers and other interested members 
of the public for a public comment period of not less than 30 days and 
includes any comments received during this time in the final request 
for the waiver.
    (3) The waiver must not exceed the duration of the local plan and 
may be renewed by submitting a new waiver request consistent with 
paragraphs (c)(1) and (2) of this section for additional periods, not 
to exceed the durations of such subsequent plans.
    (4) The Governor may revoke the waiver if the Governor determines 
the waiver is no longer needed or that the Local WDB involved has 
engaged in a pattern of inappropriate referrals to training services 
operated by the Local WDB.
    (d) The restrictions on the provision of career and training 
services by the Local WDB, as one-stop operator, also apply to staff of 
the Local WDB.


Sec.  679.420  What are the functions of the local fiscal agent?

    (a) In order to assist in administration of the grant funds, the 
chief elected official or the Governor, where the Governor serves as 
the local grant recipient for a local area, may designate an entity to 
serve as a local fiscal agent. Designation of a fiscal agent does not 
relieve the chief elected official or Governor of liability for the 
misuse of grant funds. If the CEO designates a fiscal agent, the CEO 
must ensure this agent has clearly defined roles and responsibilities.
    (b) In general the fiscal agent is responsible for the following 
functions:
    (1) Receive funds.
    (2) Ensure sustained fiscal integrity and accountability for 
expenditures of funds in accordance with Office of Management and 
Budget circulars, WIOA and the corresponding Federal Regulations and 
State policies.
    (3) Respond to audit financial findings.
    (4) Maintain proper accounting records and adequate documentation.
    (5) Prepare financial reports.
    (6) Provide technical assistance to subrecipients regarding fiscal 
issues.
    (c) At the direction of the Local WDB or the State WDB in single-
area States, the fiscal agent may have the following additional 
functions:
    (1) Procure contracts or obtain written agreements.
    (2) Conduct financial monitoring of service providers.
    (3) Ensure independent audit of all employment and training 
programs.


Sec.  679.430  How do entities performing multiple functions in a local 
area demonstrate internal controls and prevent conflict of interest?

    Local organizations often function simultaneously in a variety of 
roles, including local fiscal agent, Local WDB staff, one-stop 
operator, and direct provider of services. Any organization that has 
been selected or otherwise designated to perform more than one of these 
functions must develop a written agreement with the Local WDB and CEO 
to clarify how the organization will carry out its responsibilities 
while demonstrating compliance with WIOA and corresponding regulations, 
relevant Office of Management and Budget circulars, and the State's 
conflict of interest policy.

Subpart D--Regional and Local Plan


Sec.  679.500  What is the purpose of the regional and local plan?

    (a) The local plan serves as 4-year action plan to develop, align, 
and integrate service delivery strategies and to support the State's 
vision and strategic and operational goals. The local plan sets forth 
the strategy to:
    (1) Direct investments in economic, education, and workforce 
training programs to focus on providing relevant education and training 
to ensure that individuals, including youth and individuals with 
barriers to employment, have the skills to compete in the job market 
and that employers have a ready supply of skilled workers;
    (2) Apply job-driven strategies in the one-stop delivery system;
    (3) Enable economic, education, and workforce partners to build a 
skilled workforce through innovation in, and alignment of, employment, 
training, and education programs; and
    (4) Incorporate the local plan into the regional plan per Sec.  
679.540.
    (b) In the case of planning regions, a regional plan is required to 
meet the purposes described in paragraph (a) of this section and to 
coordinate resources among multiple WDBs in a region.
    (c) The Governor must establish and disseminate to Local WDBs and 
regional planning areas a policy for the submission of local and 
regional plans. The policy must set a deadline for the submission of 
the regional and local plans that accounts for the activities required 
in plan development outlined in Sec. Sec.  679.510 and 679.550.


Sec.  679.510  What are the requirements for regional planning?

    (a) Local WDBs and chief elected officials within an identified 
planning region (as defined in WIOA secs. 106(a)(2)(B)-(C) and Sec.  
679.200) must:
    (1) Participate in a regional planning process that results in:
    (i) The preparation of a regional plan, as described in paragraph 
(a)(2) of this section and consistent with any guidance issued by the 
Department;
    (ii) The establishment of regional service strategies, including 
use of cooperative service delivery agreements;
    (iii) The development and implementation of sector initiatives for 
in-demand industry sectors or occupations for the planning region;
    (iv) The collection and analysis of regional labor market data (in 
conjunction with the State) which must include the local planning 
requirements at Sec.  679.560(a)(1)(i) and (ii);
    (v) The coordination of administrative cost arrangements, including 
the pooling of funds for administrative costs, as appropriate;
    (vi) The coordination of transportation and other supportive 
services as appropriate;
    (vii) The coordination of services with regional economic 
development services and providers; and
    (viii) The establishment of an agreement concerning how the 
planning

[[Page 56381]]

region will collectively negotiate and reach agreement with the 
Governor on local levels of performance for, and report on, the 
performance accountability measures described in WIOA sec. 116(c) for 
local areas or the planning region.
    (2) Prepare, submit, and obtain approval of a single regional plan 
that:
    (i) Includes a description of the activities described in paragraph 
(a)(1) of this section; and
    (ii) Incorporates local plans for each of the local areas in the 
planning region, consistent with Sec.  679.540(a).
    (b) Consistent with Sec.  679.550(b), the Local WDBs representing 
each local area in the planning region must provide an opportunity for 
public comment on the development of the regional plan or subsequent 
plan modifications before submitting the plan to the Governor. To 
provide adequate opportunity for public comment, the Local WDBs must:
    (1) Make copies of the proposed regional plan available to the 
public through electronic and other means, such as public hearings and 
local news media;
    (2) Include an opportunity for comment by members of the public, 
including representatives of business, labor organizations, and 
education;
    (3) Provide no more than a 30-day period for comment on the plan 
before its submission to the Governor, beginning on the date on which 
the proposed plan is made available; and
    (4) The Local WDBs must submit any comments that express 
disagreement with the plan to the Governor along with the plan.
    (5) Consistent with WIOA sec. 107(e), the Local WDB must make 
information about the plan available to the public on a regular basis 
through electronic means and open meetings.
    (c) The State must provide technical assistance and labor market 
data, as requested by local areas, to assist with regional planning and 
subsequent service delivery efforts.
    (d) As they relate to regional areas and regional plans, the terms 
local area and local plan are defined in WIOA secs. 106(c)(3)(A)-(B).


Sec.  679.520  What are the requirements for approval of a regional 
plan?

    Consistent with the requirements of Sec.  679.570, the Governor 
must review completed plans (including a modification to the plan). 
Such plans will be considered approved 90 days after receipt of the 
plan unless the Governor determines in writing that:
    (a) There are deficiencies in workforce investment activities that 
have been identified through audits and the local area has not made 
acceptable progress in implementing plans to address deficiencies; or
    (b) The plan does not comply with applicable provisions of WIOA and 
the WIOA regulations, including the required consultations and public 
comment provisions, and the nondiscrimination requirements of 29 CFR 
part 38.
    (c) The plan does not align with the State Plan, including with 
regard to the alignment of the core programs to support the strategy 
identified in the State Plan in accordance with WIOA sec. 102(b)(1)(E) 
and Sec.  676.105 of this chapter.


Sec.  679.530  When must the regional plan be modified?

    (a) Consistent with Sec.  679.580, the Governor must establish 
procedures governing the modification of regional plans.
    (b) At the end of the first 2-year period of the 4-year local plan, 
the Local WDBs within a planning region, in partnership with the 
appropriate chief elected officials, must review the regional plan and 
prepare and submit modifications to the regional plan to reflect 
changes:
    (1) In regional labor market and economic conditions; and
    (2) Other factors affecting the implementation of the local plan, 
including but not limited to changes in the financing available to 
support WIOA title I and partner-provided WIOA services.


Sec.  679.540  How are local planning requirements reflected in a 
regional plan?

    (a) The regional plan must address the requirements at WIOA secs. 
106(c)(1)(A)-(H), and incorporate the local planning requirements 
identified for local plans at WIOA secs. 108(b)(1)-(22).
    (b) The Governor may issue regional planning guidance that allows 
Local WDBs and chief elected officials in a planning region to address 
any local plan requirements through the regional plan where there is a 
shared regional responsibility.


Sec.  679.550  What are the requirements for the development of the 
local plan?

    (a) Under WIOA sec. 108, each Local WDB must, in partnership with 
the appropriate chief elected officials, develop and submit a 
comprehensive 4-year plan to the Governor.
    (1) The plan must identify and describe the policies, procedures, 
and local activities that are carried out in the local area, consistent 
with the State Plan.
    (2) If the local area is part of a planning region, the Local WDB 
must comply with WIOA sec. 106(c) and Sec. Sec.  679.510 through 
679.540 in the preparation and submission of a regional plan.
    (b) Consistent with Sec.  679.510(b), the Local WDB must provide an 
opportunity for public comment on the development of the local plan or 
subsequent plan modifications before submitting the plan to the 
Governor. To provide adequate opportunity for public comment, the Local 
WDB must:
    (1) Make copies of the proposed local plan available to the public 
through electronic and other means, such as public hearings and local 
news media;
    (2) Include an opportunity for comment by members of the public, 
including representatives of business, labor organizations, and 
education;
    (3) Provide no more than a 30-day period for comment on the plan 
before its submission to the Governor, beginning on the date on which 
the proposed plan is made available, prior to its submission to the 
Governor; and
    (4) The Local WDB must submit any comments that express 
disagreement with the plan to the Governor along with the plan.
    (5) Consistent WIOA sec. 107(e), the Local WDB must make 
information about the plan available to the public on a regular basis 
through electronic means and open meetings.


Sec.  679.560  What are the contents of the local plan?

    (a) The local workforce investment plan must describe strategic 
planning elements, including:
    (1) A regional analysis of:
    (i) Economic conditions including existing and emerging in-demand 
industry sectors and occupations; and
    (ii) Employment needs of employers in existing and emerging in-
demand industry sectors and occupations.
    (iii) As appropriate, a local area may use an existing analysis, 
which is a timely current description of the regional economy, to meet 
the requirements of paragraphs (a)(1)(i) and (ii) of this section;
    (2) Knowledge and skills needed to meet the employment needs of the 
employers in the region, including employment needs in in-demand 
industry sectors and occupations;
    (3) An analysis of the regional workforce, including current labor 
force employment and unemployment data, information on labor market 
trends, and educational and skill levels of the workforce, including 
individuals with barriers to employment;
    (4) An analysis of workforce development activities, including

[[Page 56382]]

education and training, in the region. This analysis must include the 
strengths and weaknesses of workforce development activities and 
capacity to provide the workforce development activities to address the 
education and skill needs of the workforce, including individuals with 
barriers to employment, and the employment needs of employers;
    (5) A description of the Local WDB's strategic vision to support 
regional economic growth and economic self-sufficiency. This must 
include goals for preparing an educated and skilled workforce 
(including youth and individuals with barriers to employment), and 
goals relating to the performance accountability measures based on 
performance indicators described in Sec.  677.155(a)(1) of this 
chapter; and
    (6) Taking into account analyses described in paragraphs (a)(1) 
through (4) of this section, a strategy to work with the entities that 
carry out the core programs and required partners to align resources 
available to the local area, to achieve the strategic vision and goals 
described in paragraph (a)(5) of this section.
    (b) The plan must include a description of the following 
requirements at WIOA secs. 108(b)(2)-(21):
    (1) The workforce development system in the local area that 
identifies:
    (i) The programs that are included in the system; and
    (ii) How the Local WDB will support the strategy identified in the 
State Plan under Sec.  676.105 of this chapter and work with the 
entities carrying out core programs and other workforce development 
programs, including programs of study authorized under the Carl D. 
Perkins Career and Technical Education Act of 2006 (20 U.S.C. 2301 et 
seq.) to support service alignment;
    (2) How the Local WDB will work with entities carrying out core 
programs to:
    (i) Expand access to employment, training, education, and 
supportive services for eligible individuals, particularly eligible 
individuals with barriers to employment;
    (ii) Facilitate the development of career pathways and co-
enrollment, as appropriate, in core programs; and
    (iii) Improve access to activities leading to a recognized 
postsecondary credential (including a credential that is an industry-
recognized certificate or certification, portable, and stackable);
    (3) The strategies and services that will be used in the local 
area:
    (i) To facilitate engagement of employers in workforce development 
programs, including small employers and employers in in-demand industry 
sectors and occupations;
    (ii) To support a local workforce development system that meets the 
needs of businesses in the local area;
    (iii) To better coordinate workforce development programs and 
economic development;
    (iv) To strengthen linkages between the one-stop delivery system 
and unemployment insurance programs; and
    (v) That may include the implementation of initiatives such as 
incumbent worker training programs, on-the-job training programs, 
customized training programs, industry and sector strategies, career 
pathways initiatives, utilization of effective business intermediaries, 
and other business services and strategies designed to meet the needs 
of regional employers. These initiatives must support the strategy 
described in paragraph (b)(3) of this section;
    (4) An examination of how the Local WDB will coordinate local 
workforce investment activities with regional economic development 
activities that are carried out in the local area and how the Local WDB 
will promote entrepreneurial skills training and microenterprise 
services;
    (5) The one-stop delivery system in the local area, including:
    (i) How the Local WDB will ensure the continuous improvement of 
eligible providers through the system and that such providers will meet 
the employment needs of local employers, workers, and job seekers;
    (ii) How the Local WDB will facilitate access to services provided 
through the one-stop delivery system, including in remote areas, 
through the use of technology and other means;
    (iii) How entities within the one-stop delivery system, including 
one-stop operators and the one-stop partners, will comply with WIOA 
sec. 188, if applicable, and applicable provisions of the Americans 
with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) regarding the 
physical and programmatic accessibility of facilities, programs and 
services, technology, and materials for individuals with disabilities, 
including providing staff training and support for addressing the needs 
of individuals with disabilities; and
    (iv) The roles and resource contributions of the one-stop partners;
    (6) A description and assessment of the type and availability of 
adult and dislocated worker employment and training activities in the 
local area;
    (7) A description of how the Local WDB will coordinate workforce 
investment activities carried out in the local area with statewide 
rapid response activities;
    (8) A description and assessment of the type and availability of 
youth workforce investment activities in the local area including 
activities for youth who are individuals with disabilities, which must 
include an identification of successful models of such activities;
    (9) How the Local WDB will coordinate relevant secondary and 
postsecondary education programs and activities with education and 
workforce investment activities to coordinate strategies, enhance 
services, and avoid duplication of services;
    (10) How the Local WDB will coordinate WIOA title I workforce 
investment activities with the provision of transportation and other 
appropriate supportive services in the local area;
    (11) Plans, assurances, and strategies for maximizing coordination, 
improving service delivery, and avoiding duplication of Wagner-Peyser 
Act (29 U.S.C. 49 et seq.) services and other services provided through 
the one-stop delivery system;
    (12) How the Local WDB will coordinate WIOA title I workforce 
investment activities with adult education and literacy activities 
under WIOA title II. This description must include how the Local WDB 
will carry out the review of local applications submitted under title 
II consistent with WIOA secs. 107(d)(11)(A) and (B)(i) and WIOA sec. 
232;
    (13) Copies of executed cooperative agreements which define how all 
local service providers, including additional providers, will carry out 
the requirements for integration of and access to the entire set of 
services available in the local one-stop delivery system. This includes 
cooperative agreements (as defined in WIOA sec. 107(d)(11)) between the 
Local WDB or other local entities described in WIOA sec. 101(a)(11)(B) 
of the Rehabilitation Act of 1973 (29 U.S.C. 721(a)(11)(B)) and the 
local office of a designated State agency or designated State unit 
administering programs carried out under title I of the Rehabilitation 
Act (29 U.S.C. 720 et seq.) (other than sec. 112 or part C of that 
title (29 U.S.C. 732, 741) and subject to sec. 121(f)) in accordance 
with sec. 101(a)(11) of the Rehabilitation Act (29 U.S.C. 721(a)(11)) 
with respect to efforts that will enhance the provision of services to 
individuals with disabilities and to other individuals, such as cross 
training of staff, technical assistance, use and sharing of 
information, cooperative efforts with employers, and other efforts at 
cooperation, collaboration, and coordination;

[[Page 56383]]

    (14) An identification of the entity responsible for the disbursal 
of grant funds described in WIOA sec. 107(d)(12)(B)(i)(III), as 
determined by the chief elected official or the Governor under WIOA 
sec. 107(d)(12)(B)(i);
    (15) The competitive process that will be used to award the 
subgrants and contracts for WIOA title I activities;
    (16) The local levels of performance negotiated with the Governor 
and chief elected official consistent with WIOA sec. 116(c), to be used 
to measure the performance of the local area and to be used by the 
Local WDB for measuring the performance of the local fiscal agent 
(where appropriate), eligible providers under WIOA title I subtitle B, 
and the one-stop delivery system in the local area;
    (17) The actions the Local WDB will take toward becoming or 
remaining a high-performing WDB, consistent with the factors developed 
by the State WDB;
    (18) How training services outlined in WIOA sec. 134 will be 
provided through the use of individual training accounts, including, if 
contracts for training services will be used, how the use of such 
contracts will be coordinated with the use of individual training 
accounts under that chapter, and how the Local WDB will ensure informed 
customer choice in the selection of training programs regardless of how 
the training services are to be provided;
    (19) The process used by the Local WDB, consistent with WIOA sec. 
108(d), to provide a 30-day public comment period prior to submission 
of the plan, including an opportunity to have input into the 
development of the local plan, particularly for representatives of 
businesses, education, and labor organizations;
    (20) How one-stop centers are implementing and transitioning to an 
integrated, technology-enabled intake and case management information 
system for programs carried out under WIOA and by one-stop partners; 
and
    (21) The direction given by the Governor and the Local WDB to the 
one-stop operator to ensure priority for adult career and training 
services will be given to recipients of public assistance, other low-
income individuals, and individuals who are basic skills deficient 
consistent with WIOA sec. 134(c)(3)(E) and Sec.  680.600 of this 
chapter.
    (c) The local plan must include any additional information required 
by the Governor.
    (d) The local plan must identify the portions that the Governor has 
designated as appropriate for common response in the regional plan 
where there is a shared regional responsibility, as permitted by Sec.  
679.540(b).
    (e) Comments submitted during the public comment period that 
represent disagreement with the plan must be submitted with the local 
plan.


Sec.  679.570  What are the requirements for approval of a local plan?

    (a) Consistent with the requirements at Sec.  679.520 the Governor 
must review completed plans (including a modification to the plan). 
Such plans will be considered approved 90 days after the Governor 
receives the plan unless the Governor determines in writing that:
    (1) There are deficiencies in workforce investment activities that 
have been identified through audits and the local area has not made 
acceptable progress in implementing plans to address deficiencies; or
    (2) The plan does not comply with applicable provisions of WIOA and 
the WIOA regulations, including the required consultations and public 
comment provisions, and the nondiscrimination requirements of 29 CFR 
part 38.
    (3) The plan does not align with the State Plan, including with 
regard to the alignment of the core programs to support the strategy 
identified in the State Plan in accordance with WIOA sec. 102(b)(1)(E) 
and Sec.  676.105 of this chapter.
    (b) In cases where the State is a single local area:
    (1) The State must incorporate the local plan into the State's 
Unified or Combined State Plan and submit it to the U.S. Department of 
Labor in accordance with the procedures described in Sec.  676.105 of 
this chapter.
    (2) The Secretary of Labor performs the roles assigned to the 
Governor as they relate to local planning activities.
    (3) The Secretary of Labor will issue planning guidance for such 
States.


Sec.  679.580  When must the local plan be modified?

    (a) Consistent with the requirements at Sec.  679.530, the Governor 
must establish procedures governing the modification of local plans.
    (b) At the end of the first 2-year period of the 4-year local plan, 
each Local WDB, in partnership with the appropriate chief elected 
officials, must review the local plan and prepare and submit 
modifications to the local plan to reflect changes:
    (1) In labor market and economic conditions; and
    (2) Other factors affecting the implementation of the local plan, 
including but not limited to:
    (i) Significant changes in local economic conditions;
    (ii) Changes in the financing available to support WIOA title I and 
partner-provided WIOA services;
    (iii) Changes to the Local WDB structure; and
    (iv) The need to revise strategies to meet local performance goals.

Subpart E--Waivers/WorkFlex (Workforce Flexibility Plan)


Sec.  679.600  What is the purpose of the general statutory and 
regulatory waiver authority in the Workforce Innovation and Opportunity 
Act?

    (a) The purpose of the general statutory and regulatory waiver 
authority provided at sec. 189(i)(3) of the WIOA is to provide 
flexibility to States and local areas and enhance their ability to 
improve the statewide workforce development system to achieve the goals 
and purposes of WIOA.
    (b) A waiver may be requested to address impediments to the 
implementation of a Unified or Combined State Plan, including the 
continuous improvement strategy, consistent with the purposes of title 
I of WIOA as identified in Sec.  675.100 of this chapter.


Sec.  679.610  What provisions of the Workforce Innovation and 
Opportunity Act and the Wagner-Peyser Act may be waived, and what 
provisions may not be waived?

    (a) The Secretary may waive for a State, or local area in a State, 
any of the statutory or regulatory requirements of subtitles A, B and E 
of title I of WIOA, except for requirements relating to:
    (1) Wage and labor standards;
    (2) Non-displacement protections;
    (3) Worker rights;
    (4) Participation and protection of workers and participants;
    (5) Grievance procedures and judicial review;
    (6) Nondiscrimination;
    (7) Allocation of funds to local areas;
    (8) Eligibility of providers or participants;
    (9) The establishment and functions of local areas and Local WDBs;
    (10) Procedures for review and approval of State and Local plans;
    (11) The funding of infrastructure costs for one-stop centers; and
    (12) Other requirements relating to the basic purposes of title I 
of WIOA described in Sec.  675.100 of this chapter.
    (b) The Secretary may waive for a State, or local area in a State, 
any of the statutory or regulatory requirements of secs. 8 through 10 
of the Wagner- Peyser Act (29 U.S.C. 49g-49i) except for requirements 
relating to:

[[Page 56384]]

    (1) The provision of services to unemployment insurance claimants 
and veterans; and
    (2) Universal access to the basic labor exchange services without 
cost to job seekers.


Sec.  679.620  Under what conditions may a Governor request, and the 
Secretary approve, a general waiver of statutory or regulatory 
requirements under the Workforce Innovation and Opportunity Act?

    (a) The Secretary will issue guidelines under which the States may 
request general waivers of WIOA and Wagner-Peyser Act requirements.
    (b) A Governor may request a general waiver in consultation with 
appropriate chief elected officials:
    (1) By submitting a waiver plan which may accompany the State's 
WIOA 4-year Unified or Combined State Plan or 2-year modification; or
    (2) After a State's WIOA Plan is approved, by separately submitting 
a waiver plan.
    (c) A Governor's waiver request may seek waivers for the entire 
State or for one or more local areas within the State.
    (d) A Governor requesting a general waiver must submit to the 
Secretary a plan to improve the statewide workforce development system 
that:
    (1) Identifies the statutory or regulatory requirements for which a 
waiver is requested and the goals that the State or local area, as 
appropriate, intends to achieve as a result of the waiver and how those 
goals relate to the Unified or Combined State Plan;
    (2) Describes the actions that the State or local area, as 
appropriate, has undertaken to remove State or local statutory or 
regulatory barriers;
    (3) Describes the goals of the waiver and the expected programmatic 
outcomes if the request is granted;
    (4) Describes how the waiver will align with the Department's 
policy priorities, such as:
    (i) Supporting employer engagement;
    (ii) Connecting education and training strategies;
    (iii) Supporting work-based learning;
    (iv) Improving job and career results; and
    (v) Other priorities as articulated in guidance;
    (5) Describes the individuals affected by the waiver, including how 
the waiver will impact services for disadvantaged populations or 
individuals with multiple barriers to employment; and
    (6) Describes the processes used to:
    (i) Monitor the progress in implementing the waiver;
    (ii) Provide notice to any Local WDB affected by the waiver;
    (iii) Provide any Local WDB affected by the waiver an opportunity 
to comment on the request;
    (iv) Ensure meaningful public comment, including comment by 
business and organized labor, on the waiver; and
    (v) Collect and report information about waiver outcomes in the 
State's WIOA Annual Report.
    (7) The Secretary may require that States provide the most recent 
data available about the outcomes of the existing waiver in cases where 
the State seeks renewal of a previously approved waiver.
    (e) The Secretary will issue a decision on a waiver request within 
90 days after the receipt of the original waiver request.
    (f) The Secretary will approve a waiver request if and only to the 
extent that:
    (1) The Secretary determines that the requirements for which a 
waiver is requested impede the ability of either the State or local 
area to implement the State's Plan to improve the statewide workforce 
development system;
    (2) The Secretary determines that the waiver plan meets all of the 
requirements of WIOA sec. 189(i)(3) and Sec. Sec.  679.600 through 
679.620; and
    (3) The State has executed a memorandum of understanding (MOU) with 
the Secretary requiring the State to meet, or ensure that the local 
area meets, agreed-upon outcomes and to implement other appropriate 
measures to ensure accountability.
    (g) A waiver may be approved for as long as the Secretary 
determines appropriate, but for not longer than the duration of the 
State's existing Unified or Combined State Plan.
    (h) The Secretary may revoke a waiver granted under this section if 
the Secretary determines that the State has failed to meet the agreed 
upon outcomes, measures, failed to comply with the terms and conditions 
in the MOU described in paragraph (f) of this section or any other 
document establishing the terms and conditions of the waiver, or if the 
waiver no longer meets the requirements of Sec. Sec.  679.600 through 
679.620.


Sec.  679.630  Under what conditions may the Governor submit a 
workforce flexibility plan?

    (a) A State may submit to the Secretary, and the Secretary may 
approve, a workforce flexibility (workflex) plan under which the State 
is authorized to waive, in accordance with the plan:
    (1) Any of the statutory or regulatory requirements under title I 
of WIOA applicable to local areas, if the local area requests the 
waiver in a waiver application, except for:
    (i) Requirements relating to the basic purposes of title I of WIOA 
described in Sec.  675.100 of this chapter;
    (ii) Wage and labor standards;
    (iii) Grievance procedures and judicial review;
    (iv) Nondiscrimination;
    (v) Eligibility of participants;
    (vi) Allocation of funds to local areas;
    (vii) Establishment and functions of local areas and Local WDBs;
    (viii) Procedures for review and approval of local plans; and
    (ix) Worker rights, participation, and protection.
    (2) Any of the statutory or regulatory requirements applicable to 
the State under secs. 8 through 10 of the Wagner-Peyser Act (29 U.S.C. 
49g-49i), except for requirements relating to:
    (i) The provision of services to unemployment insurance claimants 
and veterans; and
    (ii) Universal access to basic labor exchange services without cost 
to job seekers.
    (3) Any of the statutory or regulatory requirements applicable 
under the Older Americans Act of 1965 (OAA) (42 U.S.C. 3001 et seq.), 
to State agencies on aging with respect to activities carried out using 
funds allotted under OAA sec. 506(b) (42 U.S.C. 3056d(b)), except for 
requirements relating to:
    (i) The basic purposes of OAA;
    (ii) Wage and labor standards;
    (iii) Eligibility of participants in the activities; and
    (iv) Standards for grant agreements.
    (b) A workforce flexibility plan submitted under paragraph (a) of 
this section must include descriptions of:
    (1) The process by which local areas in the State may submit and 
obtain State approval of applications for waivers of requirements under 
title I of WIOA;
    (2) A description of the criteria the State will use to approve 
local area waiver requests and how such requests support implementation 
of the goals identified State Plan;
    (3) The statutory and regulatory requirements of title I of WIOA 
that are likely to be waived by the State under the workforce 
flexibility plan;
    (4) The statutory and regulatory requirements of secs. 8 through 10 
of the Wagner-Peyser Act that are proposed for waiver, if any;
    (5) The statutory and regulatory requirements of the OAA that are 
proposed for waiver, if any;
    (6) The outcomes to be achieved by the waivers described in 
paragraphs (b)(1) through (5) of this section including, where 
appropriate, revisions

[[Page 56385]]

to adjusted levels of performance included in the State or local plan 
under title I of WIOA, and a description of the data or other 
information the State will use to track and assess outcomes; and
    (7) The measures to be taken to ensure appropriate accountability 
for Federal funds in connection with the waivers.
    (c) A State's workforce flexibility plan may accompany the State's 
Unified or Combined State Plan, 2-year modification, or may be 
submitted separately as a modification to that plan.
    (d) The Secretary may approve a workforce flexibility plan 
consistent with the period of approval of the State's Unified or 
Combined State Plan, and not for more than 5 years.
    (e) Before submitting a workforce flexibility plan to the Secretary 
for approval, the State must provide adequate notice and a reasonable 
opportunity for comment on the proposed waiver requests under the 
workforce flexibility plan to all interested parties and to the general 
public.
    (f) The Secretary will issue guidelines under which States may 
request designation as a work-flex State. These guidelines may require 
a State to implement an evaluation of the impact of work-flex in the 
State.


Sec.  679.640  What limitations apply to the State's workforce 
flexibility plan authority under the Workforce Innovation and 
Opportunity Act?

    (a)(1) Under work-flex waiver authority a State must not waive the 
WIOA, Wagner-Peyser Act or OAA requirements which are excepted from the 
work-flex waiver authority and described in Sec.  679.630(a).
    (2) Requests to waive statutory and regulatory requirements of 
title I of WIOA applicable at the State level may not be granted under 
work-flex waiver authority granted to a State. Such requests only may 
be granted by the Secretary under the general waiver authority 
described at Sec. Sec.  679.610 through 679.620.
    (b) As required in Sec.  679.630(b)(6), States must address the 
outcomes to result from work-flex waivers as part of its workforce 
flexibility plan. The Secretary may terminate a State's work-flex 
designation if the State fails to meet agreed-upon outcomes or other 
terms and conditions contained in its workforce flexibility plan.

0
13. Add part 680 to read as follows:

PART 680--ADULT AND DISLOCATED WORKER ACTIVITIES UNDER TITLE I OF 
THE WORKFORCE INNOVATION AND OPPORTUNITY ACT

Subpart A--Delivery of Adult and Dislocated Worker Activities Under 
Title I of the Workforce Innovation and Opportunity Act
Sec.
680.100 What is the role of the adult and dislocated worker programs 
in the one-stop delivery system?
680.110 When must adults and dislocated workers be registered and 
considered a participant?
680.120 What are the eligibility criteria for career services for 
adults in the adult and dislocated worker programs?
680.130 What are the eligibility criteria for career services for 
dislocated workers in the adult and dislocated worker programs?
680.140 What Workforce Innovation and Opportunity Act title I adult 
and dislocated worker services are Local Workforce Development 
Boards required and permitted to provide?
680.150 What career services must be provided to adults and 
dislocated workers?
680.160 How are career services delivered?
680.170 What is the individual employment plan?
680.180 What is an internship or work experience for adults and 
dislocated workers?
680.190 What is a transitional job?
680.195 What funds may be used for transitional jobs?
Subpart B--Training Services
Sec.
680.200 What are training services for adults and dislocated 
workers? 680.210 Who may receive training services?
680.220 Are there particular career services an individual must 
receive before receiving training services under the Workforce 
Innovation and Opportunity Act?
680.230 What are the requirements for coordination of Workforce 
Innovation and Opportunity Act training funds and other grant 
assistance?
Subpart C--Individual Training Accounts
Sec.
680.300 How are training services provided?
680.310 Can the duration and amount of Individual Training Accounts 
be limited?
680.320 Under what circumstances may mechanisms other than 
Individual Training Accounts be used to provide training services?
680.330 How can Individual Training Accounts, supportive services, 
and needs-related payments be used to support placing participating 
adults and dislocated workers into a registered apprenticeship 
program and support participants once they are in a registered 
apprenticeship program?
680.340 What are the requirements for consumer choice?
680.350 May Workforce Innovation and Opportunity Act title I adult 
and dislocated worker funds be used to directly support adult 
education and literacy activities?
Subpart D--Eligible Training Providers
Sec.
680.400 What is the purpose of this subpart?
680.410 What is an eligible training provider?
680.420 What is a ``program of training services''?
680.430 Who is responsible for managing the training provider 
eligibility process?
680.440 [Reserved]
680.450 What is the initial eligibility process for new providers 
and programs?
680.460 What is the application procedure for continued eligibility?
680.470 What are the procedures for including and removing 
registered apprenticeship programs on a State list of eligible 
training providers and programs?
680.480 May an eligible training provider lose its eligibility?
680.490 What kind of performance and cost information must eligible 
training providers other than registered apprenticeship programs 
provide for each program of training services?
680.500 How is the State list of eligible training providers and 
programs disseminated?
680.510 In what ways can a Local Workforce Development Board 
supplement the information available from the State list of eligible 
training providers and programs?
680.520 May individuals choose training providers and programs 
located outside of the local area or outside of the State?
680.530 What eligibility requirements apply to providers of on-the-
job-training, customized training, incumbent worker training, and 
other training exceptions?
Subpart E--Priority and Special Populations
680.600 What priority must be given to low-income adults and public 
assistance recipients and individuals who are basic skills deficient 
served with adult funds under title I of the Workforce Innovation 
and Opportunity Act?
680.610 Does the statutory priority for use of adult funds also 
apply to dislocated worker funds?
680.620 How does the Temporary Assistance for Needy Families program 
relate to the one-stop delivery system?
680.630 How does a displaced homemaker qualify for services under 
title I of the Workforce Innovation and Opportunity Act?
680.640 May an individual with a disability whose family does not 
meet income eligibility criteria under the Workforce Innovation and 
Opportunity Act be eligible for priority as a low-income adult?

[[Page 56386]]

680.650 Do veterans receive priority of service under the Workforce 
Innovation and Opportunity Act?
680.660 Are separating military service members eligible for 
dislocated worker activities under the Workforce Innovation and 
Opportunity Act?
Subpart F--Work-Based Training
680.700 What are the requirements for on-the-job training?
680.710 What are the requirements for on-the-job training contracts 
for employed workers?
680.720 What conditions govern on-the-job training payments to 
employers?
680.730 Under what conditions may a Governor or Local Workforce 
Development Board raise the on-the-job training reimbursement rate 
up to 75 percent of the wage rate?
680.740 How can on-the-job training funds be used to support placing 
participants into a registered apprenticeship program?
680.750 Can Individual Training Account and on-the-job training 
funds be combined to support placing participants into a registered 
apprenticeship program?
680.760 What is customized training?
680.770 What are the requirements for customized training for 
employed workers?
680.780 Who is an ``incumbent worker'' for purposes of statewide and 
local employment and training activities?
680.790 What is incumbent worker training?
680.800 What funds may be used for incumbent worker training?
680.810 What criteria must be taken into account for an employer to 
be eligible to receive local incumbent worker funds?
680.820 Are there cost sharing requirements for local area incumbent 
worker training?
680.830 May funds provided to employers for work-based training be 
used to assist, promote, or deter union organizing?
680.840 May funds provided to employers for work-based training and 
other work experiences be used to fill job openings as a result of a 
labor dispute?
Subpart G--Supportive Services
680.900 What are supportive services for adults and dislocated 
workers?
680.910 When may supportive services be provided to participants?
680.920 Are there limits on the amount or duration of funds for 
supportive services?
680.930 What are needs-related payments?
680.940 What are the eligibility requirements for adults to receive 
needs-related payments?
680.950 What are the eligibility requirements for dislocated workers 
to receive needs-related payments?
680.960 May needs-related payments be paid while a participant is 
waiting to start training classes?
680.970 How is the level of needs-related payments determined?

    Authority:  Secs. 122, 134, 189, 503, Pub. L. 113-128, 128 Stat. 
1425 (Jul. 22, 2014).

Subpart A--Delivery of Adult and Dislocated Worker Activities Under 
Title I of the Workforce Innovation and Opportunity Act


Sec.  680.100  What is the role of the adult and dislocated worker 
programs in the one-stop delivery system?

    (a) The one-stop delivery system is the basic delivery system for 
adult and dislocated worker services. Through this system, adults and 
dislocated workers can access a continuum of services. The services are 
classified as career and training services.
    (b) The chief elected official or his/her designee(s), as the local 
grant recipient(s) for the adult and dislocated worker programs, is a 
required one-stop partner and is subject to the provisions relating to 
such partners described in part 678 of this chapter. Consistent with 
those provisions:
    (1) Career services for adults and dislocated workers must be made 
available in at least one one-stop center in each local area. Services 
also may be available elsewhere, either at affiliated sites or at 
specialized centers. For example, specialized centers may be 
established to serve workers being dislocated from a particular 
employer or industry, or to serve residents of public housing.
    (2) Through the one-stop delivery system, adults and dislocated 
workers needing training are provided Individual Training Accounts 
(ITAs) and access to lists of eligible training providers and programs 
of training. These lists contain quality consumer information, 
including cost and performance information for each of the providers' 
programs, so that participants can make informed choices on where to 
use their ITAs. (ITAs are more fully discussed in subpart C of this 
part.)


Sec.  680.110  When must adults and dislocated workers be registered 
and considered a participant?

    (a) Registration is the process for collecting information to 
support a determination of eligibility. This information may be 
collected through methods that include electronic data transfer, 
personal interview, or an individual's application. Individuals are 
considered participants when they have received a Workforce Innovation 
and Opportunity Act (WIOA) service other than self-service or 
information-only activities and have satisfied all applicable 
programmatic requirements for the provision of services, such as 
eligibility determination (see Sec.  677.150(a) of this chapter).
    (b) Adults and dislocated workers who receive services funded under 
WIOA title I other than self-service or information-only activities 
must be registered and must be a participant.
    (c) EO data, as defined in Sec.  675.300 of this chapter, must be 
collected on every individual who is interested in being considered for 
WIOA title I financially assisted aid, benefits, services, or training 
by a recipient, and who has signified that interest by submitting 
personal information in response to a request from the grant recipient 
or designated service provider.


Sec.  680.120  What are the eligibility criteria for career services 
for adults in the adult and dislocated worker programs?

    To be eligible to receive career services as an adult in the adult 
and dislocated worker programs, an individual must be 18 years of age 
or older. To be eligible for any dislocated worker programs, an 
eligible adult must meet the criteria of Sec.  680.130. Eligibility 
criteria for training services are found at Sec.  680.210.


Sec.  680.130  What are the eligibility criteria for career services 
for dislocated workers in the adult and dislocated worker programs?

    (a) To be eligible to receive career services as a dislocated 
worker in the adult and dislocated worker programs, an individual must 
meet the definition of ``dislocated worker'' at WIOA sec. 3(15). 
Eligibility criteria for training services are found at Sec.  680.210.
    (b) Governors and Local Workforce Development Boards (WDBs) may 
establish policies and procedures for one-stop centers to use in 
determining an individual's eligibility as a dislocated worker, 
consistent with the definition at WIOA sec. 3(15). These policies and 
procedures may address such conditions as:
    (1) What constitutes a ``general announcement'' of plant closing 
under WIOA sec. 3(15)(B)(ii) or (iii);
    (2) What constitutes ``unemployed as a result of general economic 
conditions in the community in which the individual resides or because 
of natural disasters'' for determining the eligibility of self-employed 
individuals, including family members and farm workers or ranch hands, 
under WIOA sec. 3(15)(C); and
    (3) What constitutes ``unlikely to return to a previous industry or 
occupation'' under WIOA sec. 3(15)(A)(iii), consistent with Sec.  
680.660.


Sec.  680.140  What Workforce Innovation and Opportunity Act title I 
adult and dislocated worker services are Local Workforce Development 
Boards required and permitted to provide?

    (a) WIOA title I formula funds allocated to local areas for adults 
and

[[Page 56387]]

dislocated workers must be used to provide career and training services 
through the one-stop delivery system. Local WDBs determine the most 
appropriate mix of these services, but both types must be available for 
eligible adults and dislocated workers. Different eligibility criteria 
apply for each type of services. See Sec. Sec.  680.120, 680.130, and 
680.210.
    (b) WIOA title I funds also may be used to provide the additional 
services described in WIOA sec. 134(d), including:
    (1) Job seeker services, such as:
    (i) Customer support to enable individuals with barriers to 
employment (including individuals with disabilities) and veterans, to 
navigate among multiple services and activities;
    (ii) Training programs for displaced homemakers and for individuals 
training for nontraditional employment (as defined in WIOA sec. 3(37) 
as occupations or fields of work in which individuals of one gender 
comprise less than 25 percent of the individuals so employed), in 
conjunction with programs operated in the local area;
    (iii) Work support activities for low-wage workers, in coordination 
with one-stop partners, which will provide opportunities for these 
workers to retain or enhance employment. These activities may include 
any activities available under the WIOA adult and dislocated worker 
programs in coordination with activities and resources available 
through partner programs. These activities may be provided in a manner 
that enhances the worker's ability to participate, for example by 
providing them at nontraditional hours or providing on-site child care;
    (iv) Supportive services, including needs-related payments, as 
described in subpart G of this part; and
    (v) Transitional jobs, as described in Sec.  680.190, to 
individuals with barriers to employment who are chronically unemployed 
or have an inconsistent work history;
    (2) Employer services, such as:
    (i) Customized screening and referral of qualified participants in 
training services to employers;
    (ii) Customized employment-related services to employers, employer 
associations, or other such organization on a fee-for-service basis 
that are in addition to labor exchange services available to employers 
under the Wagner-Peyser Act Employment Service;
    (iii) Activities to provide business services and strategies that 
meet the workforce investment needs of area employers, as determined by 
the Local WDB and consistent with the local plan (see Sec.  678.435 of 
this chapter and WIOA sec. 134(d)(1)(A)(ix)); and
    (3) Coordination activities, such as:
    (i) Employment and training activities in coordination with child 
support enforcement activities, as well as child support services and 
assistance activities, of the State and local agencies carrying out 
part D of title IV of the Social Security Act (42 U.S.C. 651 et seq.);
    (ii) Employment and training activities in coordination with 
cooperative extension programs carried out by the Department of 
Agriculture;
    (iii) Employment and training activities in coordination with 
activities to facilitate remote access to services provided through a 
one-stop delivery system, including facilitating access through the use 
of technology;
    (iv) Improving coordination between workforce investment activities 
and economic development activities carried out within the local area 
involved, and to promote entrepreneurial skills training and 
microenterprise services;
    (v) Improving services and linkages between the local workforce 
development system (including the local one-stop delivery system) and 
employers, including small employers, in the local area;
    (vi) Strengthening linkages between the one-stop delivery system 
and the unemployment insurance programs; and
    (vii) Improving coordination between employment and training 
activities and programs carried out in the local area for individuals 
with disabilities, including programs carried out by State agencies 
relating to intellectual disabilities and developmental disabilities, 
activities carried out by Statewide Independent Living Councils 
established under sec. 705 of the Rehabilitation Act of 1973 (29 U.S.C. 
796d), programs funded under part B of chapter 1 of title VII of such 
Act (29 U.S.C. 796e et seq.), and activities carried out by centers for 
independent living, as defined in sec. 702 of such Act (29 U.S.C. 
796a);
    (4) Implementing a Pay-for-Performance contract strategy for 
training services in accordance with Sec. Sec.  683.500 through 683.530 
of this chapter for which up to 10 percent of the Local WDB's total 
adult and dislocated worker funds may be used;
    (5) Technical assistance for one-stop centers, partners, and 
eligible training providers (ETPs) on the provision of service to 
individuals with disabilities in local areas, including staff training 
and development, provision of outreach and intake assessments, service 
delivery, service coordination across providers and programs, and 
development of performance accountability measures;
    (6) Activities to adjust the economic self-sufficiency standards 
referred to in WIOA sec. 134(a)(3)(A)(xii) for local factors or 
activities to adopt, calculate or commission for approval, economic 
self-sufficiency standards for the local areas that specify the income 
needs of families, by family size, the number and ages of children in 
the family, and sub-State geographical considerations;
    (7) Implementing promising service to workers and businesses, which 
may include support for education, training, skill upgrading, and 
statewide networking for employees to become workplace learning 
advisors and maintain proficiency in carrying out the activities 
associated with such advising; and
    (8) Incumbent worker training programs, as described in subpart F 
of this part.


Sec.  680.150  What career services must be provided to adults and 
dislocated workers?

    (a) At a minimum, all of the basic career services described in 
WIOA secs. 134(c)(2)(A)(i)-(xi) and Sec.  678.430(a) of this chapter 
must be provided in each local area through the one-stop delivery 
system.
    (b) Individualized career services described in WIOA sec. 
134(c)(2)(A)(xii) and Sec.  678.430(b) of this chapter must be made 
available, if determined appropriate in order for an individual to 
obtain or retain employment.
    (c) Follow-up services, as described in WIOA sec. 
134(c)(2)(A)(xiii) and Sec.  678.430(c) of this chapter, must be made 
available, as determined appropriate by the Local WDB, for a minimum of 
12 months following the first day of employment, to participants who 
are placed in unsubsidized employment.


Sec.  680.160  How are career services delivered?

    Career services must be provided through the one-stop delivery 
system. Career services may be provided directly by the one-stop 
operator or through contracts with service providers that are approved 
by the Local WDB. The Local WDB only may be a provider of career 
services when approved by the chief elected official and the Governor 
in accordance with the requirements of WIOA sec. 107(g)(2) and Sec.  
679.410 of this chapter.


Sec.  680.170  What is the individual employment plan?

    The individual employment plan (IEP) is an individualized career 
service, under WIOA sec. 134(c)(2)(A)(xii)(II),

[[Page 56388]]

that is developed jointly by the participant and career planner when 
determined appropriate by the one-stop center or one-stop partner. The 
plan is an ongoing strategy to identify employment goals, achievement 
objectives, and an appropriate combination of services for the 
participant to achieve the employment goals.


Sec.  680.180  What is an internship or work experience for adults and 
dislocated workers?

    For the purposes of WIOA sec. 134(c)(2)(A)(xii)(VII), an internship 
or work experience is a planned, structured learning experience that 
takes place in a workplace for a limited period of time. Internships 
and other work experience may be paid or unpaid, as appropriate and 
consistent with other laws, such as the Fair Labor Standards Act. An 
internship or other work experience may be arranged within the private 
for profit sector, the non-profit sector, or the public sector. Labor 
standards apply in any work experience setting where an employee/
employer relationship, as defined by the Fair Labor Standards Act, 
exists. Transitional jobs are a type of work experience, as described 
in Sec. Sec.  680.190 and 680.195.


Sec.  680.190  What is a transitional job?

    A transitional job is one that provides a time-limited work 
experience, that is wage-paid and subsidized, and is in the public, 
private, or non-profit sectors for those individuals with barriers to 
employment who are chronically unemployed or have inconsistent work 
history, as determined by the Local WDB. These jobs are designed to 
enable an individual to establish a work history, demonstrate work 
success in an employee-employer relationship, and develop the skills 
that lead to unsubsidized employment.


Sec.  680.195  What funds may be used for transitional jobs?

    The local area may use up to 10 percent of their combined total of 
adult and dislocated worker allocations for transitional jobs as 
described in Sec.  680.190. Transitional jobs must be combined with 
comprehensive career services (see Sec.  680.150) and supportive 
services (see Sec.  680.900).

Subpart B--Training Services


Sec.  680.200  What are training services for adults and dislocated 
workers?

    Types of training services are listed in WIOA sec. 134(c)(3)(D) and 
in paragraphs (a) through (k) of this section. This list is not all-
inclusive and additional training services may be provided.
    (a) Occupational skills training, including training for 
nontraditional employment;
    (b) On-the-job training (OJT) (see Sec. Sec.  680.700, 680.710, 
680.720, and 680.730);
    (c) Incumbent worker training, in accordance with WIOA sec. 
134(d)(4) and Sec. Sec.  680.780, 680.790, 680.800, 680.810, and 
680.820;
    (d) Programs that combine workplace training with related 
instruction, which may include cooperative education programs;
    (e) Training programs operated by the private sector;
    (f) Skills upgrading and retraining;
    (g) Entrepreneurial training;
    (h) Transitional jobs in accordance with WIOA sec 134(d)(5) and 
Sec. Sec.  680.190 and 680.195;
    (i) Job readiness training provided in combination with services 
listed in paragraphs (a) through (h) of this section;
    (j) Adult education and literacy activities, including activities 
of English language acquisition and integrated education and training 
programs, provided concurrently or in combination with training 
services listed in paragraphs (a) through (g) of this section; and
    (k) Customized training conducted with a commitment by an employer 
or group of employers to employ an individual upon successful 
completion of the training (see Sec. Sec.  680.760 and 680.770).


Sec.  680.210  Who may receive training services?

    Under WIOA sec. 134(c)(3)(A) training services may be made 
available to employed and unemployed adults and dislocated workers who:
    (a) A one-stop center or one-stop partner determines, after an 
interview, evaluation, or assessment, and career planning, are:
    (1) Unlikely or unable to obtain or retain employment that leads to 
economic self-sufficiency or wages comparable to or higher than wages 
from previous employment through career services;
    (2) In need of training services to obtain or retain employment 
leading to economic self-sufficiency or wages comparable to or higher 
than wages from previous employment; and
    (3) Have the skills and qualifications to participate successfully 
in training services;
    (b) Select a program of training services that is directly linked 
to the employment opportunities in the local area or the planning 
region, or in another area to which the individuals are willing to 
commute or relocate;
    (c) Are unable to obtain grant assistance from other sources to pay 
the costs of such training, including such sources as State-funded 
training funds, Trade Adjustment Assistance (TAA), and Federal Pell 
Grants established under title IV of the Higher Education Act of 1965, 
or require WIOA assistance in addition to other sources of grant 
assistance, including Federal Pell Grants (provisions relating to fund 
coordination are found at Sec.  680.230 and WIOA sec. 134(c)(3)(B)); 
and
    (d) If training services are provided through the adult funding 
stream, are determined eligible in accordance with the State and local 
priority system in effect for adults under WIOA sec. 134(c)(3)(E) and 
Sec.  680.600.


Sec.  680.220  Are there particular career services an individual must 
receive before receiving training services under the Workforce 
Innovation and Opportunity Act?

    (a) Yes, except as provided by paragraph (b) of this section, an 
individual must at a minimum receive either an interview, evaluation, 
or assessment, and career planning or any other method through which 
the one-stop center or partner can obtain enough information to make an 
eligibility determination to be determined eligible for training 
services under WIOA sec. 134(c)(3)(A)(i) and Sec.  680.210. Where 
appropriate, a recent interview, evaluation, or assessment, may be used 
for the assessment purpose.
    (b) The case file must contain a determination of need for training 
services under Sec.  680.210 as determined through the interview, 
evaluation, or assessment, and career planning informed by local labor 
market information and training provider performance information, or 
through any other career service received. There is no requirement that 
career services be provided as a condition to receipt of training 
services; however, if career services are not provided before training, 
the Local WDB must document the circumstances that justified its 
determination to provide training without first providing the services 
described in paragraph (a) of this section.
    (c) There is no Federally required minimum time period for 
participation in career services before receiving training services.

[[Page 56389]]

Sec.  680.230  What are the requirements for coordination of Workforce 
Innovation and Opportunity Act training funds and other grant 
assistance?

    (a) WIOA funding for training is limited to participants who:
    (1) Are unable to obtain grant assistance from other sources to pay 
the costs of their training; or
    (2) Require assistance beyond that available under grant assistance 
from other sources to pay the costs of such training. Programs and 
training providers must coordinate funds available to pay for training 
as described in paragraphs (b) and (c) of this section. In making the 
determination under this paragraph (a), one-stop centers may take into 
account the full cost of participating in training services, including 
the cost of support services and other appropriate costs.
    (b) One-stop centers must coordinate training funds available and 
make funding arrangements with one-stop partners and other entities to 
apply the provisions of paragraph (a) of this section. One-stop centers 
must consider the availability of other sources of grants to pay for 
training costs such as Temporary Assistance for Needy Families (TANF), 
State-funded training funds, and Federal Pell Grants, so that WIOA 
funds supplement other sources of training grants.
    (c) A WIOA participant may enroll in WIOA-funded training while 
his/her application for a Pell Grant is pending as long as the one-stop 
center has made arrangements with the training provider and the WIOA 
participant regarding allocation of the Pell Grant, if it is 
subsequently awarded. In that case, the training provider must 
reimburse the one-stop center the WIOA funds used to underwrite the 
training for the amount the Pell Grant covers, including any education 
fees the training provider charges to attend training. Reimbursement is 
not required from the portion of Pell Grant assistance disbursed to the 
WIOA participant for education-related expenses.

Subpart C--Individual Training Accounts


Sec.  680.300  How are training services provided?

    Training services for eligible individuals are typically provided 
by training providers who receive payment for their services through an 
ITA. The ITA is a payment agreement established on behalf of a 
participant with a training provider. WIOA title I adult and dislocated 
workers purchase training services from State eligible training 
providers they select in consultation with the career planner, which 
includes discussion of program quality and performance information on 
the available eligible training providers. Payments from ITAs may be 
made in a variety of ways, including the electronic transfer of funds 
through financial institutions, vouchers, or other appropriate methods. 
Payments also may be made incrementally, for example, through payment 
of a portion of the costs at different points in the training course. 
Under limited conditions, as provided in Sec.  680.320 and WIOA sec. 
134(d)(3)(G), a Local WDB may contract for these services, rather than 
using an ITA for this purpose. In some limited circumstances, the Local 
WDB may itself provide the training services, but only if it obtains a 
waiver from the Governor for this purpose, and the Local WDB meets the 
other requirements of Sec.  679.410 of this chapter and WIOA sec. 
107(g)(1).


Sec.  680.310  Can the duration and amount of Individual Training 
Accounts be limited?

    (a) Yes, the State or Local WDB may impose limits on ITAs, such as 
limitations on the dollar amount and/or duration.
    (b) Limits to ITAs may be established in different ways:
    (1) There may be a limit for an individual participant that is 
based on the needs identified in the IEP, such as the participant's 
occupational choice or goal and the level of training needed to succeed 
in that goal; or
    (2) There may be a policy decision by the State WDB or Local WDB to 
establish a range of amounts and/or a maximum amount applicable to all 
ITAs.
    (c) Limitations established by State or Local WDB policies must be 
described in the State or Local Plan, respectively, but must not be 
implemented in a manner that undermines WIOA's requirement that 
training services are provided in a manner that maximizes customer 
choice in the selection of an ETP. Exceptions to ITA limitations may be 
provided for individual cases and must be described in State or Local 
WDB policies.
    (d) An individual may select training that costs more than the 
maximum amount available for ITAs under a State or local policy when 
other sources of funds are available to supplement the ITA. These other 
sources may include: Pell Grants; scholarships; severance pay; and 
other sources.


Sec.  680.320  Under what circumstances may mechanisms other than 
Individual Training Accounts be used to provide training services?

    (a) Contracts for services may be used instead of ITAs only when 
one or more of the following five exceptions apply, and the local area 
has fulfilled the consumer choice requirements of Sec.  680.340:
    (1) When the services provided are on-the-job-training (OJT), 
customized training, incumbent worker training, or transitional jobs.
    (2) When the Local WDB determines that there are an insufficient 
number of eligible training providers in the local area to accomplish 
the purpose of a system of ITAs. The determination process must include 
a public comment period for interested providers of at least 30 days, 
and be described in the Local Plan.
    (3) When the Local WDB determines that there is a training services 
program of demonstrated effectiveness offered in the area by a 
community-based organization or another private organization to serve 
individuals with barriers to employment, as described in paragraph (b) 
of this section. The Local WDB must develop criteria to be used in 
determining demonstrated effectiveness, particularly as it applies to 
the individuals with barriers to employment to be served. The criteria 
may include:
    (i) Financial stability of the organization;
    (ii) Demonstrated performance in the delivery of services to 
individuals with barriers to employment through such means as program 
completion rate; attainment of the skills, certificates or degrees the 
program is designed to provide; placement after training in 
unsubsidized employment; and retention in employment; and
    (iii) How the specific program relates to the workforce investment 
needs identified in the local plan.
    (4) When the Local WDB determines that it would be most appropriate 
to contract with an institution of higher education (see WIOA sec. 
3(28)) or other provider of training services in order to facilitate 
the training of multiple individuals in in-demand industry sectors or 
occupations, provided that the contract does not limit consumer choice.
    (5) When the Local WDB is considering entering into a Pay-for-
Performance contract, and the Local WDB ensures that the contract is 
consistent with Sec.  683.510 of this chapter.
    (b) Under paragraph (a)(3) of this section, individuals with 
barriers to

[[Page 56390]]

employment include those individuals in one or more of the following 
categories, as prescribed by WIOA sec. 3(24):
    (1) Displaced homemakers;
    (2) Low-income individuals;
    (3) Indians, Alaska Natives, and Native Hawaiians;
    (4) Individuals with disabilities;
    (5) Older individuals, i.e., those aged 55 or over;
    (6) Ex-offenders;
    (7) Homeless individuals;
    (8) Youth who are in or have aged out of the foster care system;
    (9) Individuals who are English language learners, individuals who 
have low levels of literacy, and individuals facing substantial 
cultural barriers;
    (10) Eligible migrant and seasonal farmworkers, defined in WIOA 
sec. 167(i);
    (11) Individuals within 2 years of exhausting lifetime eligibility 
under TANF (part A of title IV of the Social Security Act);
    (12) Single-parents (including single pregnant women);
    (13) Long-term unemployed individuals; or
    (14) Other groups determined by the Governor to have barriers to 
employment.
    (c) The Local Plan must describe the process to be used in 
selecting the providers under a contract for services.


Sec.  680.330  How can Individual Training Accounts, supportive 
services, and needs-related payments be used to support placing 
participating adults and dislocated workers into a registered 
apprenticeship program and support participants once they are in a 
registered apprenticeship program?

    Registered apprenticeships automatically qualify to be a on a 
State's eligible training provider list (ETPL) as described in Sec.  
680.470.
    (a) ITAs can be used to support placing participants in registered 
apprenticeship through:
    (1) Pre-apprenticeship training, as defined in Sec.  681.480 of 
this chapter; and
    (2) Training services provided under a registered apprenticeship 
program.
    (b) Supportive services may be provided as described in Sec. Sec.  
680.900 and 680.910.
    (c) Needs-related payments may be provided as described in 
Sec. Sec.  680.930, 680.940, 680.950, 680.960, and 680.970.
    (d) Work-based training options also may be used to support 
participants in registered apprenticeship programs (see Sec. Sec.  
680.740 and 680.750).


Sec.  680.340  What are the requirements for consumer choice?

    (a) Training services, whether under ITAs or under contract, must 
be provided in a manner that maximizes informed consumer choice in 
selecting an eligible provider.
    (b) Each Local WDB, through the one-stop center, must make 
available to customers the State list of eligible training providers 
required in WIOA sec. 122(d). The list includes a description of the 
programs through which the providers may offer the training services, 
and the performance and cost information about those providers 
described in WIOA sec. 122(d). Additionally, the Local WDB must make 
available information identifying eligible providers as may be required 
by the Governor under WIOA sec. 122(h) (where applicable).
    (c) An individual who has been determined eligible for training 
services under Sec.  680.210 may select a provider described in 
paragraph (b) of this section after consultation with a career planner. 
Unless the program has exhausted training funds for the program year, 
the one-stop center must refer the individual to the selected provider, 
and establish an ITA for the individual to pay for training. For 
purposes of this paragraph (c), a referral may be carried out by 
providing a voucher or certificate to the individual to obtain the 
training.
    (d) The cost of referral of an individual with an ITA to a training 
provider is paid by the applicable adult or dislocated worker program 
under title I of WIOA.
    (e) Each Local WDB, through the one-stop center, may coordinate 
funding for ITAs with funding from other Federal, State, local, or 
private job training programs or sources to assist the individual in 
obtaining training services.
    (f) Consistent with paragraph (a) of this section, priority 
consideration must be given to programs that lead to recognized 
postsecondary credentials (defined at WIOA sec. 3(52)) that are aligned 
with in-demand industry sectors or occupations in the local area.


Sec.  680.350  May Workforce Innovation and Opportunity Act title I 
adult and dislocated worker funds be used to directly support adult 
education and literacy activities?

    Yes, under WIOA sec. 134(c)(3)(D)(x), title I funds may provide 
adult education and literacy activities if they are provided 
concurrently or in combination with one or more of the following 
training services:
    (a) Occupational skills training, including training for 
nontraditional employment;
    (b) OJT;
    (c) Incumbent worker training (as described in Sec. Sec.  680.780, 
680.790, 680.800, 680.810, and 680.820);
    (d) Programs that combined workplace training and related 
instruction, which may include cooperative education programs;
    (e) Training programs operated by the private sector;
    (f) Skill upgrading and retraining; or
    (g) Entrepreneurial training.

Subpart D--Eligible Training Providers


Sec.  680.400  What is the purpose of this subpart?

    (a) This subpart describes the process for determining eligible 
training providers and programs for WIOA title I, subtitle B adult, 
dislocated worker, and out-of-school youth (OSY) aged 16-24 training 
participants and for publicly disseminating the list of these providers 
with relevant information about their programs. The workforce 
development system established under WIOA emphasizes informed consumer 
choice, job-driven training, provider performance, and continuous 
improvement. The quality and selection of providers and programs of 
training services is vital to achieving these core principles.
    (b) The State list of eligible training providers and programs and 
the related eligibility procedures ensure the accountability, quality 
and labor-market relevance of programs of training services that 
receive funds through WIOA title I, subtitle B. The State list of 
eligible training providers and programs also is a means for ensuring 
informed customer choice for individuals eligible for training. In 
administering the eligible training provider eligibility process, 
States and local areas must work to ensure that qualified providers 
offering a wide variety of job-driven programs of training services are 
available. The State list of eligible training providers and programs 
is made publicly available online through Web sites and searchable 
databases as well as any other means the State uses to disseminate 
information to consumers, including formats accessible to individuals 
with disabilities. The list must be accompanied by relevant performance 
and cost information and must be presented in a way that is easily 
understood, in order to maximize informed consumer choice and serve all 
significant population groups, and also must be available in an 
electronic format. The State eligible training provider performance 
reports, as required under WIOA sec. 116(d)(4), are addressed 
separately in Sec.  677.230 of this chapter.


Sec.  680.410  What is an eligible training provider?

    An ETP:

[[Page 56391]]

    (a) Is the only type of entity that receives funding for training 
services, as defined in Sec.  680.200, through an individual training 
account;
    (b) Must be included on the State list of eligible training 
providers and programs under this subpart;
    (c) Must provide a program of training services; and
    (d) Must be one of the following types of entities:
    (1) Institutions of higher education that provide a program which 
leads to a recognized postsecondary credential;
    (2) Entities that carry out programs registered under the National 
Apprenticeship Act (29 U.S.C. 50 et seq.); or
    (3) Other public or private providers of training services, which 
may include:
    (i) Community-based organizations;
    (ii) Joint labor-management organizations; and
    (iii) Eligible providers of adult education and literacy activities 
under title II of WIOA if such activities are provided in combination 
with training services described at Sec.  680.350.


Sec.  680.420  What is a ``program of training services''?

    A program of training services is one or more courses or classes, 
or a structured regimen, that provides the services in Sec.  680.200 
and leads to:
    (a) An industry-recognized certificate or certification, a 
certificate of completion of a registered apprenticeship, a license 
recognized by the State involved or the Federal government, an 
associate or baccalaureate degree;
    (b) Consistent with Sec.  680.350, a secondary school diploma or 
its equivalent;
    (c) Employment; or
    (d) Measurable skill gains toward a credential described in 
paragraph (a) or (b) of this section or employment.


Sec.  680.430  Who is responsible for managing the training provider 
eligibility process?

    (a) The Governor, in consultation with the State WDB, establishes 
the criteria, information requirements, and procedures, including 
procedures identifying the respective roles of the State and local 
areas, governing the eligibility of providers and programs of training 
services to receive funds through ITAs.
    (b) The Governor may designate a State agency (or appropriate State 
entity) to assist in carrying out the process and procedures for 
determining the eligibility of training providers and programs of 
training services. The Governor or such agency (or appropriate State 
entity) is responsible for:
    (1) Ensuring the development and maintenance of the State list of 
eligible training providers and programs, as described in Sec. Sec.  
680.450 (initial eligibility), 680.460 (continued eligibility), and 
680.490 (performance and cost information reporting requirements);
    (2) Ensuring that programs meet eligibility criteria and 
performance levels established by the State, including verifying the 
accuracy of the information;
    (3) Removing programs that do not meet State-established program 
criteria or performance levels, as described in Sec.  680.480(c);
    (4) Taking appropriate enforcement actions against providers that 
intentionally provide inaccurate information, or that substantially 
violate the requirements of WIOA, as described in Sec.  680.480(a) and 
(b); and
    (5) Disseminating the State list of eligible training providers and 
programs, accompanied by performance and cost information relating to 
each program, to the public and the Local WDBs throughout the State, as 
further described in Sec.  680.500.
    (c) The Local WDB must:
    (1) Carry out the procedures assigned to the Local WDB by the 
State, such as determining the initial eligibility of entities 
providing a program of training services, renewing the eligibility of 
providers and programs, and considering the possible termination of an 
eligible training provider due to the provider's submission of 
inaccurate eligibility and performance information or the provider's 
substantial violation of WIOA requirements;
    (2) Work with the State to ensure there are sufficient numbers and 
types of providers of training services, including eligible providers 
with expertise in assisting individuals with disabilities and eligible 
providers with expertise in assisting adults in need of adult education 
and literacy activities described under WIOA sec. 107(d)(10)(E), 
serving the local area; and
    (3) Ensure the dissemination and appropriate use of the State list 
of eligible training providers and programs through the local one-stop 
delivery system, including formats accessible to individuals with 
disabilities.
    (d) The Local WDB may make recommendations to the Governor on the 
procedure used in determining eligibility of providers and programs.
    (e) The Local WDB may, except with respect to registered 
apprenticeship programs:
    (1) Require additional criteria and information from local 
providers as criteria to become or remain eligible in that local area; 
and
    (2) Set higher levels of performance than those required by the 
State as criteria for local programs to become or remain eligible to 
provide services in that local area.


Sec.  680.440  [Reserved]


Sec.  680.450  What is the initial eligibility process for new 
providers and programs?

    (a) All providers and programs that have not previously been 
eligible to provide training services under WIOA sec. 122 or WIA sec. 
122, except for registered apprenticeship programs, must submit 
required information to be considered for initial eligibility in 
accordance with the Governor's procedures.
    (b) Apprenticeship programs registered under the National 
Apprenticeship Act are exempt from initial eligibility procedures. 
Registered apprenticeship programs must be included and maintained on 
the State list of eligible training providers and programs as long as 
the program remains registered, unless the registered apprenticeship 
program is removed from the list for a reason set forth in Sec.  
680.470. Procedures for registered apprenticeship programs to be 
included and maintained on the list are described in Sec.  680.470.
    (c) In establishing the State requirements described in paragraph 
(e) of this section, the Governor must, in consultation with the State 
WDB, develop a procedure for determining the eligibility of training 
providers and programs. This procedure, which must be described in the 
State Plan, must be developed after:
    (1) Soliciting and taking into consideration recommendations from 
Local WDBs and providers of training services within the State;
    (2) Providing an opportunity for interested members of the public, 
including representatives of business and labor organizations, to 
submit comments on the procedure; and
    (3) Designating a specific time period for soliciting and 
considering the recommendations of Local WDBs and providers, and for 
providing an opportunity for public comment.
    (d) For institutions of higher education that provide a program 
that leads to a recognized postsecondary credential and for other 
public or private providers of programs of training services, including 
joint labor-management organizations, and providers of adult education 
and literacy activities, the Governor must establish criteria and State 
requirements

[[Page 56392]]

for providers and programs seeking initial eligibility.
    (e) The Governor must require providers and programs seeking 
initial eligibility to provide verifiable program specific performance 
information. At a minimum, these criteria must require applicant 
providers to:
    (1) Describe each program of training services to be offered;
    (2) Provide information addressing a factor related to the 
indicators of performance, as described in WIOA secs. 
116(b)(2)(A)(i)(I)-(IV) and Sec.  680.460(g)(1) through (4) which 
include unsubsidized employment during the second quarter after exit, 
unsubsidized employment during the fourth quarter after exit, median 
earnings and credentials attainment;
    (3) Describe whether the provider is in a partnership with a 
business;
    (4) Provide other information the Governor may require in order to 
demonstrate high quality programs of training services, which may 
include information related to training services that lead to a 
recognized postsecondary credential; and
    (5) Provide information that addresses alignment of the training 
services with in-demand industry sectors and occupations, to the extent 
possible.
    (f) In establishing the initial eligibility procedures and 
criteria, the Governor may establish minimum performance standards, 
based on the performance information described in paragraph (e) of this 
section.
    (g) Under WIOA sec. 122(b)(4)(B), eligible training providers 
receive initial eligibility for only 1 year for a particular program.
    (h) After the initial eligibility expires, these initially eligible 
training providers are subject to the Governor's application procedures 
for continued eligibility, described at Sec.  680.460, in order to 
remain eligible.


Sec.  680.460  What is the application procedure for continued 
eligibility?

    (a) The Governor must establish an application procedure for 
eligible training providers and programs to maintain their continued 
eligibility. The application procedure must take into account the 
program's prior eligibility status.
    (1) Training providers and programs that were previously eligible 
under WIA will be subject to the application procedure for continued 
eligibility after the close of the Governor's transition period for 
implementation.
    (2) Training providers and programs that were not previously 
eligible under WIA and have been determined to be initially eligible 
under WIOA, under the procedures described at Sec.  680.450, will be 
subject to the application procedure for continued eligibility after 
their initial eligibility expires.
    (b) The Governor must develop this procedure after:
    (1) Soliciting and taking into consideration recommendations from 
Local WDBs and providers of training services within the State;
    (2) Providing an opportunity for interested members of the public, 
including representatives of business and labor organizations, to 
submit comments on such procedure; and
    (3) Designating a specific time period for soliciting and 
considering the recommendations of Local WDBs and providers, and for 
providing an opportunity for public comment.
    (c) Procedures for registered apprenticeship programs to be 
included and maintained on the list are described in Sec.  680.470. 
Apprenticeship programs registered under the National Apprenticeship 
Act must be included and maintained on the State list of eligible 
training providers and programs as long as the program remains 
registered, unless the registered apprenticeship program is removed 
from the list for a reason set forth in Sec.  680.470.
    (d) The application procedure must describe the roles of the State 
and local areas in receiving and reviewing provider applications and in 
making eligibility determinations.
    (e) The application procedure must be described in the State Plan.
    (f) In establishing eligibility criteria, the Governor must take 
into account:
    (1) The performance of the eligible training provider's program on:
    (i) The performance accountability measures described in WIOA secs. 
116(b)(2)(A)(i)(I)-(IV) and the other matters required by WIOA sec. 
122(b)(2);
    (ii) Other appropriate measures of performance outcomes determined 
by the Governor for program participants receiving training services 
under WIOA title I, subtitle B, taking into consideration the 
characteristics of the population served and relevant economic 
conditions; and
    (iii) Outcomes of the program for students in general with respect 
to employment and earnings as defined in WIOA sec. 116(b)(2).
    (iv) All of these measures may include minimum performance 
standards.
    (v) Until data from the conclusion of each performance indicator's 
first data cycle are available, the Governor may take into account 
alternate factors related to the measures described in paragraphs 
(f)(1)(i) through (iv) of this section.
    (2) Ensuring access to training services throughout the State, 
including in rural areas, and through the use of technology;
    (3) Information reported to State agencies on Federal and State 
training programs other than programs within WIOA title I, subtitle B;
    (4) The degree to which programs of training services relate to in-
demand industry sectors and occupations in the State;
    (5) State licensure requirements of training providers;
    (6) Encouraging the use of industry-recognized certificates and 
credentials;
    (7) The ability of providers to offer programs of training services 
that lead to postsecondary credentials;
    (8) The quality of the program of training services including a 
program that leads to a recognized postsecondary credential;
    (9) The ability of the providers to provide training services to 
individuals who are employed and individuals with barriers to 
employment;
    (10) Whether the providers timely and accurately submitted all of 
the information required for completion of eligible training provider 
performance reports required under WIOA sec. 116(d)(4) and all of the 
information required for initial and continued eligibility in this 
subpart; and
    (11) Other factors that the Governor determines are appropriate in 
order to ensure: The accountability of providers; that one-stop centers 
in the State will meet the needs of local employers and participants; 
and, that participants will be given an informed choice among 
providers.
    (g) The information requirements that the Governor establishes 
under paragraph (f)(1) of this section must require eligible training 
providers to submit appropriate, accurate, and timely information for 
participants receiving training under WIOA title I, subtitle B. That 
information must include:
    (1) The percentage of program participants who are in unsubsidized 
employment during the second quarter after exit from the program;
    (2) The percentage of program participants who are in unsubsidized 
employment during the fourth quarter after exit from the program;
    (3) The median earnings of program participants who are in 
unsubsidized employment during the second quarter after exit from the 
program;
    (4) The percentage of program participants who obtain a recognized 
postsecondary credential, or a secondary school diploma or its

[[Page 56393]]

recognized equivalent during participation in or within 1 year after 
exit from the program;
    (5) Information on recognized postsecondary credentials received by 
program participants;
    (6) Information on cost of attendance, including costs of tuition 
and fees, for program participants;
    (7) Information on the program completion rate for such 
participants.
    (h) The eligibility criteria must require that:
    (1) Providers submit performance and cost information as described 
in paragraph (g) of this section and in the Governor's procedures for 
each program of training services for which the provider has been 
determined to be eligible, in a timeframe and manner determined by the 
State, but at least every 2 years; and
    (2) That the collection of information required to demonstrate 
compliance with the criteria is not unduly burdensome or costly to 
providers.
    (i) The procedure for continued eligibility also must provide for 
the State biennially to review provider eligibility information to 
assess the renewal of training provider eligibility. Such procedures 
may establish minimum levels of training provider performance as 
criteria for continued eligibility.
    (j) The procedure for biennial review of the provider eligibility 
must include verification of the registration status of registered 
apprenticeship programs and removal of any registered apprenticeship 
programs as described in Sec.  680.470.
    (k) The Governor may establish procedures and timeframes for 
providing technical assistance to eligible training providers who are 
not intentionally supplying inaccurate information or who have not 
substantially violated any of the requirements under this section but 
are failing to meet the criteria and information requirements due to 
undue cost or burden.
    (l) The Governor's procedures must include what the Governor 
considers to be a substantial violation of the requirement to timely 
and accurately submit all of the information required for completion of 
the eligible training provider performance reports required under WIOA 
sec. 116(d)(4) and all of the information required for initial and 
continued eligibility in this subpart.
    (1) The Governor's procedures on determining a substantial 
violation must take into account exceptional circumstances beyond the 
provider's control, such as natural disasters, unexpected personnel 
transitions, and unexpected technology-related issues.
    (2) Providers who substantially violate the requirement in 
paragraph (g) of this section to timely and accurately submit all 
required information must be removed from the State list of eligible 
training providers and programs, as provided in Sec.  680.480(b).


Sec.  680.470  What are the procedures for including and removing 
registered apprenticeship programs on a State list of eligible training 
providers and programs?

    (a) All registered apprenticeship programs that are registered with 
the U.S. Department of Labor, Office of Apprenticeship, or a recognized 
State apprenticeship agency, are automatically eligible to be included 
in the State list of eligible training providers and programs. All 
registered apprenticeship programs must be informed of their automatic 
eligibility to be included on the list, and must be provided an 
opportunity to consent to their inclusion, before being placed on the 
State list of eligible training providers and programs. The Governor 
must establish a mechanism for registered apprenticeship program 
sponsors in the State to be informed of their automatic eligibility and 
to indicate that the program sponsor wishes to be included on the State 
list of eligible training providers and programs. This mechanism must 
place minimal burden on registered apprenticeship program sponsors and 
must be developed in accordance with guidance from the U.S. Department 
of Labor Office of Apprenticeship or with the assistance of the 
recognized State apprenticeship agency, as applicable.
    (b) Once on the State list of eligible training providers and 
programs, registered apprenticeship programs will remain on the list:
    (1) Until they are deregistered;
    (2) Until the registered apprenticeship program notifies the State 
that it no longer wants to be included on the list; or
    (3) Until the registered apprenticeship program is determined to 
have intentionally supplied inaccurate information or to have 
substantially violated any provision of title I of WIOA or the WIOA 
regulations, including 29 CFR part 38.
    (c) A registered apprenticeship program whose eligibility is 
terminated under paragraph (b)(3) of this section must be terminated 
for not less than 2 years and is liable to repay all youth, adult, and 
dislocated worker training funds it received during the period of 
noncompliance. The Governor must specify in the procedures required by 
Sec.  680.480 which individual or entity is responsible for making 
these determinations and the process by which the determination will be 
made, which must include an opportunity for a hearing that meets the 
requirements of Sec.  683.630(b) of this chapter.
    (d) Inclusion of a registered apprenticeship in the State list of 
eligible training providers and programs allows an individual who is 
eligible to use WIOA title I, subtitle B funds to use those funds 
toward registered apprenticeship training, consistent with their 
availability and limitations as prescribed by Sec.  680.300. The use of 
ITAs and other WIOA title I, subtitle B funds toward registered 
apprenticeship training is further described in Sec.  680.330.
    (e) The Governor is encouraged to consult with the State and Local 
WDBs, ETA's Office of Apprenticeship, recognized State apprenticeship 
agencies (where they exist in the Governor's State) or other State 
agencies, to establish voluntary reporting of performance information.
    (f) Pre-apprenticeship providers that wish to provide training 
services to participants using WIOA title I, subtitle B funds are 
subject to the eligibility procedures of this subpart.


Sec.  680.480  May an eligible training provider lose its eligibility?

    (a) Yes. A training provider must meet the Governors requirements 
for eligibility and provide accurate information in order to retain its 
status as an eligible training provider.
    (b) Providers determined to have intentionally supplied inaccurate 
information or to have substantially violated any provision of title I 
of WIOA or the WIOA regulations, including 29 CFR part 38, must be 
removed from the State list of eligible training providers and programs 
in accordance with the enforcement provisions of WIOA sec. 122(f). A 
provider whose eligibility is terminated under these conditions must be 
terminated for not less than 2 years and is liable to repay all youth, 
adult, and dislocated worker training funds it received during the 
period of noncompliance. The Governor must specify in the procedures 
which individual or entity is responsible for making these 
determinations and the process by which the determination will be made, 
which must include an opportunity for a hearing that meets the 
requirements of Sec.  683.630(b) of this chapter.
    (c) As a part of the biennial review of eligibility established by 
the Governor, the State must remove programs of training services that 
fail to meet criteria

[[Page 56394]]

established by the Governor to remain eligible, which may include 
failure to meet established minimum performance levels. Registered 
apprenticeship programs only may be removed for the reasons set forth 
in Sec.  680.470.
    (d) The Governor must establish an appeals procedure for providers 
of training services to appeal a denial of eligibility under this 
subpart that meets the requirements of Sec.  683.630(b) of this 
chapter, which explains the appeals process for denial or termination 
of eligibility of a provider of training services.
    (e) Where a Local WDB has established higher minimum performance 
standards, according to Sec.  680.430(e), the Local WDB may remove a 
program of training services from the eligible programs in that local 
area for failure to meet those higher performance standards. Training 
providers may appeal a denial of eligibility under Sec.  683.630(b) of 
this chapter.


Sec.  680.490  What kind of performance and cost information must 
eligible training providers other than registered apprenticeship 
programs provide for each program of training services?

    (a) In accordance with the State procedure under Sec.  680.460(i), 
eligible training providers, except registered apprenticeship programs, 
must submit, at least every 2 years, appropriate, timely, and accurate 
performance and cost information.
    (b) Program-specific performance information must include:
    (1) The information described in WIOA sec. 122(b)(2)(A) for 
individuals participating in the programs of training services who are 
receiving assistance under WIOA. This information includes indicators 
of performance as described in WIOA secs. 116(b)(2)(I)-(IV) and Sec.  
680.460(g)(1) through (4);
    (2) Information identifying the recognized postsecondary 
credentials received by such participants in Sec.  680.460(g)(5);
    (3) Program cost information, including tuition and fees, for WIOA 
participants in the program in Sec.  680.460(g)(6); and
    (4) Information on the program completion rate for WIOA 
participants in Sec.  680.460(g)(7).
    (c) Governors may require any additional performance information 
(such as the information described at WIOA sec. 122(b)(1)) that the 
Governor determines to be appropriate to determine, maintain 
eligibility, or better to inform consumers.
    (d) Governors must establish a procedure by which a provider can 
demonstrate that providing additional information required under this 
section would be unduly burdensome or costly. If the Governor 
determines that providers have demonstrated such extraordinary costs or 
undue burden:
    (1) The Governor must provide access to cost-effective methods for 
the collection of the information;
    (2) The Governor may provide additional resources to assist 
providers in the collection of the information from funds for statewide 
workforce investment activities reserved under WIOA secs. 128(a) and 
133(a)(1); or
    (3) The Governor may take other steps to assist eligible training 
providers in collecting and supplying required information such as 
offering technical assistance.


Sec.  680.500  How is the State list of eligible training providers and 
programs disseminated?

    (a) In order to assist participants in choosing employment and 
training activities, the Governor or State agency must disseminate the 
State list of eligible training providers and programs and accompanying 
performance and cost information to Local WDBs in the State and to 
members of the public online, including through Web sites and 
searchable databases, and through whatever other means the State uses 
to disseminate information to consumers, including the one-stop 
delivery system and its program partners throughout the State.
    (b) The State list of eligible training providers and programs and 
information must be updated regularly and provider and program 
eligibility must be reviewed biennially according to the procedures 
established by the Governor in Sec.  680.460(i).
    (c) In order to ensure informed consumer choice, the State list of 
eligible training providers and programs and accompanying information 
must be widely available to the public through electronic means, 
including Web sites and searchable databases, as well as through any 
other means the State uses to disseminate information to consumers. The 
list and accompanying information must be available through the one-
stop delivery system and its partners including the State's secondary 
and postsecondary education systems. The list must be accessible to 
individuals seeking information on training outcomes, as well as 
participants in employment and training activities funded under WIOA, 
including those under Sec.  680.210, and other programs. In accordance 
with WIOA sec. 188, the State list also must be accessible to 
individuals with disabilities.
    (d) The State list of eligible training providers and programs must 
be accompanied by appropriate information to assist participants in 
choosing employment and programs of training services. Such information 
must include:
    (1) Recognized postsecondary credential(s) offered;
    (2) Provider information supplied to meet the Governor's 
eligibility procedure as described in Sec. Sec.  680.450 and 680.460;
    (3) Performance and cost information as described in Sec.  680.490; 
and
    (4) Additional information as the Governor determines appropriate.
    (e) The State list of eligible training providers and programs and 
accompanying information must be made available in a manner that does 
not reveal personally identifiable information about an individual 
participant. In addition, in developing the information to accompany 
the State list described in Sec.  680.490(b), disclosure of personally 
identifiable information from an education record must be carried out 
in accordance with the Family Educational Rights and Privacy Act, 
including the circumstances relating to prior written consent.


Sec.  680.510  In what ways can a Local Workforce Development Board 
supplement the information available from the State list of eligible 
training providers and programs?

    (a) Local WDBs may supplement the criteria and information 
requirements established by the Governor in order to support informed 
consumer choice and the achievement of local performance indicators. 
However, the Local WDB may not do so for registered apprenticeship 
programs.
    (b) This additional information may include:
    (1) Information on programs of training services that are linked to 
occupations in demand in the local area;
    (2) Performance and cost information, including program-specific 
performance and cost information, for the local outlet(s) of multi-site 
eligible training providers;
    (3) Information that shows how programs are responsive to local 
requirements; and
    (4) Other appropriate information related to the objectives of 
WIOA.


Sec.  680.520  May individuals choose training providers and programs 
located outside of the local area or outside of the State?

    (a) An individual may choose training providers and programs 
outside of the local area provided the training program

[[Page 56395]]

is on the State list, in accordance with local policies and procedures.
    (b) An individual may choose eligible training providers and 
programs outside of the State consistent with State and local policies 
and procedures. State policies and procedures may provide for 
reciprocal or other agreements established with another State to permit 
eligible training providers in a State to accept ITAs provided by the 
other State.


Sec.  680.530  What eligibility requirements apply to providers of on-
the-job-training, customized training, incumbent worker training, and 
other training exceptions?

    (a) Providers of on-the-job training, customized training, 
incumbent worker training, internships, paid or unpaid work experience, 
or transitional jobs are not subject to the requirements applicable to 
entities listed on the eligible training provider list, and are not 
included on the State list of eligible training providers and programs.
    (b) For providers of training described in paragraph (a) of this 
section, the Governor may establish performance criteria those 
providers must meet to receive funds under the adult or dislocated 
worker programs pursuant to a contract as provided in Sec.  680.320.
    (c) One-stop operators in a local area must collect such 
performance information as the Governor may require and determine 
whether the providers meet any performance criteria the Governor may 
establish under paragraph (b) of this section.
    (d) One-stop operators must disseminate information identifying 
providers and programs that have met the Governor's performance 
criteria, along with the relevant performance information about them, 
through the one-stop delivery system.

Subpart E--Priority and Special Populations


Sec.  680.600  What priority must be given to low-income adults and 
public assistance recipients and individuals who are basic skills 
deficient served with adult funds under title I of the Workforce 
Innovation and Opportunity Act?

    (a) WIOA sec. 134(c)(3)(E) states that priority for individualized 
career services (see Sec.  678.430(b) of this chapter) and training 
services funded with title I adult funds must be given to recipients of 
public assistance, other low-income individuals, and individuals who 
are basic skills deficient (as defined in WIOA sec. 3(5)(B)) in the 
local area.
    (b) States and local areas must establish criteria by which the 
one-stop center will apply the priority under WIOA sec. 134(c)(3)(E). 
Such criteria may include the availability of other funds for providing 
employment and training-related services in the local area, the needs 
of the specific groups within the local area, and other appropriate 
factors.
    (c) The priority established under paragraph (a) of this section 
does not necessarily mean that these services only may be provided to 
recipients of public assistance, other low-income individuals, and 
individuals who are basic skills deficient. The Local WDB and the 
Governor may establish a process that also gives priority to other 
individuals eligible to receive such services, provided that it is 
consistent with priority of service for veterans (see Sec.  680.650) 
and the priority provisions of WIOA sec. 134(c)(3)(E), discussed above 
in paragraphs (a) and (b) of this section.


Sec.  680.610  Does the statutory priority for use of adult funds also 
apply to dislocated worker funds?

    No, the statutory priority only applies to adult funds and only 
applies to providing individualized career services, as described in 
Sec.  680.150(b), and training services. Funds allocated for dislocated 
workers are not subject to this requirement.


Sec.  680.620  How does the Temporary Assistance for Needy Families 
program relate to the one-stop delivery system?

    The local TANF program is a required partner in the one-stop 
delivery system. Part 678 of this chapter describes the roles of such 
partners in the one-stop delivery system and it applies to the TANF 
program. TANF serves individuals who also may be served by the WIOA 
programs and, through appropriate linkages and referrals, these 
customers will have access to a broader range of services through the 
cooperation of the TANF program in the one-stop delivery system. TANF 
participants, who are determined to be WIOA eligible, and who need 
occupational skills training may be referred through the one-stop 
delivery system to receive WIOA training, when TANF grant and other 
grant funds are not available to the individual in accordance with 
Sec.  680.230(a). WIOA participants who also are determined TANF 
eligible may be referred to the TANF program for assistance.


Sec.  680.630  How does a displaced homemaker qualify for services 
under title I of the Workforce Innovation and Opportunity Act?

    (a) Individuals who meet the definitions of a ``displaced 
homemaker'' (see WIOA sec. 3(16)) qualify for career and training 
services with dislocated worker title I funds.
    (b) Displaced homemakers also may qualify for career and training 
services with adult funds under title I if the requirements of this 
part are met (see Sec. Sec.  680.120 and 680.600).
    (c) Displaced homemakers also may be served in statewide employment 
and training projects conducted with reserve funds for innovative 
programs for displaced homemakers, as described in Sec.  682.210(c) of 
this chapter.
    (d) The definition of displaced homemaker includes the dependent 
spouse of a member of the Armed Forces on active duty (as defined in 
sec. 101(d)(1) of title 10, United States Code) and whose family income 
is significantly reduced because of a deployment, a call or order to 
active duty under a provision of law referred to in sec. 101(a)(13)(B) 
of title 10, United State Code, a permanent change of station, or the 
service-connected death or disability of the member.


Sec.  680.640  May an individual with a disability whose family does 
not meet income eligibility criteria under the Workforce Innovation and 
Opportunity Act be eligible for priority as a low-income adult?

    Yes, even if the family of an individual with a disability does not 
meet the income eligibility criteria, the individual with a disability 
is to be considered a low-income individual if the individual's own 
income:
    (a) Meets the income criteria established in WIOA sec. 
3(36)(A)(vi); or
    (b) Meets the income eligibility criteria for payments under any 
Federal, State or local public assistance program (see WIOA sec. 
3(36)(A)(i)).


Sec.  680.650  Do veterans receive priority of service under the 
Workforce Innovation and Opportunity Act?

    Yes, veterans, as defined under WIOA sec. 3(63)(A) and 38 U.S.C. 
101, receive priority of service in all Department of Labor-funded 
training programs under 38 U.S.C. 4215 and described in 20 CFR part 
1010. A veteran still must meet each program's eligibility criteria to 
receive services under the respective employment and training program. 
For income-based eligibility determinations, amounts paid while on 
active duty or paid by the Department of Veterans Affairs (VA) for 
vocational rehabilitation, disability payments, or related VA-funded 
programs are not to be considered as income, in accordance with 38 
U.S.C. 4213 and Sec.  683.230 of this chapter.

[[Page 56396]]

Sec.  680.660  Are separating military service members eligible for 
dislocated worker activities under the Workforce Innovation and 
Opportunity Act?

    If the separating service member is separating from the Armed 
Forces with a discharge that is anything other than dishonorable, the 
separating service member qualifies for dislocated worker activities 
based on the following criteria:
    (a) The separating service member has received a notice of 
separation, a DD-214 from the Department of Defense, or other 
documentation showing a separation or imminent separation from the 
Armed Forces to satisfy the termination or layoff part of the 
dislocated worker eligibility criteria in WIOA sec. 3(15)(A)(i);
    (b) The separating service member qualifies for the dislocated 
worker eligibility criteria on eligibility for or exhaustion of 
unemployment compensation in WIOA sec. 3(15)(A)(ii)(I) or (II); and,
    (c) As a separating service member, the individual meets the 
dislocated worker eligibility criteria that the individual is unlikely 
to return to a previous industry or occupation in WIOA sec. 
3(15)(A)(iii).

Subpart F--Work-Based Training


Sec.  680.700  What are the requirements for on-the-job training?

    (a) OJT is defined at WIOA sec. 3(44). OJT is provided under a 
contract with an employer or registered apprenticeship program sponsor 
in the public, private non-profit, or private sector. Through the OJT 
contract, occupational training is provided for the WIOA participant in 
exchange for the reimbursement, typically up to 50 percent of the wage 
rate of the participant, for the extraordinary costs of providing the 
training and supervision related to the training. In limited 
circumstances, as provided in WIOA sec. 134(c)(3)(h) and Sec.  680.730, 
the reimbursement may be up to 75 percent of the wage rate of the 
participant.
    (b) OJT contracts under WIOA title I, must not be entered into with 
an employer who has received payments under previous contracts under 
WIOA or WIA if the employer has exhibited a pattern of failing to 
provide OJT participants with continued long-term employment as regular 
employees with wages and employment benefits (including health 
benefits) and working conditions at the same level and to the same 
extent as other employees working a similar length of time and doing 
the same type of work.
    (c) An OJT contract must be limited to the period of time required 
for a participant to become proficient in the occupation for which the 
training is being provided. In determining the appropriate length of 
the contract, consideration should be given to the skill requirements 
of the occupation, the academic and occupational skill level of the 
participant, prior work experience, and the participant's IEP.


Sec.  680.710  What are the requirements for on-the-job training 
contracts for employed workers?

    OJT contracts may be written for eligible employed workers when:
    (a) The employee is not earning a self-sufficient wage or wages 
comparable to or higher than wages from previous employment, as 
determined by Local WDB policy;
    (b) The requirements in Sec.  680.700 are met; and
    (c) The OJT relates to the introduction of new technologies, 
introduction to new production or service procedures, upgrading to new 
jobs that require additional skills, workplace literacy, or other 
appropriate purposes identified by the Local WDB.


Sec.  680.720  What conditions govern on-the-job training payments to 
employers?

    (a) OJT payments to employers are deemed to be compensation for the 
extraordinary costs associated with training participants and 
potentially lower productivity of the participants while in the OJT.
    (b) Employers may be reimbursed up to 50 percent of the wage rate 
of an OJT participant, and up to 75 percent using the criteria in Sec.  
680.730, for the extraordinary costs of providing the training and 
additional supervision related to the OJT.
    (c) Employers are not required to document such extraordinary 
costs.


Sec.  680.730  Under what conditions may a Governor or Local Workforce 
Development Board raise the on-the-job training reimbursement rate up 
to 75 percent of the wage rate?

    (a) The Governor may increase the reimbursement rate for OJT 
contracts funded through the statewide employment and training 
activities described in Sec.  682.210 of this chapter up to 75 percent, 
and the Local WDB also may increase the reimbursement rate for OJT 
contracts described in Sec.  680.320(a)(1) up to 75 percent, when 
taking into account the following factors:
    (1) The characteristics of the participants taking into 
consideration whether they are ``individuals with barriers to 
employment,'' as defined in WIOA sec. 3(24);
    (2) The size of the employer, with an emphasis on small businesses;
    (3) The quality of employer-provided training and advancement 
opportunities, for example if the OJT contract is for an in-demand 
occupation and will lead to an industry-recognized credential; and
    (4) Other factors the Governor or Local WDB may determine to be 
appropriate, which may include the number of employees participating, 
wage and benefit levels of the employees (both at present and after 
completion), and relation of the training to the competitiveness of the 
participant.
    (b) Governors or Local WDBs must document the factors used when 
deciding to increase the wage reimbursement levels above 50 percent up 
to 75 percent.


Sec.  680.740  How can on-the-job training funds be used to support 
placing participants into a registered apprenticeship program?

    (a) OJT contracts may be entered into with registered 
apprenticeship program sponsors or participating employers in 
registered apprenticeship programs for the OJT portion of the 
registered apprenticeship program consistent with Sec.  680.700. 
Depending on the length of the registered apprenticeship and State and 
local OJT policies, these funds may cover some or all of the registered 
apprenticeship training.
    (b) If the apprentice is unemployed at the time of participation, 
the OJT must be conducted as described in Sec.  680.700. If the 
apprentice is employed at the time of participation, the OJT must be 
conducted as described in Sec.  680.710.


Sec.  680.750  Can Individual Training Account and on-the-job training 
funds be combined to support placing participants into a registered 
apprenticeship program?

    There is no Federal prohibition on using both ITA and OJT funds 
when placing participants into a registered apprenticeship program. See 
Sec.  680.330 on using ITAs to support participants in registered 
apprenticeship.


Sec.  680.760  What is customized training?

    Customized training is training:
    (a) That is designed to meet the special requirements of an 
employer (including a group of employers);
    (b) That is conducted with a commitment by the employer to employ 
an individual upon successful completion of the training; and
    (c) For which the employer pays for a significant cost of the 
training, as determined by the Local WDB in

[[Page 56397]]

accordance with the factors identified in WIOA sec. 3(14).


Sec.  680.770  What are the requirements for customized training for 
employed workers?

    Customized training of an eligible employed individual may be 
provided for an employer or a group of employers when:
    (a) The employee is not earning a self-sufficient wage or wages 
comparable to or higher than wages from previous employment, as 
determined by Local WDB policy;
    (b) The requirements in Sec.  680.760 are met; and
    (c) The customized training relates to the purposes described in 
Sec.  680.710(c) or other appropriate purposes identified by the Local 
WDB.


Sec.  680.780  Who is an ``incumbent worker'' for purposes of statewide 
and local employment and training activities?

    States and local areas must establish policies and definitions to 
determine which workers, or groups of workers, are eligible for 
incumbent worker services. To qualify as an incumbent worker, the 
incumbent worker needs to be employed, meet the Fair Labor Standards 
Act requirements for an employer-employee relationship, and have an 
established employment history with the employer for 6 months or more, 
with the following exception: In the event that the incumbent worker 
training is being provided to a cohort of employees, not every employee 
in the cohort must have an established employment history with the 
employer for 6 months or more as long as a majority of those employees 
being trained do meet the employment history requirement. An incumbent 
worker does not have to meet the eligibility requirements for career 
and training services for adults and dislocated workers under WIOA, 
unless they also are enrolled as a participant in the WIOA adult or 
dislocated worker program.


Sec.  680.790  What is incumbent worker training?

    Incumbent worker training must satisfy the requirements in WIOA 
sec. 134(d)(4) and increase the competitiveness of the employee or 
employer. For purposes of WIOA sec. 134(d)(4)(B), incumbent worker 
training is training:
    (a) Designed to meet the special requirements of an employer 
(including a group of employers) to retain a skilled workforce or avert 
the need to lay off employees by assisting the workers in obtaining the 
skills necessary to retain employment.
    (b) Conducted with a commitment by the employer to retain or avert 
the layoffs of the incumbent worker(s) trained.


Sec.  680.800  What funds may be used for incumbent worker training?

    (a) The local area may reserve up to 20 percent of their combined 
total of adult and dislocated worker allocations for incumbent worker 
training as described in Sec.  680.790;
    (b) The State may use their statewide activities funds (per WIOA 
sec. 134(a)(3)(A)(i)) and Rapid Response funds for statewide incumbent 
worker training activities (see Sec. Sec.  682.210(b) and 682.320(b)(4) 
of this chapter).


Sec.  680.810  What criteria must be taken into account for an employer 
to be eligible to receive local incumbent worker training funds?

    The Local WDB must consider under WIOA sec. 134(d)(4)(A)(ii):
    (a) The characteristics of the individuals in the program;
    (b) The relationship of the training to the competitiveness of an 
individual and the employer; and
    (c) Other factors the Local WDB determines appropriate, including 
number of employees trained, wages and benefits including post training 
increases, and the existence of other training opportunities provided 
by the employer.


Sec.  680.820  Are there cost sharing requirements for local area 
incumbent worker training?

    Yes. Under WIOA secs. 134(d)(4)(C) and 134(d)(4)(D)(i)-(iii), 
employers participating in incumbent worker training are required to 
pay the non-Federal share of the cost of providing training to their 
incumbent workers. The amount of the non-Federal share depends upon the 
limits established under WIOA secs. 134(d)(4)(ii)(C) and (D).


Sec.  680.830  May funds provided to employers for work-based training 
be used to assist, promote, or deter union organizing?

    No. Funds provided to employers for work-based training, as 
described in this subpart, must not be used to directly or indirectly 
assist, promote, or deter union organizing.


Sec.  680.840  May funds provided to employers for work-based training 
and other work experiences be used to fill job openings as a result of 
a labor dispute?

    No. Funds provided to employers for work-based training, as 
described in this subpart and in subpart A of this part, may not be 
used to directly or indirectly aid in the filling of a job opening 
which is vacant because the former occupant is on strike, or is being 
locked out in the course of a labor dispute, or the filling of which is 
otherwise an issue in a labor dispute involving a work stoppage.

Subpart G--Supportive Services


Sec.  680.900  What are supportive services for adults and dislocated 
workers?

    Supportive services for adults and dislocated workers are defined 
at WIOA sec. 3(59) and secs. 134(d)(2) and (3). Local WDBs, in 
consultation with the one-stop partners and other community service 
providers, must develop a policy on supportive services that ensures 
resource and service coordination in the local area. The policy should 
address procedures for referral to such services, including how such 
services will be funded when they are not otherwise available from 
other sources. The provision of accurate information about the 
availability of supportive services in the local area, as well as 
referral to such activities, is one of the career services that must be 
available to adults and dislocated workers through the one-stop 
delivery system. (WIOA sec. 134(c)(2)(A)(ix) and Sec.  678.430 of this 
chapter). Local WDBs must ensure that needs-related payments are made 
in a manner consistent with Sec. Sec.  680.930, 680.940, 680.950, 
680.960, and 680.970. Supportive services are services that are 
necessary to enable an individual to participate in activities 
authorized under WIOA sec. 134(c)(2) and (3). These services may 
include, but are not limited to, the following:
    (a) Linkages to community services;
    (b) Assistance with transportation;
    (c) Assistance with child care and dependent care;
    (d) Assistance with housing;
    (e) Needs-related payments, as described at Sec. Sec.  680.930, 
680.940, 680.950, 680.960, and 680.970;
    (f) Assistance with educational testing;
    (g) Reasonable accommodations for individuals with disabilities;
    (h) Legal aid services;
    (i) Referrals to health care;
    (j) Assistance with uniforms or other appropriate work attire and 
work-related tools, including such items as eyeglasses and protective 
eye gear;
    (k) Assistance with books, fees, school supplies, and other 
necessary items for students enrolled in postsecondary education 
classes; and
    (l) Payments and fees for employment and training-related 
applications, tests, and certifications.

[[Page 56398]]

Sec.  680.910  When may supportive services be provided to 
participants?

    (a) Supportive services may only be provided to individuals who 
are:
    (1) Participating in career or training services as defined in WIOA 
secs. 134(c)(2) and (3); and
    (2) Unable to obtain supportive services through other programs 
providing such services.
    (b) Supportive services only may be provided when they are 
necessary to enable individuals to participate in career service or 
training activities.


Sec.  680.920  Are there limits on the amount or duration of funds for 
supportive services?

    (a) Local WDBs may establish limits on the provision of supportive 
services or provide the one-stop center with the authority to establish 
such limits, including a maximum amount of funding and maximum length 
of time for supportive services to be available to participants.
    (b) Procedures also may be established to allow one-stop centers to 
grant exceptions to the limits established under paragraph (a) of this 
section.


Sec.  680.930  What are needs-related payments?

    Needs-related payments provide financial assistance to participants 
for the purpose of enabling them to participate in training and are a 
supportive service authorized by WIOA sec. 134(d)(3). Unlike other 
supportive services, in order to qualify for needs-related payments a 
participant must be enrolled in training.


Sec.  680.940  What are the eligibility requirements for adults to 
receive needs-related payments?

    Adults must:
    (a) Be unemployed;
    (b) Not qualify for, or have ceased qualifying for, unemployment 
compensation; and
    (c) Be enrolled in a program of training services under WIOA sec. 
134(c)(3).


Sec.  680.950  What are the eligibility requirements for dislocated 
workers to receive needs-related payments?

    To receive needs-related payments, a dislocated worker must:
    (a) Be unemployed, and:
    (1) Have ceased to qualify for unemployment compensation or trade 
readjustment allowance under TAA; and
    (2) Be enrolled in a program of training services under WIOA sec. 
134(c)(3) by the end of the 13th week after the most recent layoff that 
resulted in a determination of the worker's eligibility as a dislocated 
worker, or, if later, by the end of the 8th week after the worker is 
informed that a short-term layoff will exceed 6 months; or
    (b) Be unemployed and did not qualify for unemployment compensation 
or trade readjustment assistance under TAA and be enrolled in a program 
of training services under WIOA sec. 134(c)(3).


Sec.  680.960  May needs-related payments be paid while a participant 
is waiting to start training classes?

    Yes, payments may be provided if the participant has been accepted 
in a training program that will begin within 30 calendar days. The 
Governor may authorize local areas to extend the 30-day period to 
address appropriate circumstances.


Sec.  680.970  How is the level of needs-related payments determined?

    (a) The payment level for adults must be established by the Local 
WDB. For statewide projects, the payment level for adults must be 
established by the State WDB.
    (b) For dislocated workers, payments must not exceed the greater of 
either of the following levels:
    (1) The applicable weekly level of the unemployment compensation 
benefit, for participants who were eligible for unemployment 
compensation as a result of the qualifying dislocation; or
    (2) The poverty level for an equivalent period, for participants 
who did not qualify for unemployment compensation as a result of the 
qualifying layoff. The weekly payment level must be adjusted to reflect 
changes in total family income, as determined by Local WDB policies.

0
14. Add part 681 to read as follows:

PART 681--YOUTH ACTIVITIES UNDER TITLE I OF THE WORKFORCE 
INNOVATION AND OPPORTUNITY ACT

Subpart A--Standing Youth Committees
Sec.
681.100 What is a standing youth committee?
681.110 Who is included on a standing youth committee?
681.120 What does a standing youth committee do?
Subpart B--Eligibility for Youth Services
Sec.
681.200 Who is eligible for youth services?
681.210 Who is an ``out-of-school youth''?
681.220 Who is an ``in-school youth''?
681.230 What does ``school'' refer to in the ``not attending or 
attending any school'' in the out-of-school and in-school 
eligibility criteria?
681.240 When do local youth programs verify dropout status?
681.250 Who does the low-income eligibility requirement apply to?
681.260 How does the Department define ``high poverty area'' for the 
purposes of the special regulation for low-income youth in the 
Workforce Innovation and Opportunity Act?
681.270 May a local program use eligibility for free or reduced 
price lunches under the National School Lunch Program as a 
substitute for the income eligibility criteria under title I of the 
Workforce Innovation and Opportunity Act?
681.280 Is a youth with a disability eligible for youth services 
under the Workforce Innovation and Opportunity Act if his or her 
family income exceeds the income eligibility criteria?
681.290 How does the Department define the ``basic skills 
deficient'' criterion this part?
681.300 How does the Department define the ``requires additional 
assistance to enter or complete an educational program, or to secure 
and hold employment'' criterion in this part for OSY?
681.310 How does the Department define the ``requires additional 
assistance to complete an educational program, or to secure and hold 
employment'' criterion in this part for ISY?
681.320 Must youth participants enroll to participate in the youth 
program?
Subpart C--Youth Program Design, Elements, and Parameters
Sec.
681.400 What is the process used to select eligible youth providers?
681.410 Does the requirement that a State and local area expend at 
least 75 percent of youth funds to provide services to out-of-school 
youth apply to all youth funds?
681.420 How must Local Workforce Development Boards design Workforce 
Innovation and Opportunity Act youth programs?
681.430 May youth participate in both the Workforce Innovation and 
Opportunity Act (WIOA) youth and adult programs concurrently, and 
how do local program operators track concurrent enrollment in the 
WIOA youth and adult programs?
681.440 How does a local youth program determine if an 18 to 24 year 
old is enrolled in the Workforce Innovation and Opportunity Act 
(WIOA) youth program or the WIOA adult program?
681.450 For how long must a local Workforce Innovation and 
Opportunity Act youth program serve a participant?
681.460 What services must local programs offer to youth 
participants?
681.470 Does the Department require local programs to use Workforce 
Innovation and Opportunity Act funds for each of the 14 program 
elements?
681.480 What is a pre-apprenticeship program?
681.490 What is adult mentoring?
681.500 What is financial literacy education?
681.510 What is comprehensive guidance and counseling?
681.520 What are leadership development opportunities?

[[Page 56399]]

681.530 What are positive social and civic behaviors?
681.540 What is occupational skills training?
681.550 Are Individual Training Accounts permitted for youth 
participants?
681.560 What is entrepreneurial skills training and how is it 
taught?
681.570 What are supportive services for youth?
681.580 What are follow-up services for youth?
681.590 What is the work experience priority and how will local 
youth programs track the work experience priority?
681.600 What are work experiences?
681.610 Does the Workforce Innovation and Opportunity Act require 
Local Workforce Development Boards to offer summer employment 
opportunities in the local youth program?
681.620 How are summer employment opportunities administered?
681.630 What does education offered concurrently with and in the 
same context as workforce preparation activities and training for a 
specific occupation or occupational cluster mean?
681.640 Are incentive payments to youth participants permitted?
681.650 How can parents, youth, and other members of the community 
get involved in the design and implementation of local youth 
programs?
Subpart D--One-Stop Services to Youth
Sec.
681.700 What is the connection between the youth program and the 
one-stop delivery system?
681.710 Do Local Workforce Development Boards have the flexibility 
to offer services to area youth who are not eligible under the youth 
program through the one-stop centers?

    Authority:  Secs. 107, 121, 123, 129, 189, 503, Pub. L. 113-128, 
128 Stat. 1425 (Jul. 22, 2014).

Subpart A--Standing Youth Committees


Sec.  681.100  What is a standing youth committee?

    The Workforce Innovation and Opportunity Act (WIOA) eliminates the 
requirement for Local Workforce Development Boards (WDBs) to establish 
a youth council. However, the Department encourages Local WDBs to 
establish a standing committee to provide information and to assist 
with planning, operational, oversight, and other issues relating to the 
provision of services to youth. If the Local WDB does not designate a 
standing youth committee, it retains responsibility for all aspects of 
youth formula programs.


Sec.  681.110  Who is included on a standing youth committee?

    (a) If a Local WDB decides to form a standing youth committee, the 
committee must include a member of the Local WDB, who chairs the 
committee, members of community-based organizations with a demonstrated 
record of success in serving eligible youth, and other individuals with 
appropriate expertise and experience who are not members of the Local 
WDB.
    (b) The committee must reflect the needs of the local area. The 
committee members appointed for their experience and expertise may 
bring their expertise to help the committee address the employment, 
training, education, human and supportive service needs of eligible 
youth including out-of-school youth (OSY). Members may represent 
agencies such as secondary and postsecondary education, training, 
health, disability, mental health, housing, public assistance, and 
justice, or be representatives of philanthropic or economic and 
community development organizations, and employers. The committee may 
also include parents, participants, and youth.
    (c) A Local WDB may designate an existing entity such as an 
effective youth council as the standing youth committee if it fulfills 
the requirements above in paragraph (a) of this section.


Sec.  681.120  What does a standing youth committee do?

    Under the direction of the Local WDB, a standing youth committee 
may:
    (a) Recommend policy direction to the Local WDB for the design, 
development, and implementation of programs that benefit all youth;
    (b) Recommend the design of a comprehensive community workforce 
development system to ensure a full range of services and opportunities 
for all youth, including disconnected youth;
    (c) Recommend ways to leverage resources and coordinate services 
among schools, public programs, and community-based organizations 
serving youth;
    (d) Recommend ways to coordinate youth services and recommend 
eligible youth service providers;
    (e) Provide on-going leadership and support for continuous quality 
improvement for local youth programs;
    (f) Assist with planning, operational, and other issues relating to 
the provision of services to youth; and
    (g) If so delegated by the Local WDB after consultation with the 
chief elected official (CEO), oversee eligible youth providers, as well 
as other youth program oversight responsibilities.

Subpart B--Eligibility for Youth Services


Sec.  681.200  Who is eligible for youth services?

    Both in-school youth (ISY) and OSY are eligible for youth services.


Sec.  681.210  Who is an ``out-of-school youth''?

    An OSY is an individual who is:
    (a) Not attending any school (as defined under State law);
    (b) Not younger than age 16 or older than age 24 at time of 
enrollment. Because age eligibility is based on age at enrollment, 
participants may continue to receive services beyond the age of 24 once 
they are enrolled in the program; and
    (c) One or more of the following:
    (1) A school dropout;
    (2) A youth who is within the age of compulsory school attendance, 
but has not attended school for at least the most recent complete 
school year calendar quarter. School year calendar quarter is based on 
how a local school district defines its school year quarters. In cases 
where schools do not use quarters, local programs must use calendar 
year quarters;
    (3) A recipient of a secondary school diploma or its recognized 
equivalent who is a low-income individual and is either basic skills 
deficient or an English language learner;
    (4) An offender;
    (5) A homeless individual aged 16 to 24 who meets the criteria 
defined in sec. 41403(6) of the Violence Against Women Act of 1994 (42 
U.S.C. 14043e-2(6)), a homeless child or youth aged 16 to 24 who meets 
the criteria defined in sec. 725(2) of the McKinney-Vento Homeless 
Assistance Act (42 U.S.C. 11434a(2)) or a runaway;
    (6) An individual in foster care or who has aged out of the foster 
care system or who has attained 16 years of age and left foster care 
for kinship guardianship or adoption, a child eligible for assistance 
under sec. 477 of the Social Security Act (42 U.S.C. 677), or in an 
out-of-home placement;
    (7) An individual who is pregnant or parenting;
    (8) An individual with a disability; or
    (9) A low-income individual who requires additional assistance to 
enter or complete an educational program or to secure or hold 
employment.


Sec.  681.220  Who is an ``in-school youth''?

    An ISY is an individual who is:
    (a) Attending school (as defined by State law), including secondary 
and postsecondary school;
    (b) Not younger than age 14 or (unless an individual with a 
disability who is

[[Page 56400]]

attending school under State law) older than age 21 at time of 
enrollment. Because age eligibility is based on age at enrollment, 
participants may continue to receive services beyond the age of 21 once 
they are enrolled in the program;
    (c) A low-income individual; and
    (d) One or more of the following:
    (1) Basic skills deficient;
    (2) An English language learner;
    (3) An offender;
    (4) A homeless individual aged 14 to 21 who meets the criteria 
defined in sec. 41403(6) of the Violence Against Women Act of 1994 (42 
U.S.C. 14043e-2(6)), a homeless child or youth aged 14 to 21 who meets 
the criteria defined in sec. 725(2) of the McKinney-Vento Homeless 
Assistance Act (42 U.S.C. 11434a(2)), or a runaway;
    (5) An individual in foster care or who has aged out of the foster 
care system or who has attained 16 years of age and left foster care 
for kinship guardianship or adoption, a child eligible for assistance 
under sec. 477 of the Social Security Act (42 U.S.C. 677), or in an 
out-of-home placement;
    (6) An individual who is pregnant or parenting;
    (7) An individual with a disability; or
    (8) An individual who requires additional assistance to complete an 
educational program or to secure or hold employment.


Sec.  681.230  What does ``school'' refer to in the ``not attending or 
attending any school'' in the out-of-school and in-school eligibility 
criteria?

    In general, the applicable State law for secondary and 
postsecondary institutions defines ``school.'' However, for purposes of 
WIOA, the Department does not consider providers of adult education 
under title II of WIOA, YouthBuild programs, the Job Corps program, 
high school equivalency programs, or dropout re-engagement programs to 
be schools. Therefore, in all cases except the one provided below, WIOA 
youth programs may consider a youth to be an OSY for purposes of WIOA 
youth program eligibility if he or she attend adult education provided 
under title II of WIOA, YouthBuild, Job Corps, high school equivalency 
programs, or dropout re-engagement programs regardless of the funding 
source of those programs. Youth attending high school equivalency 
programs funded by the public K-12 school system who are classified by 
the school system as still enrolled in school are an exception; they 
are considered ISY.


Sec.  681.240  When do local youth programs verify dropout status?

    Local WIOA youth programs must verify a youth's dropout status at 
the time of WIOA youth program enrollment. An individual who is out of 
school at the time of enrollment, and subsequently placed in any 
school, is an OSY for the purposes of the 75 percent expenditure 
requirement for OSY throughout his/her participation in the program.


Sec.  681.250  Who does the low-income eligibility requirement apply 
to?

    (a) For OSY, only those youth who are the recipient of a secondary 
school diploma or its recognized equivalent and are either basic skills 
deficient or an English language learner, and youth who require 
additional assistance to enter or complete an educational program or to 
secure or hold employment, must be low-income. All other OSY meeting 
OSY eligibility under Sec.  681.210(c)(1), (2), (4), (5), (6), (7), and 
(8) are not required to be low-income.
    (b) All ISY must be low-income to meet the ISY eligibility 
criteria, except those that fall under the low-income exception.
    (c) WIOA allows a low-income exception where five percent of WIOA 
youth may be participants who ordinarily would be required to be low-
income for eligibility purposes and meet all other eligibility criteria 
for WIOA youth except the low-income criteria. A program must calculate 
the five percent based on the percent of newly enrolled youth in the 
local area's WIOA youth program in a given program year who would 
ordinarily be required to meet the low-income criteria.
    (d) In addition to the criteria in the definition of ``low-income 
individual'' in WIOA sec. 3(36), a youth is low-income if he or she 
receives or is eligible to receive a free or reduced price lunch under 
the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et 
seq. or if he or she lives in a high poverty area.


Sec.  681.260  How does the Department define ``high poverty area'' for 
the purposes of the special regulation for low-income youth in the 
Workforce Innovation and Opportunity Act?

    A youth who lives in a high poverty area is automatically 
considered to be a low-income individual. A high poverty area is a 
Census tract, a set of contiguous Census tracts, an American Indian 
Reservation, Oklahoma Tribal Statistical Area (as defined by the U.S. 
Census Bureau), Alaska Native Village Statistical Area or Alaska Native 
Regional Corporation Area, Native Hawaiian Homeland Area, or other 
tribal land as defined by the Secretary in guidance or county that has 
a poverty rate of at least 25 percent as set every 5 years using 
American Community Survey 5-Year data.


Sec.  681.270  May a local program use eligibility for free or reduced 
price lunches under the National School Lunch Program as a substitute 
for the income eligibility criteria under title I of the Workforce 
Innovation and Opportunity Act?

    Yes, WIOA sec. 3(36) defines a low-income individual to include an 
individual who receives (or is eligible to receive) a free or reduced 
price lunch under the Richard B. Russell National School Lunch Act.


Sec.  681.280  Is a youth with a disability eligible for youth services 
under the Workforce Innovation and Opportunity Act if his or her family 
income exceeds the income eligibility criteria?

    Yes, for an individual with a disability, income level for 
eligibility purposes is based on the individual's own income rather 
than his or her family's income. WIOA sec. 3(36)(A)(vi) states that an 
individual with a disability whose own income meets the low-income 
definition in clause (ii) (income that does not exceed the higher of 
the poverty line or 70 percent of the lower living standard income 
level), but who is a member of a family whose income exceeds this 
income requirement is eligible for youth services. Furthermore, only 
ISY with a disability must be low income. OSY with a disability are not 
required to be low-income.


Sec.  681.290  How does the Department define the ``basic skills 
deficient'' criterion in this part?

    (a) As used in Sec.  681.210(c)(3), a youth is ``basic skills 
deficient'' if he or she:
    (1) Have English reading, writing, or computing skills at or below 
the 8th grade level on a generally accepted standardized test; or
    (2) Are unable to compute or solve problems, or read, write, or 
speak English at a level necessary to function on the job, in the 
individual's family, or in society.
    (b) The State or Local WDB must establish its policy on paragraph 
(a)(2) of this section in its respective State or local plan.
    (c) In assessing basic skills, local programs must use assessment 
instruments that are valid and appropriate for the target population, 
and must provide reasonable accommodation in the assessment process, if 
necessary, for individuals with disabilities.

[[Page 56401]]

Sec.  681.300  How does the Department define the ``requires additional 
assistance to enter or complete an educational program, or to secure 
and hold employment'' criterion in this part for OSY?

    Either the State or the local level may establish definitions and 
eligibility documentation requirements for the ``requires additional 
assistance to enter or complete an educational program, or to secure 
and hold employment'' criterion of Sec.  681.210(c)(9). In cases where 
the State WDB establishes State policy on this criterion, the State WDB 
must include the definition in the State Plan. In cases where the State 
WDB does not establish a policy, the Local WDB must establish a policy 
in its local plan if using this criterion.


Sec.  681.310  How does the Department define the ``requires additional 
assistance to complete an educational program, or to secure and hold 
employment'' criterion in this part for ISY?

    (a) Either the State or the local level may establish definitions 
and eligibility documentation requirements for the ``requires 
additional assistance to complete an educational program, or to secure 
and hold employment'' criterion of Sec.  681.220(d)(8). In cases where 
the State WDB establishes State policy on this criterion, the State WDB 
must include the definition in the State Plan. In cases where the State 
WDB does not establish a policy, the Local WDB must establish a policy 
in its local plan if using this criterion.
    (b) In each local area, not more than five percent of the ISY newly 
enrolled in a given program year may be eligible based on the 
``requires additional assistance to complete an educational program or 
to secure or hold employment'' criterion.


Sec.  681.320  Must youth participants enroll to participate in the 
youth program?

    (a) Yes, to participate in youth programs, participants must enroll 
in the WIOA youth program.
    (b) In order to be a participant in the WIOA youth program, all of 
the following must occur:
    (1) An eligibility determination;
    (2) The provision of an objective assessment;
    (3) Development of an individual service strategy; and
    (4) Participation in any of the 14 WIOA youth program elements.

Subpart C--Youth Program Design, Elements, and Parameters


Sec.  681.400  What is the process used to select eligible youth 
service providers?

    (a) The grant recipient/fiscal agent has the option to provide 
directly some or all of the youth workforce investment activities.
    (b) However, as provided in WIOA sec. 123, if a Local WDB chooses 
to award grants or contracts to youth service providers to carry out 
some or all of the youth workforce investment activities, the Local WDB 
must award such grants or contracts on a competitive basis, subject to 
the exception explained in paragraph (b)(4) of this section:
    (1) The Local WDB must identify youth service providers based on 
criteria established in the State Plan (including such quality criteria 
established by the Governor for a training program that leads to a 
recognized postsecondary credential) and take into consideration the 
ability of the provider to meet performance accountability measures 
based on the primary indicators of performance for youth programs.
    (2) The Local WDB must procure the youth service providers in 
accordance with the Uniform Guidance at 2 CFR parts 200 and 2900, in 
addition to applicable State and local procurement laws.
    (3) If the Local WDB establishes a standing youth committee under 
Sec.  681.100 it may assign the committee the function of selecting of 
grants or contracts.
    (4) Where the Local WDB determines there are an insufficient number 
of eligible youth providers in the local area, such as a rural area, 
the Local WDB may award grants or contracts on a sole source basis.


Sec.  681.410  Does the requirement that a State and local area expend 
at least 75 percent of youth funds to provide services to out-of-school 
youth apply to all youth funds?

    Yes. The 75 percent requirement applies to both statewide youth 
activities funds and local youth funds with 2 exceptions.
    (a) Only statewide funds spent on direct services to youth are 
subject to the OSY expenditure requirement. Funds spent on statewide 
youth activities that do not provide direct services to youth, such as 
most of the required statewide youth activities listed in WIOA sec. 
129(b)(1), are not subject to the OSY expenditure requirement. For 
example, administrative costs, monitoring, and technical assistance are 
not subject to OSY expenditure requirement; while funds spent on direct 
services to youth such as statewide demonstration projects, are subject 
to the OSY expenditure requirement.
    (b) For a State that receives a small State minimum allotment under 
WIOA sec. 127(b)(1)(C)(iv)(II) for youth or WIOA sec. 
132(b)(1)(B)(iv)(II) for adults, the State may submit a request to the 
Secretary to decrease the percentage to not less than 50 percent for a 
local area in the State, and the Secretary may approve such a request 
for that program year, if the State meets the following requirements:
    (1) After an analysis of the ISY and OSY populations in the local 
area, the State determines that the local area will be unable to use at 
least 75 percent of the local area WIOA youth funds to serve OSY due to 
a low number of OSY; and
    (2) The State submits to the Secretary, for the local area, a 
request including a proposed percentage decreased to not less than 50 
percent to provide workforce investment activities for OSY.
    (c) In the exercise of discretion afforded by WIOA sec. 129(a)(4), 
the Secretary has determined that requests to decrease the percentage 
of funds used to provide youth workforce investment activities for OSY 
will not be granted to States that received 90 percent of the allotment 
percentage for the past year. Therefore, when the Secretary receives 
such a request from a State, the request will be denied.
    (d) For local area funds, the administrative costs of carrying out 
local workforce investment activities described in WIOA sec. 128(b)(4) 
are not subject to the OSY expenditure requirement. All other local 
area youth funds beyond the administrative costs are subject to the OSY 
expenditure requirement.


Sec.  681.420  How must Local Workforce Development Boards design 
Workforce Innovation and Opportunity Act youth programs?

    (a) The design framework services of local youth programs must:
    (1) Provide for an objective assessment of each youth participant 
that meets the requirements of WIOA sec. 129(c)(1)(A), and includes a 
review of the academic and occupational skill levels, as well as the 
service needs and strengths, of each youth for the purpose of 
identifying appropriate services and career pathways for participants 
and informing the individual service strategy;
    (2) Develop, and update as needed, an individual service strategy 
based on the needs of each youth participant that is directly linked to 
one or more indicators of performance described in WIOA sec. 
116(b)(2)(A)(ii), that identifies career pathways that include 
education and employment goals, that considers career planning and the 
results of the objective assessment and that prescribes

[[Page 56402]]

achievement objectives and services for the participant; and
    (3) Provide case management of youth participants, including 
follow-up services.
    (b) The local plan must describe the design framework for youth 
programs in the local area, and how the 14 program elements required in 
Sec.  681.460 are to be made available within that framework.
    (c) Local WDBs must ensure appropriate links to entities that will 
foster the participation of eligible local area youth. Such links may 
include connections to:
    (1) Local area justice and law enforcement officials;
    (2) Local public housing authorities;
    (3) Local education agencies;
    (4) Local human service agencies;
    (5) WIOA title II adult education providers;
    (6) Local disability-serving agencies and providers and health and 
mental health providers;
    (7) Job Corps representatives; and
    (8) Representatives of other area youth initiatives, such as 
YouthBuild, and including those that serve homeless youth and other 
public and private youth initiatives.
    (d) Local WDBs must ensure that WIOA youth service providers meet 
the referral requirements in WIOA sec. 129(c)(3)(A) for all youth 
participants, including:
    (1) Providing these participants with information about the full 
array of applicable or appropriate services available through the Local 
WDBs or other eligible providers, or one-stop partners; and
    (2) Referring these participants to appropriate training and 
educational programs that have the capacity to serve them either on a 
sequential or concurrent basis.
    (e) If a youth applies for enrollment in a program of workforce 
investment activities and either does not meet the enrollment 
requirements for that program or cannot be served by that program, the 
eligible training provider of that program must ensure that the youth 
is referred for further assessment, if necessary, or referred to 
appropriate programs to meet the skills and training needs of the 
youth.
    (f) In order to meet the basic skills and training needs of 
applicants who do not meet the eligibility requirements of a particular 
program or who cannot be served by the program, each youth provider 
must ensure that these youth are referred:
    (1) For further assessment, as necessary; and
    (2) To appropriate programs, in accordance with paragraph (d)(2) of 
this section.
    (g) Local WDBs must ensure that parents, youth participants, and 
other members of the community with experience relating to youth 
programs are involved in both the design and implementation of its 
youth programs.
    (h) The objective assessment required under paragraph (a)(1) of 
this section or the individual service strategy required under 
paragraph (a)(2) of this section is not required if the program 
provider determines that it is appropriate to use a recent objective 
assessment or individual service strategy that was developed under 
another education or training program.
    (i) The Local WDBs may implement a WIOA Pay-for-Performance 
contract strategy for program elements described at Sec.  681.460, for 
which the Local WDB may reserve and use not more than 10 percent of the 
total funds allocated to the local area under WIOA sec. 128(b). For 
additional regulations on WIOA Pay-for-Performance contract strategies, 
see Sec.  683.500 of this chapter.


Sec.  681.430  May youth participate in both the Workforce Innovation 
and Opportunity Act (WIOA) youth and adult programs concurrently, and 
how do local program operators track concurrent enrollment in the WIOA 
youth and adult programs?

    (a) Yes, individuals who meet the respective program eligibility 
requirements may participate in adult and youth programs concurrently. 
Such individuals must be eligible under the youth or adult eligibility 
criteria applicable to the services received. Local program operators 
may determine, for these individuals, the appropriate level and balance 
of services under the youth and adult programs.
    (b) Local program operators must identify and track the funding 
streams which pay the costs of services provided to individuals who are 
participating in youth and adult programs concurrently, and ensure no 
duplication of services.
    (c) Individuals who meet the respective program eligibility 
requirements for WIOA youth title I and title II may participate in 
title I youth and title II concurrently.


Sec.  681.440  How does a local youth program determine if an 18 to 24 
year old is enrolled in the Workforce Innovation and Opportunity Act 
(WIOA) youth program or the WIOA adult program?

    A local program must determine the appropriate program for the 
participant based on the service needs of the participant and if the 
participant is career-ready based on an assessment of their 
occupational skills, prior work experience, employability, and the 
participant's needs.


Sec.  681.450  For how long must a local Workforce Innovation and 
Opportunity Act youth program serve a participant?

    Local youth programs must provide service to a participant for the 
amount of time necessary to ensure successful preparation to enter 
postsecondary education and/or unsubsidized employment. While there is 
no minimum or maximum time a youth can participate in the WIOA youth 
program, programs must link participation to the individual service 
strategy and not the timing of youth service provider contracts or 
program years.


Sec.  681.460  What services must local programs offer to youth 
participants?

    (a) Local programs must make each of the following 14 services 
available to youth participants:
    (1) Tutoring, study skills training, instruction and evidence-based 
dropout prevention and recovery strategies that lead to completion of 
the requirements for a secondary school diploma or its recognized 
equivalent (including a recognized certificate of attendance or similar 
document for individuals with disabilities) or for a recognized 
postsecondary credential;
    (2) Alternative secondary school services, or dropout recovery 
services, as appropriate;
    (3) Paid and unpaid work experiences that have academic and 
occupational education as a component of the work experience, which may 
include the following types of work experiences:
    (i) Summer employment opportunities and other employment 
opportunities available throughout the school year;
    (ii) Pre-apprenticeship programs;
    (iii) Internships and job shadowing; and
    (iv) On-the-job training opportunities;
    (4) Occupational skill training, which includes priority 
consideration for training programs that lead to recognized 
postsecondary credentials that align with in-demand industry sectors or 
occupations in the local area involved, if the Local WDB determines 
that the programs meet the quality criteria described in WIOA sec. 123;
    (5) Education offered concurrently with and in the same context as 
workforce preparation activities and training for a specific occupation 
or occupational cluster;
    (6) Leadership development opportunities, including community 
service and peer-centered activities encouraging responsibility and 
other positive social and civic behaviors;
    (7) Supportive services, including the services listed in Sec.  
681.570;

[[Page 56403]]

    (8) Adult mentoring for a duration of at least 12 months, that may 
occur both during and after program participation;
    (9) Follow-up services for not less than 12 months after the 
completion of participation, as provided in Sec.  681.580;
    (10) Comprehensive guidance and counseling, which may include drug 
and alcohol abuse counseling, as well as referrals to counseling, as 
appropriate to the needs of the individual youth;
    (11) Financial literacy education;
    (12) Entrepreneurial skills training;
    (13) Services that provide labor market and employment information 
about in-demand industry sectors or occupations available in the local 
area, such as career awareness, career counseling, and career 
exploration services; and
    (14) Activities that help youth prepare for and transition to 
postsecondary education and training.
    (b) Local programs have the discretion to determine what specific 
program services a youth participant receives, based on each 
participant's objective assessment and individual service strategy. 
Local programs are not required to provide every program service to 
each participant.
    (c) When available, the Department encourages local programs to 
partner with existing local, State, or national entities that can 
provide program element(s) at no cost to the local youth program.


Sec.  681.470  Does the Department require local programs to use 
Workforce Innovation and Opportunity Act funds for each of the 14 
program elements?

    No. The Department does not require local programs to use WIOA 
youth funds for each of the program elements. Local programs may 
leverage partner resources to provide some of the readily available 
program elements. However, the local area must ensure that if a program 
element is not funded with WIOA title I youth funds, the local program 
has an agreement in place with a partner organization to ensure that 
the program element will be offered. The Local WDB must ensure that the 
program element is closely connected and coordinated with the WIOA 
youth program.


Sec.  681.480  What is a pre-apprenticeship program?

    A pre-apprenticeship is a program designed to prepare individuals 
to enter and succeed in an apprenticeship program registered under the 
Act of August 16, 1937 (commonly known as the ``National Apprenticeship 
Act''; 50 Stat. 664, chapter 663; 29 U.S.C. 50 et. seq.) (referred to 
in this part as a ``registered apprenticeship'' or ``registered 
apprenticeship program'') and includes the following elements:
    (a) Training and curriculum that aligns with the skill needs of 
employers in the economy of the State or region involved;
    (b) Access to educational and career counseling and other 
supportive services, directly or indirectly;
    (c) Hands-on, meaningful learning activities that are connected to 
education and training activities, such as exploring career options, 
and understanding how the skills acquired through coursework can be 
applied toward a future career;
    (d) Opportunities to attain at least one industry-recognized 
credential; and
    (e) A partnership with one or more registered apprenticeship 
programs that assists in placing individuals who complete the pre-
apprenticeship program in a registered apprenticeship program.


Sec.  681.490  What is adult mentoring?

    (a) Adult mentoring for youth must:
    (1) Last at least 12 months and may take place both during the 
program and following exit from the program;
    (2) Be a formal relationship between a youth participant and an 
adult mentor that includes structured activities where the mentor 
offers guidance, support, and encouragement to develop the competence 
and character of the mentee; and
    (3) While group mentoring activities and mentoring through 
electronic means are allowable as part of the mentoring activities, at 
a minimum, the local youth program must match the youth with an 
individual mentor with whom the youth interacts on a face-to-face 
basis.
    (b) Mentoring may include workplace mentoring where the local 
program matches a youth participant with an employer or employee of a 
company.


Sec.  681.500  What is financial literacy education?

    The financial literacy education program element may include 
activities which:
    (a) Support the ability of participants to create budgets, initiate 
checking and savings accounts at banks, and make informed financial 
decisions;
    (b) Support participants in learning how to effectively manage 
spending, credit, and debt, including student loans, consumer credit, 
and credit cards;
    (c) Teach participants about the significance of credit reports and 
credit scores; what their rights are regarding their credit and 
financial information; how to determine the accuracy of a credit report 
and how to correct inaccuracies; and how to improve or maintain good 
credit;
    (d) Support a participant's ability to understand, evaluate, and 
compare financial products, services, and opportunities and to make 
informed financial decisions;
    (e) Educate participants about identity theft, ways to protect 
themselves from identify theft, and how to resolve cases of identity 
theft and in other ways understand their rights and protections related 
to personal identity and financial data;
    (f) Support activities that address the particular financial 
literacy needs of non-English speakers, including providing the support 
through the development and distribution of multilingual financial 
literacy and education materials;
    (g) Support activities that address the particular financial 
literacy needs of youth with disabilities, including connecting them to 
benefits planning and work incentives counseling;
    (h) Provide financial education that is age appropriate, timely, 
and provides opportunities to put lessons into practice, such as by 
access to safe and affordable financial products that enable money 
management and savings; and
    (i) Implement other approaches to help participants gain the 
knowledge, skills, and confidence to make informed financial decisions 
that enable them to attain greater financial health and stability by 
using high quality, age-appropriate, and relevant strategies and 
channels, including, where possible, timely and customized information, 
guidance, tools, and instruction.


Sec.  681.510  What is comprehensive guidance and counseling?

    Comprehensive guidance and counseling provides individualized 
counseling to participants. This includes drug and alcohol abuse 
counseling, mental health counseling, and referral to partner programs, 
as appropriate. When referring participants to necessary counseling 
that cannot be provided by the local youth program or its service 
providers, the local youth program must coordinate with the 
organization it refers to in order to ensure continuity of service.


Sec.  681.520  What are leadership development opportunities?

    Leadership development opportunities are opportunities that 
encourage responsibility, confidence, employability, self-
determination, and other positive social behaviors such as:
    (a) Exposure to postsecondary educational possibilities;
    (b) Community and service learning projects;

[[Page 56404]]

    (c) Peer-centered activities, including peer mentoring and 
tutoring;
    (d) Organizational and team work training, including team 
leadership training;
    (e) Training in decision-making, including determining priorities 
and problem solving;
    (f) Citizenship training, including life skills training such as 
parenting and work behavior training;
    (g) Civic engagement activities which promote the quality of life 
in a community; and
    (h) Other leadership activities that place youth in a leadership 
role such as serving on youth leadership committees, such as a Standing 
Youth Committee.


Sec.  681.530  What are positive social and civic behaviors?

    Positive social and civic behaviors are outcomes of leadership 
opportunities, which are incorporated by local programs as part of 
their menu of services. Positive social and civic behaviors focus on 
areas that may include the following:
    (a) Positive attitudinal development;
    (b) Self-esteem building;
    (c) Openness to work with individuals from diverse backgrounds;
    (d) Maintaining healthy lifestyles, including being alcohol- and 
drug-free;
    (e) Maintaining positive social relationships with responsible 
adults and peers, and contributing to the well-being of one's 
community, including voting;
    (f) Maintaining a commitment to learning and academic success;
    (g) Avoiding delinquency; and
    (h) Positive job attitudes and work skills.


Sec.  681.540  What is occupational skills training?

    (a) The Department defines occupational skills training as an 
organized program of study that provides specific vocational skills 
that lead to proficiency in performing actual tasks and technical 
functions required by certain occupational fields at entry, 
intermediate, or advanced levels. Local areas must give priority 
consideration to training programs that lead to recognized 
postsecondary credentials that align with in-demand industry sectors or 
occupations in the local area. Such training must:
    (1) Be outcome-oriented and focused on an occupational goal 
specified in the individual service strategy;
    (2) Be of sufficient duration to impart the skills needed to meet 
the occupational goal; and
    (3) Lead to the attainment of a recognized postsecondary 
credential.
    (b) The chosen occupational skills training must meet the quality 
standards in WIOA sec. 123.


Sec.  681.550  Are Individual Training Accounts permitted for youth 
participants?

    Yes. In order to enhance individual participant choice in their 
education and training plans and provide flexibility to service 
providers, the Department allows WIOA Individual Training Accounts 
(ITAs) for OSY, ages 16 to 24 using WIOA youth funds when appropriate.


Sec.  681.560  What is entrepreneurial skills training and how is it 
taught?

    Entrepreneurial skills training provides the basics of starting and 
operating a small business.
    (a) Such training must develop the skills associated with 
entrepreneurship. Such skills may include, but are not limited to, the 
ability to:
    (1) Take initiative;
    (2) Creatively seek out and identify business opportunities;
    (3) Develop budgets and forecast resource needs;
    (4) Understand various options for acquiring capital and the trade-
offs associated with each option; and
    (5) Communicate effectively and market oneself and one's ideas.
    (b) Approaches to teaching youth entrepreneurial skills include, 
but are not limited to, the following:
    (1) Entrepreneurship education that provides an introduction to the 
values and basics of starting and running a business. Entrepreneurship 
education programs often guide youth through the development of a 
business plan and also may include simulations of business start-up and 
operation.
    (2) Enterprise development which provides supports and services 
that incubate and help youth develop their own businesses. Enterprise 
development programs go beyond entrepreneurship education by helping 
youth access small loans or grants that are needed to begin business 
operation and by providing more individualized attention to the 
development of viable business ideas.
    (3) Experiential programs that provide youth with experience in the 
day-to-day operation of a business. These programs may involve the 
development of a youth-run business that young people participating in 
the program work in and manage. Or, they may facilitate placement in 
apprentice or internship positions with adult entrepreneurs in the 
community.


Sec.  681.570  What are supportive services for youth?

    Supportive services for youth, as defined in WIOA sec. 3(59), are 
services that enable an individual to participate in WIOA activities. 
These services include, but are not limited to, the following:
    (a) Linkages to community services;
    (b) Assistance with transportation;
    (c) Assistance with child care and dependent care;
    (d) Assistance with housing;
    (e) Needs-related payments;
    (f) Assistance with educational testing;
    (g) Reasonable accommodations for youth with disabilities;
    (h) Legal aid services;
    (i) Referrals to health care;
    (j) Assistance with uniforms or other appropriate work attire and 
work-related tools, including such items as eyeglasses and protective 
eye gear;
    (k) Assistance with books, fees, school supplies, and other 
necessary items for students enrolled in postsecondary education 
classes; and
    (l) Payments and fees for employment and training-related 
applications, tests, and certifications.


Sec.  681.580  What are follow-up services for youth?

    (a) Follow-up services are critical services provided following a 
youth's exit from the program to help ensure the youth is successful in 
employment and/or postsecondary education and training. Follow-up 
services may include regular contact with a youth participant's 
employer, including assistance in addressing work-related problems that 
arise.
    (b) Follow-up services for youth also may include the following 
program elements:
    (1) Supportive services;
    (2) Adult mentoring;
    (3) Financial literacy education;
    (4) Services that provide labor market and employment information 
about in-demand industry sectors or occupations available in the local 
area, such as career awareness, career counseling, and career 
exploration services; and
    (5) Activities that help youth prepare for and transition to 
postsecondary education and training.
    (c) All youth participants must be offered an opportunity to 
receive follow-up services that align with their individual service 
strategies. Furthermore, follow-up services must be provided to all 
participants for a minimum of 12 months unless the participant declines 
to receive follow-up services or the participant cannot be located or 
contacted. Follow-up services

[[Page 56405]]

may be provided beyond 12 months at the State or Local WDB's 
discretion. The types of services provided and the duration of services 
must be determined based on the needs of the individual and therefore, 
the type and intensity of follow-up services may differ for each 
participant. Follow-up services must include more than only a contact 
attempted or made for securing documentation in order to report a 
performance outcome.


Sec.  681.590  What is the work experience priority and how will local 
youth programs track the work experience priority?

    (a) Local youth programs must expend not less than 20 percent of 
the funds allocated to them to provide ISY and OSY with paid and unpaid 
work experiences that fall under the categories listed in Sec.  
681.460(a)(3) and further defined in Sec.  681.600.
    (b) Local WIOA youth programs must track program funds spent on 
paid and unpaid work experiences, including wages and staff costs for 
the development and management of work experiences, and report such 
expenditures as part of the local WIOA youth financial reporting. The 
percentage of funds spent on work experience is calculated based on the 
total local area youth funds expended for work experience rather than 
calculated separately for ISY and OSY. Local area administrative costs 
are not subject to the 20 percent minimum work experience expenditure 
requirement.


Sec.  681.600  What are work experiences?

    (a) Work experiences are a planned, structured learning experience 
that takes place in a workplace for a limited period of time. Work 
experience may be paid or unpaid, as appropriate. A work experience may 
take place in the private for-profit sector, the non-profit sector, or 
the public sector. Labor standards apply in any work experience where 
an employee/employer relationship, as defined by the Fair Labor 
Standards Act or applicable State law, exists. Consistent with Sec.  
680.840 of this chapter, funds provided for work experiences may not be 
used to directly or indirectly aid in the filling of a job opening that 
is vacant because the former occupant is on strike, or is being locked 
out in the course of a labor dispute, or the filling of which is 
otherwise an issue in a labor dispute involving a work stoppage. Work 
experiences provide the youth participant with opportunities for career 
exploration and skill development.
    (b) Work experiences must include academic and occupational 
education. The educational component may occur concurrently or 
sequentially with the work experience. Further academic and 
occupational education may occur inside or outside the work site.
    (c) The types of work experiences include the following categories:
    (1) Summer employment opportunities and other employment 
opportunities available throughout the school year;
    (2) Pre-apprenticeship programs;
    (3) Internships and job shadowing; and
    (4) On-the-job training (OJT) opportunities as defined in WIOA sec. 
3(44) and in Sec.  680.700 of this chapter.


Sec.  681.610  Does the Workforce Innovation and Opportunity Act 
require Local Workforce Development Boards to offer summer employment 
opportunities in the local youth program?

    No, WIOA does not require Local WDBs to offer summer youth 
employment opportunities as summer employment is no longer its own 
program element under WIOA. However, WIOA does require Local WDBs to 
offer work experience opportunities using at least 20 percent of their 
funding, which may include summer employment.


Sec.  681.620  How are summer employment opportunities administered?

    Summer employment opportunities are a component of the work 
experience program element. If youth service providers administer the 
work experience program element, they must be selected by the Local WDB 
according to the requirements of WIOA sec. 123 and Sec.  681.400, based 
on criteria contained in the State Plan. However, the summer employment 
administrator does not need to select the employers who are providing 
the employment opportunities through a competitive process.


Sec.  681.630  What does education offered concurrently with and in the 
same context as workforce preparation activities and training for a 
specific occupation or occupational cluster mean?

    This program element reflects an integrated education and training 
model and describes how workforce preparation activities, basic 
academic skills, and hands-on occupational skills training are to be 
taught within the same time frame and connected to training in a 
specific occupation, occupational cluster, or career pathway.


Sec.  681.640  Are incentive payments to youth participants permitted?

    Yes, incentive payments to youth participants are permitted for 
recognition and achievement directly tied to training activities and 
work experiences. The local program must have written policies and 
procedures in place governing the award of incentives and must ensure 
that such incentive payments are:
    (a) Tied to the goals of the specific program;
    (b) Outlined in writing before the commencement of the program that 
may provide incentive payments;
    (c) Align with the local program's organizational policies; and
    (d) Are in accordance with the requirements contained in 2 CFR part 
200.


Sec.  681.650  How can parents, youth, and other members of the 
community get involved in the design and implementation of local youth 
programs?

    Local WDBs and programs must provide opportunities for parents, 
participants, and other members of the community with experience 
working with youth to be involved in the design and implementation of 
youth programs. Parents, youth participants, and other members of the 
community can get involved in a number of ways, including serving on 
youth standing committees, if they exist and they are appointed by the 
Local WDB. They also can get involved by serving as mentors, serving as 
tutors, and providing input into the design and implementation of other 
program design elements. Local WDBs also must make opportunities 
available to successful participants to volunteer to help participants 
as mentors, tutors, or in other activities.

Subpart D--One-Stop Services to Youth


Sec.  681.700  What is the connection between the youth program and the 
one-stop delivery system?

    (a) WIOA sec. 121(b)(1)(B)(i) requires that the youth program 
function as a required one-stop partner and fulfill the roles and 
responsibilities of a one-stop partner described in WIOA sec. 
121(b)(1)(A).
    (b) In addition to the provisions of part 678 of this chapter, 
connections between the youth program and the one-stop delivery system 
may include those that facilitate:
    (1) The coordination and provision of youth activities;
    (2) Linkages to the job market and employers;
    (3) Access for eligible youth to the information and services 
required in Sec.  681.460;
    (4) Services for non-eligible youth such as basic labor exchange 
services, other self-service activities such as job searches, career 
exploration, use of one-

[[Page 56406]]

stop center resources, and referral as appropriate; and
    (5) Other activities described in WIOA sec. 129(b)-(c).
    (c) Local WDBs must either colocate WIOA youth program staff at 
one-stop centers and/or ensure one-stop centers and staff are trained 
to serve youth and equipped to advise youth to increase youth access to 
services and connect youth to the program that best aligns with their 
needs.


Sec.  681.710  Do Local Workforce Development Boards have the 
flexibility to offer services to area youth who are not eligible under 
the youth program through the one-stop centers?

    Yes. However, Local WDBs must ensure one-stop centers fund services 
for non-eligible youth through programs authorized to provide services 
to such youth. For example, one-stop centers may provide basic labor 
exchange services under the Wagner-Peyser Act to any youth.

0
15. Add part 682 to read as follows:

PART 682--STATEWIDE ACTIVITIES UNDER TITLE I OF THE WORKFORCE 
INNOVATION AND OPPORTUNITY ACT

Subpart A--General Description
Sec.
682.100 What are the statewide employment and training activities 
under title I of the Workforce Innovation and Opportunity Act?
682.110 How are statewide employment and training activities funded?
Subpart B--Required and Allowable Statewide Employment and Training 
Activities
Sec.
682.200 What are required statewide employment and training 
activities?
682.210 What are allowable statewide employment and training 
activities?
682.220 What are States' responsibilities in regard to evaluations?
Subpart C--Rapid Response Activities
Sec.
682.300 What is rapid response, and what is its purpose?
682.302 Under what circumstances must rapid response services be 
delivered?
682.305 How does the Department define the term ``mass layoff'' for 
the purposes of rapid response?
682.310 Who is responsible for carrying out rapid response 
activities?
682.320 What is layoff aversion, and what are appropriate layoff 
aversion strategies and activities?
682.330 What rapid response activities are required?
682.340 May other activities be undertaken as part of rapid 
response?
682.350 What is meant by ``provision of additional assistance'' in 
the Workforce Innovation and Opportunity Act?
682.360 What rapid response, layoff aversion, or other information 
will States be required to report to the Employment and Training 
Administration?
682.370 What are the statewide activities for which rapid response 
funds remaining unobligated after the first program year for which 
the funds were allotted may be used by the State?

    Authority:  Secs. 129, 134, 189, 503, Pub. L. 113-128, 128 Stat. 
1425 (Jul. 22, 2014).

Subpart A--General Description


Sec.  682.100  What are the statewide employment and training 
activities under title I of the Workforce Innovation and Opportunity 
Act?

    Statewide employment and training activities include those 
activities for adults and dislocated workers, as described in WIOA sec. 
134(a), and statewide youth activities, as described in the Workforce 
Innovation and Opportunity Act (WIOA) sec. 129(b). They include both 
required and allowable activities. In accordance with the requirements 
of this subpart, the State may develop policies and strategies for use 
of statewide employment and training funds. Descriptions of these 
policies and strategies must be included in the State Plan.


Sec.  682.110  How are statewide employment and training activities 
funded?

    (a) Except for the statewide rapid response activities described in 
paragraph (c) of this section, statewide employment and training 
activities are supported by funds reserved by the Governor under WIOA 
sec. 128(a).
    (b) Funds reserved by the Governor for statewide workforce 
investment activities may be combined and used for any of the 
activities authorized in WIOA sec. 129(b), 134(a)(2)(B), or 
134(a)(3)(A) (which are described in Sec. Sec.  682.200 and 682.210), 
regardless of whether the funds were allotted through the youth, adult, 
or dislocated worker funding streams.
    (c) Funds for statewide rapid response activities are reserved 
under WIOA sec.133(a)(2) and may be used to provide the activities 
authorized at WIOA sec. 134(a)(2)(A) (which are described in Sec. Sec.  
682.310 through 682.330).

Subpart B--Required and Allowable Statewide Employment and Training 
Activities


Sec.  682.200  What are required statewide employment and training 
activities?

    Required statewide employment and training activities are:
    (a) Required rapid response activities, as described in Sec.  
682.310;
    (b) Disseminating by various means, as provided by WIOA sec. 
134(a)(2)(B):
    (1) The State list of eligible training providers (including those 
providing non-traditional training services), for adults and dislocated 
workers and eligible training providers of registered apprenticeship 
programs;
    (2) Information identifying eligible providers of on-the-job 
training (OJT), customized training, incumbent worker training (see 
Sec.  680.790 of this chapter), internships, paid or unpaid work 
experience opportunities (see Sec.  680.180 of this chapter) and 
transitional jobs (see Sec.  680.190 of this chapter);
    (3) Information on effective outreach and partnerships with 
business;
    (4) Information on effective service delivery strategies and 
promising practices to serve workers and job seekers;
    (5) Performance information and information on the cost of 
attendance, including tuition and fees, consistent with the 
requirements of Sec. Sec.  680.490 and 680.530 of this chapter;
    (6) A list of eligible providers of youth activities as described 
in WIOA sec. 123; and
    (7) Information of physical and programmatic accessibility for 
individuals with disabilities;
    (c) States must assure that the information listed in paragraphs 
(b)(1) through (7) of this section is widely available;
    (d) Conducting evaluations under WIOA sec. 116(e), consistent with 
the requirements found under Sec.  682.220;
    (e) Providing technical assistance to State entities and agencies, 
local areas, and one-stop partners in carrying out activities described 
in the State Plan, including coordination and alignment of data systems 
used to carry out the requirements of this Act;
    (f) Assisting local areas, one-stop operators, one-stop partners, 
and eligible providers, including development of staff, including staff 
training to provide opportunities for individuals with barriers to 
employment to enter in-demand industry sectors or occupations and 
nontraditional occupations, and the development of exemplary program 
activities;
    (g) Assisting local areas for carrying out the regional planning 
and service delivery efforts required under WIOA sec. 106(c);
    (h) Assisting local areas by providing information on and support 
for the effective development, convening, and implementation of 
industry and sector partnerships;
    (i) Providing technical assistance to local areas that fail to meet 
the adjusted

[[Page 56407]]

levels of performance agreed to under Sec.  677.210 of this chapter;
    (j) Carrying out monitoring and oversight of activities for 
services to youth, adults, and dislocated workers under WIOA title I, 
and which may include a review comparing the services provided to male 
and female youth;
    (k) Providing additional assistance to local areas that have a high 
concentration of eligible youth; and
    (l) Operating a fiscal and management accountability information 
system, based on guidelines established by the Secretary.


Sec.  682.210  What are allowable statewide employment and training 
activities?

    Allowable statewide employment and training activities may include:
    (a) State administration of the adult, dislocated worker and youth 
workforce investment activities, consistent with the five percent 
administrative cost limitation at WIOA sec. 134(a)(3)(B) and Sec.  
683.205(a)(1) of this chapter;
    (b) Developing and implementing innovative programs and strategies 
designed to meet the needs of all employers (including small employers) 
in the State, including the programs and strategies referenced in WIOA 
sec. 134(a)(3)(A)(i);
    (c) Developing strategies for serving individuals with barriers to 
employment, and for coordinating programs and services among one-stop 
partners;
    (d) Development or identification of education and training 
programs that have the characteristics referenced in WIOA sec. 
134(a)(3)(A)(iii);
    (e) Implementing programs to increase the number of individuals 
training for and placed in non-traditional employment;
    (f) Conducting research and demonstrations related to meeting the 
employment and education needs of youth, adults and dislocated workers;
    (g) Supporting the development of alternative, evidence-based 
programs, and other activities that enhance the choices available to 
eligible youth and which encourage youth to reenter and complete 
secondary education, enroll in postsecondary education and advanced 
training, progress through a career pathway, and enter into 
unsubsidized employment that leads to economic self-sufficiency;
    (h) Supporting the provision of career services in the one-stop 
delivery system in the State as described in Sec.  678.430 of this 
chapter and WIOA secs. 129(b)(2)(C) and 134(c)(2);
    (i) Supporting financial literacy activities as described in Sec.  
681.500 of this chapter and WIOA sec. 129(b)(2)(D);
    (j) Providing incentive grants to local areas for performance by 
the local areas on local performance accountability measures;
    (k) Providing technical assistance to Local Workforce Development 
Boards (WDBs), chief elected officials, one-stop operators, one-stop 
partners, and eligible providers in local areas on the development of 
exemplary program activities and on the provision of technology to 
facilitate remote access to services provided through the one-stop 
delivery system in the State;
    (l) Providing technical assistance to local areas that are 
implementing WIOA Pay-for-Performance contract strategies and 
conducting evaluations of such strategies. Technical assistance may 
include providing assistance with data collections, meeting data entry 
requirements, and identifying level of performance;
    (m) Carrying out activities to facilitate remote access to training 
services provided through the one-stop delivery system;
    (n) Activities that include:
    (1) Activities to improve coordination of workforce investment 
activities, with economic development activities; and
    (2) Activities to improve coordination of employment and training 
activities with child support services and activities, cooperative 
extension programs carried out by the Department of Agriculture, 
programs carried out by local areas for individuals with disabilities 
(including the programs identified in WIOA sec. 
134(a)(3)(A)(viii)(II)(cc)), adult education and literacy activities 
including those provided by public libraries, activities in the 
correction systems to assist ex-offenders in reentering the workforce 
and financial literacy activities; and
    (3) Developing and disseminating workforce and labor market 
information;
    (o) Implementation of promising practices for workers and 
businesses as described in WIOA sec. 134(a)(3)(A)(x);
    (p) Adopting, calculating, or commissioning for approval an 
economic self-sufficiency standard for the State that specifies the 
income needs of families, by family size, the number and ages of 
children in the family, and sub-State geographical considerations;
    (q) Developing and disseminating common intake procedures and 
related items, including registration processes, across core and 
partner programs; and
    (r) Coordinating activities with the child welfare system to 
facilitate provision of services for children and youth who are 
eligible for assistance under sec. 477 of the Social Security Act.


Sec.  682.220  What are States' responsibilities in regard to 
evaluations?

    (a) As required by Sec.  682.200(d), States must use funds reserved 
by the Governor for statewide activities to conduct evaluations of 
activities under the WIOA title I core programs in order to promote 
continuous improvement, research and test innovative services and 
strategies, and achieve high levels of performance and outcomes.
    (b) Evaluations conducted under paragraph (a) of this section must:
    (1) Be coordinated with and designed in conjunction with State and 
Local WDBs and with State agencies responsible for the administration 
of all core programs;
    (2) When appropriate, include analysis of customer feedback and 
outcome and process measures in the statewide workforce development 
system;
    (3) Use designs that employ the most rigorous analytical and 
statistical methods that are reasonably feasible, such as the use of 
control groups; and
    (4) To the extent feasible, be coordinated with the evaluations 
provided for by the Secretary of Labor and the Secretary of Education 
under WIOA sec. 169 (regarding title I programs and other employment-
related programs), WIOA sec. 242(c)(2)(D) (regarding adult education), 
sec. 12(a)(5), 14, and 107 of the Rehabilitation Act of 1973 (29 U.S.C. 
709(a)(5), 711, 727) (applied with respect to programs carried out 
under title I of that Act (29 U.S.C. 720 et seq.)), and the 
investigations provided by the Secretary of Labor under sec. 10(b) of 
the Wagner-Peyser Act (29 U.S.C. 49i(b)).
    (c) States must annually prepare, submit to the State WDB and Local 
WDBs in the State, and make available to the public (including by 
electronic means) reports containing the results, as available, of the 
evaluations described in paragraph (a) of this section.
    (d) States must cooperate, to the extent practicable, in 
evaluations and related research projects conducted by the Secretaries 
of Labor and Education under the laws cited in paragraph (b)(4) of this 
section. Such cooperation must, at a minimum, meet the following 
requirements:
    (1) The timely provision of:
    (i) Data, in accordance with appropriate privacy protections 
established by the Secretary of Labor;
    (ii) Responses to surveys;
    (iii) Site visits; and
    (iv) Data and survey responses from local subgrantees and State and 
Local WDBs, and assuring that subgrantees and WDBs allow timely site 
visits;

[[Page 56408]]

    (2) Encouraging other one-stop partners at local level to cooperate 
in timely provision of data, survey responses and site visits as listed 
in paragraphs (d)(1)(i) through (iv) of this section; and
    (3) If a State determines that timely cooperation in data provision 
as described in paragraph (d)(1) of this section is not practicable, 
the Governor must inform the Secretary in writing and explain the 
reasons why it is not practicable. In such circumstances, the State 
must cooperate with the Department in developing a plan or strategy to 
mitigate or overcome the problems preventing timely provision of data, 
survey responses, and site visits.
    (e) In fulfilling the requirements under paragraphs (a) through (c) 
of this section, States are permitted, but not required, to:
    (1) Conduct evaluations that jointly examine title I core program 
activities and activities under other core programs in WIOA titles II-
IV, as determined through the processes associated with paragraph 
(b)(1) of this section;
    (2) Conduct any type of evaluation similar to those authorized for, 
or conducted by, the Department of Labor or the Department of Education 
under the laws cited in paragraph (b)(4) of this section, including 
process and outcome studies, pilot and demonstration projects that have 
an evaluative component, analyses of administrative and programmatic 
data, impact and benefit-cost analyses, and use of rigorous designs to 
test the efficacy of various interventions; and
    (3) Conduct evaluations over multiple program years, involving 
multiple phases and such tasks and activities as necessary for an 
evaluation, such as a literature or evidence review, feasibility study, 
planning, research, coordination, design, data collection, analysis, 
and report preparation, clearance, and dissemination.
    (f) In funding evaluations conducted under paragraph (a) of this 
section, States are permitted, but not required to:
    (1) Use funds from any WIOA title I-IV core program to conduct 
evaluations, as determined through the processes associated with 
paragraph (b)(1) of this section; and
    (2) Use or combine funds, consistent with Federal and State law, 
regulation and guidance, from other public or private sources, to 
conduct evaluations relating to activities under the WIOA title I-IV 
core programs. Such projects may include those funded by the Department 
of Labor and other Federal agencies, among other sources.

Subpart C--Rapid Response Activities


Sec.  682.300  What is rapid response, and what is its purpose?

    (a) Rapid response is described in Sec. Sec.  682.300 through 
682.370, and encompasses the strategies and activities necessary to:
    (1) Plan for and respond to as quickly as possible following an 
event described in Sec.  682.302; and
    (2) Deliver services to enable dislocated workers to transition to 
new employment as quickly as possible.
    (b) The purpose of rapid response is to promote economic recovery 
and vitality by developing an ongoing, comprehensive approach to 
identifying, planning for, responding to layoffs and dislocations, and 
preventing or minimizing their impacts on workers, businesses, and 
communities. A successful rapid response system includes:
    (1) Informational and direct reemployment services for workers, 
including but not limited to information and support for filing 
unemployment insurance claims, information on the impacts of layoff on 
health coverage or other benefits, information on and referral to 
career services, reemployment-focused workshops and services, and 
training;
    (2) Delivery of solutions to address the needs of businesses in 
transition, provided across the business lifecycle (expansion and 
contraction), including comprehensive business engagement and layoff 
aversion strategies and activities designed to prevent or minimize the 
duration of unemployment;
    (3) Convening, brokering, and facilitating the connections, 
networks and partners to ensure the ability to provide assistance to 
dislocated workers and their families such as home heating assistance, 
legal aid, and financial advice; and
    (4) Strategic planning, data gathering and analysis designed to 
anticipate, prepare for, and manage economic change.


Sec.  682.302  Under what circumstances must rapid response services be 
delivered?

    Rapid response must be delivered when one or more of the following 
circumstances occur:
    (a) Announcement or notification of a permanent closure, regardless 
of the number of workers affected;
    (b) Announcement or notification of a mass layoff as defined in 
Sec.  682.305;
    (c) A mass job dislocation resulting from a natural or other 
disaster; or
    (d) The filing of a Trade Adjustment Assistance (TAA) petition.


Sec.  682.305  How does the Department define the term ``mass layoff'' 
for the purposes of rapid response?

    For the purposes of rapid response, the term ``mass layoff'' used 
throughout this subpart will have occurred when at least one of the 
following conditions have been met:
    (a) A layoff meets the State's definition of mass layoff, as long 
as the definition does not exceed a minimum threshold of 50 affected 
workers;
    (b) Where a State has not defined a minimum threshold for mass 
layoff meeting the requirements of paragraph (a) of this section, 
layoffs affecting 50 or more workers; or
    (c) When a Worker Adjustment and Retraining Notification (WARN) Act 
notice has been filed, regardless of the number of workers affected by 
the layoff announced.


Sec.  682.310  Who is responsible for carrying out rapid response 
activities?

    (a) Rapid response activities must be carried out by the State or 
an entity designated by the State, in conjunction with the Local WDBs, 
chief elected officials, and other stakeholders, as provided by WIOA 
secs. 133(a)(2) and 134(a)(2)(A).
    (b) States must establish and maintain a rapid response unit to 
carry out statewide rapid response activities and to oversee rapid 
response activities undertaken by a designated State entity, Local WDB, 
or the chief elected officials for affected local areas, as provided 
under WIOA sec. 134(a)(2)(A)(i)(I).


Sec.  682.320  What is layoff aversion, and what are appropriate layoff 
aversion strategies and activities?

    (a) Layoff aversion consists of strategies and activities, 
including those provided in paragraph (b) of this section and 
Sec. Sec.  682.330 and 682.340, to prevent or minimize the duration of 
unemployment resulting from layoffs.
    (b) Layoff aversion activities may include:
    (1) Providing assistance to employers in managing reductions in 
force, which may include early identification of firms at risk of 
layoffs, assessment of the needs of and options for at-risk firms, and 
the delivery of services to address these needs, as provided by WIOA 
sec. 134(d)(1)(A)(ix)(II)(cc);
    (2) Ongoing engagement, partnership, and relationship-building 
activities with businesses in the community, in order to create an 
environment for successful layoff aversion efforts and to enable the 
provision of assistance to dislocated workers in obtaining reemployment 
as soon as possible;
    (3) Funding feasibility studies to determine if a company's 
operations

[[Page 56409]]

may be sustained through a buyout or other means to avoid or minimize 
layoffs;
    (4) Developing, funding, and managing incumbent worker training 
programs or other worker upskilling approaches as part of a layoff 
aversion strategy or activity;
    (5) Connecting companies to:
    (i) Short-time compensation or other programs designed to prevent 
layoffs or to reemploy dislocated workers quickly, available under 
Unemployment Insurance programs;
    (ii) Employer loan programs for employee skill upgrading; and
    (iii) Other Federal, State, and local resources as necessary to 
address other business needs that cannot be funded with resources 
provided under this title;
    (6) Establishing linkages with economic development activities at 
the Federal, State, and local levels, including Federal Department of 
Commerce programs and available State and local business retention and 
expansion activities;
    (7) Partnering or contracting with business-focused organizations 
to assess risks to companies, propose strategies to address those 
risks, implement services, and measure impacts of services delivered;
    (8) Conducting analyses of the suppliers of an affected company to 
assess their risks and vulnerabilities from a potential closing or 
shift in production of their major customer;
    (9) Engaging in proactive measures to identify opportunities for 
potential economic transition and training needs in growing industry 
sectors or expanding businesses; and
    (10) Connecting businesses and workers to short-term, on-the-job, 
or customized training programs and registered apprenticeships before 
or after layoff to help facilitate rapid reemployment.


Sec.  682.330  What rapid response activities are required?

    Rapid response activities must include:
    (a) Layoff aversion activities as described in Sec.  682.320, as 
applicable.
    (b) Immediate and on-site contact with the employer, 
representatives of the affected workers, and the local community, 
including an assessment of and plans to address the:
    (1) Layoff plans and schedule of the employer;
    (2) Background and probable assistance needs of the affected 
workers;
    (3) Reemployment prospects for workers; and
    (4) Available resources to meet the short and long-term assistance 
needs of the affected workers.
    (c) The provision of information and access to unemployment 
compensation benefits and programs, such as Short-Time Compensation, 
comprehensive one-stop delivery system services, and employment and 
training activities, including information on the TAA program (19 
U.S.C. 2271 et seq.), Pell Grants, the GI Bill, and other resources.
    (d) The delivery of other necessary services and resources 
including workshops and classes, use of worker transition centers, and 
job fairs, to support reemployment efforts for affected workers.
    (e) Partnership with the Local WDB(s) and chief elected official(s) 
to ensure a coordinated response to the dislocation event and, as 
needed, obtain access to State or local economic development 
assistance. Such coordinated response may include the development of an 
application for a national dislocated worker grant as provided under 
part 687 of this chapter.
    (f) The provision of emergency assistance adapted to the particular 
layoff or disaster.
    (g) As appropriate, developing systems and processes for:
    (1) Identifying and gathering information for early warning of 
potential layoffs or opportunities for layoff aversion;
    (2) Analyzing, and acting upon, data and information on 
dislocations and other economic activity in the State, region, or local 
area; and
    (3) Tracking outcome and performance data and information related 
to the activities of the rapid response program.
    (h) Developing and maintaining partnerships with other appropriate 
Federal, State and local agencies and officials, employer associations, 
technical councils, other industry business councils, labor 
organizations, and other public and private organizations, as 
applicable, in order to:
    (1) Conduct strategic planning activities to develop strategies for 
addressing dislocation events and ensuring timely access to a broad 
range of necessary assistance; and
    (2) Develop mechanisms for gathering and exchanging information and 
data relating to potential dislocations, resources available, and the 
customization of layoff aversion or rapid response activities, to 
ensure the ability to provide rapid response services as early as 
possible.
    (i) Delivery of services to worker groups for which a petition for 
Trade Adjustment Assistance has been filed.
    (j) The provision of additional assistance, as described in Sec.  
682.350, to local areas that experience disasters, mass layoffs, or 
other dislocation events when such events exceed the capacity of the 
local area to respond with existing resources as provided under WIOA 
sec. 134(a)(2)(A)(i)(II).
    (k) Provision of guidance and financial assistance as appropriate, 
in establishing a labor-management committee if voluntarily agreed to 
by the employee's bargaining representative and management. The 
committee may devise and oversee an implementation strategy that 
responds to the reemployment needs of the workers. The assistance to 
this committee may include:
    (1) The provision of training and technical assistance to members 
of the committee; and
    (2) Funding the operating costs of a committee to enable it to 
provide advice and assistance in carrying out rapid response activities 
and in the design and delivery of WIOA-authorized services to affected 
workers.


Sec.  682.340  May other activities be undertaken as part of rapid 
response?

    (a) Yes, in order to conduct layoff aversion activities, or to 
prepare for and respond to dislocation events, in addition to the 
activities required under Sec.  682.330, a State or designated entity 
may devise rapid response strategies or conduct activities that are 
intended to minimize the negative impacts of dislocation on workers, 
businesses, and communities and ensure rapid reemployment for workers 
affected by layoffs.
    (b) When circumstances allow, rapid response may provide guidance 
and/or financial assistance to establish community transition teams to 
assist the impacted community in organizing support for dislocated 
workers and in meeting the basic needs of their families, including 
heat, shelter, food, clothing and other necessities and services that 
are beyond the resources and ability of the one-stop delivery system to 
provide.


Sec.  682.350  What is meant by ``provision of additional assistance'' 
in the Workforce Innovation and Opportunity Act?

    As stated in WIOA sec. 133(a)(2), a State may reserve up to 25 
percent of its allotted dislocated worker funds for rapid response 
activities. Once the State has reserved adequate funds for rapid 
response activities, such as those described in Sec. Sec.  682.310, 
682.320, and 682.330, any of the remaining funds reserved may be 
provided to local areas that experience increases of unemployment due 
to natural disasters, mass layoffs or other events, for provision of 
direct career services to

[[Page 56410]]

participants if there are not adequate local funds available to assist 
the dislocated workers. States may wish to establish the policies or 
procedures governing the provision of additional assistance as 
described in Sec.  682.340.


Sec.  682.360  What rapid response, layoff aversion, or other 
information will States be required to report to the Employment and 
Training Administration?

    (a) Where a WIOA individual record exists for an individual served 
under programs reporting through the WIOA individual record, States 
must report information regarding the receipt of services under this 
subpart for such an individual. This information must be reported in 
the WIOA individual record.
    (b) States must comply with these requirements as explained in 
guidance issued by the Department of Labor.


Sec.  682.370  What are the statewide activities for which rapid 
response funds remaining unobligated after the first program year for 
which the funds were allotted may be used by the State?

    Funds reserved by the Governor for rapid response activities that 
remain unobligated after the first program year for which such funds 
were allotted may be used by the Governor to carry out statewide 
activities under Sec. Sec.  682.200 and 682.210. Statewide activities 
for which these funds may be used include prioritizing the planning for 
and delivery of activities designed to prevent job loss, increasing the 
rate of reemployment, building relationships with businesses and other 
stakeholders, building and maintaining early warning networks and 
systems, and otherwise supporting efforts to allow long-term unemployed 
workers to return to work.

0
16. Add part 683 to read as follows:

PART 683--ADMINISTRATIVE PROVISIONS UNDER TITLE I OF THE WORKFORCE 
INNOVATION AND OPPORTUNITY ACT

Subpart A--Funding and Closeout
Sec.
683.100 When do Workforce Innovation and Opportunity Act grant funds 
become available for obligation?
683.105 What award document authorizes the expenditure of funds 
under title I of the Workforce Innovation and Opportunity Act and 
the Wagner-Peyser Act?
683.110 What is the period of performance of Workforce Innovation 
and Opportunity Act title I and Wagner-Peyser Act funds?
683.115 What planning information must a State submit in order to 
receive a formula grant?
683.120 How are Workforce Innovation and Opportunity Act title I 
formula funds allocated to local areas?
683.125 What minimum funding provisions apply to Workforce 
Innovation and Opportunity Act adult, dislocated worker, and youth 
allocations?
683.130 Does a Local Workforce Development Board have the authority 
to transfer funds between the adult employment and training 
activities allocation and the dislocated worker employment and 
training activities allocation?
683.135 What reallotment procedures does the Secretary use?
683.140 What reallocation procedures must the Governors use?
683.145 What merit review and risk assessment does the Department 
conduct for Federal financial assistance awards made under the 
Workforce Innovation and Opportunity Act title I, subtitle D?
683.150 What closeout requirements apply to grants funded with 
Workforce Innovation and Opportunity Act title I and Wagner-Peyser 
Act funds?
Subpart B--Administrative Rules, Costs, and Limitations
Sec.
683.200 What general fiscal and administrative rules apply to the 
use of Workforce Innovation and Opportunity Act title I and Wagner-
Peyser Act funds?
683.205 What administrative cost limitations apply to Workforce 
Innovation and Opportunity Act title I grants?
683.210 What audit requirements apply to the use of Workforce 
Innovation and Opportunity Act title I and Wagner-Peyser Act funds?
683.215 What Workforce Innovation and Opportunity Act title I 
functions and activities constitute the costs of administration 
subject to the administrative cost limitation?
683.220 What are the internal controls requirements for recipients 
and subrecipients of Workforce Innovation and Opportunity Act title 
I and Wagner-Peyser Act funds?
683.225 What requirements relate to the enforcement of the Military 
Selective Service Act?
683.230 Are there special rules that apply to veterans when income 
is a factor in eligibility determinations?
683.235 May Workforce Innovation and Opportunity Act title I funds 
be spent for construction?
683.240 What are the instructions for using real property with 
Federal equity?
683.245 Are employment generating activities, or similar activities, 
allowable under title I of the Workforce Innovation and Opportunity 
Act?
683.250 What other activities are prohibited under title I of the 
Workforce Innovation and Opportunity Act?
683.255 What are the limitations related to religious activities of 
title I of the Workforce Innovation and Opportunity Act?
683.260 What prohibitions apply to the use of Workforce Innovation 
and Opportunity Act title I funds to encourage business relocation?
683.265 What procedures and sanctions apply to violations of this 
part?
683.270 What safeguards are there to ensure that participants in 
Workforce Innovation and Opportunity Act employment and training 
activities do not displace other employees?
683.275 What wage and labor standards apply to participants in 
activities under title I of the Workforce Innovation and Opportunity 
Act?
683.280 What health and safety standards apply to the working 
conditions of participants in activities under title I of the 
Workforce Innovation and Opportunity Act?
683.285 What are a recipient's obligations to ensure 
nondiscrimination and equal opportunity, and what are a recipient's 
obligations with respect to religious activities?
683.290 Are there salary and bonus restrictions in place for the use 
of title I and Wagner-Peyser Act funds?
683.295 Is earning of profit allowed under the Workforce Innovation 
and Opportunity Act?
Subpart C--Reporting Requirements
Sec.
683.300 What are the reporting requirements for programs funded 
under the Workforce Innovation and Opportunity Act?
Subpart D--Oversight and Resolution of Findings
Sec.
683.400 What are the Federal and State monitoring and oversight 
responsibilities?
683.410 What are the oversight roles and responsibilities of 
recipients and subrecipients of Federal financial assistance awarded 
under title I of the Workforce Innovation and Opportunity Act and 
the Wagner-Peyser Act?
683.420 What procedures apply to the resolution of findings arising 
from audits, investigations, monitoring, and oversight reviews?
683.430 How does the Secretary resolve investigative and monitoring 
findings?
683.440 What is the Grant Officer resolution process?
Subpart E--Pay-for-Performance Contract Strategies
Sec.
683.500 What is a Workforce Innovation and Opportunity Act Pay-for-
Performance contract strategy?
683.510 What is a Workforce Innovation and Opportunity Act Pay-for-
Performance contract?
683.520 What funds can be used to support Workforce Innovation and 
Opportunity Act Pay-for-Performance contract strategies?
683.530 How long are funds used for Workforce Innovation and 
Opportunity Act Pay-for-Performance contract strategies available?
683.540 What is the State's role in assisting local areas in using 
Workforce Innovation and Opportunity Act Pay-for-Performance 
contract strategies?

[[Page 56411]]

Subpart F--Grievance Procedures, Complaints, and State Appeals 
Processes
Sec.
683.600 What local area, State, and direct recipient grievance 
procedures must be established?
683.610 What processes does the Secretary use to review grievances 
and complaints of Workforce Innovation and Opportunity Act title I 
recipients?
683.620 How are complaints and reports of criminal fraud and abuse 
addressed under the Workforce Innovation and Opportunity Act?
683.630 What additional appeal processes or systems must a State 
have for the Workforce Innovation and Opportunity Act program?
683.640 What procedures apply to the appeals of non-designation of 
local areas?
683.650 What procedures apply to the appeals of the Governor's 
imposition of sanctions for substantial violations or performance 
failures by a local area?
Subpart G--Sanctions, Corrective Actions, and Waiver of Liability
Sec.
683.700 When can the Secretary impose sanctions and corrective 
actions on recipients and subrecipients of title I Workforce 
Innovation and Opportunity Act funds?
683.710 Who is responsible for funds provided under title I of the 
Workforce Innovation and Opportunity Act and the Wagner-Peyser Act?
683.720 What actions are required to address the failure of a local 
area to comply with the applicable uniform administrative 
provisions?
683.730 When can the Secretary waive the imposition of sanctions?
683.740 What is the procedure to handle a recipient of title I 
Workforce Innovation and Opportunity Act funds' request for advance 
approval of contemplated corrective actions?
683.750 What procedure must be used for administering the offset/
deduction provisions of the Workforce Innovation and Opportunity 
Act?
Subpart H--Administrative Adjudication and Judicial Review
Sec.
683.800 What actions of the Department may be appealed to the Office 
of Administrative Law Judges?
683.810 What rules of procedure apply to hearings conducted under 
this subpart?
683.820 What authority does the Administrative Law Judge have in 
ordering relief as an outcome of an administrative hearing?
683.830 When will the Administrative Law Judge issue a decision?
683.840 Is there an alternative dispute resolution process that may 
be used in place of an Office of Administrative Law Judges hearing?
683.850 Is there judicial review of a final order of the Secretary 
issued under WIOA?

    Authority:  Secs. 102, 116, 121, 127, 128, 132, 133, 147, 167, 
169, 171, 181, 185, 189, 195, 503, Public Law 113-128, 128 Stat. 
1425 (Jul. 22, 2014).

Subpart A--Funding and Closeout


Sec.  683.100  When do Workforce Innovation and Opportunity Act grant 
funds become available for obligation?

    (a) WIOA title I. Except as provided in paragraph (b) of this 
section or in the applicable fiscal year appropriation, fiscal year 
appropriations for programs and activities carried out under title I 
are available for obligation on the basis of a program year. A program 
year begins on July 1 in the fiscal year for which the appropriation is 
made and ends on June 30 of the following year.
    (b) Youth funds. Fiscal year appropriations for a program year's 
youth activities, authorized under chapter 2, subtitle B, title I of 
WIOA may be made available for obligation beginning on April 1 of the 
fiscal year for which the appropriation is made.
    (c) Wagner-Peyser Act employment service. Fiscal year 
appropriations for activities authorized under sec. 6 of the Wagner-
Peyser Act, 29 U.S.C. 49e, are available for obligation on the basis of 
a program year. A program year begins July 1 in the fiscal year for 
which the appropriation is made and ends on June 30 of the following 
year.
    (d) Discretionary grants. Discretionary grant funds are available 
for obligation in accordance with the fiscal year appropriation.


Sec.  683.105  What award document authorizes the expenditure of funds 
under title I of the Workforce Innovation and Opportunity Act and the 
Wagner-Peyser Act?

    (a) Agreement. All WIOA title I and Wagner-Peyser Act funds are 
awarded by grant or cooperative agreement, as defined in the Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements 
for Federal Awards regulations at 2 CFR 200.51 and 200.24 respectively, 
or contract, as defined in 2 CFR 200.22. All grant or cooperative 
agreements are awarded by the Grant Officer through negotiation with 
the recipient (the non-Federal entity). The agreement describes the 
terms and conditions applicable to the award of WIOA title I and 
Wagner-Peyser Act funds and will conform to the requirements of 2 CFR 
200.210. Contracts are issued by the Contracting Officer in compliance 
with the Federal Acquisition Regulations.
    (b) Grant funds awarded to States and outlying areas. The Federal 
funds allotted to the States and outlying areas each program year in 
accordance with secs. 127(b) and 132(b) of WIOA will be obligated by 
grant agreement.
    (c) Native American programs. Awards of grants, contracts, or 
cooperative agreements for the WIOA Native American program will be 
made to eligible entities on a competitive basis every 4 program years 
for a 4-year period, in accordance with the provisions of sec. 166 of 
WIOA.
    (d) Migrant and seasonal farmworker programs. Awards of grants or 
contracts for the Migrant and Seasonal Farmworker Program will be made 
to eligible entities on a competitive basis every 4 program years for a 
4-year period, in accordance with the provisions of sec. 167 of WIOA.
    (e) Awards for evaluation and research under sec. 169 of WIOA. (1) 
Awards of grants, contracts, or cooperative agreements will be made to 
eligible entities for programs or activities authorized under WIOA sec. 
169. These funds are for:
    (i) Evaluations;
    (ii) Research;
    (iii) Studies;
    (iv) Multi-State projects; and
    (v) Dislocated worker projects.
    (2) Awards of grants, contracts, or cooperative agreements under 
paragraphs (e)(1)(ii) through (iv) of this section in amounts that 
exceed $100,000 will be awarded on a competitive basis, except that a 
noncompetitive award may be made in the case of a project that is 
funded jointly with other public or private sector entities that 
provide a substantial portion of the assistance under the grant, 
contract, or cooperative agreement for the project.
    (3) Awards of grants, contracts, or cooperative agreements for 
carrying out projects in paragraphs (e)(1)(ii) through (iv) of this 
section may not be awarded to the same organization for more than 3 
consecutive years unless:
    (i) Such grant, contract, or cooperative agreement is competitively 
reevaluated within such period;
    (ii) The initial grant, contract, or cooperative agreement was 
issued on a non-competitive basis because it was for less than 
$100,000, and:
    (A) The non-competitive continuation is for less than $100,000;
    (B) The scope of work is essentially the same as the initial grant, 
contract, or cooperative agreement;
    (C) Progress in meeting performance objectives is satisfactory; and
    (D) Other terms and conditions established by the Department have 
been met; or
    (iii) The initial grant, contract, or cooperative agreement was 
issued on a non-competitive basis because the project was funded 
jointly with other

[[Page 56412]]

public or private sector entities that provide a substantial portion of 
the assistance, and:
    (A) The non-competitive continuation maintains a substantial 
portion of joint funding;
    (B) The scope of work is essentially the same as the initial grant, 
contract, or cooperative agreement;
    (C) Progress in meeting performance objectives is satisfactory; and
    (D) Other terms and conditions established by the Department have 
been met.
    (4) Entities with recognized expertise in the methods, techniques, 
and knowledge of workforce investment activities will be provided 
priority in awarding funds for the projects under paragraphs (e)(1)(ii) 
through (iv) of this section. The duration of such projects will be 
specified in the grant, contract, or cooperative agreement.
    (5) A peer review process will be used to review and evaluate 
projects under this paragraph (e) for grants, contracts, or cooperative 
agreements that exceed $500,000, and to designate exemplary and 
promising programs.
    (f) Termination. Each grant, cooperative agreement, or contract 
terminates as indicated in the terms of the agreement or when the 
period of performance has expired. The grants and cooperative 
agreements must be closed in accordance with the closeout provisions at 
2 CFR 200.343 and 2 CFR part 2900 as applicable.


Sec.  683.110  What is the period of performance of Workforce 
Innovation and Opportunity Act title I and Wagner-Peyser Act funds?

    (a) The statutory period of availability for expenditure for WIOA 
title I grants will be established as the period of performance for 
such grants unless otherwise provided in the grant agreement or 
cooperative agreement. All funds must be fully expended by the 
expiration of the period of performance or they risk losing their 
availability. Unless otherwise authorized in a grant or cooperative 
agreement or subsequent modification, recipients must expend funds with 
the shortest period of availability first.
    (b) Grant funds expended by States. Funds allotted to States under 
WIOA secs. 127(b) and 132(b) for any program year are available for 
expenditure by the State receiving the funds only during that program 
year and the 2 succeeding program years as identified in Sec.  683.100.
    (c) Grant funds expended by local areas as defined in WIOA sec. 
106. (1)(i) Funds allocated by a State to a local area under WIOA secs. 
128(b) and 133(b), for any program year are available for expenditure 
only during that program year and the succeeding program year;
    (ii) Pay-for-Performance exception. Funds used to carry out WIOA 
Pay-for-Performance contract strategies will remain available until 
expended in accordance with WIOA sec. 189(g)(2)(D).
    (2) Funds which are not expended by a local area(s) in the 2-year 
period described in paragraph (c)(1)(i) of this section, must be 
returned to the State. Funds so returned are available for expenditure 
by State and local recipients and subrecipients only during the third 
program year of availability in accordance with WIOA secs. 128(c) and 
132(c). These funds are available for only the following purposes:
    (i) For statewide projects; or
    (ii) For distribution to local areas which had fully expended their 
allocation of funds for the same program year within the 2-year period.
    (d) Native American programs. Funds awarded by the Department under 
WIOA sec. 166(c) are available for expenditure for the period 
identified in the grant or contract award document, which will not 
exceed 4 years.
    (e) Migrant and seasonal farmworker programs. Funds awarded by the 
Department under WIOA sec. 167 are available for expenditure for the 
period identified in the grant award document, which will not exceed 4 
years.
    (f) Evaluations and research. Funds awarded by the Department under 
WIOA sec. 169 are available for expenditure for any program or activity 
authorized under sec. 169 of WIOA and will remain available until 
expended or as specified in the award document.
    (g) Other programs under title I of WIOA, including secs. 170 and 
171, and all other grants, contracts and cooperative agreements. Funds 
are available for expenditure for a period of performance identified in 
the grant or contract agreement.
    (h) Wagner-Peyser Act. Funds allotted to States for grants under 
secs. 3 and 15 of the Wagner-Peyser Act for any program year are 
available for expenditure by the State receiving the funds only during 
that program year and the 2 succeeding program years. The program year 
begins on July 1 of the fiscal year for which the appropriation is 
made.


Sec.  683.115  What planning information must a State submit in order 
to receive a formula grant?

    Each State seeking financial assistance under subtitle B, chapter 2 
(youth) or chapter 3 (adults and dislocated workers), of title I of 
WIOA, or under the Wagner-Peyser Act must submit a Unified State Plan 
under sec. 102 of WIOA or a Combined State Plan under WIOA sec. 103. 
The requirements for the plan content and the plan review process are 
described in secs. 102 and 103 of WIOA, sec. 8 of Wagner-Peyser Act, 
and Sec. Sec.  676.100 through 676.145 of this chapter and Sec. Sec.  
652.211 through 652.214 of this chapter.


Sec.  683.120  How are Workforce Innovation and Opportunity Act title I 
formula funds allocated to local areas?

    (a) General. The Governor must allocate WIOA formula funds allotted 
for services to youth, adults and dislocated workers in accordance with 
secs. 128 and 133 of WIOA and this section.
    (1) State WDBs must assist Governors in the development of any 
youth or adult discretionary within-State allocation formulas.
    (2) Within-State allocations must be made:
    (i) In accordance with the allocation formulas contained in secs. 
128(b) and 133(b) of WIOA and in the State Plan;
    (ii) After consultation with chief elected officials and Local WDBs 
in each of the local areas; and
    (iii) In accordance with sec. 182(e) of WIOA, available to local 
areas not later than 30 days after the date funds are made available to 
the State or 7 days after the date the local plan for the area is 
approved, whichever is later.
    (b) State reserve. Of the WIOA formula funds allotted for services 
to youth, adults and dislocated workers, the Governor must reserve not 
more than 15 percent of the funds from each of these sources to carry 
out statewide activities. Funds reserved under this paragraph may be 
combined and spent on statewide activities under WIOA sec. 129(b) and 
statewide employment and training activities under WIOA sec. 134(a), 
for adults and dislocated workers, and youth activities, as described 
in Sec. Sec.  682.200 and 682.210 of this chapter, without regard to 
the funding source of the reserved funds.
    (c) Youth allocation formula. (1) Unless the Governor elects to 
distribute funds in accordance with the discretionary allocation 
formula described in paragraph (c)(2) of this section, the remainder of 
youth funds not reserved under paragraph (b) of this section must be 
allocated:
    (i) 33\1/3\ percent on the basis of the relative number of 
unemployed individuals in areas of substantial unemployment in each 
local area, compared to the total number of unemployed individuals in 
all areas of substantial unemployment in the State;

[[Page 56413]]

    (ii) 33\1/3\ percent on the basis of the relative excess number of 
unemployed individuals in each local area, compared to the total excess 
number of unemployed individuals in the State; and
    (iii) 33\1/3\ percent on the basis of the relative number of 
disadvantaged youth in each local area, compared to the total number of 
disadvantaged youth in the State except for local areas as described in 
sec. 107(c)(1)(C) of WIOA where the allotment must be based on the 
greater of either the number of individuals aged 16 to 21 in families 
with an income below the low-income level for the area or the number of 
disadvantaged youth in the area.
    (2) Discretionary youth allocation formula. In lieu of making the 
formula allocation described in paragraph (c)(1) of this section, the 
State may allocate youth funds under a discretionary formula. Under 
this discretionary formula, the State must allocate a minimum of 70 
percent of youth funds not reserved under paragraph (b) of this section 
on the basis of the formula in paragraph (c)(1) of this section, and 
may allocate up to 30 percent on the basis of a formula that:
    (i) Incorporates additional factors (other than the factors 
described in paragraph (c)(1) of this section) relating to:
    (A) Excess youth poverty in urban, rural and suburban local areas; 
and
    (B) Excess unemployment above the State average in urban, rural and 
suburban local areas; and
    (ii) Was developed by the State WDB and approved by the Secretary 
of Labor as part of the State Plan.
    (d) Adult allocation formula. (1) Unless the Governor elects to 
distribute funds in accordance with the discretionary allocation 
formula described in paragraph (d)(2) of this section, the remainder of 
adult funds not reserved under paragraph (b) of this section must be 
allocated:
    (i) 33\1/3\ percent on the basis of the relative number of 
unemployed individuals in areas of substantial unemployment in each 
local area, compared to the total number of unemployed individuals in 
areas of substantial unemployment in the State;
    (ii) 33\1/3\ percent on the basis of the relative excess number of 
unemployed individuals in each local area, compared to the total excess 
number of unemployed individuals in the State; and
    (iii) 33\1/3\ percent on the basis of the relative number of 
disadvantaged adults in each local area, compared to the total number 
of disadvantaged adults in the State. Except for local areas as 
described in sec. 107(c)(1)(C) of WIOA where the allotment must be 
based on the higher of either the number of adults with an income below 
the low-income level for the area or the number of disadvantaged adults 
in the area.
    (2) Discretionary adult allocation formula. In lieu of making the 
formula allocation described in paragraph (d)(1) of this section, the 
State may allocate adult funds under a discretionary formula, Under 
this discretionary formula, the State must allocate a minimum of 70 
percent of adult funds not reserved under paragraph (b) of this section 
on the basis of the formula in paragraph (d)(1), and may allocate up to 
30 percent on the basis of a formula that:
    (i) Incorporates additional factors (other than the factors 
described in paragraph (d)(1) of this section) relating to:
    (A) Excess poverty in urban, rural and suburban local areas; and
    (B) Excess unemployment above the State average in urban, rural and 
suburban local areas; and
    (ii) Was developed by the State WDB and approved by the Secretary 
of Labor as part of the State Plan.
    (e) Dislocated worker allocation formula. (1) The remainder of 
dislocated worker funds not reserved under paragraph (b) of this 
section must be allocated on the basis of a formula prescribed by the 
Governor that distributes funds in a manner that addresses the State's 
dislocated worker needs. Funds so distributed must not be less than 60 
percent of the State's formula allotment.
    (2) The Governor's dislocated worker formula must use the most 
appropriate information available to the Governor, including 
information on:
    (i) Insured unemployment data;
    (ii) Unemployment concentrations;
    (iii) Plant closings and mass layoff data;
    (iv) Declining industries data;
    (v) Farmer-rancher economic hardship data; and
    (vi) Long-term unemployment data.
    (3) The Governor may not amend the dislocated worker formula more 
than once for any program year.
    (f) Rapid response. (1) Of the WIOA formula funds allotted for 
services to dislocated workers in sec. 132(b)(2)(B) of WIOA, the 
Governor must reserve not more than 25 percent of the funds for 
statewide rapid response activities described in WIOA sec. 134(a)(2)(A) 
and Sec. Sec.  682.300 through 682.370 of this chapter.
    (2) Unobligated funds. Funds reserved by a Governor for rapid 
response activities under sec. 133(a)(2) of WIOA, and sec. 133(a)(2) of 
the Workforce Investment Act (as in effect on the day before the date 
of enactment of WIOA), to carry out sec. 134(a)(2)(A) of WIOA that 
remain unobligated after the first program year for which the funds 
were allotted, may be used by the Governor to carry out statewide 
activities authorized under paragraph (b) of this section and 
Sec. Sec.  682.200 and 682.210 of this chapter.
    (g) Special rule. For the purpose of the formula in paragraphs 
(c)(1) and (d)(1) of this section, the State must, as appropriate and 
to the extent practicable, exclude college students and members of the 
Armed Forces from the determination of the number of disadvantaged 
youth and disadvantaged adults.


Sec.  683.125  What minimum funding provisions apply to Workforce 
Innovation and Opportunity Act adult, dislocated worker, and youth 
allocations?

    (a) For funding authorized by secs. 128(b)(2), 133(b)(2)(A), and 
133(b)(2)(B) of WIOA, which are youth, adult, and dislocated worker 
funds, a local area must not receive an allocation percentage for a 
fiscal year that is less than 90 percent of the average allocation 
percentage of the local area for the 2 preceding fiscal years.
    (b) The Department's annual fiscal year appropriation provides 
funding for programs and activities described in paragraph (a) of this 
section under separate appropriations with various periods of 
availability. These periods of availability are described in Sec.  
683.100 as a program year. A program year for funds allocated under 
secs. 133(b)(2)(A) and 133(b)(2)(B) of WIOA begins on July 1 in the 
fiscal year for which the appropriation is made and ends on June 30 of 
the following year. A program year for funds available under WIOA sec. 
128(b)(2) is available from April 1 of the fiscal year in which the 
appropriation is made and ends on June 30 of the following year. 
Therefore, when grantees are calculating the minimum funding percentage 
they must do so on a program year basis.
    (c) When a new local area is designated under sec. 106 of WIOA the 
State must develop a methodology to apply the minimum funding provision 
specified in paragraph (a) of this section to local area allocations of 
WIOA youth, adult, and dislocated worker funds.
    (d) Amounts necessary to increase allocations to local areas to 
comply with paragraph (a) of this section must be obtained by ratably 
reducing the allocations to be made to other local areas.

[[Page 56414]]

    (e) If the amounts of WIOA funds appropriated in a fiscal year are 
not sufficient to provide the amount specified in paragraph (a) of this 
section to all local areas, the amounts allocated to each local area 
must be ratably reduced.


Sec.  683.130  Does a Local Workforce Development Board have the 
authority to transfer funds between the adult employment and training 
activities allocation and the dislocated worker employment and training 
activities allocation?

    (a) A Local WDB may transfer up to 100 percent of a program year 
allocation for adult employment and training activities, and up to 100 
percent of a program year allocation for dislocated worker employment 
and training activities between the two programs.
    (b) Local WDBs may not transfer funds to or from the youth program.
    (c) Before making any transfer described in paragraph (a) of this 
section, a Local WDB must obtain the Governor's written approval. The 
Governor's written approval must be based on criteria or factors that 
the Governor must establish in a written policy, such as the State 
Unified or Combined Plan or other written policy.


Sec.  683.135  What reallotment procedures does the Secretary use?

    (a) The Secretary determines, during the second quarter of each 
program year, whether a State has obligated its required level of at 
least 80 percent of the funds allotted under secs. 127 and 132 of WIOA 
for programs serving youth, adults, and dislocated workers for the 
prior program year, as separately determined for each of the three 
funding streams. The amount to be recaptured from each State for 
reallotment, if any, is based on State obligations of the funds 
allotted to each State under secs. 127 and 132 of WIOA for programs 
serving youth, adults, or dislocated workers, less any amount reserved 
(up to five percent at the State level) for the costs of 
administration. The recapture amount, if any, is separately determined 
for each funding stream.
    (b) The Secretary reallots youth, adult and dislocated worker funds 
among eligible States in accordance with the provisions of secs. 127(c) 
and 132(c) of WIOA, respectively. To be eligible to receive a 
reallotment of youth, adult, or dislocated worker funds under the 
reallotment procedures, a State must have obligated at least 80 percent 
of the prior program year's allotment, less any amount reserved for the 
costs of administration at the State level of youth, adult, or 
dislocated worker funds. A State's eligibility to receive a reallotment 
is separately determined for each funding stream.
    (c) The term ``obligation'' is defined at 2 CFR 200.71.
    (d) Obligations must be reported on the required Department of 
Labor (the Department) financial form, such as the ETA-9130 form, 
unless otherwise noted in guidance.


Sec.  683.140  What reallocation procedures must the Governors use?

    (a) The Governor, after consultation with the State WDB, may 
reallocate youth, adult, and dislocated worker funds among local areas 
within the State in accordance with the provisions of secs. 128(c) and 
133(c) of WIOA. If the Governor chooses to reallocate funds, the 
provisions in paragraphs (b) and (c) of this section apply.
    (b) For the youth, adult and dislocated worker programs, the amount 
to be recaptured from each local area for purposes of reallocation, if 
any, must be based on the amount by which the prior year's unobligated 
balance of allocated funds exceeds 20 percent of that year's allocation 
for the program, less any amount reserved (up to 10 percent) for the 
costs of administration. Unobligated balances must be determined based 
on allocations adjusted for any allowable transfer between funding 
streams. The amount to be recaptured, if any, must be separately 
determined for each funding stream. The term ``obligation'' is defined 
at 2 CFR 200.71.
    (c) To be eligible to receive youth, adult or dislocated worker 
funds under the reallocation procedures, a local area must have 
obligated at least 80 percent of the prior program year's allocation, 
less any amount reserved (up to 10 percent) for the costs of 
administration, for youth, adult, or dislocated worker activities, as 
separately determined. A local area's eligibility to receive a 
reallocation must be separately determined for each funding stream.


Sec.  683.145  What merit review and risk assessment does the 
Department conduct for Federal financial assistance awards made under 
Workforce Innovation and Opportunity Act title I, subtitle D?

    (a) For competitive awards, the Department will design and execute 
a merit review process for applications as prescribed under 2 CFR 
200.204 when issuing Federal financial assistance awards made under 
WIOA title I, subtitle D. This process will be described in the 
applicable funding opportunity announcement.
    (b) Prior to issuing a Federal financial assistance award under 
WIOA title I, subtitle D, the Department will conduct a risk assessment 
to assess the organization's overall ability to administer Federal 
funds as required under 2 CFR 200.205. As part of this assessment, the 
Department may consider any information that has come to its attention 
and will consider the organization's history with regard to the 
management of other grants, including Department of Labor grants.
    (c) In evaluating risks posed by applicants, the Department will 
consider the following:
    (1) Financial stability;
    (2) Quality of management systems and ability to meet the 
management standards prescribed in this part;
    (3) History of performance. The applicant's record in managing 
Federal awards, if it is a prior recipient of Federal awards, including 
timeliness of compliance with applicable reporting requirements, 
conformance to the terms and conditions of previous Federal awards, and 
if applicable, the extent to which any previously awarded amounts will 
be expended prior to future awards;
    (4) Reports and findings from audits; and
    (5) The applicant's ability to implement effectively statutory, 
regulatory, or other requirements imposed on non-Federal entities.


Sec.  683.150  What closeout requirements apply to grants funded with 
Workforce Innovation and Opportunity Act title I and Wagner-Peyser Act 
funds?

    (a) After the expiration of the period of performance, the 
Department will closeout the Federal award when it determines that all 
applicable administrative actions and all required work of the Federal 
award have been completed by the grant recipient. This section 
specifies the actions the grant recipient and the Department must take 
to complete this process.
    (1) The grant recipient must submit, no later than 90 calendar days 
after the end date of the period of performance, all financial, 
performance, and other reports as required by the terms and conditions 
of the Federal award.
    (2) The Department may approve extensions when requested by the 
grant recipient.
    (b) Unless otherwise noted in the terms and conditions of the award 
or an extension, grant recipients must comply with 2 CFR 200.343(b) and 
2900.15 in regards to closeout.
    (c) The Department must make prompt payments to the grant recipient 
for allowable reimbursable costs under the Federal award being closed 
out.
    (d) The grant recipient must promptly refund any balances of 
unobligated cash that the Department paid in advance or paid and that 
is not authorized to be retained by the grant recipient. See

[[Page 56415]]

Office of Management and Budget Circular A-129, 2 CFR 200.345, and 2 
CFR part 2900 for requirements regarding unreturned amounts that become 
delinquent debts.
    (e) Consistent with the terms and conditions of the Federal award, 
the Department must make a settlement for any upward or downward 
adjustments to the Federal share of costs after closeout reports are 
received.
    (f) The grant recipient must account for any real and personal 
property acquired with Federal funds or received from the Federal 
government in accordance with 2 CFR 200.310 through 200.316, and 
200.329.
    (g) The Department should complete all closeout actions for Federal 
awards no later than 1 year after receipt and acceptance of all 
required final reports.
    (h) The closeout of an award does not affect any of the following:
    (1) The right of the Department to disallow costs and recover funds 
on the basis of a later audit or other review.
    (2) The obligation of the grant recipient to return any funds due 
as a result of later refunds, corrections, or other transactions.
    (3) Audit requirements as described in 2 CFR part 200, subpart F.
    (4) Property management requirements in 2 CFR 200.310 through 
200.316.
    (5) Records retention as required in 2 CFR 200.333 through 200.337.
    (i) After closeout of an award, a relationship created under the 
award may be modified or ended in whole or in part with the consent of 
the Department and the grant recipient, provided the responsibilities 
of the grant recipient referred to in 2 CFR 200.344(a) and 200.310 
through 200.316 are considered, and provisions are made for continuing 
responsibilities of the grant recipient, as appropriate.
    (j) Grant recipients that award WIOA funds to subrecipients must 
institute a timely closeout process after the end of performance to 
ensure a timely closeout in accordance with 2 CFR 200.343 and 200.344.

Subpart B--Administrative Rules, Costs, and Limitations


Sec.  683.200  What general fiscal and administrative rules apply to 
the use of Workforce Innovation and Opportunity Act title I and Wagner-
Peyser Act funds?

    (a) Uniform Guidance. Recipients and subrecipients of a Federal 
award under title I of WIOA and the Wagner-Peyser Act must follow the 
Uniform Guidance at 2 CFR parts 200, 215, 225, 230, including any 
exceptions identified by the Department at 2 CFR part 2900.
    (1) Commercial organizations, for-profit entities, and foreign 
entities that are recipients and subrecipients of a Federal award must 
adhere to 2 CFR part 200, including any exceptions identified by the 
Department under 2 CFR part 2900;
    (2) Commercial organizations, for-profit entities, and foreign 
entities that are contractors or subcontractors must adhere to the 
Federal Acquisition Regulations (FAR), including 48 CFR part 31.
    (b) Allowable costs and cost principles. (1) Recipients and 
subrecipients of a Federal award under title I of WIOA and the Wagner-
Peyser Act must follow the cost principles at subpart E and appendices 
III through IX of 2 CFR part 200, including any exceptions identified 
by the Department at 2 CFR part 2900.
    (2) Unless specified in the grant agreement, for those items 
requiring prior approval in the Uniform Guidance (e.g., selected items 
of cost, budget realignment), the authority to grant or deny approval 
is delegated to the Governor for programs funded under sec. 127 or 132 
of WIOA or under the Wagner-Peyser Act.
    (3) Costs of workforce councils, advisory councils, Native American 
Employment and Training Councils, and Local WDB committees established 
under title I of WIOA are allowable.
    (c) Uniform administrative requirements. (1) Except as provided in 
paragraphs (c)(3) through (6) of this section, all recipients and 
subrecipients of a Federal award under title I of WIOA and under the 
Wagner-Peyser Act must follow 2 CFR part 200, including any exceptions 
identified by the Department at 2 CFR part 2900.
    (2) Unless otherwise specified in the grant agreement, expenditures 
must be reported on accrual basis.
    (3) In accordance with the requirements at 2 CFR 200.400(g), 
subrecipients may not earn or keep any profit resulting from Federal 
financial assistance, unless expressly authorized by the terms and 
conditions of the Federal award.
    (4) In addition to the requirements at 2 CFR 200.317 through 
200.326 (as appropriate), all procurement contracts between Local WDBs 
and units of State or local governments must be conducted only on a 
cost reimbursement basis.
    (5) In addition to the requirements at 2 CFR 200.318, which address 
codes of conduct and conflict of interest the following applies:
    (i) A State WDB member, Local WDB member, or WDB standing committee 
member must neither cast a vote on, nor participate in any decision-
making capacity, on the provision of services by such member (or any 
organization which that member directly represents), nor on any matter 
which would provide any direct financial benefit to that member or that 
member's immediate family.
    (ii) Neither membership on the State WDB, the Local WDB, or a WDB 
standing committee, nor the receipt of WIOA funds to provide training 
and related services, by itself, violates these conflict of interest 
provisions.
    (iii) In accordance with the requirements at 2 CFR 200.112, 
recipients of Federal awards must disclose in writing any potential 
conflict of interest to the Department. Subrecipients must disclose in 
writing any potential conflict of interest to the recipient of grant 
funds.
    (6) The addition method, described at 2 CFR 200.307, must be used 
for all program income earned under title I of WIOA and Wagner-Peyser 
Act grants. When the cost of generating program income has been charged 
to the program, the gross amount earned must be added to the program in 
which it was earned. However, the cost of generating program income 
must be subtracted from the amount earned to establish the net amount 
of program income available for use under the grants when these costs 
have not been charged to the program.
    (7) Any excess of revenue over costs incurred for services provided 
by a governmental or non-profit entity must be included in program 
income.
    (8) Interest income earned on funds received under title I of WIOA 
and the Wagner-Peyser Act must be included in program income.
    (9) On a fee-for-service basis, employers may use local area 
services, facilities, or equipment funded under title I of WIOA to 
provide employment and training activities to incumbent workers:
    (i) When the services, facilities, or equipment are not being used 
by eligible participants;
    (ii) If their use does not affect the ability of eligible 
participants to use the services, facilities, or equipment; and
    (iii) If the income generated from such fees is used to carry out 
programs authorized under this title.
    (d) Government-wide debarment and suspension, and government-wide 
drug-free workplace requirements. All WIOA title I and Wagner-Peyser 
Act grant recipients and subrecipients must comply with the government-
wide requirements for debarment and suspension, and the government-wide 
requirements for a drug-free workplace in accordance with the Drug-Free

[[Page 56416]]

Workplace Act of 1988, 41 U.S.C. 8103 et seq., and 2 CFR part 182.
    (e) Restrictions on lobbying. All WIOA title I and Wagner-Peyer 
grant recipients and subrecipients must comply with the restrictions on 
lobbying specified in WIOA sec. 195 and codified in the Department 
regulations at 29 CFR part 93.
    (f) Buy-American. As stated in sec. 502 of WIOA, all funds 
authorized in title I of WIOA and the Wagner-Peyser Act must be 
expended in compliance with secs. 8301 through 8303 of the Buy American 
Act (41 U.S.C. 8301-8305).
    (g) Nepotism. (1) No individual may be placed in a WIOA employment 
activity if a member of that person's immediate family is directly 
supervised by or directly supervises that individual.
    (2) To the extent that an applicable State or local legal 
requirement regarding nepotism is more restrictive than this provision, 
such State or local requirement must be followed.
    (h) Mandatory disclosures. All WIOA title I and Wagner-Peyser Act 
recipients of Federal awards must disclose as required at 2 CFR 
200.113, in a timely manner, in writing to the Federal awarding agency 
or pass-through entity all violations of Federal criminal law involving 
fraud, bribery, or gratuity violations potentially affecting the 
Federal award. Failure to make required disclosures can result in any 
of the remedies described in 2 CFR 200.338 (Remedies for 
noncompliance), including suspension or debarment.


Sec.  683.205  What administrative cost limitations apply to Workforce 
Innovation and Opportunity Act title I grants?

    (a) State formula grants. (1) As part of the 15 percent that a 
State may reserve for statewide activities, the State may spend up to 5 
percent of the amount allotted under secs. 127(b)(1), 132(b)(1), and 
132(b)(2) of WIOA for the administrative costs of statewide activities.
    (2) Local area expenditures for administrative purposes under WIOA 
formula grants are limited to no more than 10 percent of the amount 
allocated to the local area under secs. 128(b) and 133(b) of WIOA.
    (3) The 5 percent reserved for statewide administrative costs and 
the 10 percent reserved for local administrative costs may be used for 
administrative costs for any of the statewide youth workforce 
investment activities or statewide employment and training activities 
under secs. 127(b)(1), 128(b), 132(b), and 133(b) of WIOA.
    (4) In a one-stop environment, administrative costs borne by other 
sources of funds, such as the Wagner-Peyser Act, are not included in 
the administrative cost limit calculation. Each program's 
administrative activities are chargeable to its own grant and subject 
to its own administrative cost limitations.
    (5) Costs of negotiating a MOU or infrastructure funding agreement 
under title I of WIOA are excluded from the administrative cost 
limitations.
    (b) Discretionary grants. Limits on administrative costs, if any, 
for programs operated under subtitle D of title I of WIOA will be 
identified in the grant or cooperative agreement.


Sec.  683.210  What audit requirements apply to the use of Workforce 
Innovation and Opportunity Act title I and Wagner-Peyser Act funds?

    All recipients of WIOA title I and Wagner-Peyser Act funds that 
expend more than the minimum amounts specified in 2 CFR part 200, 
subpart F, in Federal awards during their fiscal year must have a 
program specific or single audit conducted in accordance with 2 CFR 
part 200, subpart F.
    (a) Commercial or for-profit. Grant recipients and subrecipients of 
title I and Wagner-Peyser Act funds that are commercial or for-profit 
entities must adhere to the requirements contained in 2 CFR part 200, 
subpart F.
    (b) Subrecipients and contractors. An auditee may simultaneously be 
a recipient, a subrecipient, and a contractor depending on the 
substance of its agreements with Federal awarding agencies and pass-
through entities. Federal awards expended as a recipient or 
subrecipient are subject to audit requirements under 2 CFR part 200, 
subpart F.
    (c) Contractors. The payments received for goods or services 
provided as a contractor are not Federal awards. Subrecipient and 
contractor determinations made under 2 CFR 200.330 must be considered 
in determining whether payments constitute a Federal award or a payment 
for goods and services provided as a contractor.


Sec.  683.215  What Workforce Innovation and Opportunity Act title I 
functions and activities constitute the costs of administration subject 
to the administrative cost limitation?

    (a) The costs of administration are expenditures incurred by State 
and Local WDBs, Regions, direct grant recipients, including State grant 
recipients under subtitle B of title I of WIOA, and recipients of 
awards under subtitle D of title I, as well as local grant recipients, 
local grant subrecipients, local fiscal agents and one-stop operators 
that are associated with those specific functions identified in 
paragraph (b) of this section and which are not related to the direct 
provision of workforce investment services, including services to 
participants and employers. These costs can be both personnel and non-
personnel and both direct and indirect.
    (b) The costs of administration are the costs associated with 
performing the following functions:
    (1) Performing the following overall general administrative 
functions and coordination of those functions under title I of WIOA:
    (i) Accounting, budgeting, financial and cash management functions;
    (ii) Procurement and purchasing functions;
    (iii) Property management functions;
    (iv) Personnel management functions;
    (v) Payroll functions;
    (vi) Coordinating the resolution of findings arising from audits, 
reviews, investigations and incident reports;
    (vii) Audit functions;
    (viii) General legal services functions;
    (ix) Developing systems and procedures, including information 
systems, required for these administrative functions; and
    (x) Fiscal agent responsibilities;
    (2) Performing oversight and monitoring responsibilities related to 
WIOA administrative functions;
    (3) Costs of goods and services required for administrative 
functions of the program, including goods and services such as rental 
or purchase of equipment, utilities, office supplies, postage, and 
rental and maintenance of office space;
    (4) Travel costs incurred for official business in carrying out 
administrative activities; and
    (5) Costs of information systems related to administrative 
functions (for example, personnel, procurement, purchasing, property 
management, accounting, and payroll systems) including the purchase, 
systems development and operating costs of such systems.
    (c)(1) Awards to subrecipients or contractors that are solely for 
the performance of administrative functions are classified as 
administrative costs.
    (2) Personnel and related non-personnel costs of staff that perform 
both administrative functions specified in paragraph (b) of this 
section and programmatic services or activities must be allocated as 
administrative or program costs to the benefitting cost objectives/
categories.
    (3) Specific costs charged to an overhead or indirect cost pool 
that can be identified directly as a program cost

[[Page 56417]]

are to be charged as a program cost. Documentation of such charges must 
be maintained.
    (4) Except as provided at paragraph (c)(1) of this section, all 
costs incurred for functions and activities of subrecipients, other 
than those subrecipients listed in paragraph (a) of this section, and 
contractors are program costs.
    (5) Continuous improvement activities are charged to administration 
or program category based on the purpose or nature of the activity to 
be improved. Documentation of such charges must be maintained.
    (6) Costs of the following information systems including the 
purchase, systems development, and operational costs (e.g., data entry) 
are charged to the program category:
    (i) Tracking or monitoring of participant and performance 
information;
    (ii) Employment statistics information, including job listing 
information, job skills information, and demand occupation information;
    (iii) Performance and program cost information on eligible training 
providers, youth activities, and appropriate education activities;
    (iv) Local area performance information; and
    (v) Information relating to supportive services and unemployment 
insurance claims for program participants.
    (d) Where possible, entities identified in paragraph (a) of this 
section must make efforts to streamline the services in paragraphs 
(b)(1) through (5) of this section to reduce administrative costs by 
minimizing duplication and effectively using information technology to 
improve services.


Sec.  683.220  What are the internal controls requirements for 
recipients and subrecipients of Workforce Innovation and Opportunity 
Act title I and Wagner-Peyser Act funds?

    (a) Recipients and subrecipients of WIOA title I and Wagner-Peyser 
Act funds must have an internal control structure and written policies 
in place that provide safeguards to protect personally identifiable 
information, records, contracts, grant funds, equipment, sensitive 
information, tangible items, and other information that is readily or 
easily exchanged in the open market, or that the Department or the 
recipient or subrecipient considers to be sensitive, consistent with 
applicable Federal, State and local privacy and confidentiality laws. 
Internal controls also must include reasonable assurance that the 
entity is:
    (1) Managing the award in compliance with Federal statutes, 
regulations, and the terms and conditions of the Federal award;
    (2) Complying with Federal statutes, regulations, and the terms and 
conditions of the Federal awards;
    (3) Evaluating and monitoring the recipient's and subrecipient's 
compliance with WIOA, regulations and the terms and conditions of 
Federal awards; and
    (4) Taking prompt action when instances of noncompliance are 
identified.
    (b) Internal controls should be in compliance with the guidance in 
``Standards for Internal Control in the Federal Government'' issued by 
the Comptroller General of the United States and the ``Internal Control 
Integrated Framework'', issued by the Committee of Sponsoring 
Organizations of the Treadway Commission (COSO). See 2 CFR 200.303.


Sec.  683.225  What requirements relate to the enforcement of the 
Military Selective Service Act?

    The requirements relating to the enforcement of the Military 
Selective Service Act are found at WIOA sec. 189(h).


Sec.  683.230  Are there special rules that apply to veterans when 
income is a factor in eligibility determinations?

    Yes, under 38 U.S.C. 4213, when past income is an eligibility 
determinant for Federal employment or training programs, any amounts 
received as military pay or allowances by any person who served on 
active duty, and certain other specified benefits must be disregarded 
for the veteran and for other individuals for whom those amounts would 
normally be applied in making an eligibility determination. This 
applies when determining if a person is a ``low-income individual'' for 
eligibility purposes (for example, in the WIOA youth, or NFJP 
programs). Also, it applies when income is used as a factor when a 
local area provides priority of service for ``low-income individuals'' 
with title I WIOA funds (see Sec. Sec.  680.600 and 680.650 of this 
chapter). A veteran must still meet each program's eligibility criteria 
to receive services under the respective employment and training 
program.


Sec.  683.235  May Workforce Innovation and Opportunity Act title I 
funds be spent for construction?

    WIOA title I funds must not be spent on construction, purchase of 
facilities or buildings, or other capital expenditures for improvements 
to land or buildings, except with the prior written approval of the 
Secretary.


Sec.  683.240  What are the instructions for using real property with 
Federal equity?

    (a) SESA properties. Federal equity acquired in real property 
through grants to States awarded under title III of the Social Security 
Act or the Wagner-Peyser Act, including State Employment Security 
Agency (SESA) real property, is transferred to the States that used the 
grant to acquire such equity.
    (1) The portion of any real property that is attributable to the 
Federal equity transferred under this section must be used to carry out 
activities authorized under WIOA, title III of the Social Security Act 
(Unemployment Compensation program), or the Wagner-Peyser Act.
    (2) When such real property is no longer needed for the activities 
described in paragraph (a)(1) of this section, the States must request 
disposition instructions from the Grant Officer prior to disposition or 
sale of the property. The portion of the proceeds from the disposition 
of the real property that is attributable to the Federal equity 
transferred under this section must be used to carry out activities 
authorized under WIOA, title III of the Social Security Act, or the 
Wagner-Peyser Act.
    (3) States must not use funds awarded under WIOA, title III of the 
Social Security Act, or the Wagner-Peyser Act to amortize the costs of 
real property that is purchased by any State on or after February 15, 
2007, the date of enactment of the Revised Continuing Appropriations 
Resolution, 2007.
    (4) Properties occupied by the Wagner-Peyser Act Employment Service 
must be colocated with one-stop centers.
    (b) Reed Act-funded properties. Properties with Reed Act equity may 
be used for the one-stop service delivery system to the extent that the 
proportionate share of Reed Act equity is less than or equal to the 
proportionate share of occupancy by the Unemployment Compensation and 
Wagner-Peyser Act programs in such properties. When such real property 
is no longer needed for authorized purposes, the State must request 
disposition instructions from the Grant Officer prior to disposition or 
sale. The portion of the proceeds from the disposition or sale of the 
real property that is attributable to the Reed Act equity must be 
returned to the State's account in the Unemployment Trust Fund (UTF) 
and used in accordance with Department-issued guidance.
    (c) Job Training Partnership Act and Workforce Investment Act-
funded properties. Real property that was purchased with WIA funds or 
that was transferred to WIA now is transferred to

[[Page 56418]]

the WIOA title I programs and must be used for WIOA purposes. When such 
real property is no longer needed for the activities of WIOA, the 
recipient or subrecipient must seek instructions from the Grant Officer 
or State (in the case of a subrecipient) prior to disposition or sale.


Sec.  683.245  Are employment generating activities, or similar 
activities, allowable under title I of the Workforce Innovation and 
Opportunity Act?

    (a) Under sec. 181(e) of WIOA, title I funds must not be spent on 
employment generating activities, investment in revolving loan funds, 
capitalization of businesses, investment in contract bidding resource 
centers, economic development activities, or similar activities, unless 
they are directly related to training for eligible individuals. For 
purposes of this prohibition, employer outreach and job development 
activities are directly related to training for eligible individuals.
    (b) These employer outreach and job development activities may 
include:
    (1) Contacts with potential employers for the purpose of placement 
of WIOA participants;
    (2) Participation in business associations (such as chambers of 
commerce); joint labor management committees, labor associations, and 
resource centers;
    (3) WIOA staff participation on economic development boards and 
commissions, and work with economic development agencies to:
    (i) Provide information about WIOA programs;
    (ii) Coordinate activities in a region or local area to promote 
entrepreneurial training and microenterprise services;
    (iii) Assist in making informed decisions about community job 
training needs; and
    (iv) Promote the use of first source hiring agreements and 
enterprise zone vouchering services;
    (4) Active participation in local business resource centers 
(incubators) to provide technical assistance to small businesses and 
new businesses to reduce the rate of business failure;
    (5) Subscriptions to relevant publications;
    (6) General dissemination of information on WIOA programs and 
activities;
    (7) The conduct of labor market surveys;
    (8) The development of on-the-job training opportunities; and
    (9) Other allowable WIOA activities in the private sector.


Sec.  683.250  What other activities are prohibited under title I of 
the Workforce Innovation and Opportunity Act?

    (a) WIOA title I funds must not be spent on:
    (1) The wages of incumbent employees during their participation in 
economic development activities provided through a statewide workforce 
development system.
    (2) Public service employment, except as specifically authorized 
under title I of WIOA.
    (3) Expenses prohibited under any other Federal, State or local law 
or regulation.
    (4) Subawards or contracts with parties that are debarred, 
suspended, or otherwise excluded from or ineligible for participation 
in Federal programs or activities.
    (5) Contracts with persons falsely labeling products made in 
America.
    (b) WIOA formula funds available to States and local areas under 
title I, subtitle B must not be used for foreign travel.


Sec.  683.255  What are the limitations related to religious activities 
of title I of the Workforce Innovation and Opportunity Act?

    (a) Section 188(a)(3) of WIOA prohibits the use of funds to employ 
participants to carry out the construction, operation, or maintenance 
of any part of any facility used for sectarian instruction or as a 
place for religious worship with the exception of maintenance of 
facilities that are not primarily used for instruction or worship and 
are operated by organizations providing services to WIOA participants.
    (b) 29 CFR part 2, subpart D, governs the circumstances under which 
Department support, including WIOA title I financial assistance, may be 
used to employ or train participants in religious activities. Under 
that subpart, such assistance may be used for such employment or 
training only when the assistance is provided indirectly within the 
meaning of the Establishment Clause of the U.S. Constitution, and not 
when the assistance is provided directly. That subpart also contains 
requirements related to equal treatment in Department of Labor programs 
for religious organizations, and to protecting the religious liberty of 
Department of Labor social service providers and beneficiaries. (29 CFR 
part 2, subpart D--Equal Treatment in Department of Labor Programs for 
Religious Organizations, Protection of Religious Liberty of Department 
of Labor Social Service Providers and Beneficiaries).


Sec.  683.260  What prohibitions apply to the use of Workforce 
Innovation and Opportunity Act title I funds to encourage business 
relocation?

    (a) Prohibition. Section 181(d) of WIOA states that funds must not 
be used or proposed to be used for:
    (1) The encouragement or inducement of a business, or part of a 
business, to relocate from any location in the United States, if the 
relocation results in any employee losing his or her job at the 
original location;
    (2) Customized training, skill training, on-the-job training, 
incumbent worker training, transitional employment, or company specific 
assessments of job applicants for or employees of any business or part 
of a business that has relocated from any location in the United 
States, until the company has operated at that location for 120 days, 
if the relocation has resulted in any employee losing his or her jobs 
at the original location.
    (b) Pre-award review. To verify that a business establishment which 
is new or expanding is not, in fact, relocating employment from another 
area, standardized pre-award review criteria developed by the State 
must be completed and documented jointly by the local area and the 
business establishment as a prerequisite to WIOA assistance.
    (1) The review must include names under which the establishment 
does business, including predecessors and successors in interest; the 
name, title, and address of the company official certifying the 
information, and whether WIOA assistance is sought in connection with 
past or impending job losses at other facilities, including a review of 
whether WARN notices relating to the employer have been filed.
    (2) The review may include consultations with labor organizations 
and others in the affected local area(s).


Sec.  683.265  What procedures and sanctions apply to violations of 
this part?

    (a) The Grant Officer will promptly review and take appropriate 
action on alleged violations of the provisions relating to:
    (1) Construction (Sec.  683.235);
    (2) Employment generating activities (Sec.  683.245);
    (3) Other prohibited activities (Sec.  683.250);
    (4) The limitation related to religious activities (Sec.  683.255); 
and
    (5) The use of WIOA title I funds to encourage business relocation 
(Sec.  683.260).
    (b) Procedures for the investigation and resolution of the 
violations are provided under the Grant Officer's resolution process at 
Sec.  683.440.

[[Page 56419]]

    (c) Sanctions and remedies are provided for under sec. 184(c) of 
WIOA for violations of the provisions relating to:
    (1) Construction (Sec.  683.235);
    (2) Employment generating activities (Sec.  683.245);
    (3) Other prohibited activities (Sec.  683.250); and
    (4) The limitation related to religious activities (Sec.  
683.255(b)).
    (d) Sanctions and remedies are provided for in sec. 181(d)(3) of 
WIOA for violations of Sec.  683.260, which addresses business 
relocation.
    (e) Violations of Sec.  683.255(a) will be handled in accordance 
with the Department's nondiscrimination regulations implementing sec. 
188 of WIOA, codified at 29 CFR part 38.


Sec.  683.270  What safeguards are there to ensure that participants in 
Workforce Innovation and Opportunity Act employment and training 
activities do not displace other employees?

    (a) A participant in a program or activity authorized under title I 
of WIOA must not displace (including a partial displacement, such as a 
reduction in the hours of non-overtime work, wages, or employment 
benefits) any currently employed employee (as of the date of the 
participation).
    (b) A program or activity authorized under title I of WIOA must not 
impair existing contracts for services or collective bargaining 
agreements. When a program or activity authorized under title I of WIOA 
would be inconsistent with a collective bargaining agreement, the 
appropriate labor organization and employer must provide written 
concurrence before the program or activity begins.
    (c) A participant in a program or activity under title I of WIOA 
may not be employed in or assigned to a job if:
    (1) Any other individual is on layoff from the same or any 
substantially equivalent job;
    (2) The employer has terminated the employment of any regular, 
unsubsidized employee or otherwise caused an involuntary reduction in 
its workforce with the intention of filling the vacancy so created with 
the WIOA participant; or
    (3) The job is created in a promotional line that infringes in any 
way on the promotional opportunities of currently employed workers as 
of the date of the participation.
    (d) Regular employees and program participants alleging 
displacement may file a complaint under the applicable grievance 
procedures found at Sec.  683.600.


Sec.  683.275  What wage and labor standards apply to participants in 
activities under title I of the Workforce Innovation and Opportunity 
Act?

    (a) Individuals in on-the-job training or individuals employed in 
activities under title I of WIOA must be compensated at the same rates, 
including periodic increases, as trainees or employees who are 
similarly situated in similar occupations by the same employer and who 
have similar training, experience, and skills. Such rates must be in 
accordance with applicable law, but may not be less than the higher of 
the rate specified in sec. 6(a)(1) of the Fair Labor Standards Act of 
1938 (29 U.S.C. 206(a)(1)) or the applicable State or local minimum 
wage law.
    (b) The reference in paragraph (a) of this section to sec. 6(a)(1) 
of the Fair Labor Standards Act of 1938 (29 U.S.C. 206(a)(1)) is not 
applicable for individuals in territorial jurisdictions in which sec. 
6(a)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 206(a)(1)) 
does not apply.
    (c) Individuals in on-the-job training or individuals employed in 
programs and activities under title I of WIOA must be provided benefits 
and working conditions at the same level and to the same extent as 
other trainees or employees working a similar length of time and doing 
the same type of work.
    (d) Allowances, earnings, and payments to individuals participating 
in programs under title I of WIOA are not considered as income for 
purposes of determining eligibility for and the amount of income 
transfer and in-kind aid furnished under any Federal or Federally-
assisted program based on need, other than as provided under the Social 
Security Act (42 U.S.C. 301 et seq.).


Sec.  683.280  What health and safety standards apply to the working 
conditions of participants in activities under title I of the Workforce 
Innovation and Opportunity Act?

    (a) Health and safety standards established under Federal and State 
law otherwise applicable to working conditions of employees are equally 
applicable to working conditions of participants engaged in programs 
and activities under title I of WIOA.
    (b)(1) To the extent that a State workers' compensation law 
applies, workers' compensation must be provided to participants in 
programs and activities under title I of WIOA on the same basis as the 
compensation is provided to other individuals in the State in similar 
employment.
    (2) If a State workers' compensation law applies to a participant 
in work experience, workers' compensation benefits must be available 
for injuries suffered by the participant in such work experience. If a 
State workers' compensation law does not apply to a participant in work 
experience, insurance coverage must be secured for injuries suffered by 
the participant in the course of such work experience.


Sec.  683.285  What are a recipient's obligations to ensure 
nondiscrimination and equal opportunity, and what are a recipient's 
obligations with respect to religious activities?

    (a)(1) Recipients, as defined in 29 CFR 37.4, must comply with the 
nondiscrimination and equal opportunity provisions of WIOA sec. 188 and 
its implementing regulations, codified at 29 CFR part 38. Under that 
definition, the term ``recipients'' includes State and Local WDBs, one-
stop operators, service providers, Job Corps contractors, and 
subrecipients, as well as other types of individuals and entities.
    (2) Nondiscrimination and equal opportunity requirements and 
procedures, including complaint processing and compliance reviews, are 
governed by the regulations implementing sec. 188 of WIOA, codified at 
29 CFR part 38, and are administered and enforced by the Department of 
Labor Civil Rights Center.
    (3) Financial assistance provided under title I of WIOA may be used 
to meet a recipient's obligation to provide physical and programmatic 
accessibility and reasonable accommodation/modification in regard to 
the WIOA program, as required by sec. 504 of the Rehabilitation Act of 
1973, as amended; the Americans with Disabilities Act of 1990, as 
amended; sec. 188 of WIOA; and the regulations implementing these 
statutory provisions.
    (4) No person may discriminate against an individual who is a 
participant in a program or activity that receives funds under title I 
of WIOA, with respect to the terms and conditions affecting, or rights 
provided to, the individual, solely because of the status of the 
individual as a participant.
    (5) Participation in programs and activities or receiving funds 
under title I of WIOA must be available to citizens and nationals of 
the United States, lawfully admitted permanent resident aliens, 
refugees, asylees, and parolees, and other immigrants authorized by the 
Secretary of Homeland Security or the Secretary's designee to work in 
the United States.
    (b)(1) Title 29 CFR part 2, subpart D, governs the circumstances 
under which recipients may use Department support,

[[Page 56420]]

including WIOA title I and Wagner-Peyser Act financial assistance, to 
employ or train participants in religious activities. As explained in 
that subpart, such assistance may be used for such employment or 
training only when the assistance is provided indirectly within the 
meaning of the Establishment Clause of the U.S. Constitution, and not 
when the assistance is provided directly. As explained in that subpart, 
assistance provided through an Individual Training Account is generally 
considered indirect, and other mechanisms also may be considered 
indirect. See also Sec.  683.255 and 29 CFR 37.6(f)(1).
    (2) Title 29 CFR part 2, subpart D, also contains requirements 
related to equal treatment of religious organizations in Department of 
Labor programs, and to protection of religious liberty for Department 
of Labor social service providers and beneficiaries. Limitations on the 
employment of participants under WIOA title I to carry out the 
construction, operation, or maintenance of any part of any facility 
used or to be used for religious instruction or as a place of religious 
worship are described at 29 CFR 37.6(f)(2). See also WIOA sec. 
188(a)(3).


Sec.  683.290  Are there salary and bonus restrictions in place for the 
use of title I of Workforce Innovation and Opportunity Act and Wagner-
Peyser Act funds?

    (a) No funds available under title I of WIOA or the Wagner-Peyser 
Act may be used by a recipient or subrecipient of such funds to pay the 
salary and bonuses of an individual, either as direct costs or indirect 
costs, at a rate in excess of the annual rate of basic pay prescribed 
for level II of the Executive Schedule under 5 U.S.C. 5313, which can 
be found at https://www.opm.gov/.
    (b) In instances where funds awarded under title I of WIOA or the 
Wagner-Peyser Act pay only a portion of the salary or bonus, the WIOA 
title I or Wagner-Peyser Act funds may only be charged for the share of 
the employee's salary or bonus attributable to the work performed on 
the WIOA title I or Wagner-Peyser Act grant. That portion cannot exceed 
the proportional Executive level II rate. The restriction applies to 
the sum of salaries and bonuses charged as either direct costs or 
indirect costs under title I of WIOA and the Wagner-Peyser Act.
    (c) The limitation described in paragraph (a) of this section will 
not apply to contractors (as defined in 2 CFR 200.23) providing goods 
and services. In accordance with 2 CFR 200.330, characteristics 
indicative of contractor are the following:
    (1) Provides the goods and services within normal business 
operations;
    (2) Provides similar goods or services to many different 
purchasers;
    (3) Normally operates in a competitive environment;
    (4) Provides goods or services that are ancillary to the operation 
of the Federal program; and
    (5) Is not subject to compliance requirements of the Federal 
program as a result of the agreement, though similar requirements may 
apply for other reasons.
    (d) If a State is a recipient of such funds, the State may 
establish a lower limit than is provided in paragraph (a) of this 
section for salaries and bonuses of those receiving salaries and 
bonuses from a subrecipient of such funds, taking into account factors 
including the relative cost of living in the State, the compensation 
levels for comparable State or local government employees, and the size 
of the organizations that administer the Federal programs involved.
    (e) When an individual is working for the same recipient or 
subrecipient in multiple offices that are funded by title I of WIOA or 
the Wagner-Peyser Act, the recipient or subrecipient must ensure that 
the sum of the individual's salary and bonus does not exceed the 
prescribed limit in paragraph (a) of this section.


Sec.  683.295  Is earning of profit allowed under the Workforce 
Innovation and Opportunity Act?

    (a)(1) Under secs. 121(d), 122(a) and 134(b) of WIOA, for-profit 
entities are eligible to be one-stop operators, service providers, and 
eligible training providers.
    (2) Where for-profit entities are one-stop operators, service 
providers, and eligible training providers, and those entities are 
recipients of Federal financial assistance, the recipient or 
subrecipient and the for-profit entity must follow 2 CFR 200.323.
    (b) For programs authorized by other sections of WIOA, 2 CFR 
200.400(g) prohibits earning and keeping of profit in Federal financial 
assistance unless expressly authorized by the terms and conditions of 
the Federal award.
    (c) Income earned by a public or private nonprofit entity may be 
retained by such entity only if such income is used to continue to 
carry out the program.

Subpart C--Reporting Requirements


Sec.  683.300  What are the reporting requirements for programs funded 
under the Workforce Innovation and Opportunity Act?

    (a) General. All States and other direct grant recipients must 
report financial, participant, and other performance data in accordance 
with instructions issued by the Secretary. Reports, records, plans, or 
any other data required to be submitted or made available must, to the 
extent practicable, be submitted or made available through electronic 
means. Reports will not be required to be submitted more frequently 
than quarterly within a time period specified in the reporting 
instructions.
    (b) Subrecipient reporting. (1) For the annual eligible training 
provider performance reports described in Sec.  677.230 of this chapter 
and local area performance reports described in Sec.  677.205 of this 
chapter, the State must require the template developed under WIOA sec. 
116(d)(1) to be used.
    (2) For financial reports and performance reports other than those 
described in paragraph (b)(1) of this section, a State or other grant 
recipient may impose different forms or formats, shorter due dates, and 
more frequent reporting requirements on subrecipients.
    (3) If a State intends to impose different reporting requirements 
on subrecipients, it must describe those reporting requirements in its 
State WIOA Plan.
    (c) Financial reports. (1) Each grant recipient must submit 
financial reports on a quarterly basis.
    (2) Local WDBs will submit quarterly financial reports to the 
Governor.
    (3) Each State will submit to the Secretary a summary of the 
reports submitted to the Governor pursuant to paragraph (c)(2) of this 
section.
    (4) Reports must include cash on hand, obligations, expenditures, 
any income or profits earned, including such income or profits earned 
by subrecipients, indirect costs, recipient share of expenditures and 
any expenditures incurred (such as stand-in costs) by the recipient 
that are otherwise allowable except for funding limitations.
    (5) Reported expenditures, matching funds, and program income, 
including any profits earned, must be reported on the accrual basis of 
accounting and cumulative by fiscal year of appropriation. If the 
recipient's accounting records are not normally kept on the accrual 
basis of accounting, the recipient must develop accrual

[[Page 56421]]

information through an analysis of the documentation on hand.
    (d) Performance reports. (1) States must submit an annual 
performance report for each of the core workforce programs administered 
under WIOA as required by sec. 116(d) of WIOA and in accordance with 
part 677, subpart A, of this chapter.
    (2) For all programs authorized under subtitle D of WIOA, each 
grant recipient must complete reports on performance indicators or 
goals specified in its grant agreement.
    (e) Due date. (1) For the core programs, performance reports are 
due on the date set forth in guidance.
    (2) Financial reports and all performance and data reports not 
described in paragraph (e)(1) of this section are due no later than 45 
days after the end of each quarter unless otherwise specified in 
reporting instructions. Closeout financial reports are required no 
later than 90 calendar days after the expiration of a period of 
performance or period of fund availability (whichever comes first) and/
or termination of the grant. If required by the terms and conditions of 
the grant, closeout performance reports are required no later than 90 
calendar days after the expiration of a period of performance or period 
of fund availability (whichever comes first) and/or termination of the 
grant.
    (f) Format. All reports whenever practicable should be collected, 
transmitted, and stored in open and machine readable formats.
    (g) Systems compatibility. States and grant recipients will develop 
strategies for aligning data systems based upon guidelines issued by 
the Secretary of Labor and the Secretary of Education.
    (h) Additional reporting. At the Grant Officer's or Secretary's 
discretion, reporting may be required more frequently of its grant 
recipients. Such requirement is consistent with 2 CFR parts 200 and 
2900.

Subpart D--Oversight and Resolution of Findings


Sec.  683.400  What are the Federal and State monitoring and oversight 
responsibilities?

    (a) The Secretary is authorized to monitor all recipients and 
subrecipients of all Federal financial assistance awarded and funds 
expended under title I of WIOA and the Wagner-Peyser Act to determine 
compliance with these statutes and Department regulations, and may 
investigate any matter deemed necessary to determine such compliance. 
Federal oversight will be conducted primarily at the recipient level.
    (b) As funds allow, in each fiscal year, the Secretary also will 
conduct in-depth reviews in several States, including financial and 
performance monitoring, to assure that funds are spent in accordance 
with WIOA and the Wagner-Peyser Act.
    (c)(1) Each recipient and subrecipient must monitor grant-supported 
activities in accordance with 2 CFR part 200.
    (2) In the case of grants under secs. 128 and 133 of WIOA, the 
Governor must develop a State monitoring system that meets the 
requirements of Sec.  683.410(b). The Governor must monitor Local WDBs 
and regions annually for compliance with applicable laws and 
regulations in accordance with the State monitoring system. Monitoring 
must include an annual review of each local area's compliance with 2 
CFR part 200.
    (d) Documentation of monitoring, including monitoring reports and 
audit work papers, conducted under paragraph (c) of this section, along 
with corrective action plans, must be made available for review upon 
request of the Secretary, Governor, or a representative of the Federal 
government authorized to request the information.


Sec.  683.410  What are the oversight roles and responsibilities of 
recipients and subrecipients of Federal financial assistance awarded 
under title I of the Workforce Innovation and Opportunity Act and the 
Wagner-Peyser Act?

    (a) Each recipient and subrecipient of funds under title I of WIOA 
and under the Wagner-Peyser Act must conduct regular oversight and 
monitoring of its WIOA and Wagner-Peyser Act program(s) and those of 
its subrecipients and contractors as required under title I of WIOA and 
the Wagner-Peyser Act, as well as under 2 CFR part 200, including 2 CFR 
200.327, 200.328, 200.330, 200.331, and Department exceptions at 2 CFR 
part 2900, in order to:
    (1) Determine that expenditures have been made against the proper 
cost categories and within the cost limitations specified in WIOA and 
the regulations in this part;
    (2) Determine whether there is compliance with other provisions of 
WIOA and the WIOA regulations and other applicable laws and 
regulations;
    (3) Assure compliance with 2 CFR part 200; and
    (4) Determine compliance with the nondiscrimination, disability, 
and equal opportunity requirements of sec. 188 of WIOA, including the 
Assistive Technology Act of 1998 (29 U.S.C. 3003).
    (b) State roles and responsibilities for grants under secs. 128 and 
133 of WIOA:
    (1) The Governor is responsible for the development of the State 
monitoring system. The Governor must be able to demonstrate, through a 
monitoring plan or otherwise, that the State monitoring system meets 
the requirements of paragraph (b)(2) of this section.
    (2) The State monitoring system must:
    (i) Provide for annual on-site monitoring reviews of local areas' 
compliance with 2 CFR part 200, as required by sec. 184(a)(3) of WIOA;
    (ii) Ensure that established policies to achieve program 
performance and outcomes meet the objectives of WIOA and the WIOA 
regulations;
    (iii) Enable the Governor to determine if subrecipients and 
contractors have demonstrated substantial compliance with WIOA and 
Wagner-Peyser Act requirements;
    (iv) Enable the Governor to determine whether a local plan will be 
disapproved for failure to make acceptable progress in addressing 
deficiencies, as required in sec. 108(e) of WIOA; and
    (v) Enable the Governor to ensure compliance with the 
nondiscrimination, disability, and equal opportunity requirements of 
sec. 188 of WIOA, including the Assistive Technology Act of 1998 (29 
U.S.C. 3003).
    (3) The State must conduct an annual on-site monitoring review of 
each local area's compliance with 2 CFR part 200, as required by sec. 
184(a)(4) of WIOA.
    (4) The Governor must require that prompt corrective action be 
taken if any substantial violation of standards identified in paragraph 
(b)(2) or (3) of this section is found.
    (5) The Governor must impose the sanctions provided in secs. 
184(b)-(c) of WIOA in the event of a subrecipient's failure to take 
required corrective action required under paragraph (b)(4) of this 
section.
    (6) The Governor may issue additional requirements and instructions 
to subrecipients on monitoring activities.
    (7) The Governor must certify to the Secretary every 2 years that:
    (i) The State has implemented 2 CFR part 200;
    (ii) The State has monitored local areas to ensure compliance with 
2 CFR part 200, including annual certifications and disclosures as 
outlined in 2 CFR 200.113, Mandatory Disclosures. Failure to do so may 
result in remedies described under 2 CFR 200.338, including suspension 
and debarment; and

[[Page 56422]]

    (iii) The State has taken appropriate corrective action to secure 
such compliance.


Sec.  683.420  What procedures apply to the resolution of findings 
arising from audits, investigations, monitoring, and oversight reviews?

    (a) Resolution of subrecipient-level findings. (1) The Governor or 
direct grant recipient is responsible for resolving findings that arise 
from the monitoring reviews, investigations, other Federal monitoring 
reviews, and audits (including under 2 CFR part 200) of subrecipients 
awarded funds through title I of WIOA or the Wagner-Peyser Act.
    (i) A State or direct grant recipient must utilize the written 
monitoring and audit resolution, debt collection and appeal procedures 
that it uses for other Federal grant programs.
    (ii) If a State or direct grant recipient does not have such 
written procedures, it must prescribe standards and procedures to be 
used for this grant program.
    (2) For subrecipients awarded funds through a recipient of grant 
funds under subtitle D of title I of WIOA, the direct recipient of the 
grant funds must have written monitoring and resolution procedures in 
place that are consistent with 2 CFR part 200.
    (b) Resolution of State and other direct recipient-level findings. 
(1) The Secretary is responsible for resolving findings that arise from 
Federal audits, monitoring reviews, investigations, incident reports, 
and audits under 2 CFR part 200 for direct recipients of Federal awards 
under title I of WIOA and the Wagner-Peyser Act, as amended by WIOA 
title III.
    (2) The Secretary will use the Department audit resolution process, 
consistent with 2 CFR part 200 (and Department modifications at 2 CFR 
part 2900), and Grant Officer Resolution provisions of Sec.  683.440, 
as appropriate.
    (3) A final determination issued by a Grant Officer under this 
process may be appealed to the Department of Labor Office of 
Administrative Law Judges under the procedures at Sec.  683.800.
    (c) Resolution of nondiscrimination findings. Findings arising from 
investigations or reviews conducted under nondiscrimination laws will 
be resolved in accordance with WIOA sec. 188 of WIOA and the Department 
of Labor nondiscrimination regulations implementing sec. 188 of WIOA, 
codified at 29 CFR part 38.


Sec.  683.430  How does the Secretary resolve investigative and 
monitoring findings?

    (a) As a result of an investigation, on-site visit, other 
monitoring, or an audit (i.e., Single Audit, OIG Audit, GAO Audit, or 
other audit), the Secretary will notify the direct recipient of the 
Federal award of the findings of the investigation and give the direct 
recipient a period of time (not more than 60 days) to comment and to 
take appropriate corrective actions.
    (1) Adequate resolution. The Grant Officer in conjunction with the 
Federal project officer, reviews the complete file of the monitoring 
review, monitoring report, or final audit report and the recipient's 
response and actions under paragraph (a) of this section. The Grant 
Officer's review takes into account the sanction provisions of secs. 
184(b)-(c) of WIOA. If the Grant Officer agrees with the recipient's 
handling of the situation, the Grant Officer so notifies the recipient. 
This notification constitutes final agency action.
    (2) Inadequate resolution. If the direct recipient's response and 
actions to resolve the findings are found to be inadequate, the Grant 
Officer will begin the Grant Officer resolution process under Sec.  
683.440.
    (b) Audits from 2 CFR part 200 will be resolved through the Grant 
Officer resolution process, as discussed in Sec.  683.440.


Sec.  683.440  What is the Grant Officer resolution process?

    (a) General. When the Grant Officer is dissatisfied with the a 
recipient's disposition of an audit or other resolution of findings 
(including those arising out of site visits, incident reports or 
compliance reviews), or with the recipient's response to findings 
resulting from investigations or monitoring reports, the initial and 
final determination process as set forth in this section is used to 
resolve the matter.
    (b) Initial determination. The Grant Officer makes an initial 
determination on the findings for both those matters where there is 
agreement and those where there is disagreement with the recipient's 
resolution, including the allowability of questioned costs or 
activities. This initial determination is based upon the requirements 
of WIOA, the Wagner-Peyser Act, and applicable regulations, and the 
terms and conditions of the grants or other agreements under the award.
    (c) Informal resolution. Except in an emergency situation, when the 
Secretary invokes the authority described in sec. 184(e) of WIOA, the 
Grant Officer may not revoke a recipient's grant in whole or in part, 
nor institute corrective actions or sanctions, without first providing 
the recipient with an opportunity to present documentation or arguments 
to resolve informally those matters in dispute contained in the initial 
determination. The initial determination must provide for an informal 
resolution period of at least 60 days from issuance of the initial 
determination. If the matters are resolved informally, the Grant 
Officer must issue a final determination under paragraph (d) of this 
section which notifies the parties in writing of the nature of the 
resolution and may close the file.
    (d) Final determination. (1) Upon completion of the informal 
resolution process, the Grant Officer provides each party with a 
written final determination by certified mail, return receipt 
requested. For audits of recipient-level entities and other recipients 
which receive WIOA funds directly from the Department, ordinarily, the 
final determination is issued not later than 180 days from the date 
that the Office of Inspector General (OIG) issues the final approved 
audit report to the Employment and Training Administration. For audits 
of subrecipients conducted by the OIG, ordinarily the final 
determination is issued not later than 360 days from the date the OIG 
issues the final approved audit report to ETA.
    (2) A final determination under this paragraph (d) must:
    (i) Indicate whether efforts to resolve informally matters 
contained in the initial determination have been unsuccessful;
    (ii) List those matters upon which the parties continue to 
disagree;
    (iii) List any modifications to the factual findings and 
conclusions set forth in the initial determination and the rationale 
for such modifications;
    (iv) Establish a debt, if appropriate;
    (v) Require corrective action, when needed;
    (vi) Determine liability, method of restitution of funds, and 
sanctions; and
    (vii) Offer an opportunity for a hearing in accordance with Sec.  
683.800.
    (3) Unless a hearing is requested, a final determination under this 
paragraph (d) is final agency action and is not subject to further 
review.

Subpart E--Pay-for-Performance Contract Strategies


Sec.  683.500  What is a Workforce Innovation and Opportunity Act Pay-
for-Performance contract strategy?

    (a) A WIOA Pay-for-Performance contract strategy is a specific type 
of performance-based contract strategy that has four distinct 
characteristics:
    (1) It is a strategy to use WIOA Pay-for-Performance contracts as 
they are described in Sec.  683.510;

[[Page 56423]]

    (2) It must include the identification of the workforce development 
problem and target populations for which a local area will pursue a 
WIOA Pay-for-Performance contract strategy; the outcomes the local area 
would hope to achieve through a Pay-for-Performance contract relative 
to baseline performance; and the acceptable cost to government 
associated with achieving these outcomes;
    (3) It must include a strategy for independently validating the 
performance outcomes achieved under each contract within the strategy 
prior to payment occurring; and
    (4) It must include a description of how the State or local area 
will reallocate funds to other activities under the contract strategy 
in the event a service provider does not achieve performance benchmarks 
under a WIOA Pay-for-Performance contract.
    (b) Prior to the implementation of a WIOA Pay-for-Performance 
contract strategy, a local area must conduct a feasibility study to 
determine whether the intervention is suitable for a WIOA Pay-for-
Performance contract strategy.
    (c) The WIOA Pay-for-Performance contract strategy must be 
developed in accordance with guidance issued by the Secretary.


Sec.  683.510  What is a Workforce Innovation and Opportunity Act Pay-
for-Performance contract?

    (a) Pay-for-Performance contract. A WIOA Pay-for-Performance 
contract is a type of Performance-Based contract.
    (b) Applicability. WIOA Pay-for-Performance contracts may only be 
entered into when they are a part of a WIOA Pay-for-Performance 
contract strategy described in Sec.  683.500.
    (c) Cost-plus a percentage of cost contracts. Use of cost plus a 
percentage of cost contracts is prohibited. (2 CFR 200.323.)
    (d) Services provided. WIOA Pay-for-Performance contracts must be 
used to provide adult training services described in sec. 134(c)(3) of 
WIOA or youth activities described in sec. 129(c)(2) of WIOA.
    (e) Structure of payment. WIOA Pay-for-Performance contracts must 
specify a fixed amount that will be paid to the service provider based 
on the achievement of specified levels of performance on the 
performance outcomes in sec. 116(b)(2)(A) of WIOA for target 
populations within a defined timetable. Outcomes must be independently 
validated, as described in paragraph (j) of this section and Sec.  
683.500, prior to disbursement of funds.
    (f) Eligible service providers. WIOA Pay-for-Performance contracts 
may be entered into with eligible service providers, which may include 
local or national community-based organizations or intermediaries, 
community colleges, or other training providers that are eligible under 
sec. 122 or 123 of WIOA (as appropriate).
    (g) Target populations. WIOA Pay-for-Performance contracts must 
identify target populations as specified by the Local WDB, which may 
include individuals with barriers to employment.
    (h) Bonus payments. WIOA Pay-for-Performance contracts may include 
bonus payments for the contractor based on achievement of specified 
levels of performance. Bonus payments for achieving outcomes above and 
beyond those specified in the contract must be used by the service 
provider to expand capacity to provide effective training.
    (i) Performance reporting. Performance outcomes achieved under the 
WIOA Pay-for-Performance contract, measured against the levels of 
performance specified in the contract, must be tracked by the local 
area and reported to the State pursuant to WIOA sec. 116(d)(2)(K) and 
Sec.  677.160 of this chapter.
    (j) Validation. WIOA Pay-for-Performance contracts must include 
independent validation of the contractor's achievement of the 
performance benchmarks specified in the contract. This validation must 
be based on high-quality, reliable, and verified data.
    (k) Guidance. The Secretary may issue additional guidance related 
to use of WIOA Pay-for-Performance contracts.


Sec.  683.520  What funds can be used to support Workforce Innovation 
and Opportunity Act Pay-for-Performance contract strategies?

    (a) For WIOA Pay-for-Performance contract strategies providing 
adult and dislocated worker training services, funds allocated under 
secs. 133(b)(2)-(3) of WIOA can be used. For WIOA Pay-for-Performance 
contract strategies providing youth activities, funds allocated under 
WIOA sec. 128(b) can be used.
    (b) No more than 10 percent of the total local adult and dislocated 
worker allocations can be reserved and used on the implementation of 
WIOA Pay-for-Performance contract strategies for adult training 
services described in sec. 134(c)(3) of WIOA. No more than 10 percent 
of the local youth allocation can be reserved and used on the 
implementation of WIOA Pay-for-Performance contract strategies for 
youth training services and other activities described in secs. 
129(c)(2) of WIOA.


Sec.  683.530  How long are funds used for Workforce Innovation and 
Opportunity Act Pay-for-Performance contract strategies available?

    Section 189(g)(2)(D) of WIOA authorizes funds used for WIOA Pay-
for-Performance contract strategies to be available until expended. 
Under WIOA sec. 3(47)(C), funds that are obligated but not expended due 
to a contractor not achieving the levels of performance specified in a 
WIOA Pay-for-Performance contract may be reallocated for further 
activities related to WIOA Pay-for-Performance contract strategies 
only. The Secretary will issue additional guidance related to the funds 
availability and reallocation.


Sec.  683.540  What is the State's role in assisting local areas in 
using Workforce Innovation and Opportunity Act Pay-for-Performance 
contract strategies?

    (a) Using funds from the Governor's Reserve the State may:
    (1) Provide technical assistance to local areas including 
assistance with structuring WIOA Pay-for-Performance contracting 
strategies, performance data collection, meeting performance data entry 
requirements, and identifying levels of performance.
    (2) Conduct evaluations of local WIOA Pay-for-Performance 
contracting strategies, if appropriate.
    (3) Conduct other activities that comply with limitations on the 
use of the Governor's Reserve.
    (b) Using non-Federal funds, Governors may establish incentives for 
Local WDBs to implement WIOA Pay-for-Performance contract strategies as 
described in this subpart.
    (c) In the case of a State in which local areas are implementing 
WIOA Pay-for-Performance contract strategies, the State must:
    (1) Collect and report to the Department data on the performance of 
service providers entering into WIOA Pay-for-Performance contracts, 
measured against the levels of performance benchmarks specified in the 
contracts, pursuant to sec. 116(d)(2)(K) of WIOA and Sec.  677.160 of 
this chapter and in accordance with any additional guidance issued by 
the Secretary.
    (2) Collect and report to the Department State and/or local 
evaluations of the design and performance of the WIOA Pay-for-
Performance contract strategies, and, where possible, the level of 
satisfaction with the strategies among employers and participants 
benefitting from the

[[Page 56424]]

strategies, pursuant to sec. 116(d)(2)(K) of WIOA and Sec.  677.160 of 
this chapter, and in accordance with any guidance issued by the 
Secretary.
    (3) Monitor local areas' use of WIOA Pay-for-Performance contract 
strategies to ensure compliance with Sec.  683.500 and the contract 
specifications in Sec.  683.510, and State procurement policies.
    (4) Monitor local areas' expenditures to ensure that no more than 
10 percent of a local area's adult and dislocated worker allotments and 
no more than 10 percent of a local area's youth allotment is reserved 
and used on WIOA Pay-for-Performance contract strategies.
    (d) The Secretary will issue additional guidance on State roles in 
WIOA Pay-for-Performance contract strategies.

Subpart F--Grievance Procedures, Complaints, and State Appeals 
Processes


Sec.  683.600  What local area, State, and direct recipient grievance 
procedures must be established?

    (a) Each local area, State, outlying area, and direct recipient of 
funds under title I of WIOA, except for Job Corps, must establish and 
maintain a procedure for participants and other interested parties to 
file grievances and complaints alleging violations of the requirements 
of title I of WIOA, according to the requirements of this section. The 
grievance procedure requirements applicable to Job Corps are set forth 
at Sec. Sec.  686.960 and 686.965 of this chapter.
    (b) Each local area, State, and direct recipient must:
    (1) Provide information about the content of the grievance and 
complaint procedures required by this section to participants and other 
interested parties affected by the local workforce development system, 
including one-stop partners and service providers;
    (2) Require that every entity to which it awards title I funds 
provide the information referred to in paragraph (b)(1) of this section 
to participants receiving title I-funded services from such entities; 
and
    (3) Must make reasonable efforts to assure that the information 
referred to in paragraph (b)(1) of this section will be understood by 
affected participants and other individuals, including youth and those 
who are limited-English speaking individuals. Such efforts must comply 
with the language requirements of 29 CFR 37.35 regarding the provision 
of services and information in languages other than English.
    (c) Local area procedures must provide:
    (1) A process for dealing with grievances and complaints from 
participants and other interested parties affected by the local 
workforce development system, including one-stop partners and service 
providers;
    (2) An opportunity for an informal resolution and a hearing to be 
completed within 60 days of the filing of the grievance or complaint;
    (3) A process which allows an individual alleging a labor standards 
violation to submit the grievance to a binding arbitration procedure, 
if a collective bargaining agreement covering the parties to the 
grievance so provides; and
    (4) An opportunity for a local level appeal to a State entity when:
    (i) No decision is reached within 60 days; or
    (ii) Either party is dissatisfied with the local hearing decision.
    (d) State procedures must provide:
    (1) A process for dealing with grievances and complaints from 
participants and other interested parties affected by the statewide 
Workforce Investment programs;
    (2) A process for resolving appeals made under paragraph (c)(4) of 
this section;
    (3) A process for remanding grievances and complaints related to 
the local Workforce Innovation and Opportunity Act programs to the 
local area grievance process; and
    (4) An opportunity for an informal resolution and a hearing to be 
completed within 60 days of the filing of the grievance or complaint; 
and
    (5) An opportunity for appeal to the Secretary under the 
circumstances described in Sec.  683.610(a).
    (e) Procedures of direct recipients must provide:
    (1) A process for dealing with grievance and complaints from 
participants and other interested parties affected by the recipient's 
Workforce Innovation and Opportunity Act programs; and
    (2) An opportunity for an informal resolution and a hearing to be 
completed within 60 days of the filing of the grievance or complaint.
    (f) The remedies that may be imposed under local, State, and direct 
recipient grievance procedures are enumerated at WIOA sec. 181(c)(3).
    (g)(1) The provisions of this section on grievance procedures do 
not apply to discrimination complaints brought under WIOA sec. 188 and/
or 29 CFR part 38. Such complaints must be handled in accordance with 
the procedures set forth in that regulatory part.
    (2) Questions about or complaints alleging a violation of the 
nondiscrimination provisions of WIOA sec. 188 may be directed or mailed 
to the Director, Civil Rights Center, U.S. Department of Labor, Room 
N4123, 200 Constitution Avenue NW., Washington, DC 20210, for 
processing.
    (h) Nothing in this subpart precludes a grievant or complainant 
from pursuing a remedy authorized under another Federal, State, or 
local law.


Sec.  683.610  What processes does the Secretary use to review 
grievances and complaints of Workforce Innovation and Opportunity Act 
title I recipients?

    (a) The Secretary investigates allegations arising through the 
grievance procedures described in Sec.  683.600 when:
    (1) A decision on a grievance or complaint under Sec.  683.600(d) 
has not been reached within 60 days of receipt of the grievance or 
complaint or within 60 days of receipt of the request for appeal of a 
local level grievance and either party appeals to the Secretary; or
    (2) A decision on a grievance or complaint under Sec.  683.600(d) 
has been reached and the party to which such decision is adverse 
appeals to the Secretary.
    (b) The Secretary must make a final decision on an appeal under 
paragraph (a) of this section no later than 120 days after receiving 
the appeal.
    (c) Appeals made under paragraph (a)(2) of this section must be 
filed within 60 days of the receipt of the decision being appealed. 
Appeals made under paragraph (a)(1) of this section must be filed 
within 120 days of the filing of the grievance with the State, or the 
filing of the appeal of a local grievance with the State. All appeals 
must be submitted by certified mail, return receipt requested, to the 
Secretary, U.S. Department of Labor, 200 Constitution Ave. NW., 
Washington, DC 20210, Attention: ASET. A copy of the appeal must be 
simultaneously provided to the appropriate ETA Regional Administrator 
and the opposing party.
    (d) Except for complaints arising under WIOA sec. 184(f) or sec. 
188, grievances or complaints made directly to the Secretary will be 
referred to the appropriate State or local area for resolution in 
accordance with this section, unless the Department notifies the 
parties that the Department of Labor will investigate the grievance 
under the procedures at Sec.  683.430. Discrimination complaints 
brought under WIOA sec. 184(f) or sec. 188 or 29 CFR part 38 will be 
referred to the Director of the Civil Rights Center.
    (e) Complaints and grievances from participants receiving services 
under the

[[Page 56425]]

Wagner-Peyser Act will follow the procedures outlined at part 658 of 
this chapter.


Sec.  683.620  How are complaints and reports of criminal fraud and 
abuse addressed under the Workforce Innovation and Opportunity Act?

    (a) Information and complaints involving criminal fraud, waste, 
abuse or other criminal activity must be reported immediately through 
the Department's Incident Reporting System to the Department of Labor 
Office of Inspector General, Office of Investigations, Room S5514, 200 
Constitution Avenue NW., Washington, DC 20210, or to the corresponding 
Regional Inspector General for Investigations, with a copy 
simultaneously provided to the Employment and Training Administration. 
The Hotline number is 1-800-347-3756. The Web site is http://www.oig.dol.gov/contact.htm.
    (b) Complaints of a non-criminal nature may be handled under the 
procedures set forth in Sec.  683.600 or through the Department's 
Incident Reporting System.


Sec.  683.630  What additional appeal processes or systems must a State 
have for the Workforce Innovation and Opportunity Act program?

    (a) Non-designation of local areas:
    (1) The State must establish, and include in its State Plan, due 
process procedures which provide expeditious appeal to the State WDB 
for a unit of general local government (including a combination of such 
units) or grant recipient that requests, but is not granted, initial or 
subsequent designation of an area as a local area under WIOA sec. 
106(b)(2) or 106(b)(3) and Sec.  679.250 of this chapter.
    (2) These procedures must provide an opportunity for a hearing and 
prescribe appropriate time limits to ensure prompt resolution of the 
appeal.
    (3) If the appeal to the State WDB does not result in designation, 
the appellant may request review by the Secretary under Sec.  683.640.
    (b) Denial or termination of eligibility as a training provider:
    (1) A State must establish procedures which allow providers of 
training services the opportunity to appeal:
    (i) Denial of eligibility by a Local WDB or the designated State 
agency under WIOA sec. 122(b), 122(c), or 122(d).
    (ii) Termination of eligibility or other action by a Local WDB or 
State agency under WIOA sec. 122(f); or
    (iii) Denial of eligibility as a provider of on-the-job training 
(OJT) or customized training by a one-stop operator under WIOA sec. 
122(h).
    (2) Such procedures must provide an opportunity for a hearing and 
prescribe appropriate time limits to ensure prompt resolution of the 
appeal.
    (3) A decision under this State appeal process may not be appealed 
to the Secretary.
    (c) Testing and sanctioning for use of controlled substances.
    (1) A State must establish due process procedures, in accordance 
with WIOA sec. 181(f), which provide expeditious appeal for:
    (i) Participants in programs under title I, subtitle B of WIOA 
subject to testing for use of controlled substances, imposed under a 
State policy established under WIOA sec. 181(f)(1); and
    (ii) Participants in programs under title I, subtitle B of WIOA who 
are sanctioned, in accordance with WIOA sec. 181(f)(2), after testing 
positive for the use of controlled substances, under the policy 
described in paragraph (c)(1)(i) of this section.
    (2) A decision under this State appeal process may not be appealed 
to the Secretary.


Sec.  683.640  What procedures apply to the appeals of non-designation 
of local areas?

    (a) A unit of general local government (including a combination of 
such units) or grant recipient whose appeal of the denial of a request 
for initial or subsequent designation as a local area to the State WDB 
has not resulted in such designation, may appeal the State WDB's denial 
to the Secretary.
    (b) Appeals made under paragraph (a) of this section must be filed 
no later than 30 days after receipt of written notification of the 
denial from the State WDB, and must be submitted by certified mail, 
return receipt requested, to the Secretary, U.S. Department of Labor, 
200 Constitution Ave. NW., Washington, DC 20210, Attention: ASET. A 
copy of the appeal must be simultaneously provided to the State WDB.
    (c) The appellant must establish that it was not accorded 
procedural rights under the appeal process set forth in the State Plan, 
or establish that it meets the requirements for designation in WIOA 
sec. 106(b)(2) or 106(b)(3) and Sec.  679.250 of this chapter.
    (d) If the Secretary determines that the appellant has met its 
burden of establishing that it was not accorded procedural rights under 
the appeal process set forth in the State Plan, or that it meets the 
requirements for designation in WIOA sec. 106(b)(2) or 106(b)(3) and 
Sec.  679.250 of this chapter, the Secretary may require that the area 
be designated as a local area. In making this determination, the 
Secretary may consider any comments submitted by the State WDB in 
response to the appeal made under paragraph (a) of this section.
    (e) The Secretary must issue a written decision to the Governor and 
the appellant.


Sec.  683.650  What procedures apply to the appeals of the Governor's 
imposition of sanctions for substantial violations or performance 
failures by a local area?

    (a) A local area which has been found in substantial violation of 
WIOA title I, and has received notice from the Governor that either all 
or part of the local plan will be revoked or that a reorganization will 
occur, may appeal such sanctions to the Secretary under WIOA sec. 
184(b). The appeal must be filed no later than 30 days after receipt of 
written notification of the revoked plan or imposed reorganization.
    (b) The sanctions described in paragraph (a) of this section do not 
become effective until:
    (1) The time for appeal has expired; or
    (2) The Secretary has issued the decision described in paragraph 
(e) of this section.
    (c) A local area which has failed to meet local performance 
indicators for 3 consecutive program years, and has received the 
Governor's notice of intent to impose a reorganization plan, may appeal 
to the Governor to rescind or revise such plan, in accordance with 
Sec.  677.225 of this chapter.
    (d) Appeals to the Secretary made under paragraph (a) of this 
section must be submitted by certified mail, return receipt requested, 
to the Secretary, U.S. Department of Labor, 200 Constitution Ave. NW., 
Washington, DC 20210, Attention: ASET. A copy of the appeal must be 
simultaneously provided to the Governor.
    (e) The Secretary will notify the Governor and the appellant in 
writing of the Secretary's decision under paragraph (a) of this section 
within 45 days after receipt of the appeal. In making this 
determination, the Secretary may consider any comments submitted by the 
Governor in response to the appeals.

[[Page 56426]]

Subpart G--Sanctions, Corrective Actions, and Waiver of Liability


Sec.  683.700  When can the Secretary impose sanctions and corrective 
actions on recipients and subrecipients of title I Workforce Innovation 
and Opportunity Act funds?

    (a) Applicability. (1) Except for actions under WIOA secs. 116 and 
188(a) or 29 CFR parts 31, 32, 35, and 38 and 49 CFR part 25, the Grant 
Officer must use the procedures outlined in Sec.  683.440 before 
imposing a sanction on, or requiring corrective action by, recipients 
of funds under title I of WIOA.
    (2) To impose a sanction or corrective action for a violation of 
WIOA sec. 188(a) the Department will use the procedures set forth in 29 
CFR part 38.
    (3) To impose a sanction or corrective action for a violation of 
WIOA sec. 116 the Department will use the procedures set forth in part 
677 of this chapter.
    (b) States. When a Grant Officer determines that the Governor has 
not fulfilled its requirements under 2 CFR part 200, an audit, or a 
monitoring compliance review set forth at sec. 184(a)(4) of WIOA and 
Sec.  683.410, or has not taken corrective action to remedy a violation 
as required by WIOA secs. 184(a)(5) and 184(b)(1), the Grant Officer 
must require the Governor to impose the necessary corrective actions 
set forth at WIOA secs. 184(a)(5) and 184(b)(1), or may require 
repayment of funds under WIOA sec. 184(c). If the Secretary determines 
it is necessary to protect the funds or ensure the proper operation of 
a program or activity, the Secretary may immediately suspend or 
terminate financial assistance in accordance with WIOA sec. 184(e).
    (c) Local areas. If the Governor fails to promptly take the actions 
specified in WIOA sec. 184(b)(1) when it determines that a local area 
has failed to comply with the requirements described in Sec.  
683.720(a), and that the local area has not taken the necessary 
corrective action, the Grant Officer may impose such actions directly 
against the local area.
    (d) Direct grant recipients. When the Grant Officer determines that 
a direct grant recipient of subtitle D of title I of WIOA has not taken 
corrective action to remedy a substantial violation as the result of 
noncompliance with 2 CFR part 200, the Grant Officer may impose 
sanctions against the grant recipient.
    (e) Subrecipients. The Grant Officer may impose a sanction directly 
against a subrecipient, as authorized in WIOA sec. 184(d)(3) and 2 CFR 
200.338. In such a case, the Grant Officer will inform the direct grant 
recipient of the action.


Sec.  683.710  Who is responsible for funds provided under title I of 
the Workforce Innovation and Opportunity Act and the Wagner-Peyser Act?

    (a) The recipient of the funds is responsible for all funds under 
its grant(s) awarded under WIOA title I and the Wagner-Peyser Act.
    (b)(1) The local government's chief elected official(s) in a local 
area is liable for any misuse of the WIOA grant funds allocated to the 
local area under WIOA secs. 128 and 133, unless the chief elected 
official(s) reaches an agreement with the Governor to bear such 
liability.
    (2) When a local workforce area or region is composed of more than 
one unit of general local government, the liability of the individual 
jurisdictions must be specified in a written agreement between the 
chief elected officials.
    (3) When there is a change in the chief elected official(s), the 
Local WDB is required to inform the new chief elected official(s), in a 
timely manner, of their responsibilities and liabilities as well as the 
need to review and update any written agreements among the chief 
elected official(s).
    (4) The use of a fiscal agent does not relieve the chief elected 
official, or Governor if designated under paragraph (b)(1) of this 
section, of responsibility for any misuse of grant funds allocated to 
the local area under WIOA secs. 128 and 133.


Sec.  683.720  What actions are required to address the failure of a 
local area to comply with the applicable uniform administrative 
provisions?

    (a) If, as part of the annual on-site monitoring of local areas, 
the Governor determines that a local area is not in compliance with 2 
CFR part 200, including the failure to make the required disclosures in 
accordance with 2 CFR 200.113 or the failure to disclose all violations 
of Federal criminal law involving fraud, bribery or gratuity 
violations, the Governor must:
    (1) Require corrective action to secure prompt compliance; and
    (2) Impose the sanctions provided for at WIOA sec. 184(b) if the 
Governor finds that the local area has failed to take timely corrective 
action.
    (b) An action by the Governor to impose a sanction against a local 
area, in accordance with this section, may be appealed to the Secretary 
in accordance with Sec.  683.650.
    (c)(1) If the Secretary finds that the Governor has failed to 
monitor and certify compliance of local areas with the administrative 
requirements under WIOA sec. 184(a), or that the Governor has failed to 
take the actions promptly required upon a determination under paragraph 
(a) of this section, the Secretary must take the action described in 
Sec.  683.700(b).
    (2) If the Governor fails to take the corrective actions required 
by the Secretary under paragraph (c)(1) of this section, the Secretary 
may immediately suspend or terminate financial assistance under WIOA 
sec. 184(e).


Sec.  683.730  When can the Secretary waive the imposition of 
sanctions?

    (a)(1) A recipient of title I funds may request that the Secretary 
waive the imposition of sanctions authorized under WIOA sec. 184.
    (2) A Grant officer may approve the waiver described in paragraph 
(a)(1) of this section if the grant officer finds that the recipient 
has demonstrated substantial compliance with the requirements of WIOA 
sec. 184(d)(2).
    (b)(1) When the debt for which a waiver request was established in 
a non-Federal resolution proceeding, the resolution report must 
accompany the waiver request.
    (2) When the waiver request is made during the ETA Grant Officer 
resolution process, the request must be made during the informal 
resolution period described in Sec.  683.440(c).
    (c) A waiver of the recipient's liability must be considered by the 
Grant Officer only when:
    (1) The misexpenditure of WIOA funds occurred at a subrecipient's 
level;
    (2) The misexpenditure was not due to willful disregard of the 
requirements of title I of WIOA, gross negligence, failure to observe 
accepted standards of administration, and did not constitute fraud or 
failure to make the required disclosures in accordance with 2 CFR 
200.113 addressing all violations of Federal criminal law involving 
fraud, bribery or gratuity violations (2 CFR part 180 and 31 U.S.C. 
3321)
    (3) If fraud did exist, was perpetrated against the recipient/
subrecipients, and:
    (i) The recipient/subrecipients discovered, investigated, reported, 
and cooperated in any prosecution of the perpetrator of the fraud; and
    (ii) After aggressive debt collection action, it has been 
documented that further attempts at debt collection from the 
perpetrator of the fraud would be inappropriate or futile;
    (4) The recipient has issued a final determination which disallows 
the misexpenditure, the recipient's appeal process has been exhausted, 
and a debt has been established; and
    (5) The recipient provides documentation to demonstrate that it has 
substantially complied with the

[[Page 56427]]

requirements of WIOA sec. 184(d)(2) and this section.
    (d) The recipient will not be released from liability for misspent 
funds under the determination required by WIOA sec. 184(d) unless the 
Grant Officer determines that further collection action, either by the 
recipient or subrecipient(s), would be inappropriate or would prove 
futile.


Sec.  683.740  What is the procedure to handle a recipient of title I 
Workforce Innovation and Opportunity Act funds' request for advance 
approval of contemplated corrective actions?

    (a) The recipient may request advance approval from the Grant 
Officer for contemplated corrective actions, including debt collection 
actions, which the recipient plans to initiate or to forego. The 
recipient's request must include a description and an assessment of all 
actions taken to collect the misspent funds.
    (b) Based on the recipient's request, the Grant Officer may 
determine that the recipient may forego certain debt collection actions 
against a subrecipient when:
    (1) The subrecipient meets the criteria set forth in WIOA sec. 
184(d)(2);
    (2) The misexpenditure of funds:
    (i) Was not made by that subrecipient but by an entity that 
received WIOA funds from that subrecipient;
    (ii) Was not a violation of WIOA sec. 184(d)(1), did not constitute 
fraud, or failure to disclose, in a timely manner, all violations of 
Federal criminal law involving fraud, bribery, or gratuity violations 
potentially affecting the Federal award; or
    (iii) If fraud did exist:
    (A) It was perpetrated against the subrecipient;
    (B) The subrecipient discovered, investigated, reported, and 
cooperated in any prosecution of the perpetrator of the fraud; and
    (C) After aggressive debt collection action, it has been documented 
that further attempts at debt collection from the perpetrator of the 
fraud would be inappropriate or futile;
    (3) A determination which disallows the misexpenditure and 
establishes a debt has been issued at the appropriate level; and,
    (4) Further debt collection action by that subrecipient or the 
recipient would be either inappropriate or futile.


Sec.  683.750  What procedure must be used for administering the 
offset/deduction provisions of the Workforce Innovation and Opportunity 
Act?

    (a)(1) For misexpenditures by direct recipients of title I and 
Wagner-Peyser Act formula funds the Grant Officer may determine that a 
debt, or a portion thereof, may be offset against amounts that are 
allotted to the recipient. Recipients must submit a written request for 
an offset to the Grant Officer. Generally, the Grant Officer will apply 
the offset against amounts that are available at the recipient level 
for administrative costs.
    (2) The Grant Officer may approve an offset request, under 
paragraph (a)(1) of this section, if the misexpenditures were not due 
to willful disregard of the requirements of WIOA and regulations, 
fraud, gross negligence, failure to observe accepted standards of 
administration or a pattern of misexpenditure.
    (b) For subrecipient misexpenditures that were not due to willful 
disregard of the requirements of WIOA and regulations, fraud, gross 
negligence, failure to observe accepted standards of administration or 
a pattern of misexpenditure, if the Grant Officer has required the 
State to repay or offset such amount, the State may deduct an amount 
equal to the misexpenditure from the subrecipient's allocation of the 
program year after the determination was made. Deductions are to be 
made from funds reserved for the administrative costs of the local 
programs involved, as appropriate.
    (c) If offset is granted, the debt will not be fully satisfied 
until the Grant Officer reduces amounts allotted to the recipient by 
the amount of the misexpenditure.
    (d) For recipients of funds under title I and Wagner-Peyser Act 
funds, a direct recipient may not make a deduction under paragraph (b) 
of this section until the State has taken appropriate corrective action 
to ensure full compliance within the local area with regard to 
appropriate expenditure of WIOA funds.

Subpart H--Administrative Adjudication and Judicial Review


Sec.  683.800  What actions of the Department may be appealed to the 
Office of Administrative Law Judges?

    (a) An applicant for financial assistance under title I of WIOA who 
is dissatisfied by a determination not to award Federal financial 
assistance, in whole or in part, to such applicant; or a recipient, 
subrecipient, or a contractor against which the Grant Officer has 
directly imposed a sanction or corrective action under sec. 184 of 
WIOA, including a sanction against a State under part 677 of this 
chapter, may appeal to the U.S. Department of Labor, Office of 
Administrative Law Judges (OALJ) within 21 days of receipt of the final 
determination.
    (b) Failure to request a hearing within 21 days of receipt of the 
final determination constitutes a waiver of the right to a hearing.
    (c) A request for a hearing under this subpart must specifically 
state those issues or findings in the final determination upon which 
review is requested. Issues or findings in the final determination not 
specified for review, or the entire final determination when no hearing 
has been requested within the 21 days, are considered resolved and not 
subject to further review. Only alleged violations of WIOA, its 
regulations, the grant or other agreement under WIOA raised in the 
final determination and the request for hearing are subject to review.
    (d) A request for a hearing must be transmitted by certified mail, 
return receipt requested, to the Chief Administrative Law Judge, U.S. 
Department of Labor, Suite 400, 800 K Street NW., Washington, DC 20001, 
with one copy to the Departmental official who issued the 
determination.
    (e) The procedures in this subpart apply in the case of a 
complainant who has engaged in the alternative dispute resolution 
process set forth in Sec.  683.840, if neither a settlement was reached 
nor a decision issued within the 60 days, except that the request for 
hearing before the OALJ must be filed within 15 days of the conclusion 
of the 60-day period provided in Sec.  683.840. In addition to 
including the final determination upon which review is requested, the 
complainant must include a copy of any Stipulation of Facts and a brief 
summary of proceedings.


Sec.  683.810  What rules of procedure apply to hearings conducted 
under this subpart?

    (a) Rules of practice and procedure. The rules of practice and 
procedure promulgated by the OALJ at subpart A of 29 CFR part 18, 
govern the conduct of hearings under this subpart. However, a request 
for hearing under this subpart is not considered a complaint to which 
the filing of an answer by the Department or a Department agency or 
official is required. Technical rules of evidence will not apply to 
hearings conducted pursuant to this part. However, rules or principles 
designed to assure production of the most credible evidence available 
and to subject testimony to cross-examination will apply.
    (b) Prehearing procedures. In all cases, the Administrative Law 
Judge (ALJ) should encourage the use of

[[Page 56428]]

prehearing procedures to simplify and clarify facts and issues.
    (c) Subpoenas. Subpoenas necessary to secure the attendance of 
witnesses and the production of documents or other items at hearings 
must be obtained from the ALJ and must be issued under the authority 
contained in WIOA sec. 183(c), incorporating 15 U.S.C. 49.
    (d) Timely submission of evidence. The ALJ must not permit the 
introduction at the hearing of any documentation if it has not been 
made available for review by the other parties to the proceeding either 
at the time ordered for any prehearing conference, or, in the absence 
of such an order, at least 3 weeks prior to the hearing date.
    (e) Burden of production. The Grant Officer has the burden of 
production to support her or his decision. This burden is satisfied 
once the Grant Officer prepares and files an administrative file in 
support of the decision which must be made part of the record. 
Thereafter, the party or parties seeking to overturn the Grant 
Officer's decision has the burden of persuasion.


Sec.  683.820  What authority does the Administrative Law Judge have in 
ordering relief as an outcome of an administrative hearing?

    (a) In ordering relief the ALJ has the full authority of the 
Secretary under WIOA, except as described in paragraph (b) of this 
section.
    (b) In grant selection appeals of awards funded under WIOA title I, 
subtitle D:
    (1) If the Administrative Law Judge rules, under Sec.  683.800, 
that the appealing organization should have been selected for an award, 
the matter must be remanded to the Grant Officer. The Grant Officer 
must, within 10 working days, determine whether the organization 
continues to meet the requirements of the applicable solicitation, 
whether the funds which are the subject of the ALJ's decision will be 
awarded to the organization, and the timing of the award. In making 
this determination, the Grant Officer must take into account disruption 
to participants, disruption to grantees, and the operational needs of 
the program.
    (2) If the Administrative Law Judge rules that additional 
application review is required, the Grant Officer must implement that 
review and, if a new organization is selected, follow the steps laid 
out in paragraph (b)(1) of this section to determine whether the grant 
funds will be awarded to that organization.
    (3) In the event that the Grant Officer determines that the funds 
will not be awarded to the appealing organization for the reasons 
discussed in paragraph (b)(1) of this section, an organization which 
does not have an approved Negotiated Indirect Cost Rate Agreement will 
be awarded its reasonable application preparation costs.
    (4) If funds are awarded to the appealing organization, the Grant 
Officer will notify the current grantee within 10 days. In addition, 
the appealing organization is not entitled to the full grant amount but 
only will receive the funds remaining in the grant that have not been 
obligated by the current grantee through its operation of the grant and 
its subsequent closeout.
    (5) In the event that an organization, other than the appealing 
organization, is adversely effected by the Grant Officer's 
determination upon completion of the additional application review 
under paragraph (b)(2) of this section, that organization may appeal 
that decision to the Office of Administrative Law Judges by following 
the procedures set forth in Sec.  683.800.
    (6) Any organization selected and/or funded under WIOA title I, 
subtitle D, is subject to having its award removed if an ALJ decision 
so orders. As part of this process, the Grant Officer will provide 
instructions on transition and closeout to both the newly selected 
grantee and to the grantee whose position is affected or which is being 
removed. All awardees must agree to the provisions of this paragraph 
(b) as a condition of accepting a grant award.


Sec.  683.830  When will the Administrative Law Judge issue a decision?

    (a) The ALJ should render a written decision not later than 90 days 
after the closing of the record.
    (b) The decision of the ALJ constitutes final agency action unless, 
within 20 days of the decision, a party dissatisfied with the ALJ's 
decision has filed a petition for review with the Administrative Review 
Board (ARB) (established under Secretary's Order No. 02-2012), 
specifically identifying the procedure, fact, law or policy to which 
exception is taken. Any exception not specifically raised in the 
petition is deemed to have been waived. A copy of the petition for 
review also must be sent to the opposing party and if an applicant or 
recipient, to the Grant Officer and the Grant Officer's Counsel at the 
time of filing. Unless the ARB, within 30 days of the filing of the 
petition for review, notifies the parties that the case has been 
accepted for review, the decision of the ALJ constitutes final agency 
action. Any case accepted by the ARB must be decided within 180 days of 
acceptance. If not so decided, the decision of the ALJ constitutes 
final agency action.


Sec.  683.840  Is there an alternative dispute resolution process that 
may be used in place of an Office of Administrative Law Judges hearing?

    (a) The parties to a complaint which has been filed according to 
the requirements of Sec.  683.800 may choose to waive their rights to 
an administrative hearing before the OALJ. Instead, they may choose to 
transfer the settlement of their dispute to an individual acceptable to 
all parties who will conduct an informal review of the stipulated facts 
and render a decision in accordance with applicable law. A written 
decision must be issued within 60 days after submission of the matter 
for informal review.
    (b) The waiver of the right to request a hearing before the OALJ 
described in paragraph (a) of this section will automatically be 
revoked if a settlement has not been reached or a written decision has 
not been issued within the 60 days provided in paragraph (a) of this 
section.
    (c) The decision rendered under this informal review process will 
be treated as a final decision of an Administrative Law Judge under 
WIOA sec. 186(b).


Sec.  683.850  Is there judicial review of a final order of the 
Secretary issued under WIOA?

    (a) Any party to a proceeding which resulted in a Secretary's final 
order under WIOA sec. 186 in which the Secretary awards, declines to 
award, or only conditionally awards financial assistance or with 
respect to a corrective action or sanction imposed under WIOA sec. 184 
may obtain a review in the United States Court of Appeals having 
jurisdiction over the applicant or recipient of funds involved, by 
filing a review petition within 30 days of the issuance of the 
Secretary's final order in accordance with WIOA sec. 187.
    (b) The court has jurisdiction to make and enter a decree 
affirming, modifying, or setting aside the order of the Secretary, in 
whole or in part.
    (c) No objection to the Secretary's order may be considered by the 
court unless the objection was specifically urged, in a timely manner, 
before the Secretary. The review is limited to questions of law, and 
the findings of fact of the Secretary are conclusive if supported by 
substantial evidence.
    (d) The judgment of the court is final, subject to certiorari 
review by the United States Supreme Court.

0
17. Add part 684 to read as follows:

[[Page 56429]]

PART 684--INDIAN AND NATIVE AMERICAN PROGRAMS UNDER TITLE I OF THE 
WORKFORCE INNOVATION AND OPPORTUNITY ACT

Subpart A--Purposes and Policies
Sec.
684.100 What is the purpose of the programs established to serve 
Indians and Native Americans under of the Workforce Innovation and 
Opportunity Act?
684.110 How must Indian and Native American programs be 
administered?
684.120 What obligation does the Department have to consult with the 
Indian and Native American program grantee community in developing 
rules, regulations, and standards of accountability for Indian and 
Native American programs?
684.130 What definitions apply to terms used in this part?
Subpart B--Service Delivery Systems Applicable to Section 166 Programs
Sec.
684.200 What are the requirements to apply for a Workforce 
Innovation and Opportunity Act grant?
684.210 What priority for awarding grants is given to eligible 
organizations?
684.220 What is the process for applying for a Workforce Innovation 
and Opportunity Act grant?
684.230 What appeal rights are available to entities that are denied 
a grant award?
684.240 Are there any other ways in which an entity may be awarded a 
Workforce Innovation and Opportunity Act grant?
684.250 Can an Indian and Native American program grantee's grant 
award be terminated?
684.260 Does the Department have to award a grant for every part of 
the country?
684.270 How are Workforce Innovation and Opportunity Act funds 
allocated to Indian and Native American program grantees?
Subpart C--Services to Customers
Sec.
684.300 Who is eligible to receive services under the Indian and 
Native American program?
684.310 What are Indian and Native American program grantee 
allowable activities?
684.320 Are there any restrictions on allowable activities?
684.330 What is the role of Indian and Native American program 
grantees in the one-stop delivery system?
684.340 What policies govern payments to participants, including 
wages, training allowances or stipends, or direct payments for 
supportive services?
684.350 What will the Department do to strengthen the capacity of 
Indian and Native American program grantees to deliver effective 
services?
Subpart D--Supplemental Youth Services
Sec.
684.400 What is the purpose of the supplemental youth services 
program?
684.410 What entities are eligible to receive supplemental youth 
services funding?
684.420 What are the planning requirements for receiving 
supplemental youth services funding?
684.430 What individuals are eligible to receive supplemental youth 
services?
684.440 How is funding for supplemental youth services determined?
684.450 How will supplemental youth services be provided?
684.460 What performance indicators are applicable to the 
supplemental youth services program?
Subpart E--Services to Communities
Sec.
684.500 What services may Indian and Native American program 
grantees provide to or for employers under the Workforce Innovation 
and Opportunity Act?
684.510 What services may Indian and Native American program 
grantees provide to the community at large under the Workforce 
Innovation and Opportunity Act?
684.520 Must Indian and Native American program grantees give 
preference to Indian and Native American entities in the selection 
of contractors or service providers?
684.530 What rules govern the issuance of contracts and/or 
subgrants?
Subpart F--Accountability for Services and Expenditures
Sec.
684.600 To whom is the Indian and Native American program grantee 
accountable for the provision of services and the expenditure of 
Indian and Native American funds?
684.610 How is this accountability documented and fulfilled?
684.620 What performance indicators are in place for the Indian and 
Native American program?
684.630 What are the requirements for preventing fraud and abuse 
under the WIOA?
684.640 What grievance systems must an Indian and Native American 
program grantee provide?
684.650 Can Indian and Native American program grantees exclude 
segments of the eligible population?
Subpart G--Section 166 Planning/Funding Process
Sec.
684.700 What is the process for submitting a 4-year plan?
684.710 What information must be included in the 4-year plans as 
part of the competitive application?
684.720 When must the 4-year plan be submitted?
684.730 How will the Department review and approve such plans?
684.740 Under what circumstances can the Department or the Indian 
and Native American program grantee modify the terms of the 
grantee's plan(s)?
Subpart H--Administrative Requirements
Sec.
684.800 What systems must an Indian and Native American program 
grantee have in place to administer an Indian and Native American 
program?
684.810 What types of costs are allowable expenditures under the 
Indian and Native American program?
684.820 What rules apply to administrative costs under the Indian 
and Native American program?
684.830 Does the Workforce Innovation and Opportunity Act 
administrative cost limit for States and local areas apply to WIOA 
grants?
684.840 How must Indian and Native American program grantees 
classify costs?
684.850 What cost principles apply to Indian and Native American 
funds?
684.860 What audit requirements apply to Indian and Native American 
grants?
684.870 What is ``program income'' and how is it regulated in the 
Indian and Native American program?
Subpart I--Miscellaneous Program Provisions
Sec.
684.900 Does the Workforce Innovation and Opportunity Act provide 
regulatory and/or statutory waiver authority?
684.910 What information is required in a waiver request?
684.920 What provisions of law or regulations may not be waived?
684.930 May Indian and Native American program grantees combine or 
consolidate their employment and training funds?
684.940 What is the role of the Native American Employment and 
Training Council?
684.950 Does the Workforce Innovation and Opportunity Act provide 
any additional assistance to unique populations in Alaska and 
Hawaii?

    Authority: Secs. 134, 166, 189, 503, Public Law 113-128, 128 
Stat. 1425 (Jul. 22, 2014).

Subpart A--Purposes and Policies


Sec.  684.100  What is the purpose of the programs established to serve 
Indians and Native Americans under the Workforce Innovation and 
Opportunity Act?

    (a) The purpose of WIOA Indian and Native American (INA) programs 
in sec. 166 is to support employment and training activities for INAs 
in order to:
    (1) Develop more fully the academic, occupational, and literacy 
skills of such individuals;
    (2) Make such individuals more competitive in the workforce and to 
equip them with entrepreneurial skills necessary for successful self-
employment; and
    (3) Promote the economic and social development of INA communities 
in accordance with the goals and values of such communities.
    (b) The principal means of accomplishing these purposes is to 
enable tribes and Native American organizations to provide employment

[[Page 56430]]

and training services to INAs and their communities. Services should be 
provided in a culturally appropriate manner, consistent with the 
principles of the Indian Self-Determination and Education Assistance 
Act (25 U.S.C. 450 et seq.).


Sec.  684.110  How must Indian and Native American programs be 
administered?

    (a) INA programs will be administered to maximize the Federal 
commitment to support the growth and development of INAs and their 
communities as determined by representatives of such communities.
    (b) In administering these programs, the Department will follow the 
Congressional declaration of policy set forth in the Indian Self-
Determination and Education Assistance Act, at 25 U.S.C. 450a, as well 
as the Department of Labor's ``American Indian and Alaska Native 
Policies.''
    (c) The regulations in this part are not intended to abrogate the 
trust responsibilities of the Federal government to Federally 
recognized tribes in any way.
    (d) The Department will administer INA programs through a single 
organizational unit and consistent with the requirements in sec. 166(i) 
of WIOA. The Division of Indian and Native American Programs (DINAP) 
within the Employment and Training Administration (ETA) is designated 
as this single organizational unit as required by sec. 166(i)(1) of 
WIOA.
    (e) The Department will establish and maintain administrative 
procedures for the selection, administration, monitoring, and 
evaluation of INA employment and training programs authorized under 
this Act.


Sec.  684.120  What obligation does the Department have to consult with 
the Indian and Native American grantee community in developing rules, 
regulations, and standards of accountability for Indian and Native 
American programs?

    The Department's primary consultation vehicle for INA programs is 
the Native American Employment and Training Council. In addition, the 
Department will consult with the INA program grantee community in 
developing policies for the INA programs, actively seeking and 
considering the views of INA program grantees prior to establishing INA 
program policies and regulations. The Department will follow the 
Department of Labor's tribal consultation policy and Executive Order 
13175 of November 6, 2000.


Sec.  684.130  What definitions apply to terms used in this part?

    In addition to the definitions found in secs. 3 and 166 of WIOA, 
and Sec.  675.300 of this chapter, the following definitions apply:
    Alaska Native-Controlled Organization means an organization whose 
governing board is comprised of 51 percent or more of individuals who 
are Alaska Native as defined in secs. 3(b) and 3(r) of the Alaska 
Native Claims Settlement Act (43 U.S.C. 1602(b), (r)).
    Carry-in means the total amount of funds unobligated by a grantee 
at the end of a program year. If the amount of funds unobligated by a 
grantee at the end of a program year is more than 20 percent of the 
grantee's ``total funds available'' for that program year, such excess 
amount is considered ``excess carry-in.''
    DINAP means the Division of Indian and Native American Programs 
within the Employment and Training Administration of the U.S. 
Department of Labor.
    Governing body means a body of representatives who are duly 
elected, appointed by duly elected officials, or selected according to 
traditional tribal means. A governing body must have the authority to 
provide services to and to enter into grants on behalf of the 
organization that selected or designated it.
    Grant Officer means a U.S. Department of Labor official authorized 
to obligate Federal funds.
    High-poverty area means a Census tract, a set of contiguous Census 
tracts, an American Indian Reservation, Oklahoma Tribal Statistical 
Area, Alaska Native Village Statistical Area, or Alaska Native Regional 
Corporation Area, Native Hawaiian Homeland Area or county where the 
poverty rate for the INA population is at least 25 percent of the total 
INA population of such area using the most recent ACS 5-Year data. 
Alternatively, high-poverty also can mean, a Census tract, a set of 
contiguous Census tracts, an American Indian Reservation, Oklahoma 
Tribal Statistical Area, Alaska Native Village Statistical Area, or 
Alaska Native Regional Corporation Area, Native Hawaiian Homeland Area 
or county where the poverty rate for the total population is at least 
25 percent of such area using the most recent ACS 5-Year data. INA 
program grantees may use either definition when determining if a Census 
tract is a high-poverty area.
    INA program grantee means an entity which is formally selected 
under subpart B of this part to operate an INA program and which has a 
grant agreement.
    Incumbent grantee means an entity that is currently receiving a 
grant under sec. 166 of WIOA.
    Indian and Native American or INA means, for the purpose of this 
part, an individual that is an American Indian, Native American, Native 
Hawaiian, or Alaska Native.
    Indian-Controlled Organization means an organization whose 
governing board is comprised of 51 percent or more individuals who are 
members of one or more Federally recognized tribes. Incumbent grantees 
who were receiving INA funding as of October 18, 2016 and met the 51 
percent threshold with the inclusion of members of ``State recognized 
tribes'' continue to be eligible for WIOA sec. 166 funds as an Indian-
Controlled Organization, as long as they have been continuously funded 
under WIOA as recipients of INA program grantees since October 18, 
2016. Tribal Colleges and Universities meet the definition of Indian-
Controlled Organization for the purposes of this regulation.
    Native Hawaiian-Controlled Organization means an organization whose 
governing board is comprised of 51 percent or more individuals who are 
Native Hawaiian as defined in sec. 7207 of the Native Hawaiian 
Education Act (20 U.S.C. 7517).
    Total funds available means all funds that a grantee had 
``available'' at the beginning of a program year.
    Underemployed means an individual who is working part-time but 
desires full-time employment, or who is working in employment not 
commensurate with the individual's demonstrated level of educational 
and/or skill achievement.

Subpart B--Service Delivery Systems Applicable to Section 166 
Programs


Sec.  684.200  What are the requirements to apply for a Workforce 
Innovation and Opportunity Act grant?

    (a) To be eligible to apply for a WIOA, sec. 166 grant, an entity 
must have legal status as a government or as an agency of a government, 
private non-profit corporation, or a consortium whose members all 
qualify as one of these entities.
    (b) A new entity (which is not an incumbent grantee) must have a 
population within the designated geographic service area which would 
receive at least $100,000 under the funding formula found at Sec.  
684.270(b), including any amounts received for supplemental youth 
services under the funding formula at Sec.  684.440(a).
    (c) Incumbent grantees which do not meet this dollar threshold and 
were

[[Page 56431]]

receiving INA funding of less than $100,000 as of October 18, 2016 will 
be grandfathered into the program and are eligible to be awarded less 
than $100,000 so long as the grantees have continuously received less 
than $100,000 since October 18, 2016.
    (d) The Department will make an exception to the $100,000 minimum 
for applicants that apply for WIOA funding through Public Law 102-477, 
the Indian, Employment, Training, and Related Services demonstration 
program, if all resources to be consolidated under the Public Law 102-
477 plan total at least $100,000, with at least $20,000 derived from 
sec. 166 funds. However, incumbent Public Law 102-477 grantees that 
were receiving INA funding of less than $20,000 as of October 18, 2016 
will be grandfathered into the program and are eligible to be awarded 
less than $20,000 so long as the grantees have continuously received 
less than $20,000 since October 18, 2016.
    (e) To be eligible to apply as a consortium, each member of the 
consortium must meet the requirements of paragraph (a) of this section 
and must:
    (1) Be in close proximity to one another, but may operate in more 
than one State;
    (2) Have an administrative unit legally authorized to run the 
program and to commit the other members to contracts, grants, and other 
legally-binding agreements; and
    (3) Be jointly and individually responsible for the actions and 
obligations of the consortium, including debts.
    (f) Entities eligible under paragraph (a)(1) of this section are:
    (1) Federally recognized Indian tribes;
    (2) Tribal organizations, as defined in 25 U.S.C. 450b;
    (3) Alaska Native-controlled organizations;
    (4) Native Hawaiian-controlled organizations;
    (5) Indian-controlled organizations serving INAs; and
    (6) A consortium of eligible entities which meets the legal 
requirements for a consortium described in paragraph (b) of this 
section.
    (g) State-recognized tribal organizations that meet the definition 
of an Indian-controlled organization are eligible to apply for WIOA 
sec. 166 grant funds. State-recognized tribes that do not meet this 
definition but were grantees under WIA as of July 1, 2015 will be 
grandfathered into WIOA as Indian-controlled organizations provided 
they meet the definition of Indian-controlled organization in Sec.  
684.130.


Sec.  684.210  What priority for awarding grants is given to eligible 
organizations?

    (a) Federally recognized Indian tribes, Alaska Native entities, or 
a consortium of such entities will have priority to receive grants 
under this part for those geographic service areas in which they have 
legal jurisdiction, such as an Indian reservation, Oklahoma Tribal 
Service Area (OTSA), or Alaska Native Village Service Area (ANVSA).
    (b) If the Department decides not to make an award to an Indian 
tribe or Alaska Native entity that has legal jurisdiction over a 
service area, it will consult with such tribe or Alaska Native entity 
that has jurisdiction before selecting another entity to provide 
services for such areas.
    (c) The priority described in paragraphs (a) and (b) of this 
section does not apply to service areas outside the legal jurisdiction 
of an Indian tribe or Alaska Native entity.


Sec.  684.220  What is the process for applying for a Workforce 
Innovation and Opportunity Act grant?

    (a) Entities seeking a WIOA sec. 166 grant, including incumbent 
grantees, will be provided an opportunity to apply for a WIOA sec. 166 
grant every 4 years through a competitive grant process.
    (b) As part of the competitive application process, applicants will 
be required to submit a 4-year plan as described at Sec.  684.710. The 
requirement to submit a 4-year plan does not apply to entities that 
have been granted approval to transfer their WIOA funds to the 
Department of the Interior pursuant to Public Law 102-477.


Sec.  684.230  What appeal rights are available to entities that are 
denied a grant award?

    Any entity that is denied a grant award for which it applied in 
whole or in part may appeal the denial to the Office of the 
Administrative Law Judges using the procedures at Sec.  683.800 of this 
chapter or the alternative dispute resolution procedures at Sec.  
683.840 of this chapter. The Grant Officer will provide an entity whose 
request for a grant award was denied, in whole or in part, with a copy 
of the appeal procedures.


Sec.  684.240  Are there any other ways in which an entity may be 
awarded a Workforce Innovation and Opportunity Act grant?

    Yes. For areas that would otherwise go unserved, the Grant Officer 
may designate an entity, which has not submitted a competitive 
application, but which meets the qualifications for a grant award, to 
serve the particular geographic area. Under such circumstances, DINAP 
will seek the views of INA leaders in the community that would 
otherwise go unserved before making the decision to designate the 
entity that would serve the community. DINAP will inform the Grant 
Officer of the INA leaders' views. The Grant Officer will accommodate 
views of INA leaders in such areas to the extent possible.


Sec.  684.250  Can an Indian and Native American grantee's grant award 
be terminated?

    (a) Yes, the Grant Officer can terminate a grantee's award for 
cause, or the Secretary or another Department of Labor official 
confirmed by the Senate can terminate a grantee's award in emergency 
circumstances where termination is necessary to protect the integrity 
of Federal funds or ensure the proper operation of the program under 
sec. 184(e) of WIOA.
    (b) The Grant Officer may terminate a grantee's award for cause 
only if there is a substantial or persistent violation of the 
requirements in WIOA or the WIOA regulations. The grantee must be 
provided with written notice 60 days before termination, stating the 
specific reasons why termination is proposed. The appeal procedures at 
Sec.  683.800 of this chapter apply.


Sec.  684.260  Does the Department have to award a grant for every part 
of the country?

    No, if there are no entities meeting the requirements for a grant 
award in a particular area, or willing to serve that area, the 
Department will not award funds for that service area. The funds that 
otherwise would have been allocated to that area under Sec.  684.270 
will be distributed to other INA program grantees, or used for other 
program purposes such as technical assistance and training (TAT). 
Unawarded funds used for TAT are in addition to, and not subject to the 
limitations on, amounts reserved under Sec.  684.270(e). Areas which 
are unserved by the INA program may be restored during a subsequent 
grant award cycle, when and if a current grantee or other eligible 
entity applies for a grant award to serve that area.


Sec.  684.270  How are Workforce Innovation and Opportunity Act funds 
allocated to Indian and Native American program grantees?

    (a) Except for reserved funds described in paragraph (e) of this 
section and funds used for other program purposes under Sec.  684.260, 
all funds available for WIOA sec. 166(d)(2)(A)(i) comprehensive

[[Page 56432]]

workforce investment services program at the beginning of a program 
year will be allocated to INA program grantees for the geographic 
service area(s) awarded to them through the grant competition.
    (b) Each INA program grantee will receive the sum of the funds 
calculated using the following formula:
    (1) One-quarter of the funds available will be allocated on the 
basis of the number of unemployed American Indian, Alaska Native, and 
Native Hawaiian individuals in the grantee's geographic service area(s) 
compared to all such unemployed persons in the United States.
    (2) Three-quarters of the funds available will be allocated on the 
basis of the number of American Indian, Alaska Native, and Native 
Hawaiian individuals in poverty in the grantee's geographic service 
area(s) as compared to all such persons in poverty in the United 
States.
    (3) The data and definitions used to implement these formulas are 
provided by the U.S. Bureau of the Census.
    (c) In years immediately following the use of new data in the 
formula described in paragraph (b) of this section, based upon criteria 
to be described in the Funding Opportunity Announcement (FOA), the 
Department may utilize a hold harmless factor to reduce the disruption 
in grantee services which would otherwise result from changes in 
funding levels. This factor will be determined in consultation with the 
grantee community and the Native American Employment and Training 
Council.
    (d) The Department may reallocate funds from one INA program 
grantee to another if a grantee is unable to serve its area for any 
reason, such as audit or debt problems, criminal activity, internal 
(political) strife, failure to adhere to or meet grant terms and 
conditions, or lack of ability or interest. If a grantee has excess 
carry-in for a program year, the Department also may readjust the 
awards granted under the funding formula so that an amount that equals 
the previous program year's carry-in will be allocated to another INA 
program grantee(s).
    (e) The Department may reserve up to one percent of the funds 
appropriated under WIOA sec. 166(d)(2)(A)(i) for any program year for 
TAT purposes. It will consult with the Native American Employment and 
Training Council in planning how the TAT funds will be used, 
designating activities to meet the unique needs of the INA communities 
served by the INA program. INA program grantees also will have access 
to resources available to other Department programs to the extent 
permitted under other law.

Subpart C--Services to Customers


Sec.  684.300  Who is eligible to receive services under the Indian and 
Native American program?

    (a) A person is eligible to receive services under the INA program 
if that person is:
    (1) An Indian, as determined by a policy of the INA program 
grantee. The grantee's definition must at least include anyone who is a 
member of a Federally-recognized tribe; or
    (2) An Alaska Native, as defined in WIOA sec. 166(b)(1); or
    (3) A Native Hawaiian, as defined in WIOA sec. 166(b)(3).
    (b) The person also must be any one of the following:
    (1) Unemployed; or
    (2) Underemployed, as defined in Sec.  684.130; or
    (3) A low-income individual, as defined in sec. 3(36) of WIOA; or
    (4) The recipient of a bona fide lay-off notice which has taken 
effect in the last 6 months or will take effect in the following 6-
month period, who is unlikely to return to a previous industry or 
occupation, and who is in need of retraining for either employment with 
another employer or for job retention with the current employer; or
    (5) An individual who is employed, but is determined by the grantee 
to be in need of employment and training services to obtain or retain 
employment that allows for self-sufficiency.
    (c) If applicable, male applicants also must register or be 
registered for the Selective Service.


Sec.  684.310  What are Indian and Native American program grantee 
allowable activities?

    (a) Generally, INA program grantees must make efforts to provide 
employment and training opportunities to eligible individuals (as 
described in Sec.  684.300) who can benefit from, and who are most in 
need of, such opportunities. In addition, INA program grantees must 
make efforts to develop programs that contribute to occupational 
development, upward mobility, development of new careers, and 
opportunities for nontraditional employment.
    (b) Allowable activities for INA program grantees are any services 
consistent with the purposes of this part that are necessary to meet 
the needs of INAs preparing to enter, reenter, or retain unsubsidized 
employment leading to self-sufficiency.
    (c) Examples of career services, which may be delivered in 
partnership with the one-stop delivery system, are described in sec. 
134(c)(2) of WIOA and Sec.  678.430 of this chapter.
    (d) Follow-up services, including counseling and supportive 
services for up to 12 months after the date of exit to assist 
participants in obtaining and retaining employment.
    (e) Training services include the activities described in WIOA sec. 
134(c)(3)(D).
    (f) Allowable activities specifically designed for youth, as listed 
in sec. 129 of WIOA, include:
    (1) Tutoring, study skills training, instruction, and evidence-
based dropout prevention and recovery strategies that lead to 
completion of the requirements for a secondary school diploma or its 
recognized equivalent (including a recognized certificate of attendance 
or similar document for individuals with disabilities) or for a 
recognized postsecondary credential;
    (2) Alternative secondary school services, or dropout recovery 
services, as appropriate;
    (3) Paid and unpaid work experiences that have as a component 
academic and occupational education, which may include:
    (i) Summer employment opportunities and other employment 
opportunities available throughout the school year;
    (ii) Pre-apprenticeship programs;
    (iii) Internships and job shadowing; and
    (iv) On-the-job training opportunities;
    (4) Occupational skill training, which must include priority 
consideration for training programs that lead to recognized 
postsecondary credentials that are aligned with in-demand industry 
sectors or occupations in the local area involved;
    (5) Education offered concurrently with and in the same context as 
workforce preparation activities and training for a specific occupation 
or occupational cluster;
    (6) Leadership development opportunities, which may include 
community service and peer-centered activities encouraging 
responsibility and other positive social and civic behaviors, as 
appropriate;
    (7) Supportive services as defined in WIOA sec. 3(59);
    (8) Adult mentoring for the period of participation and a 
subsequent period, for a total of not less than 12 months;
    (9) Follow-up services for not less than 12 months after the 
completion of participation, as appropriate;
    (10) Comprehensive guidance and counseling, which may include drug 
and alcohol abuse counseling and referral, as appropriate;

[[Page 56433]]

    (11) Financial literacy education;
    (12) Entrepreneurial skills training;
    (13) Services that provide labor market and employment information 
about in-demand industry sectors or occupations available in the local 
area, such as career awareness, career counseling, and career 
exploration services; and
    (14) Activities that help youth prepare for and transition to 
postsecondary education and training.
    (g) In addition, allowable activities include job development and 
employment outreach, including:
    (1) Support of the Tribal Employment Rights Office (TERO) program;
    (2) Negotiation with employers to encourage them to train and hire 
participants;
    (3) Establishment of linkages with other service providers to aid 
program participants;
    (4) Establishment of management training programs to support tribal 
administration or enterprises; and
    (5) Establishment of linkages with remedial education, such as 
adult basic education, basic literacy training, and training programs 
for limited English proficient (LEP) individuals, as necessary.
    (h) Participants may be enrolled in more than one activity at a 
time and may be sequentially enrolled in multiple activities.
    (i) Services may be provided to a participant in any sequence based 
on the particular needs of the participant.


Sec.  684.320  Are there any restrictions on allowable activities?

    (a) Training services must be directly linked to an in-demand 
industry sector or occupation in the service area, or in another area 
to which a participant receiving such services is willing to relocate.
    (b) INA program grantees must provide on-the-job training (OJT) 
services consistent with the definition provided in WIOA sec. 3(44) and 
other limitations in WIOA. Individuals in OJT must:
    (1) Be compensated at the same rates, including periodic increases, 
as trainees or employees who are similarly situated in similar 
occupations by the same employer and who have similar training, 
experience, and skills; and
    (2) Be provided benefits and working conditions at the same level 
and to the same extent as other trainees or employees working a similar 
length of time and doing the same type of work.
    (c) In addition, OJT contracts under this title must not be entered 
into with employers who have:
    (1) Received payments under previous contracts under WIOA or the 
Workforce Investment Act of 1998 and have exhibited a pattern of 
failing to provide OJT participants with continued, long-term 
employment as regular employees with wages and employment benefits 
(including health benefits) and working conditions at the same level 
and to the same extent as other employees working a similar length of 
time and doing the same type of work; or
    (2) Have exhibited a pattern of violating paragraphs (b)(1) and/or 
(2) of this section.
    (d) INA program grantees are prohibited from using funds to 
encourage the relocation of a business, as described in WIOA sec. 
181(d) and Sec.  683.260 of this chapter.
    (e) INA program grantees must only use WIOA funds for activities 
that are in addition to those that would otherwise be available to the 
INA population in the area in the absence of such funds.
    (f) INA program grantees must not spend funds on activities that 
displace currently employed individuals, impair existing contracts for 
services, or in any way affect union organizing.
    (g) Under Sec.  683.255 of this chapter, sectarian activities 
involving WIOA financial assistance or participants are limited in 
accordance with the provisions of sec. 188(a)(3) of WIOA.


Sec.  684.330  What is the role of Indian and Native American program 
grantees in the one-stop delivery system?

    (a) In those local areas where an INA program grantee conducts 
field operations or provides substantial services, the INA program 
grantee is a required partner in the local one-stop delivery system and 
is subject to the provisions relating to such partners described in 
part 678 of this chapter. Consistent with those provisions, a 
Memorandum of Understanding (MOU) between the INA program grantee and 
the Local Workforce Development Board (WDB) over the operation of the 
one-stop center(s) in the Local WDB's workforce development area also 
must be executed. Where the Local WDB is an alternative entity under 
Sec.  679.150 of this chapter, the INA program grantee must negotiate 
with the alternative entity on the terms of its MOU and the scope of 
its on-going role in the local workforce development system, as 
specified in Sec. Sec.  678.420 and 678.500 through 678.510 of this 
chapter. In local areas with a large concentration of potentially 
eligible INA participants, which are in an INA program grantee's 
service area but in which the grantee does not conduct operations or 
provide substantial services, the INA program grantee should encourage 
such individuals to participate in the one-stop delivery system in that 
area in order to receive WIOA services.
    (b) At a minimum, the MOU must contain the provisions listed in 
WIOA sec. 121(c) and:
    (1) The exchange of information on the services available and 
accessible through the one-stop delivery system and the INA program;
    (2) As necessary to provide referrals and case management services, 
the exchange of information on INA participants in the one-stop 
delivery system and the INA program; and
    (3) Arrangements for the funding of services provided by the one-
stop(s), consistent with the requirements that no expenditures may be 
made with INA program funds for individuals who are not eligible or for 
services not authorized under this part.
    (c) Where the INA program grantee has failed to enter into a MOU 
with the Local WDB, the INA program grantee must describe in its 4-year 
plan the good-faith efforts made in order to negotiate an MOU with the 
Local WDB.
    (d) Pursuant to WIOA sec. 121(h)(2)(D)(iv), INA program grantees 
will not be subject to the funding of the one-stop infrastructure 
unless otherwise agreed upon in the MOU under subpart C of part 678 of 
this chapter.


Sec.  684.340  What policies govern payments to participants, including 
wages, training allowances or stipends, or direct payments for 
supportive services?

    (a) INA program grantees may pay training allowances or stipends to 
participants for their successful participation in and completion of 
education or training services (except such allowance may not be 
provided to participants in OJT). Allowances or stipends may not exceed 
the Federal or State minimum wage, whichever is higher.
    (b) INA program grantees may not pay a participant in a training 
activity when the person fails to participate without good cause.
    (c) If a participant in a WIOA-funded activity, including 
participants in OJT, is involved in an employer-employee relationship, 
that participant must be paid wages and fringe benefits at the same 
rates as trainees or employees who have similar training, experience 
and skills and which are not less than the higher of the applicable 
Federal, State, or local minimum wage.
    (d) In accordance with the policy described in the 4-year plan 
submitted as part of the competitive process, INA program grantees may 
pay incentive bonuses to participants who meet or exceed individual 
employability or training goals established in writing in the 
individual employment plan.

[[Page 56434]]

    (e) INA program grantees must comply with other restrictions listed 
in WIOA secs. 181 through 195, which apply to all programs funded under 
title I of WIOA, including the provisions on labor standards in WIOA 
sec. 181(b).


Sec.  684.350  What will the Department do to strengthen the capacity 
of Indian and Native American program grantees to deliver effective 
services?

    The Department will provide appropriate TAT, as necessary, to INA 
program grantees. This TAT will assist INA program grantees to improve 
program performance and improve the quality of services to the target 
population(s), as resources permit.

Subpart D--Supplemental Youth Services


Sec.  684.400  What is the purpose of the supplemental youth services 
program?

    The purpose of this program is to provide supplemental employment 
and training and related services to low-income INA youth on or near 
Indian reservations and in Oklahoma, Alaska, or Hawaii.


Sec.  684.410  What entities are eligible to receive supplemental youth 
services funding?

    Entities eligible to receive supplemental youth services funding 
are limited to: Those tribal, Alaska Native, Native Hawaiian and 
Oklahoma tribal grantees funded under WIOA sec. 166(d)(2)(A)(i) or 
other grantees serving those areas, and entities serving the 
populations specified in Sec.  684.400 that received funding under sec. 
166(d)(2)(A)(ii) of the Workforce Investment Act.


Sec.  684.420  What are the planning requirements for receiving 
supplemental youth services funding?

    Applicants eligible to apply for supplemental youth funding must 
describe the supplemental youth services they intend to provide in the 
4-year plan that they will submit as part of the competitive 
application process. The information on youth services will be 
incorporated into the overall 4-year plan, which is more fully 
described in Sec. Sec.  684.700 and 684.710, and is required for both 
adult and youth funds. As indicated in Sec.  684.710(c), additional 
planning information required for applicants requesting supplemental 
youth funding will be provided in the FOA. The Department envisions 
that the strategy for youth funds will not be extensive; however, 
grantees will be required to provide the number of youth it plans to 
serve and projected performance outcomes. The Department also supports 
youth activities that preserve INA culture and will support strategies 
that promote INA values.


Sec.  684.430  What individuals are eligible to receive supplemental 
youth services?

    (a) Participants in supplemental youth services activities must be:
    (1) American Indian, Alaska Native or Native Hawaiian as determined 
by the INA program grantee according to Sec.  684.300(a);
    (2) Between the age of 14 and 24; and
    (3) A low-income individual as defined at WIOA sec. 3(36) except up 
to five percent of the participants during a program year in an INA 
youth program may not be low-income individuals provided they meet the 
eligibility requirements of paragraphs (a)(1) and (2) of this section.
    (b) For the purpose of this section, the term ``low-income,'' used 
with respect to an individual, also includes a youth living in a high-
poverty area.


Sec.  684.440  How is funding for supplemental youth services 
determined?

    (a) Supplemental youth funding will be allocated to eligible INA 
program grantees on the basis of the relative number of INA youth 
between the ages of 14 and 24 living in poverty in the grantee's 
geographic service area compared to the number of INA youth between the 
ages of 14 and 24 living in poverty in all eligible geographic service 
areas. The Department reserves the right to redefine the supplemental 
youth funding stream in future program years, in consultation with the 
Native American Employment and Training Council, as program experience 
warrants and as appropriate data become available.
    (b) The data used to implement this formula are provided by the 
U.S. Bureau of the Census.
    (c) The hold harmless factor described in Sec.  684.270(c) also 
applies to supplemental youth services funding. This factor also will 
be determined in consultation with the grantee community and the Native 
American Employment and Training Council.
    (d) The reallocation provisions of Sec.  684.270(d) also apply to 
supplemental youth services funding.
    (e) Any supplemental youth services funds not allotted to a grantee 
or refused by a grantee may be used for the purposes outlined in Sec.  
684.270(e), as described in Sec.  684.260. Any such funds are in 
addition to, and not subject to the limitations on, amounts reserved 
under Sec.  684.270(e).


Sec.  684.450  How will supplemental youth services be provided?

    (a) INA program grantees may offer supplemental services to youth 
throughout the school year, during the summer vacation, and/or during 
other breaks during the school year at their discretion.
    (b) The Department encourages INA program grantees to work with 
local educational agencies to provide academic credit for youth 
activities whenever possible.
    (c) INA program grantees may provide participating youth with the 
activities referenced in Sec.  684.310(e).


Sec.  684.460  What performance indicators are applicable to the 
supplemental youth services program?

    (a) Pursuant to WIOA secs. 166(e)(5) and 166(h), the performance 
indicators at WIOA sec. 116(b)(2)(A)(ii) apply to the INA youth 
program, which must include:
    (1) The percentage of program participants who are in education or 
training activities, or in unsubsidized employment, during the second 
quarter after exit from the program;
    (2) The percentage of program participants who are in education or 
training activities, or in unsubsidized employment, during the fourth 
quarter after exit from the program;
    (3) The median earnings of program participants who are in 
unsubsidized employment during the second quarter after exit from the 
program;
    (4) The percentage of program participants who obtain a recognized 
postsecondary credential, or a secondary school diploma or its 
recognized equivalent (subject to WIOA sec. 116(b)(2)(A)(iii)) during 
participation in or within 1 year after exit from the program;
    (5) The percentage of program participants who, during a program 
year, are in an education or training program that leads to a 
recognized postsecondary credential or employment and who are achieving 
measurable skill gains toward such a credential or employment; and
    (6) The indicators of effectiveness in serving employers 
established under WIOA sec. 116(b)(2)(A)(iv).
    (b) In addition to the performance indicators in paragraphs (a)(1) 
through (6) of this section, the Secretary, in consultation with the 
Native American Employment and Training Council, must develop a set of 
performance indicators and standards that is in addition to the primary 
indicators of performance that are applicable to the INA program under 
this section.

[[Page 56435]]

Subpart E--Services to Communities


Sec.  684.500  What services may Indian and Native American grantees 
provide to or for employers under the Workforce Innovation and 
Opportunity Act?

    (a) INA program grantees may provide a variety of services to 
employers in their areas. These services may include:
    (1) Workforce planning which involves the recruitment of current or 
potential program participants, including job restructuring services;
    (2) Recruitment and assessment of potential employees, with 
priority given to potential employees who are or who might become 
eligible for program services;
    (3) Pre-employment training;
    (4) Customized training;
    (5) OJT;
    (6) Post-employment services, including training and support 
services to encourage job retention and upgrading;
    (7) Work experience for public or private sector work sites; and
    (8) Other innovative forms of worksite training.
    (b) In addition to the services listed in paragraph (a) of this 
section, other grantee-determined services (as described in the 
grantee's 4-year plan), which are intended to assist eligible 
participants to obtain or retain employment also may be provided to or 
for employers.


Sec.  684.510  What services may Indian and Native American grantees 
provide to the community at large under the Workforce Innovation and 
Opportunity Act?

    (a) INA program grantees may provide services to the INA 
communities in their service areas by engaging in program development 
and service delivery activities which:
    (1) Strengthen the capacity of Indian-controlled institutions to 
provide education and work-based learning services to INA youth and 
adults, whether directly or through other INA institutions such as 
tribal colleges;
    (2) Increase the community's capacity to deliver supportive 
services, such as child care, transportation, housing, health, and 
similar services needed by clients to obtain and retain employment;
    (3) Use program participants engaged in education, training, work 
experience, or similar activities to further the economic and social 
development of INA communities in accordance with the goals and values 
of those communities; and
    (4) Engage in other community-building activities described in the 
INA program grantee's 4-year plan.
    (b) INA program grantees should develop their 4-year plan in 
conjunction with, and in support of, strategic tribal planning and 
community development goals.


Sec.  684.520  Must Indian and Native American program grantees give 
preference to Indian and Native American entities in the selection of 
contractors or service providers?

    Yes, INA program grantees must give as much preference as possible 
to Indian organizations and to Indian-owned economic enterprises, as 
defined in sec. 3 of the Indian Financing Act of 1974 (25 U.S.C. 1452), 
when awarding any contract or subgrant.


Sec.  684.530  What rules govern the issuance of contracts and/or 
subgrants?

    In general, INA program grantees must follow the rules of Uniform 
Administrative Requirements, Cost Principles, & Audit Requirements for 
Federal Awards when awarding contracts and/or subgrants under WIOA sec. 
166. These requirements are codified at 2 CFR part 200, subpart E (and 
Department modifications at 2 CFR part 2900), and covered in WIOA 
regulations at Sec.  683.200 of this chapter. These rules do not apply 
to OJT contract awards.

Subpart F--Accountability for Services and Expenditures


Sec.  684.600  To whom is the Indian and Native American program 
grantee accountable for the provision of services and the expenditure 
of Indian and Native American funds?

    (a) The INA program grantee is responsible to the INA community to 
be served by INA funds.
    (b) The INA program grantee also is responsible to the Department 
of Labor, which is charged by law with ensuring that all WIOA funds are 
expended:
    (1) According to applicable laws and regulations;
    (2) For the benefit of the identified INA client group; and
    (3) For the purposes approved in the grantee's plan and signed 
grant document.


Sec.  684.610  How is this accountability documented and fulfilled?

    (a) Each INA program grantee must establish its own internal 
policies and procedures to ensure accountability to the INA program 
grantee's governing body, as the representative of the INA 
community(ies) served by the INA program. At a minimum, these policies 
and procedures must provide a system for governing body review and 
oversight of program plans and measures and standards for program 
performance.
    (b) Accountability to the Department is accomplished in part 
through on-site program reviews (monitoring), which strengthen the INA 
program grantee's capability to deliver effective services and protect 
the integrity of Federal funds.
    (c) In addition to audit information, as described at Sec.  684.860 
and program reviews, accountability to the Department is documented and 
fulfilled by the submission of quarterly financial and program reports, 
and compliance with the terms and conditions of the grant award.


Sec.  684.620  What performance indicators are in place for the Indian 
and Native American program?

    (a) Pursuant to WIOA secs. 166(e)(5) and 166(h), the performance 
indicators at WIOA sec. 116(b)(2)(A)(i) apply to the INA program which 
must include:
    (1) The percentage of program participants who are in unsubsidized 
employment during the second quarter after exit from the program;
    (2) The percentage of program participants who are in unsubsidized 
employment during the fourth quarter after exit from the program;
    (3) The median earnings of program participants who are in 
unsubsidized employment during the second quarter after exit from the 
program;
    (4) The percentage of program participants who obtain a recognized 
postsecondary credential, or a secondary school diploma or its 
recognized equivalent (subject to WIOA sec. 116(b)(2)(A)(iii)) during 
participation in or within 1 year after exit from the program;
    (5) The percentage of program participants who, during a program 
year, are in an education or training program that leads to a 
recognized postsecondary credential or employment and who are achieving 
measurable skill gains toward such a credential or employment; and
    (6) The indicators of effectiveness in serving employers 
established under WIOA sec. 116(b)(2)(A)(iv).
    (b) In addition to the performance indicators at WIOA sec. 
116(b)(2)(A)(i), the Department, in consultation with the Native 
American Employment and Training Council, must develop a set of 
performance indicators and standards that are applicable to the INA 
program.


Sec.  684.630  What are the requirements for preventing fraud and abuse 
under the WIOA?

    (a) INA program grantees must establish such fiscal control and 
fund accounting procedures as may be necessary to assure the proper 
disbursal of, and accounting for, Federal funds. Such procedures must 
ensure that all

[[Page 56436]]

financial transactions are conducted and records maintained in 
accordance with generally accepted accounting principles.
    (b) Each INA program grantee must have rules to prevent conflict of 
interest by its governing body. These conflict of interest rules must 
include a rule prohibiting any member of any governing body or council 
associated with the INA program grantee from voting on any matter which 
would provide a direct financial benefit to that member, or to a member 
of his or her immediate family, in accordance with Sec.  
683.200(c)(5)(iii) of this chapter and 2 CFR parts 200 and 2900.
    (c) Officers or agents of the INA program grantee must not solicit 
or personally accept gratuities, favors, or anything of monetary value 
from any actual or potential contractor, subgrantee, vendor, or 
participant. This rule also must apply to officers or agents of the 
grantee's contractors and/or subgrantees. This prohibition does not 
apply to:
    (1) Any rebate, discount, or similar incentive provided by a vendor 
to its customers as a regular feature of its business; and
    (2) Items of nominal monetary value distributed consistent with the 
cultural practices of the INA community served by the grantee.
    (d) No person who selects program participants or authorizes the 
services provided to them may select or authorize services to any 
participant who is such a person's spouse, parent, sibling, or child 
unless:
    (1)(i) The participant involved is a low-income individual; or
    (ii) The community in which the participant resides has a 
population of less than 1,000 INAs combined; and
    (2) The INA program grantee has adopted and implemented the policy 
described in the 4-year plan to prevent favoritism on behalf of such 
relatives.
    (e) INA program grantees are subject to the provisions of 41 U.S.C. 
8702 relating to kickbacks.
    (f) No assistance provided under WIOA may involve political 
activities.
    (g) INA program grantees must comply with the restrictions on 
lobbying activities pursuant to sec. 195 of WIOA and the restrictions 
on lobbying codified in the Department regulations at 29 CFR part 93.
    (h) The provisions of 18 U.S.C. 665 and 666 prohibiting 
embezzlement apply to programs under WIOA.
    (i) Recipients of financial assistance under WIOA sec. 166 are 
prohibited from discriminatory practices as outlined at WIOA sec. 188, 
and the regulations implementing WIA sec. 188, at 29 CFR part 38. 
However, this does not affect the legal requirement that all INA 
participants be INAs. Also, INA program grantees are not obligated to 
serve populations outside the geographic boundaries for which they 
receive funds. However, INA program grantees are not precluded from 
serving eligible individuals outside their geographic boundaries if the 
INA program grantee chooses to do so.


Sec.  684.640  What grievance systems must an Indian and Native 
American program grantee provide?

    INA program grantees must establish grievance procedures consistent 
with the requirements of WIOA sec. 181(c) and Sec.  683.600 of this 
chapter.


Sec.  684.650  Can Indian and Native American grantees exclude segments 
of the eligible population?

    (a) No, INA program grantees cannot exclude segments of the 
eligible population except as otherwise provided in this part. INA 
program grantees must document in their 4-year plan that a system is in 
place to afford all members of the eligible population within the 
service area for which the grantee was designated an equitable 
opportunity to receive WIOA services and activities.
    (b) Nothing in this section restricts the ability of INA program 
grantees to target subgroups of the eligible population (for example, 
the disabled, substance abusers, TANF recipients, or similar 
categories), as outlined in an approved 4-year plan. However, it is 
unlawful to target services to subgroups on grounds prohibited by WIOA 
sec. 188 and 29 CFR part 38, including tribal affiliation (which is 
considered national origin). Outreach efforts, on the other hand, may 
be targeted to any subgroups.

Subpart G--Section 166 Planning/Funding Process


Sec.  684.700  What is the process for submitting a 4-year plan?

    Every 4 years, INA program grantees must submit a 4-year strategy 
for meeting the needs of INAs in accordance with WIOA sec. 166(e). This 
plan will be part of, and incorporated with, the 4-year competitive 
process described in WIOA sec. 166(c) and Sec.  684.220. Accordingly, 
specific requirements for the submission of a 4-year plan will be 
provided in a FOA and will include the information described at Sec.  
684.710.


Sec.  684.710  What information must be included in the 4-year plans as 
part of the competitive application?

    (a) The 4-year plan, which will be submitted as part of the 
competitive process, must include the information required at WIOA 
secs. 166(e)(2)-(5) which are:
    (1) The population to be served;
    (2) The education and employment needs of the population to be 
served and the manner in which the activities to be provided will 
strengthen the ability of the individuals served to obtain or retain 
unsubsidized employment leading to self-sufficiency;
    (3) A description of the activities to be provided and the manner 
in which such activities are to be integrated with other appropriate 
activities; and
    (4) A description of the performance indicators and expected levels 
of performance.
    (b) The 4-year plan also must include any additional information 
requested in the FOA.
    (c) INA program grantees receiving supplemental youth funds will be 
required to provide additional information (at a minimum the number of 
youth it plans to serve and the projected performance outcomes) in the 
4-year plan that describes a strategy for serving low-income, INA 
youth. Additional information required for supplemental youth funding 
will be identified in the FOA.


Sec.  684.720  When must the 4-year plan be submitted?

    The 4-year plans will be submitted as part of the competitive FOA 
process described at Sec.  684.220. Accordingly, the due date for the 
submission of the 4-year plan will be specified in the FOA.


Sec.  684.730  How will the Department review and approve such plans?

    (a) It is the Department's intent to approve a grantee's 4-year 
strategic plan before the date on which funds for the program become 
available unless:
    (1) The planning documents do not contain the information specified 
in the regulations in this part and/or the FOA; or
    (2) The services which the INA program grantee proposes are not 
permitted under WIOA or applicable regulations.
    (b) After competitive grant selections have been made, the DINAP 
office will assist INA program grantees in resolving any outstanding 
issues with the 4-year plan. However, the Department may delay funding 
to grantees until all issues have been resolved. If the issues with the 
application of an incumbent grantee cannot be solved, the Department 
will

[[Page 56437]]

reallocate funds from the grantee to other grantees that have an 
approved 4-year plan. The Grant Officer may delay executing a grant 
agreement and obligating funds to an entity selected through the 
competitive process until all the required documents--including the 4-
year plan--are in place and satisfactory.
    (c) The Department may approve a portion of the plan and disapprove 
other portions.
    (d) The grantee also has the right to appeal a nonselection 
decision or a decision by the Department to deny or reallocate funds 
based on unresolved issues with the applicant's application or 4-year 
plan. Such an appeal would go to the Office of the Administrative Law 
Judges under procedures at Sec.  683.800 or Sec.  683.840 of this 
chapter in the case of a nonelection.


Sec.  684.740  Under what circumstances can the Department or the 
Indian and Native American grantee modify the terms of the grantee's 
plan(s)?

    (a) The Department may unilaterally modify the INA program 
grantee's plan to add funds or, if required by Congressional action, to 
reduce the amount of funds available for expenditure.
    (b) The INA program grantee may request approval to modify its plan 
to add, expand, delete, or diminish any service allowable under the 
regulations in this part. The INA program grantee may modify its plan 
without our approval, unless the modification reduces the total number 
of participants to be served annually under the grantee's program by a 
number which exceeds 25 percent of the participants previously proposed 
to be served, or by 25 participants, whichever is larger.

Subpart H--Administrative Requirements


Sec.  684.800  What systems must an Indian and Native American program 
grantee have in place to administer an Indian and Native American 
program?

    (a) Each INA program grantee must have a written system describing 
the procedures the grantee uses for:
    (1) The hiring and management of personnel paid with program funds;
    (2) The acquisition and management of property purchased with 
program funds;
    (3) Financial management practices;
    (4) A participant grievance system which meets the requirements in 
sec. 181(c) of WIOA and Sec.  683.600 of this chapter; and
    (5) A participant records system.
    (b) Participant records systems must include:
    (1) A written or computerized record containing all the information 
used to determine the person's eligibility to receive program services;
    (2) The participant's signature certifying that all the eligibility 
information he or she provided is true to the best of his/her 
knowledge; and
    (3) The information necessary to comply with all program reporting 
requirements.


Sec.  684.810  What types of costs are allowable expenditures under the 
Indian and Native American program?

    Rules relating to allowable costs under WIOA are covered in 
Sec. Sec.  683.200 through 683.215 of this chapter.


Sec.  684.820  What rules apply to administrative costs under the 
Indian and Native American program?

    The definition and treatment of administrative costs are covered in 
Sec. Sec.  683.205(b) and 683.215 of this chapter.


Sec.  684.830  Does the Workforce Innovation and Opportunity Act 
administrative cost limit for States and local areas apply to WIOA 
grants?

    No, under Sec.  683.205(b) of this chapter, limits on 
administrative costs for sec. 166 grants will be negotiated with the 
grantee and identified in the grant award document.


Sec.  684.840  How must Indian and Native American program grantees 
classify costs?

    Cost classification is covered in the WIOA regulations at 
Sec. Sec.  683.200 through 683.215 of this chapter. For purposes of the 
INA program, program costs also include costs associated with other 
activities such as TERO, and supportive services, as defined in WIOA 
sec. 3(59).


Sec.  684.850  What cost principles apply to Indian and Native American 
funds?

    The cost principles at 2 CFR part 200, subpart E, Uniform 
Administrative Requirements, Cost Principles, & Audit Requirements for 
Federal Awards, and the Department's modifications to 2 CFR part 200, 
subpart E, at 2 CFR part 2900, apply to INA program grantees.


Sec.  684.860  What audit requirements apply to Indian and Native 
American grants?

    (a) WIOA sec. 166 grantees must follow the audit requirements at 2 
CFR part 200, subpart F, Uniform Administrative Requirements, Cost 
Principles, & Audit Requirements for Federal Awards, and the 
Department's modifications to 2 CFR part 200 at 2 CFR part 2900.
    (b) Grants made and contracts and cooperative agreements entered 
into under sec. 166 of WIOA are subject to the requirements of chapter 
75 of subtitle V of title 31, United States Code, and charging of costs 
under this section are subject to appropriate circulars issued by the 
Office of Management and Budget and to 2 CFR part 200 and the 
Department's modifications to 2 CFR part 200 at 2 CFR part 2900.


Sec.  684.870  What is ``program income'' and how is it regulated in 
the Indian and Native American program?

    (a) Program income is regulated by WIOA sec. 194(7)(A), Sec. Sec.  
683.200(c)(6) through (8) and 683.300(c)(5) of this chapter, and the 
applicable rules in 2 CFR parts 200 and 2900.
    (b) For grants made under this part, program income does not 
include income generated by the work of a work experience participant 
in an enterprise, including an enterprise owned by an INA entity, 
whether in the public or private sector.
    (c) Program income does not include income generated by the work of 
an OJT participant in an establishment under paragraph (b) of this 
section.

Subpart I--Miscellaneous Program Provisions


Sec.  684.900  Does the Workforce Innovation and Opportunity Act 
provide regulatory and/or statutory waiver authority?

    Yes, WIOA sec. 166(i)(3) permits waivers of any statutory or 
regulatory requirement of title I of WIOA that are inconsistent with 
the specific needs of the INA program grantee (except for the areas 
cited in Sec.  684.920). Such waivers may include those necessary to 
facilitate WIOA support of long-term community development goals.


Sec.  684.910  What information is required in a waiver request?

    (a) To request a waiver, an INA program grantee must submit a 
waiver request indicating how the waiver will improve the grantee's 
WIOA program activities. The waiver process will be generally 
consistent with, but not identical to, the waiver requirements under 
sec. 189(i)(3)(B) of WIOA. INA program grantees may submit a waiver 
request as part of the 4-year strategic plan.
    (b) A waiver may be requested at the beginning of a 4-year grant 
award cycle or anytime during a 4-year award cycle. However, all 
waivers expire at the end of the 4-year award cycle. INA program 
grantees seeking to continue an existing waiver in a new 4-year grant 
cycle must submit a new waiver request in accordance with paragraph (a) 
of this section.

[[Page 56438]]

Sec.  684.920  What provisions of law or regulations may not be waived?

    Requirements relating to:
    (a) Wage and labor standards;
    (b) Worker rights;
    (c) Participation and protection of workers and participants;
    (d) Grievance procedures;
    (e) Judicial review; and
    (f) Non-discrimination may not be waived.


Sec.  684.930  May Indian and Native American program grantees combine 
or consolidate their employment and training funds?

    Yes. INA program grantees may consolidate their employment and 
training funds under WIOA with assistance received from related 
programs in accordance with the provisions of the Public Law 102-477, 
the Indian Employment, Training, and Related Services Demonstration Act 
of 1992, as amended by Public Law 106-568, the Omnibus Indian 
Advancement Act of 2000 (25 U.S.C. 3401 et seq.). WIOA funds 
consolidated under Public Law 102-477 are administered by Department of 
the Interior (DOI). Accordingly, the administrative oversight for funds 
transferred to DOI, including the reporting of financial expenditures 
and program outcomes are the responsibility of DOI. However, the 
Department must review the initial 477 plan and ensure that all 
Departmental programmatic and financial obligations have been met 
before WIOA funds are approved to be transferred to DOI and 
consolidated with other related programs. The initial plan must meet 
the statutory requirements of WIOA. After approval of the initial plan, 
all subsequent plans that are renewed or updated from the initial plan 
may be approved by DOI without further review by the Department.


Sec.  684.940  What is the role of the Native American Employment and 
Training Council?

    The Native American Employment and Training Council is a body 
composed of representatives of the grantee community which advises the 
Secretary on the operation and administration of the INA employment and 
training program. WIOA sec. 166(i)(4) continues the Council essentially 
as it is currently constituted. The Department continues to support the 
Council.


Sec.  684.950  Does the Workforce Innovation and Opportunity Act 
provide any additional assistance to unique populations in Alaska and 
Hawaii?

    Yes. Notwithstanding any other provision of law, the Secretary is 
authorized to award grants, on a competitive basis, to entities with 
demonstrated experience and expertise in developing and implementing 
programs for the unique populations who reside in Alaska or Hawaii, 
including public and private nonprofit organizations, tribal 
organizations, American Indian tribal colleges or universities, 
institutions of higher education, or consortia of such organizations or 
institutions, to improve job training and workforce investment 
activities for such unique populations.

0
18. Add part 685 to read as follows:

PART 685--NATIONAL FARMWORKER JOBS PROGRAM UNDER TITLE I OF THE 
WORKFORCE INNOVATION AND OPPORTUNITY ACT

Subpart A--Purpose and Definitions
Sec.
685.100 What is the purpose of the National Farmworker Jobs Program 
and the other services and activities established under the 
Workforce Innovation and Opportunity Act?
685.110 What definitions apply to this program?
685.120 How does the Department administer the National Farmworker 
Jobs Program?
685.130 How does the Department assist grantees to serve eligible 
migrant and seasonal farmworkers?
685.140 What Workforce Innovation and Opportunity Act (WIOA) 
regulations apply to the programs authorized under WIOA?
Subpart B--The Service Delivery System for the National Farmworker Jobs 
Program
Sec.
685.200 Who is eligible to receive a National Farmworker Jobs 
Program grant?
685.210 How does an eligible entity become a grantee?
685.220 What is the role of the grantee in the one-stop delivery 
system?
685.230 Can a grantee's designation be terminated?
685.240 How does the Department use funds appropriated under the 
Workforce Innovation and Opportunity Act for the National Farmworker 
Jobs Program?
Subpart C--The National Farmworker Jobs Program Services to Eligible 
Migrant and Seasonal Farmworkers
Sec.
685.300 What are the general responsibilities of grantees?
685.310 What are the basic components of a National Farmworker Jobs 
Program service delivery strategy?
685.320 Who is eligible to receive services under the National 
Farmworker Jobs Program?
685.330 How are services delivered to eligible migrant and seasonal 
farmworkers?
685.340 What career services may grantees provide to eligible 
migrant and seasonal farmworkers?
685.350 What training services may grantees provide to eligible 
migrant and seasonal farmworkers?
685.360 What housing services may grantees provide to eligible 
migrant and seasonal farmworkers?
685.370 What services may grantees provide to eligible migrant and 
seasonal farmworkers youth participants aged 14-24?
685.380 What related assistance services may be provided to eligible 
migrant and seasonal farmworkers?
685.390 When may eligible migrant and seasonal farmworkers receive 
related assistance?
Subpart D--Performance Accountability, Planning, and Waiver Provisions
Sec.
685.400 What are the indicators of performance that apply to the 
National Farmworker Jobs Program?
685.410 What planning documents must a grantee submit?
685.420 What information is required in the grantee program plan?
685.430 Under what circumstances are the terms of the grantee's 
program plan modified by the grantee or the Department?
685.440 How are costs classified under the National Farmworker Jobs 
Program?
685.450 What is the Workforce Innovation and Opportunity Act 
administrative cost limit for National Farmworker Jobs Program 
grants?
685.460 Are there regulatory and/or statutory waiver provisions that 
apply to the Workforce Innovation and Opportunity Act?
685.470 How can grantees request a waiver?
Subpart E--Supplemental Youth Workforce Investment Activity Funding 
Under the Workforce Innovation and Opportunity Act
Sec.
685.500 What is supplemental youth workforce investment activity 
funding?
685.510 What requirements apply to grants funded by the Workforce 
Innovation and Opportunity Act?
685.520 What is the application process for obtaining a grant funded 
by the Workforce Innovation and Opportunity Act?
685.530 What planning documents are required for grants funded by 
the Workforce Innovation and Opportunity Act?
685.540 How are funds allocated to grants funded by the Workforce 
Innovation and Opportunity Act?
685.550 Who is eligible to receive services through grants funded by 
the Workforce Innovation and Opportunity Act?

    Authority:  Secs. 167, 189, 503, Public Law 113-128, 128 Stat. 
1425 (Jul. 22, 2014).

[[Page 56439]]

Subpart A--Purpose and Definitions


Sec.  685.100  What is the purpose of the National Farmworker Jobs 
Program and the other services and activities established under the 
Workforce Innovation and Opportunity Act?

    The purpose of the NFJP and the other services and activities 
established under WIOA sec. 167 is to strengthen the ability of 
eligible migrant and seasonal farmworkers (MSFWs) and their dependents 
to obtain or retain unsubsidized employment, stabilize their 
unsubsidized employment and achieve economic self-sufficiency, 
including upgraded employment in agriculture. This part provides the 
regulatory requirements applicable to the expenditure of WIOA secs. 167 
and 127(a)(1) funds for such programs, services, and activities.


Sec.  685.110  What definitions apply to this program?

    In addition to the definitions found in Sec.  675.300 of this 
chapter, the following definitions apply to programs under this part:
    Allowances means direct payments made to participants during their 
enrollment to enable them to participate in the career services 
described in WIOA sec. 134(c)(2)(A)(xii) or training services as 
appropriate.
    Dependent means an individual who:
    (1) Was claimed as a dependent on the eligible MSFW's Federal 
income tax return for the previous year; or
    (2) Is the spouse of the eligible MSFW; or
    (3) If not claimed as a dependent for Federal income tax purposes, 
is able to establish:
    (i) A relationship as the eligible MSFW's;
    (A) Child, grandchild, great grandchild, including legally adopted 
children;
    (B) Stepchild;
    (C) Brother, sister, half-brother, half-sister, stepbrother, or 
stepsister;
    (D) Parent, grandparent, or other direct ancestor but not foster 
parent;
    (E) Foster child;
    (F) Stepfather or stepmother;
    (G) Uncle or aunt;
    (H) Niece or nephew;
    (I) Father-in-law, mother-in-law, son-in-law; or
    (J) Daughter-in-law, brother-in-law, or sister-in-law; and
    (ii) The receipt of over half of his/her total support from the 
eligible MSFW's family during the eligibility determination period.
    Eligibility determination period means any consecutive 12-month 
period within the 24-month period immediately preceding the date of 
application for the MSFW program by the applicant MSFW.
    Eligible migrant farmworker means an eligible seasonal farmworker 
as defined in WIOA sec. 167(i)(3) whose agricultural labor requires 
travel to a job site such that the farmworker is unable to return to a 
permanent place of residence within the same day; and dependents of the 
migrant farmworker, as described in WIOA sec. 167(i)(2).
    Eligible migrant and seasonal farmworker means an eligible migrant 
farmworker or an eligible seasonal farmworker, also referred to in this 
regulation as an ``eligible MSFW,'' as defined in WIOA sec. 167(i).
    Eligible MSFW youth means an eligible MSFW aged 14-24 who is 
individually eligible or is a dependent of an eligible MSFW. The term 
eligible MSFW youth is a subset of the term eligible MSFW defined in 
this section.
    Eligible seasonal farmworker means a low-income individual who for 
12 consecutive months out of the 24 months prior to application for the 
program involved, has been primarily employed in agricultural or fish 
farming labor that is characterized by chronic unemployment or 
underemployment; and faces multiple barriers to economic self-
sufficiency; and dependents of the seasonal farmworker as described in 
WIOA sec. 167(i)(3).
    Emergency assistance is a form of ``related assistance'' and means 
assistance provided by grantees that addresses immediate needs of 
eligible MSFWs and their dependents. An applicant's self-certification 
is accepted as sufficient documentation of eligibility for emergency 
assistance.
    Family, for the purpose of reporting housing assistance grantee 
indicators of performance as described in in Sec.  685.400, means the 
eligible MSFW(s) and all the individuals identified under the 
definition of dependent in this section who are living together in one 
physical residence.
    Farmwork means work while employed in the occupations described in 
Sec.  651.10 of this chapter.
    Grantee means an entity to which the Department directly awards a 
WIOA grant to carry out programs to serve eligible MSFWs in a service 
area, with funds made available under WIOA sec. 167 or 127(a)(1).
    Housing assistance means housing services which contribute to safe 
and sanitary temporary and permanent housing constructed, supplied, or 
maintained with NFJP funding.
    Lower living standard income level means the income level as 
defined in WIOA sec. 3(36)(B).
    Low-income individual means an individual as defined in WIOA sec. 
3(36)(A).
    MOU means Memorandum of Understanding.
    National Farmworker Jobs Program (NFJP) is the Department of Labor-
administered workforce investment program for eligible MSFWs 
established by WIOA sec. 167 as a required partner of the one-stop 
delivery system and includes both career services and training grants, 
and housing grants.
    Recognized postsecondary credential means a credential as defined 
in WIOA sec. 3(52).
    Related assistance means short-term forms of direct assistance 
designed to assist eligible MSFWs retain or stabilize their 
agricultural employment. Examples of related assistance may include, 
but are not limited to, services such as transportation assistance or 
providing work clothing.
    Self-certification means an eligible MSFW's signed attestation that 
the information he/she submits to demonstrate eligibility for the NFJP 
is true and accurate.
    Service area means the geographical jurisdiction, which may be 
comprised of one or more designated State or sub-State areas, in which 
a WIOA sec. 167 grantee is designated to operate.
    Supportive services means the services defined in WIOA sec. 3(59).
    Technical assistance means the guidance provided to grantees and 
grantee staff by the Department to improve the quality of the program 
and the delivery of program services to eligible MSFWs.


Sec.  685.120  How does the Department administer the National 
Farmworker Jobs Program?

    The Department's Employment and Training Administration (ETA) 
administers NFJP activities required under WIOA sec. 167 for eligible 
MSFWs. As described in Sec.  685.210, the Department designates 
grantees using procedures consistent with standard Federal government 
competitive procedures.


Sec.  685.130  How does the Department assist grantees to serve 
eligible migrant and seasonal farmworkers?

    The Department provides guidance, administrative support, technical 
assistance, and training to grantees for the purposes of program 
implementation, and program performance management to enhance services 
and promote continuous improvement in the employment outcomes of 
eligible MSFWs.

[[Page 56440]]

Sec.  685.140  What Workforce Innovation and Opportunity Act (WIOA) 
regulations apply to the programs authorized under WIOA?

    The regulations that apply to programs authorized under WIOA sec. 
167 include but are not limited to:
    (a) The regulations found in this part;
    (b) The general administrative requirements found in part 683 of 
this chapter, including the regulations concerning Complaints, 
Investigations and Hearings found at part 683, subparts D through H, of 
this chapter, which cover programs under WIOA sec. 167;
    (c) Uniform Guidance at 2 CFR part 200 and the Department's 
exceptions at 2 CFR part 2900 pursuant to the effective dates in 2 CFR 
parts 200 and 2900;
    (d) The regulations on partnership responsibilities contained in 
parts 679 (Statewide and Local Governance) and 678 (the One-Stop 
System) of this chapter; and
    (e) The Department's regulations at 29 CFR part 38, which implement 
the nondiscrimination provisions of WIOA sec. 188.

Subpart B--The Service Delivery System for the National Farmworker 
Jobs Program


Sec.  685.200  Who is eligible to receive a National Farmworker Jobs 
Program grant?

    To be eligible to receive a grant under this section, an entity 
must have:
    (a) An understanding of the problems of eligible MSFWs;
    (b) A familiarity with the agricultural industries and the labor 
market needs of the proposed service area; and
    (c) The ability to demonstrate a capacity to administer and deliver 
effectively a diversified program of workforce investment activities, 
including youth workforce investment activities, and related assistance 
for eligible MSFWs.


Sec.  685.210  How does an eligible entity become a grantee?

    To become a grantee and receive a grant under this subpart, an 
applicant must respond to a Funding Opportunity Announcement (FOA). 
Under the FOA, grantees will be selected using standard Federal 
government competitive procedures. The entity's proposal must include a 
program plan, which is a 4-year strategy for meeting the needs of 
eligible MSFWs in the proposed service area, and a description of the 
entities experience working with the broader workforce delivery system. 
Unless specified otherwise in the FOA, grantees may serve eligible 
MSFWs, including eligible MSFW youth, under the grant. An applicant 
whose application for funding as a grantee under this section is denied 
in whole or in part may request an administrative review under Sec.  
683.800 of this chapter.


Sec.  685.220  What is the role of the grantee in the one-stop delivery 
system?

    In those local areas where the grantee operates its NFJP as 
described in its grant agreement, the grantee is a required one-stop 
partner, and is subject to the provisions relating to such partners 
described in part 678 of this chapter. Consistent with those 
provisions, the grantee and Local Workforce Development Board (WDB) 
must develop and enter into an MOU which meets the requirements of 
Sec.  678.500 of this chapter, and which sets forth their respective 
responsibilities for providing access to the full range of NFJP 
services through the one-stop delivery system to eligible MSFWs.


Sec.  685.230  Can a grantee's designation be terminated?

    Yes, a grantee's designation may be terminated by the Department 
for cause:
    (a) In emergency circumstances when such action is necessary to 
protect the integrity of Federal funds or to ensure the proper 
operation of the program. Any grantee so terminated will be provided 
with written notice and an opportunity for a hearing within 30 days 
after the termination; or
    (b) By the Department's Grant Officer, if the recipient materially 
fails to comply with the terms and conditions of the award. In such a 
case, the Grant Officer will follow the administrative regulations at 
Sec.  683.440 of this chapter.


Sec.  685.240  How does the Department use funds appropriated under the 
Workforce Innovation and Opportunity Act for the National Farmworker 
Jobs Program?

    At least 99 percent of the funds appropriated each year for WIOA 
sec. 167 activities must be allocated to service areas, based on the 
distribution of the eligible MSFW population determined under a formula 
established by the Secretary. The Department will award grants pursuant 
to Sec.  685.210 for the provision of services to eligible MSFWs within 
each service area. The Department will use a percentage of the funds 
allocated for State service areas for housing grants, specified in a 
FOA issued by the Department. The Department will use up to one percent 
of the appropriated funds for discretionary purposes, such as technical 
assistance to eligible entities and other activities prescribed by the 
Secretary.

Subpart C--The National Farmworker Jobs Program Services to 
Eligible Migrant and Seasonal Farmworkers


Sec.  685.300  What are the general responsibilities of grantees?

    (a) The Department awards career services and training grants and 
housing grants through the FOA process described in Sec.  685.210. 
Career services and training grantees are responsible for providing 
appropriate career services, training, and related assistance to 
eligible MSFWs. Housing grantees are responsible for providing housing 
assistance to eligible MSFWs.
    (b) Grantees will provide these services in accordance with the 
service delivery strategy meeting the requirements of Sec.  685.310 and 
as described in their approved program plan described in Sec.  685.420. 
These services must reflect the needs of the MSFW population in the 
service area and include the services that are necessary to achieve 
each participant's employment goals or housing needs.
    (c) Grantees are responsible for coordinating services, 
particularly outreach to MSFWs, with the State Workforce Agency as 
defined in Sec.  651.10 of this chapter and the State's Monitor 
Advocate.
    (d) Grantees are responsible for fulfilling the responsibilities of 
one-stop partners described in Sec.  678.420 of this chapter.


Sec.  685.310  What are the basic components of a National Farmworker 
Jobs Program service delivery strategy?

    The NFJP service delivery strategy must include:
    (a) A customer-focused case management approach;
    (b) The provision of workforce investment activities to eligible 
MSFWs which include career services and training, as described in WIOA 
secs. 167(d) and 134, and part 680 of this chapter;
    (c) The provision of youth workforce investment activities 
described in WIOA sec. 129 and part 681 of this chapter may be provided 
to eligible MSFW youth;
    (d) The arrangements under the MOUs with the applicable Local WDBs 
for the delivery of the services available through the one-stop 
delivery system to MSFWs; and
    (e) Related assistance services.


Sec.  685.320  Who is eligible to receive services under the National 
Farmworker Jobs Program?

    Eligible migrant farmworkers (including eligible MSFW youth) and 
eligible seasonal farmworkers (including eligible MSFW youth) as 
defined in

[[Page 56441]]

Sec.  685.110 are eligible for services funded by the NFJP.


Sec.  685.330  How are services delivered to eligible migrant and 
seasonal farmworkers?

    To ensure that all services are focused on the customer's needs, 
services are provided through a case-management approach emphasizing 
customer choice and may include: Appropriate career services and 
training; related assistance, which includes emergency assistance; and 
supportive services, which includes allowance payments. The basic 
services and delivery of case-management activities are further 
described in Sec. Sec.  685.340 through 685.390.


Sec.  685.340  What career services may grantees provide to eligible 
migrant and seasonal farmworkers?

    (a) Grantees may provide the career services described in WIOA 
secs. 167(d) and 134(c)(2), and part 680 of this chapter to eligible 
MSFWs.
    (b) Grantees may provide other services identified in the approved 
program plan.
    (c) The delivery of career services to eligible MSFWs by the 
grantee and through the one-stop delivery system must be discussed in 
the required MOU between the Local WDB and the grantee.


Sec.  685.350  What training services may grantees provide to eligible 
migrant and seasonal farmworkers?

    (a) Grantees may provide the training activities described in WIOA 
secs. 167(d) and 134(c)(3)(D), and part 680 of this chapter to eligible 
MSFWs. These activities include, but are not limited to, occupational-
skills training and on-the-job training (OJT). Eligible MSFWs are not 
required to receive career services prior to receiving training 
services.
    (1) When providing OJT services NFJP grantees may reimburse 
employers for the extraordinary costs of training by up to 50 percent 
of the wage rate of the participant for OJT.
    (2) Grantees also may increase the OJT reimbursement rate up to 75 
percent of the wage rate of a participant under certain conditions, 
provided that such reimbursement is being provided consistent with the 
reimbursement rates used under WIOA sec. 134(c)(3)(H)(i) for the local 
area(s) in which the grantee operates its program.
    (b) Training services must be directly linked to an in-demand 
industry sector or occupation in the service area, or in another area 
to which an eligible MSFW receiving such services is willing to 
relocate.
    (c) Training activities must encourage the attainment of recognized 
postsecondary credentials as defined in Sec.  685.110 when appropriate 
for an eligible MSFW.


Sec.  685.360  What housing services may grantees provide to eligible 
migrant and seasonal farmworkers?

    (a) Housing grantees must provide housing services to eligible 
MSFWs.
    (b) Career services and training grantees may provide housing 
services to eligible MSFWs as described in their program plan.
    (c) Housing services may include the following:
    (1) Permanent housing that is owner-occupied, or occupied on a 
permanent, year-round basis (notwithstanding ownership) as the eligible 
MSFW's primary residence to which he/she returns at the end of the work 
or training day.
    (i) Types of permanent housing may include rental units, single 
family homes, duplexes, and other multi-family structures, dormitories, 
group homes, and other housing types that provide short-term, seasonal, 
or year-round housing opportunities in permanent structures. Modular 
structures, manufactured housing, or mobile units placed on permanent 
foundations and supplied with appropriate utilities, and other 
infrastructure also are considered permanent housing.
    (ii) Permanent housing services include but are not limited to: 
Investments in development services, project management, and resource 
development to secure acquisition, construction/renovation and 
operating funds, property management services, and program management. 
New construction, purchase of existing structures, and rehabilitation 
of existing structures, as well as the infrastructure, utilities, and 
other improvements necessary to complete or maintain those structures 
also may be considered part of managing permanent housing.
    (2) Temporary housing that is not owner-occupied and is used by 
MSFWs whose employment requires occasional travel outside their normal 
commuting area.
    (i) Types of temporary housing may include: Housing units intended 
for temporary occupancy located in permanent structures, such as rental 
units in an apartment complex or in mobile structures that provide 
short-term, seasonal housing opportunities; temporary structures that 
may be moved from site to site, dismantled and re-erected when needed 
for farmworker occupancy, closed during the off-season, or handled 
through other similar arrangements; off-farm housing operated 
independently of employer interest in, or control of, the housing; or 
on-farm housing located on property owned by an agricultural employer 
and operated by an entity such as an agricultural employer or a 
nonprofit organization; and other housing types that provide short-
term, seasonal, or temporary housing opportunities in temporary 
structures.
    (ii) Temporary housing services include but are not limited to: 
Managing temporary housing which may involve property management of 
temporary housing facilities, case management, and referral services, 
and emergency housing payments, including vouchers and cash payments 
for rent/lease and utilities.
    (d) Permanent housing developed with NFJP funds must be promoted 
and made widely available to eligible MSFWs, but occupancy is not 
restricted to eligible MSFWs. Temporary housing services must only be 
provided to eligible MSFWs.
    (e) Except as provided in paragraph (f) of this section, NFJP funds 
used for housing assistance must ensure the provision of safe and 
sanitary temporary and permanent housing that meets the Federal housing 
standards at part 654 of this chapter (ETA housing for farmworkers) or 
29 CFR 1910.10 (OSHA housing standards).
    (f) When NFJP grantees provide temporary housing assistance that 
allows the participant to select the housing, including vouchers and 
cash payments for rent, lease, and utilities, NFJP grantees are not 
required to ensure that such housing meets the Federal housing 
standards at part 654 of this chapter or 29 CFR 1910.10.


Sec.  685.370  What services may grantees provide to eligible migrant 
and seasonal farmworkers youth participants aged 14-24?

    (a) Based on an evaluation and assessment of the needs of eligible 
MSFW youth, grantees may provide activities and services that include 
but are not limited to:
    (1) Career services and training as described in Sec. Sec.  685.340 
and 685.350;
    (2) Youth workforce investment activities specified in WIOA sec. 
129;
    (3) Life skills activities which may include self- and 
interpersonal skills development;
    (4) Community service projects; and
    (5) Other activities and services that conform to the use of funds 
for youth activities described in part 681 of this chapter.
    (b) Grantees may provide these services to any eligible MSFW youth, 
regardless of the participant's eligibility for WIOA title I youth 
activities as described in WIOA sec. 129(a).

[[Page 56442]]

Sec.  685.380  What related assistance services may be provided to 
eligible migrant and seasonal farmworkers?

    Related assistance may include short-term direct services and 
activities. Examples include emergency assistance, as defined in Sec.  
685.110, and those activities identified in WIOA sec. 167(d), such as: 
English language and literacy instruction; pesticide and worker safety 
training; housing (including permanent housing), as described in Sec.  
685.360 and as provided in the approved program plan; and school 
dropout prevention and recovery activities. Related assistance may be 
provided to eligible MSFWs not enrolled in career services, youth 
services, or training services.


Sec.  685.390  When may eligible migrant and seasonal farmworkers 
receive related assistance?

    Eligible MSFWs may receive related assistance services when the 
grantee identifies and documents the need for the related assistance, 
which may include a statement by the eligible MSFW.

Subpart D--Performance Accountability, Planning, and Waiver 
Provisions


Sec.  685.400  What are the indicators of performance that apply to the 
National Farmworker Jobs Program?

    (a) For grantees providing career services and training, the 
Department will use the indicators of performance common to the adult 
and youth programs, described in WIOA sec. 116(b)(2)(A).
    (b) For grantees providing career services and training, the 
Department will reach agreement with individual grantees on the levels 
of performance for each of the primary indicators of performance, 
taking into account economic conditions, characteristics of the 
individuals served, and other appropriate factors, and using, to the 
extent practicable, the statistical adjustment model under WIOA sec. 
116(b)(3)(A)(viii). Once agreement on the levels of performance for 
each of the primary indicators of performance is reached with 
individual grantees, the Department will incorporate the adjusted 
levels of performance in the grant plan. For the purposes of 
performance reporting, eligible MSFWs who receive any career services, 
youth services, training, or certain related assistance are considered 
participants as defined in Sec.  677.150 of this chapter and must be 
included in performance calculations for the indicators of performance. 
Eligible MSFWs who receive only those services identified in Sec.  
677.150(a)(3)(ii) or (iii) of this chapter are not included in 
performance calculations for the indicators of performance described in 
WIOA sec. 116(b)(2)(A).
    (c) For grantees providing housing services only, grantees will use 
the total number of eligible MSFWs served and the total number of 
eligible MSFW families served as indicators of performance. 
Additionally, grantees providing permanent housing development 
activities will use the total number of individuals served and the 
total number of families served as indicators of performance.
    (d) The Department may develop additional performance indicators 
with appropriate levels of performance for evaluating programs that 
serve eligible MSFWs and which reflect the State service area economy, 
local demographics of eligible MSFWs, and other appropriate factors. If 
additional performance indicators are developed, the levels of 
performance for these additional indicators must be negotiated with the 
grantee and included in the approved program plan.
    (e) Grantees may develop additional performance indicators and 
include them in the program plan or in periodic performance reports.


Sec.  685.410  What planning documents must a grantee submit?

    Each grantee receiving WIOA sec. 167 program funds must submit to 
the Department a comprehensive program plan and a projection of 
participant services and expenditures in accordance with instructions 
issued by the Secretary.


Sec.  685.420  What information is required in the grantee program 
plan?

    A grantee's 4-year program plan must describe:
    (a) The service area that the applicant proposes to serve;
    (b) The population to be served and the education and employment 
needs of the MSFW population to be served;
    (c) The manner in which proposed services to eligible MSFWs will 
strengthen their ability to obtain or retain unsubsidized employment or 
stabilize their unsubsidized employment, including upgraded employment 
in agriculture;
    (d) The related assistance and supportive services to be provided 
and the manner in which such assistance and services are to be 
integrated and coordinated with other appropriate services;
    (e) The performance accountability measures that will be used to 
assess the performance of the entity in carrying out the NFJP program 
activities, including the expected levels of performance for the 
primary indicators of performance described in Sec.  685.400;
    (f) The availability and accessibility of local resources, such as 
supportive services, services provided through one-stop delivery 
systems, and education and training activities, and how the resources 
can be made available to the population to be served;
    (g) The plan for providing services including strategies and 
systems for outreach, career planning, assessment, and delivery through 
one-stop delivery systems;
    (h) The methods the grantee will use to target its services on 
specific segments of the eligible population, as appropriate; and
    (i) Such other information as required by the Secretary in 
instructions issued under Sec.  685.410.


Sec.  685.430  Under what circumstances are the terms of the grantee's 
program plan modified by the grantee or the Department?

    (a) Plans must be modified to reflect the funding level for each 
year of the grant. The Department will provide instructions annually on 
when to submit modifications for each year of funding, which will 
generally be no later than June 1 prior to the start of the subsequent 
year of the grant cycle.
    (b) The grantee must submit a request to the Department for any 
proposed modifications to its plan to add, delete, expand, or reduce 
any part of the program plan or allowable activities. The Department 
will consider the cost principles, uniform administrative requirements, 
and terms and conditions of award when reviewing modifications to 
program plans.
    (c) If the grantee is approved for a regulatory waiver under 
Sec. Sec.  685.460 and 685.470, the grantee must submit a modification 
of its grant plan to reflect the effect of the waiver.


Sec.  685.440  How are costs classified under the National Farmworker 
Jobs Program?

    (a) Costs are classified as follows:
    (1) Administrative costs, as defined in Sec.  683.215 of this 
chapter; and
    (2) Program costs, which are all other costs not defined as 
administrative.
    (b) Program costs must be classified and reported in the following 
categories:
    (1) Related assistance (including emergency assistance);
    (2) Supportive services; and
    (3) All other program services.


Sec.  685.450  What is the Workforce Innovation and Opportunity Act 
administrative cost limit for National Farmworker Jobs Program grants?

    Under Sec.  683.205(b) of this chapter, limits on administrative 
costs for

[[Page 56443]]

programs operated under subtitle D of WIOA title I will be identified 
in the grant or contract award document. Administrative costs will not 
exceed 15 percent of total grantee funding.


Sec.  685.460  Are there regulatory and/or statutory waiver provisions 
that apply to the National Farmworker Jobs Program?

    (a) The statutory waiver provision at WIOA sec. 189(i) and 
discussed in Sec.  679.600 of this chapter does not apply to any NFJP 
grant under WIOA sec. 167.
    (b) Grantees may request waiver of any regulatory provisions only 
when such regulatory provisions are:
    (1) Not required by WIOA;
    (2) Not related to wage and labor standards, non-displacement 
protection, worker rights, participation and protection of workers and 
participants, and eligibility of participants, grievance procedures, 
judicial review, nondiscrimination, allocation of funds, procedures for 
review and approval of plans; and
    (3) Not related to the basic purposes of WIOA, described in Sec.  
675.100 of this chapter.


Sec.  685.470  How can grantees request a waiver?

    To request a waiver, a grantee must submit to the Department a 
waiver plan that:
    (a) Describes the goals of the waiver, the expected programmatic 
outcomes, and how the waiver will improve the provision of program 
activities;
    (b) Is consistent with any guidelines the Department establishes;
    (c) Describes the data that will be collected to track the impact 
of the waiver; and
    (d) Includes a modified program plan reflecting the effect of the 
requested waiver.

Subpart E--Supplemental Youth Workforce Investment Activity Funding 
Under the Workforce Innovation and Opportunity Act


Sec.  685.500  What is supplemental youth workforce investment activity 
funding?

    Pursuant to WIOA sec. 127(a)(1), if Congress appropriates more than 
$925 million for WIOA youth workforce investment activities in a fiscal 
year, 4 percent of the excess amount must be used by the Department to 
provide workforce investment activities for eligible MSFW youth under 
WIOA sec. 167.


Sec.  685.510  What requirements apply to grants funded by the 
Workforce Innovation and Opportunity Act?

    The requirements in subparts A through D of this part apply to 
grants funded by WIOA sec. 127(a)(1), except that grants described in 
this subpart must be used only for workforce investment activities for 
eligible MSFW youth, as described in Sec.  685.370 and WIOA sec. 167(d) 
(including related assistance and supportive services).


Sec.  685.520  What is the application process for obtaining a grant 
funded by the Workforce Innovation and Opportunity Act?

    The Department will issue a separate FOA for grants funded by WIOA 
sec. 127(a)(1). The selection will be made in accordance with the 
procedures described in Sec.  685.210, except that the Department 
reserves the right to provide priority to applicants that are WIOA sec. 
167 grantees.


Sec.  685.530  What planning documents are required for grants funded 
by the Workforce Innovation and Opportunity Act?

    The required planning documents will be described in the FOA.


Sec.  685.540  How are funds allocated to grants funded by the 
Workforce Innovation and Opportunity Act?

    The allocation of funds will be based on the comparative merits of 
the applications, in accordance with criteria set forth in the FOA.


Sec.  685.550  Who is eligible to receive services through grants 
funded by the Workforce Innovation and Opportunity Act?

    Eligible MSFW youth as defined in Sec.  685.110 are eligible to 
receive services through grants funded by WIOA sec. 127(a)(1).

0
19. Add part 686 to read as follows:

PART 686--THE JOB CORPS UNDER TITLE I OF THE WORKFORCE INNOVATION 
AND OPPORTUNITY ACT

Subpart A--Scope and Purpose
Sec.
686.100 What is the scope of this part?
686.110 What is the Job Corps program?
686.120 What definitions apply to this part?
Subpart B--Site Selection and Protection and Maintenance of Facilities
Sec.
686.200 How are Job Corps center locations and sizes determined?
686.210 How are center facility improvements and new construction 
handled?
686.220 Who is responsible for the protection and maintenance of 
center facilities?
Subpart C--Funding and Selection of Center Operators and Service 
Providers
Sec.
686.300 What entities are eligible to receive funds to operate 
centers and provide training and operational support services?
686.310 How are entities selected to receive funding to operate 
centers?
686.320 What if a current center operator is deemed to be an 
operator of a high-performing center?
686.330 What is the length of an agreement entered into by the 
Secretary for operation of a Job Corps center and what are the 
conditions for renewal of such an agreement?
686.340 How are entities selected to receive funding to provide 
outreach and admission, career transition and other operations 
support services?
686.350 What conditions apply to the operation of a Civilian 
Conservation Center?
686.360 What are the requirements for award of contracts and 
payments to Federal agencies?
Subpart D--Recruitment, Eligibility, Screening, Selection and 
Assignment, and Enrollment
Sec.
686.400 Who is eligible to participate in the Job Corps program?
686.410 Are there additional factors which are considered in 
selecting an eligible applicant for enrollment?
686.420 Are there any special requirements for enrollment related to 
the Military Selective Service Act?
686.430 What entities conduct outreach and admissions activities for 
the Job Corps program?
686.440 What are the responsibilities of outreach and admissions 
providers?
686.450 How are applicants who meet eligibility and selection 
criteria assigned to centers?
686.460 What restrictions are there on the assignment of eligible 
applicants for nonresidential enrollment in Job Corps?
686.470 May an individual who is determined to be ineligible or an 
individual who is denied enrollment appeal that decision?
686.480 At what point is an applicant considered to be enrolled in 
Job Corps?
686.490 How long may a student be enrolled in Job Corps?
Subpart E--Program Activities and Center Operations
Sec.
686.500 What services must Job Corps centers provide?
686.505 What types of training must Job Corps centers provide?
686.510 Are entities other than Job Corps center operators permitted 
to provide academic and career technical training?
686.515 What are advanced career training programs?
686.520 What responsibilities do the center operators have in 
managing work-based learning?
686.525 Are students permitted to hold jobs other than work-based 
learning opportunities?
686.530 What residential support services must Job Corps center 
operators provide?
686.535 Are Job Corps centers required to maintain a student 
accountability system?

[[Page 56444]]

686.540 Are Job Corps centers required to establish behavior 
management systems?
686.545 What is Job Corps' zero tolerance policy?
686.550 How does Job Corps ensure that students receive due process 
in disciplinary actions?
686.555 What responsibilities do Job Corps centers have in assisting 
students with child care needs?
686.560 What are the center's responsibilities in ensuring that 
students' religious rights are respected?
686.565 Is Job Corps authorized to conduct pilot and demonstration 
projects?
Subpart F--Student Support
Sec.
686.600 Are students provided with government-paid transportation to 
and from Job Corps centers?
686.610 When are students authorized to take leaves of absence from 
their Job Corps centers?
686.620 Are Job Corps students eligible to receive cash allowances 
and performance bonuses?
686.630 Are student allowances subject to Federal payroll taxes?
686.640 Are students provided with clothing?
Subpart G--Career Transition and Graduate Services
Sec.
686.700 What are a Job Corps center's responsibilities in preparing 
students for career transition services?
686.710 What career transition services are provided for Job Corps 
enrollees?
686.720 Who provides career transition services?
686.730 What are the responsibilities of career transition service 
providers?
686.740 What services are provided for program graduates?
686.750 Are graduates provided with transition allowances?
686.760 What services are provided to former enrollees?
Subpart H--Community Connections
Sec.
686.800 How do Job Corps centers and service providers become 
involved in their local communities?
686.810 What is the makeup of a workforce council and what are its 
responsibilities?
686.820 How will Job Corps coordinate with other agencies?
Subpart I--Administrative and Management Provisions
Sec.
686.900 Are damages caused by the acts or omissions of students 
eligible for payment under the Federal Tort Claims Act?
686.905 Are loss and damages that occur to persons or personal 
property of students at Job Corps centers eligible for 
reimbursement?
686.910 If a student is injured in the performance of duty as a Job 
Corps student, what benefits may the student receive?
686.915 When is a Job Corps student considered to be in the 
performance of duty?
686.920 How are students protected from unsafe or unhealthy 
situations?
686.925 What are the requirements for criminal law enforcement 
jurisdiction on center property?
686.930 Are Job Corps operators and service providers authorized to 
pay State or local taxes on gross receipts?
686.935 What are the financial management responsibilities of Job 
Corps center operators and other service providers?
686.940 Are center operators and service providers subject to 
Federal audits?
686.945 What are the procedures for management of student records?
686.950 What procedures apply to disclosure of information about Job 
Corps students and program activities?
686.955 What are the reporting requirements for center operators and 
operational support service providers?
686.960 What procedures are available to resolve complaints and 
disputes?
686.965 How does Job Corps ensure that complaints or disputes are 
resolved in a timely fashion?
686.970 How does Job Corps ensure that centers or other service 
providers comply with the Workforce Innovation and Opportunity Act 
and the WIOA regulations?
686.975 How does Job Corps ensure that contract disputes will be 
resolved?
686.980 How does Job Corps resolve disputes between the U.S. 
Department of Labor and the U.S. Department of Agriculture regarding 
the operation of Job Corps centers?
686.985 What Department of Labor equal opportunity and 
nondiscrimination regulations apply to Job Corps?
Subpart J--Performance
Sec.
686.1000 How is the performance of the Job Corps program assessed?
686.1010 What are the primary indicators of performance for Job 
Corps centers and the Job Corps program?
686.1020 What are the indicators of performance for Job Corps 
outreach and admissions providers?
686.1030 What are the indicators of performance for Job Corps career 
transition service providers?
686.1040 What information will be collected for use in the Annual 
Report?
686.1050 How are the expected levels of performance for Job Corps 
centers, outreach and admissions providers and career transition 
service providers established?
686.1060 How are center rankings established?
686.1070 How and when will the Secretary use performance improvement 
plans?

    Authority:  Secs. 142, 144, 146, 147, 159, 189, 503, Pub. L. 
113-128, 128 Stat. 1425 (Jul. 22, 2014).

Subpart A--Scope and Purpose


Sec.  686.100  What is the scope of this part?

    The regulations in this part outline the requirements that apply to 
the Job Corps program. More detailed policies and procedures are 
contained in a Policy and Requirements Handbook issued by the 
Secretary. Throughout this part, ``instructions (procedures) issued by 
the Secretary'' and similar references refer to the Policy and 
Requirements Handbook and other Job Corps directives.


Sec.  686.110  What is the Job Corps program?

    Job Corps is a national program that operates in partnership with 
States and communities, Local Workforce Development Boards (WDBs), 
Youth Standing Committees where established, one-stop centers and 
partners, and other youth programs to provide academic, career and 
technical education, service-learning, and social opportunities 
primarily in a residential setting, for low-income young people. The 
objective of Job Corps is to support responsible citizenship and 
provide young people with the skills they need to lead to successful 
careers that will result in economic self-sufficiency and opportunities 
for advancement in in-demand industry sectors or occupations or the 
Armed Forces, or to enrollment in postsecondary education.


Sec.  686.120  What definitions apply to this part?

    The following definitions apply to this part:
    Absent Without Official Leave (AWOL) means an adverse enrollment 
status to which a student is assigned based on extended, unapproved 
absence from his/her assigned center or off-center place of duty. 
Students do not earn Job Corps allowances while in AWOL status.
    Applicable Local WDB means a Local WDB that:
    (1) Works with a Job Corps center and provides information on local 
employment opportunities and the job skills and credentials needed to 
obtain the opportunities; and
    (2) Serves communities in which the graduates of the Job Corps seek 
employment.
    Applicable one-stop center means a one-stop center that provides 
career transition services, such as referral, assessment, recruitment, 
and placement, to support the purposes of the Job Corps.
    Capital improvement means any modification, addition, restoration 
or other improvement:
    (1) Which increases the usefulness, productivity, or serviceable 
life of an

[[Page 56445]]

existing site, facility, building, structure, or major item of 
equipment;
    (2) Which is classified for accounting purposes as a ``fixed 
asset;'' and
    (3) The cost of which increases the recorded value of the existing 
building, site, facility, structure, or major item of equipment and is 
subject to depreciation.
    Career technical training means career and technical education and 
training.
    Career transition service provider means an organization acting 
under a contract or other agreement with Job Corps to provide career 
transition services for graduates and, to the extent possible, for 
former students.
    Civilian Conservation Center (CCC) means a center operated on 
public land under an agreement between the Department of Labor (the 
Department) and the Department of Agriculture, which provides, in 
addition to other training and assistance, programs of work-based 
learning to conserve, develop, or manage public natural resources or 
public recreational areas or to develop community projects in the 
public interest.
    Contract center means a Job Corps center operated under a contract 
with the Department.
    Contracting officer means an official authorized to enter into 
contracts or agreements on behalf of the Department.
    Enrollee means an individual who has voluntarily applied for, been 
selected for, and enrolled in the Job Corps program, and remains with 
the program, but has not yet become a graduate. Enrollees also are 
referred to as ``students'' in this part.
    Enrollment means the process by which an individual formally 
becomes a student in the Job Corps program.
    Former enrollee means an individual who has voluntarily applied 
for, been selected for, and enrolled in the Job Corps program, but left 
the program prior to becoming a graduate.
    Graduate means an individual who has voluntarily applied for, been 
selected for, and enrolled in the Job Corps program and who, as a 
result of participation in the program, has received a secondary school 
diploma or recognized equivalent, or has completed the requirements of 
a career technical training program that prepares individuals for 
employment leading to economic self-sufficiency or entrance into 
postsecondary education or training.
    Individual with a disability means an individual with a disability 
as defined in sec. 3 of the Americans with Disabilities Act of 1990 (42 
U.S.C. 12102).
    Interagency agreement means a formal agreement between the 
Department and another Federal agency administering and operating 
centers. The agreement establishes procedures for the funding, 
administration, operation, and review of those centers as well as the 
resolution of any disputes.
    Job Corps means the Job Corps program established within the 
Department of Labor and described in sec. 143 of the Workforce 
Innovation and Opportunity Act (WIOA).
    Job Corps center means a facility and an organizational entity, 
including all of its parts, providing Job Corps training and designated 
as a Job Corps center, as described in sec. 147 of WIOA.
    Job Corps Director means the chief official of the Job Corps or a 
person authorized to act for the Job Corps Director.
    Low-income individual means an individual who meets the definition 
in WIOA sec. 3(36).
    National Office means the national office of Job Corps.
    National training contractor means a labor union, union-affiliated 
organization, business organization, association, or a combination of 
such organizations, which has a contract with the national office to 
provide career technical training, career transition services, or other 
services.
    Operational support services means activities or services required 
to support the operation of Job Corps, including:
    (1) Outreach and admissions services;
    (2) Contracted career technical training and off-center training;
    (3) Career transition services;
    (4) Continued services for graduates;
    (5) Certain health services; and
    (6) Miscellaneous logistical and technical support.
    Operator means a Federal, State or local agency, or a contractor 
selected under this subtitle to operate a Job Corps center under an 
agreement or contract with the Department.
    Outreach and admissions provider means an organization that 
performs recruitment services, including outreach activities, and 
screens and enrolls youth under a contract or other agreement with Job 
Corps.
    Participant, as used in this part, includes both graduates and 
enrollees and former enrollees that have completed their career 
preparation period. It also includes all enrollees and former enrollees 
who have remained in the program for at least 60 days.
    Placement means student employment, entry into the Armed Forces, or 
enrollment in other training or education programs following separation 
from Job Corps.
    Regional appeal board means the board designated by the Regional 
Director to consider student appeals of disciplinary discharges.
    Regional Director means the chief Job Corps official of a regional 
office or a person authorized to act for the Regional Director.
    Regional office means a regional office of Job Corps.
    Regional Solicitor means the chief official of a regional office of 
the Department of Labor Office of the Solicitor, or a person authorized 
to act for the Regional Solicitor.
    Separation means the action by which an individual ceases to be a 
student in the Job Corps program, either voluntarily or involuntarily.
    Service provider means an entity selected under this subtitle to 
provide operational support services described in this subtitle to a 
Job Corps center.
    Student means an individual enrolled in the Job Corps.
    Unauthorized goods means:
    (1) Firearms and ammunition;
    (2) Explosives and incendiaries;
    (3) Knives;
    (4) Homemade weapons;
    (5) All other weapons and instruments used primarily to inflict 
personal injury;
    (6) Stolen property;
    (7) Drugs, including alcohol, marijuana, depressants, stimulants, 
hallucinogens, tranquilizers, and drug paraphernalia except for drugs 
and/or paraphernalia that are prescribed for medical reasons; and
    (8) Any other goods prohibited by the Secretary, center director, 
or center operator in a student handbook.

Subpart B--Site Selection and Protection and Maintenance of 
Facilities


Sec.  686.200  How are Job Corps center locations and sizes determined?

    (a) The Secretary must approve the location and size of all Job 
Corps centers based on established criteria and procedures.
    (b) The Secretary establishes procedures for making decisions 
concerning the establishment, relocation, expansion, or closing of 
contract centers.


Sec.  686.210  How are center facility improvements and new 
construction handled?

    The Secretary establishes procedures for requesting, approving, and 
initiating capital improvements and new construction on Job Corps 
centers.

[[Page 56446]]

Sec.  686.220  Who is responsible for the protection and maintenance of 
center facilities?

    (a) The Secretary establishes procedures for the protection and 
maintenance of contract center facilities owned or leased by the 
Department of Labor, that are consistent with the current Federal 
Property Management Regulations.
    (b) The U.S. Department of Agriculture, when operating Civilian 
Conservation Centers (CCC) on public land, is responsible for the 
protection and maintenance of CCC facilities.
    (c) The Secretary issues procedures for conducting periodic 
facility surveys of centers to determine their condition and to 
identify needs such as correction of safety and health deficiencies, 
rehabilitation, and/or new construction.

Subpart C--Funding and Selection of Center Operators and Service 
Providers


Sec.  686.300  What entities are eligible to receive funds to operate 
centers and provide training and operational support services?

    (a) Center operators. Entities eligible to receive funds under this 
subpart to operate centers include:
    (1) Federal, State, and local agencies;
    (2) Private organizations, including for-profit and non-profit 
corporations;
    (3) Indian tribes and organizations; and
    (4) Area career and technical education or residential career and 
technical schools.
    (b) Service providers. Entities eligible to receive funds to 
provide outreach and admissions, career transition services and other 
operational support services are local or other entities with the 
necessary capacity to provide activities described in this part to a 
Job Corps center, including:
    (1) Applicable one-stop centers and partners;
    (2) Organizations that have a demonstrated record of effectiveness 
in serving at-risk youth and placing them into employment, including 
community action agencies; business organizations, including private 
for-profit and non-profit corporations; and labor organizations; and
    (3) Child welfare agencies that are responsible for children and 
youth eligible for benefits and services under sec. 477 of the Social 
Security Act (42 U.S.C. 677).


Sec.  686.310  How are entities selected to receive funding to operate 
centers?

    (a) The Secretary selects eligible entities to operate contract 
centers on a competitive basis in accordance with applicable statutes 
and regulations. In selecting an entity, ETA issues requests for 
proposals (RFPs) for the operation of all contract centers according to 
the Federal Acquisition Regulation (48 CFR chapter 1) and Department of 
Labor Acquisition Regulation (48 CFR chapter 29). ETA develops RFPs for 
center operators in consultation with the Governor, the center 
workforce council (if established), and the Local WDB for the workforce 
development area in which the center is located.
    (b) The RFP for each contract center describes uniform 
specifications and standards, as well as specifications and 
requirements that are unique to the operation of the specific center.
    (c) The contracting officer selects and funds Job Corps contract 
center operators on the basis of an evaluation of the proposals 
received using criteria established by the Secretary, and set forth in 
the RFP. The criteria include the following:
    (1) The offeror's ability to coordinate the activities carried out 
through the Job Corps center with activities carried out under the 
appropriate State and local workforce investment plans;
    (2) The offeror's ability to offer career technical training that 
has been proposed by the workforce council and the degree to which the 
training reflects employment opportunities in the local areas in which 
most of the enrollees intend to seek employment;
    (3) The degree to which the offeror demonstrates relationships with 
the surrounding communities, including employers, labor organizations, 
State WDBs, Local WDBs, applicable one-stop centers, and the State and 
region in which the center is located;
    (4) The offeror's past performance, if any, relating to operating 
or providing activities to a Job Corps center, including information 
regarding the offeror in any reports developed by the Office of the 
Inspector General of the Department of Labor and the offeror's 
demonstrated effectiveness in assisting individuals in achieving the 
indicators of performance for eligible youth described in sec. 
116(b)(2)(A)(ii) of WIOA, listed in Sec.  686.1010; and
    (5) The offeror's ability to demonstrate a record of successfully 
assisting at-risk youth to connect to the workforce, including 
providing them with intensive academics and career technical training.
    (d) In order to be eligible to operate a Job Corps center, the 
offeror also must submit the following information at such time and in 
such manner as required by the Secretary:
    (1) A description of the program activities that will be offered at 
the center and how the academics and career technical training reflect 
State and local employment opportunities, including opportunities in 
in-demand industry sectors and occupations recommended by the workforce 
council;
    (2) A description of the counseling, career transition, and support 
activities that will be offered at the center, including a description 
of the strategies and procedures the offeror will use to place 
graduates into unsubsidized employment or education leading to a 
recognized postsecondary credential upon completion of the program;
    (3) A description of the offeror's demonstrated record of 
effectiveness in placing at-risk youth into employment and 
postsecondary education, including past performance of operating a Job 
Corps center and as appropriate, the entity's demonstrated 
effectiveness in assisting individuals in achieving the indicators of 
performance for eligible youth described in sec. 116(b)(2)(A)(ii) of 
WIOA, listed in Sec.  686.1010;
    (4) A description of the relationships that the offeror has 
developed with State WDBs, Local WDBs, applicable one-stop centers, 
employers, labor organizations, State and local educational agencies, 
and the surrounding communities in which the center is located;
    (5) A description of the offeror's ability to coordinate the 
activities carried out through the Job Corps center with activities 
carried out under the appropriate State Plan and local plans;
    (6) A description of the strong fiscal controls the offeror has in 
place to ensure proper accounting of Federal funds and compliance with 
the Financial Management Information System established by the 
Secretary under sec. 159(a) of WIOA;
    (7) A description of the steps to be taken to control costs in 
accordance with the Financial Management Information System established 
by the Secretary;
    (8) A detailed budget of the activities that will be supported 
using Federal funds provided under this part and non-Federal resources;
    (9) An assurance the offeror is licensed to operate in the State in 
which the center is located;
    (10) An assurance that the offeror will comply with basic health 
and safety codes, including required disciplinary measures and Job 
Corps' Zero Tolerance Policy; and
    (11) Any other information on additional selection factors required 
by the Secretary.

[[Page 56447]]

Sec.  686.320  What if a current center operator is deemed to be an 
operator of a high-performing center?

    (a) If an offeror meets the requirements as an operator of a high-
performing center as applied to a particular Job Corps center, that 
operator will be allowed to compete in any competitive selection 
process carried out for an award to operate that center.
    (b) An offeror is considered to be an operator of a high-performing 
center if the Job Corps center operated by the offeror:
    (1) Is ranked among the top 20 percent of Job Corps centers for the 
most recent preceding program year according to the rankings calculated 
under Sec.  686.1060; and
    (2) Meets the expected levels of performance established under 
Sec.  686.1050 with respect to each of the primary indicators of 
performance for Job Corps centers:
    (i) For the period of the most recent preceding 3 program years for 
which information is available at the time the determination is made, 
achieved an average of 100 percent, or higher, of the expected level of 
performance for the indicator; and
    (ii) For the most recent preceding program year for which 
information is available at the time the determination is made, 
achieved 100 percent, or higher, of the expected level of performance 
established for the indicator.
    (c) If any of the program years described in paragraphs (b)(2)(i) 
and (ii) of this section precedes the implementation of the 
establishment of the expected levels of performance under Sec.  
686.1050 and the application of the primary indicators of performance 
for Job Corps centers identified in Sec.  686.1010, an entity is 
considered an operator of a high-performing center during that period 
if the Job Corps center operated by the entity:
    (1) Meets the requirements of paragraph (b)(2) of this section with 
respect to such preceding program years using the performance of the 
Job Corps center regarding the national goals or targets established by 
the Office of the Job Corps under the previous performance 
accountability system for--
    (i) The 6-month follow-up placement rate of graduates in 
employment, the military, education, or training;
    (ii) The 12-month follow-up placement rate of graduates in 
employment, the military, education, or training;
    (iii) The 6-month follow-up average weekly earnings of graduates;
    (iv) The rate of attainment of secondary school diplomas or their 
recognized equivalent;
    (v) The rate of attainment of completion certificates for career 
technical training;
    (vi) Average literacy gains; and
    (vii) Average numeracy gains; or
    (2) Is ranked among the top five percent of Job Corps centers for 
the most recent preceding program year according to the rankings 
calculated under Sec.  686.1060.


Sec.  686.330  What is the length of an agreement entered into by the 
Secretary for operation of a Job Corps center and what are the 
conditions for renewal of such an agreement?

    (a) Agreements are for not more than a 2-year period. The Secretary 
may exercise any contractual option to renew the agreement in 1-year 
increments for not more than 3 additional years.
    (b) The Secretary will establish procedures for evaluating the 
option to renew an agreement that includes: An assessment of the 
factors described in paragraph (c) of this section; a review of 
contract performance and financial reporting compliance; a review of 
the program management and performance data described in Sec. Sec.  
686.1000 and 686.1010; an assessment of whether the center is on a 
performance improvement plan as described Sec.  686.1070 and if so, 
whether the center is making measureable progress in completing the 
actions described in the plan; and an evaluation of the factors 
described in paragraph (d) of this section.
    (c) The Secretary only will renew the agreement of an entity to 
operate a Job Corps center if the entity:
    (1) Has a satisfactory record of integrity and business ethics;
    (2) Has adequate financial resources to perform the agreement;
    (3) Has the necessary organization, experience, accounting and 
operational controls, and technical skills; and
    (4) Is otherwise qualified and eligible under applicable laws and 
regulations, including that the contractor is not under suspension or 
debarred from eligibility for Federal contractors.
    (d) The Secretary will not renew an agreement for an entity to 
operate a Job Corps center for any additional 1-year period if, for 
both of the 2 most recent preceding program years for which information 
is available at the time the determination is made, or if a second 
program year is not available, the preceding year for which information 
is available, such center:
    (1) Has been ranked in the lowest 10 percent of Job Corps centers 
according to the rankings calculated under Sec.  686.1060; and
    (2) Failed to achieve an average of 50 percent or higher of the 
expected level of performance established under Sec.  686.1050 with 
respect to each of the primary indicators of performance for eligible 
youth described in sec. 116(b)(2)(A)(ii) of WIOA, listed in Sec.  
686.1010.
    (e)(1) Information will be considered to be available for a program 
year for purposes of paragraph (d) of this section if for each of the 
primary indicators of performance, all of the students included in the 
cohort being measured either began their participation under the 
current center operator or, if they began their participation under the 
previous center operator, were on center for at least 6 months under 
the current operator. If an operator assumes operation of a center that 
meets the criteria under paragraphs (d)(1) and (2) of this section, the 
first contractual option year will not be denied based on the 
application of paragraph (d) of this section provided that the operator 
otherwise meets the requirements for renewal described in paragraphs 
(a) through (c) of this section.
    (2) If complete information for any of the indicators of 
performance described in paragraph (d)(2) of this section is not 
available for either of the 2 program years described in paragraph (d) 
of this section, the Secretary will review partial program year data 
from the most recent program year for those indicators, if at least two 
quarters of data are available, when making the determination required 
under paragraph (d)(2) of this section.
    (f) If any of the program years described in paragraph (d) of this 
section precede the implementation of the establishment of the expected 
levels of performance under Sec.  686.1050 and the application of the 
primary indicators of performance for Job Corps centers described in 
Sec.  686.1010, the evaluation described in paragraph (d) of this 
section will be based on whether in its operation of the center the 
entity:
    (1) Is ranked among the lowest 10 percent of Job Corps centers for 
the most recent preceding program year according to the ranking 
calculated under Sec.  686.1060; and
    (2) Meets the requirement of paragraph (d)(2) of this section with 
respect to such preceding program years using the performance of the 
Job Corps center regarding the national goals or targets established by 
the Office of the Job Corps under the previous performance 
accountability system for--
    (i) The 6-month follow-up placement rate of graduates in 
employment, the military, education, or training;

[[Page 56448]]

    (ii) The 12-month follow-up placement rate of graduates in 
employment, the military, education, or training;
    (iii) The 6-month follow-up average weekly earnings of graduates;
    (iv) The rate of attainment of secondary school diplomas or their 
recognized equivalent;
    (v) The rate of attainment of completion certificates for career 
technical training;
    (vi) Average literacy gains; and
    (vii) Average numeracy gains.
    (g) The Secretary can exercise an option to renew the agreement 
with an entity notwithstanding the requirements in paragraph (d) of 
this section for no more than 2 additional years if the Secretary 
determines that a renewal would be in the best interest of the Job 
Corps program, taking into account factors including:
    (1) Significant improvements in program performance in carrying out 
a performance improvement plan;
    (2) That the performance is due to circumstances beyond the control 
of the entity, such as an emergency or disaster;
    (3) A significant disruption in the operations of the center, 
including in the ability to continue to provide services to students, 
or significant increase in the cost of such operations; or
    (4) A significant disruption in the procurement process with 
respect to carrying out a competition for the selection of a center 
operator.
    (h) If the Secretary does make an exception and exercises the 
option to renew per paragraph (g) of this section, the Secretary will 
provide a detailed explanation of the rationale for exercising the 
option to the Committee on Education and the Workforce of the House of 
Representatives and the Committee on Health, Education, Labor, and 
Pensions of the Senate.


Sec.  686.340  How are entities selected to receive funding to provide 
outreach and admission, career transition and other operations support 
services?

    (a) The Secretary selects eligible entities to provide outreach and 
admission, career transition, and operational services on a competitive 
basis in accordance with applicable statutes and regulations. In 
selecting an entity, ETA issues requests for proposals (RFP) for 
operational support services according to the Federal Acquisition 
Regulation (48 CFR chapter 1) and Department of Labor Acquisition 
Regulation (48 CFR chapter 29). ETA develops RFPs for operational 
support services in consultation with the Governor, the center 
workforce council (if established), and the Local WDB for the workforce 
development area in which the center is located.
    (b) The RFP for each support service contract describes uniform 
specifications and standards, as well as specifications and 
requirements that are unique to the specific required operational 
support services.
    (c) The contracting officer selects and funds operational support 
service contracts on the basis of an evaluation of the proposals 
received using criteria established by the Secretary and set forth in 
the RFP. The criteria may include the following, as applicable:
    (1) The ability of the offeror to coordinate the activities carried 
out in relation to the Job Corps center with related activities carried 
out under the appropriate State Plan and local plans;
    (2) The ability of the entity to offer career technical training 
that has been proposed by the workforce council and the degree to which 
the training reflects employment opportunities in the local areas in 
which most of the students intend to seek employment;
    (3) The degree to which the offeror demonstrates relationships with 
the surrounding communities, including employers, labor organizations, 
State WDBs, Local WDBs, applicable one-stop centers, and the State and 
region in which the services are provided;
    (4) The offeror's past performance, if any, relating to providing 
services to a Job Corps center, including information regarding the 
offeror in any reports developed by the Office of the Inspector General 
of the Department of Labor and the offeror's demonstrated effectiveness 
in assisting individuals in achieving the indicators of performance for 
eligible youth described in sec. 116(b)(2)(A)(ii) of WIOA, listed in 
Sec.  686.1010;
    (5) The offeror's ability to demonstrate a record of successfully 
assisting at-risk youth to connect to the workforce; and
    (6) Any other information on additional selection factors required 
by the Secretary.


Sec.  686.350  What conditions apply to the operation of a Civilian 
Conservation Center?

    (a) The Secretary of Labor may enter into an agreement with the 
Secretary of Agriculture to operate Job Corps centers located on public 
land, which are called Civilian Conservation Centers (CCCs). Located 
primarily in rural areas, in addition to academics, career technical 
training, and workforce preparation skills training, CCCs provide 
programs of work experience to conserve, develop, or manage public 
natural resources or public recreational areas or to develop community 
projects in the public interest.
    (b) When the Secretary of Labor enters into an agreement with the 
Secretary of Agriculture for the funding, establishment, and operation 
of CCCs, provisions are included to ensure that the Department of 
Agriculture complies with the regulations under this part.
    (c) Enrollees in CCCs may provide assistance in addressing 
national, State, and local disasters, consistent with current child 
labor laws. The Secretary of Agriculture must ensure that enrollees are 
properly trained, equipped, supervised, and dispatched consistent with 
the standards for the conservation and rehabilitation of wildlife 
established under the Fish and Wildlife Coordination Act (16 U.S.C. 661 
et seq.).
    (d) The Secretary of Agriculture must designate a Job Corps 
National Liaison to support the agreement between the Departments of 
Labor and Agriculture to operate CCCs.
    (e) The Secretary of Labor, in consultation with the Secretary of 
Agriculture, may select an entity to operate a CCC in accordance with 
the requirements of Sec.  686.310 if the Secretary of Labor determines 
appropriate.
    (f) The Secretary of Labor has the discretion to close CCCs if the 
Secretary determines appropriate.


Sec.  686.360  What are the requirements for award of contracts and 
payments to Federal agencies?

    (a) The requirements of the Federal Property and Administrative 
Services Act of 1949, as amended; the Federal Grant and Cooperative 
Agreement Act of 1977; the Federal Acquisition Regulation (48 CFR 
chapter 1); and the Department of Labor Acquisition Regulation (48 CFR 
chapter 29) apply to the award of contracts and to payments to Federal 
agencies.
    (b) Job Corps funding of Federal agencies that operate CCCs are 
made by a transfer of obligational authority from the Department to the 
respective operating agency.

Subpart D--Recruitment, Eligibility, Screening, Selection and 
Assignment, and Enrollment


Sec.  686.400  Who is eligible to participate in the Job Corps program?

    (a) To be eligible to participate in the Job Corps, an individual 
must be:
    (1) At least 16 and not more than 24 years of age at the time of 
enrollment, except that:
    (i) The Job Corps Director may waive the maximum age limitation 
described in paragraph (a)(1) of this section, and

[[Page 56449]]

the requirement in paragraph (a)(1)(ii) of this section for an 
individual with a disability if he or she is otherwise eligible 
according to the requirements listed in this section and Sec.  686.410; 
and
    (ii) Not more than 20 percent of individuals enrolled nationwide 
may be individuals who are aged 22 to 24 years old;
    (2) A low-income individual;
    (3) An individual who is facing one or more of the following 
barriers to education and employment:
    (i) Is basic skills deficient, as defined in WIOA sec. 3;
    (ii) Is a school dropout;
    (iii) Is homeless as defined in sec. 41403(6) of the Violence 
Against Women Act of 1994 (42 U.S.C. 14043e-2(6)); is a homeless child 
or youth, as defined in sec. 725(2) of the McKinney-Vento Homeless 
Assistance Act (42 U.S.C. 11434a(2)); or is a runaway, an individual in 
foster care; or an individual who was in foster care and has aged out 
of the foster care system.
    (iv) Is a parent; or
    (v) Requires additional education, career technical training, or 
workforce preparation skills in order to obtain and retain employment 
that leads to economic self-sufficiency; and
    (4) Meets the requirements of Sec.  686.420, if applicable.
    (b) Notwithstanding paragraph (a)(2) of this section, a veteran is 
eligible to become an enrollee if the individual:
    (1) Meets the requirements of paragraphs (a)(1) and (3) of this 
section; and
    (2) Does not meet the requirement of paragraph (a)(2) of this 
section because the military income earned by the individual within the 
6-month period prior to the individual's application for Job Corps 
prevents the individual from meeting that requirement.


Sec.  686.410  Are there additional factors which are considered in 
selecting an eligible applicant for enrollment?

    Yes, in accordance with procedures issued by the Secretary, an 
eligible applicant may be selected for enrollment only if:
    (a) A determination is made, based on information relating to the 
background, needs, and interests of the applicant, that the applicant's 
educational and career and technical needs can best be met through the 
Job Corps program;
    (b) A determination is made that there is a reasonable expectation 
the applicant can participate successfully in group situations and 
activities, and is not likely to engage in actions that would 
potentially:
    (1) Prevent other students from receiving the benefit of the 
program;
    (2) Be incompatible with the maintenance of sound discipline; or
    (3) Impede satisfactory relationships between the center to which 
the student is assigned and surrounding local communities;
    (c) The applicant is made aware of the center's rules, what the 
consequences are for failure to observe the rules, and agrees to comply 
with such rules, as described in procedures issued by the Secretary;
    (d) The applicant has not been convicted of a felony consisting of 
murder, child abuse, or a crime involving rape or sexual assault. Other 
than these felony convictions, no one will be denied enrollment in Job 
Corps solely on the basis of contact with the criminal justice system. 
All applicants must submit to a background check conducted according to 
procedures established by the Secretary and in accordance with 
applicable State and local laws. If the background check finds that the 
applicant is on probation, parole, under a suspended sentence, or under 
the supervision of any agency as a result of court action or 
institutionalization, the court or appropriate supervising agency may 
certify in writing that it will approve of the applicant's 
participation in Job Corps, and provide full release from its 
supervision, and that the applicant's participation and release does 
not violate applicable laws and regulations; and
    (e) Suitable arrangements are made for the care of any dependent 
children for the proposed period of enrollment.


Sec.  686.420  Are there any special requirements for enrollment 
related to the Military Selective Service Act?

    (a) Yes, each male applicant 18 years of age or older must present 
evidence that he has complied with sec. 3 of the Military Selective 
Service Act (50 U.S.C. App. 451 et seq.) if required; and
    (b) When a male student turns 18 years of age, he must submit 
evidence to the center that he has complied with the requirements of 
the Military Selective Service Act (50 U.S.C. App. 451 et seq.).


Sec.  686.430  What entities conduct outreach and admissions activities 
for the Job Corps program?

    The Secretary makes arrangements with outreach and admissions 
providers to perform Job Corps recruitment, screening and admissions 
functions according to standards and procedures issued by the 
Secretary. Entities eligible to receive funds to provide outreach and 
admissions services are identified in Sec.  686.300.


Sec.  686.440  What are the responsibilities of outreach and admissions 
providers?

    (a) Outreach and admissions agencies are responsible for:
    (1) Developing outreach and referral sources;
    (2) Actively seeking out potential applicants;
    (3) Conducting personal interviews with all applicants to identify 
their needs and eligibility status; and
    (4) Identifying youth who are interested and likely Job Corps 
participants.
    (b) Outreach and admissions providers are responsible for 
completing all Job Corps application forms and determining whether 
applicants meet the eligibility and selection criteria for 
participation in Job Corps as provided in Sec. Sec.  686.400 and 
686.410.
    (c) The Secretary may decide that determinations with regard to one 
or more of the eligibility criteria will be made by the National 
Director or his or her designee.


Sec.  686.450  How are applicants who meet eligibility and selection 
criteria assigned to centers?

    (a) Each applicant who meets the application and selection 
requirements of Sec. Sec.  686.400 and 686.410 is assigned to a center 
based on an assignment plan developed by the Secretary in consultation 
with the operators of Job Corps centers. The assignment plan identifies 
a target for the maximum percentage of students at each center who come 
from the State or region nearest the center, and the regions 
surrounding the center. The assignment plan is based on an analysis of 
the following non-exclusive list of factors that will be analyzed in 
consultation with center operators:
    (1) The number of eligible individuals in the State and region 
where the center is located and the regions surrounding where the 
center is located;
    (2) The demand for enrollment in Job Corps in the State and region 
where the center is located and in surrounding regions;
    (3) The size and enrollment level of the center, including the 
education, training, and supportive services provided through the 
center; and
    (4) The performance of the Job Corps center relating to the 
expected levels of performance for indicators described in WIOA sec. 
159(c)(1), and whether any actions have been taken with respect to the 
center under secs. 159(f)(2) and 159(f)(3) of WIOA.
    (b) Eligible applicants are assigned to the center that offers the 
type of career technical training selected by the individual, and among 
the centers that

[[Page 56450]]

offer such career technical training, is closest to the home of the 
individual. The Secretary may waive this requirement if:
    (1) The enrollee would be unduly delayed in participating in the 
Job Corps program because the closest center is operating at full 
capacity; or
    (2) The parent or guardian of the enrollee requests assignment of 
the enrollee to another Job Corps center due to circumstances in the 
community that would impair prospects for successful completion by the 
enrollee.
    (c) If a parent or guardian objects to the assignment of a student 
under the age of 18 to a center other than the center closest to home 
that offers the desired career technical training, the Secretary must 
not make such an assignment.


Sec.  686.460  What restrictions are there on the assignment of 
eligible applicants for nonresidential enrollment in Job Corps?

    No more than 20 percent of students enrolled in Job Corps 
nationwide may be nonresidential students.


Sec.  686.470  May an individual who is determined to be ineligible or 
an individual who is denied enrollment appeal that decision?

    (a) A person who is determined to be ineligible to participate in 
Job Corps under Sec.  686.400 or a person who is not selected for 
enrollment under Sec.  686.410 may appeal the determination to the 
outreach and admissions agency within 60 days of the determination. The 
appeal will be resolved according to the procedures in Sec. Sec.  
686.960 and 686.965. If the appeal is denied by the outreach/admissions 
contractor or the center, the person may appeal the decision in writing 
to the Regional Director within 60 days of the date of the denial. The 
Regional Director will decide within 60 days whether to reverse or 
approve the appealed decision. The decision by the Regional Director is 
the Department's final decision.
    (b) If an applicant believes that he or she has been determined 
ineligible or not selected for enrollment based upon a factor 
prohibited by sec. 188 of WIOA, the individual may proceed under the 
applicable Department nondiscrimination regulations implementing WIOA 
sec. 188 at 29 CFR part 38.
    (c) An applicant who is determined to be ineligible or a person who 
is denied enrollment must be referred to the appropriate one-stop 
center or other local service provider.


Sec.  686.480  At what point is an applicant considered to be enrolled 
in Job Corps?

    (a) To be considered enrolled as a Job Corps student, an applicant 
selected for enrollment must physically arrive at the assigned Job 
Corps center on the appointed date. However, applicants selected for 
enrollment who arrive at their assigned centers by government furnished 
transportation are considered to be enrolled on their dates of 
departure by such transportation.
    (b) Center operators must document the enrollment of new students 
according to procedures issued by the Secretary.


Sec.  686.490  How long may a student be enrolled in Job Corps?

    (a) Except as provided in paragraph (b) of this section, a student 
may remain enrolled in Job Corps for no more than 2 years.
    (b)(1) An extension of a student's enrollment may be authorized in 
special cases according to procedures issued by the Secretary;
    (2) A student's enrollment in an advanced career training program 
may be extended in order to complete the program for a period not to 
exceed 1 year;
    (3) An extension of a student's enrollment may be authorized in the 
case of a student with a disability who would reasonably be expected to 
meet the standards for a Job Corps graduate if allowed to participate 
in the Job Corps for not more than 1 additional year; and
    (4) An enrollment extension may be granted to a student who 
participates in national service, as authorized by a Civilian 
Conservation Center, for the amount of time equal to the period of 
national service.

Subpart E--Program Activities and Center Operations


Sec.  686.500  What services must Job Corps centers provide?

    (a) Job Corps centers must provide an intensive, well-organized, 
and fully supervised program including:
    (1) Educational activities, including:
    (i) Career technical training;
    (ii) Academic instruction;
    (iii) Employability and skills training; and
    (iv) Independent learning and living skills development.
    (2) Work-based learning and experience;
    (3) Residential support services; and
    (4) Other services as required by the Secretary.
    (b) In addition, centers must provide students with access to the 
career services described in secs. 134(c)(2)(A)(i)-(xi) of WIOA.


Sec.  686.505  What types of training must Job Corps centers provide?

    (a) Job Corps centers must provide students with a career technical 
training program that is:
    (1) Aligned with industry-recognized standards and credentials and 
with program guidance; and
    (2) Linked to employment opportunities in in-demand industry 
sectors and occupations both in the area in which the center is located 
and, if practicable, in the area the student plans to reside after 
graduation.
    (b) Each center must provide education programs, including: An 
English language acquisition program, high school diploma or high 
school equivalency certification program, and academic skills training 
necessary for students to master skills in their chosen career 
technical training programs.
    (c) Each center must provide programs for students to learn and 
practice employability and independent learning and living skills 
including: job search and career development, interpersonal relations, 
driver's education, study and critical thinking skills, financial 
literacy and other skills specified in program guidance.
    (d) All Job Corps training programs must be based on industry and 
academic skills standards leading to recognized industry and academic 
credentials, applying evidence-based instructional approaches, and 
resulting in:
    (1) Students' employment in unsubsidized, in-demand jobs with the 
potential for advancement opportunities;
    (2) Enrollment in advanced education and training programs or 
apprenticeships, including registered apprenticeship; or
    (3) Enlistment in the Armed Services.
    (e) Specific career technical training programs offered by 
individual centers must be approved by the Regional Director according 
to policies issued by the Secretary.
    (f) Center workforce councils described in Sec.  686.810 must 
review appropriate labor market information, identify in-demand 
industry sectors and employment opportunities in local areas where 
students will look for employment, determine the skills and education 
necessary for those jobs, and as appropriate, recommend changes in the 
center's career technical training program to the Secretary.
    (g) Each center must implement a system to evaluate and track the 
progress and achievements of each student at regular intervals.
    (h) Each center must develop a training plan that must be available 
for

[[Page 56451]]

review and approval by the appropriate Regional Director.


Sec.  686.510  Are entities other than Job Corps center operators 
permitted to provide academic and career technical training?

    (a) The Secretary may arrange for the career technical and academic 
education of Job Corps students through local public or private 
educational agencies, career and technical educational institutions or 
technical institutes, or other providers such as business, union or 
union-affiliated organizations with demonstrated effectiveness, as long 
as the entity can provide education and training substantially 
equivalent in cost and quality to that which the Secretary could 
provide through other means.
    (b) Entities providing these services will be selected in 
accordance with the requirements of Sec.  686.310.


Sec.  686.515  What are advanced career training programs?

    (a) The Secretary may arrange for programs of advanced career 
training (ACT) for selected students, which may be provided through the 
eligible training providers identified in WIOA sec. 122 in which the 
students continue to participate in the Job Corps program for a period 
not to exceed 1 year in addition to the period of participation to 
which these students would otherwise be limited.
    (b) Students participating in an ACT program are eligible to 
receive:
    (1) All of the benefits provided to a residential Job Corps 
student; or
    (2) A monthly stipend equal to the average value of the benefits 
described in paragraph (b)(1) of this section.
    (c) Any operator may enroll more students than otherwise authorized 
by the Secretary in an ACT program if, in accordance with standards 
developed by the Secretary, the operator demonstrates:
    (1) Participants in such a program have achieved a satisfactory 
rate of completion and placement in training-related jobs; and
    (2) For the most recently preceding 2 program years, the operator 
has, on average, met or exceeded the expected levels of performance 
under WIOA sec. 159(c)(1) for each of the primary indicators described 
in WIOA sec. 116(b)(2)(A)(ii), listed in Sec.  686.1010.


Sec.  686.520  What responsibilities do the center operators have in 
managing work-based learning?

    (a) The center operator must emphasize and implement work-based 
learning programs for students through center program activities, 
including career and technical skills training, and through 
arrangements with employers. Work-based learning must be under actual 
working conditions and must be designed to enhance the employability, 
responsibility, and confidence of the students. Work-based learning 
usually occurs in tandem with students' career technical training.
    (b) The center operator must ensure that students are assigned only 
to workplaces that meet the safety standards described in Sec.  
686.920.


Sec.  686.525  Are students permitted to hold jobs other than work-
based learning opportunities?

    Yes, a center operator may authorize a student to participate in 
gainful leisure time employment, as long as the employment does not 
interfere with required scheduled activities.


Sec.  686.530  What residential support services must Job Corps center 
operators provide?

    Job Corps center operators must provide the following services 
according to procedures issued by the Secretary:
    (a) A center-wide quality living and learning environment that 
supports the overall training program and includes a safe, secure, 
clean and attractive physical and social environment, 7 days a week, 24 
hours a day;
    (b) An ongoing, structured personal counseling program for students 
provided by qualified staff;
    (c) A quality, safe and clean food service, to provide nutritious 
meals for students;
    (d) Medical services, through provision or coordination of a 
wellness program which includes access to basic medical, dental and 
mental health services, as described in the Policy and Requirements 
Handbook, for all students from the date of enrollment until separation 
from the Job Corps program;
    (e) A recreation/avocational program that meets the needs of all 
students;
    (f) A student leadership program and an elected student government; 
and
    (g) A student welfare association for the benefit of all students 
that is funded by non-appropriated funds that come from sources such as 
snack bars, vending machines, disciplinary fines, donations, and other 
fundraising activities, and is run by an elected student government, 
with the help of a staff advisor.


Sec.  686.535  Are Job Corps centers required to maintain a student 
accountability system?

    Yes, each Job Corps center must establish and implement an 
effective system to account for and document the daily whereabouts, 
participation, and status of students during their Job Corps 
enrollment. The system must enable center staff to detect and respond 
to instances of unauthorized or unexplained student absence. Each 
center must operate its student accountability system according to 
requirements and procedures issued by the Secretary.


Sec.  686.540  Are Job Corps centers required to establish behavior 
management systems?

    (a) Yes, each Job Corps center must establish and maintain its own 
student incentives system to encourage and reward students' 
accomplishments.
    (b) The Job Corps center must establish and maintain a behavior 
management system, based on a behavior management plan, according to 
standards of conduct and procedures established by the Secretary. The 
behavior management plan must be approved by the Job Corps regional 
office and reviewed annually. The behavior management system must 
include a zero tolerance policy for violence and drugs as described in 
Sec.  686.545. All criminal incidents will be promptly reported to 
local law enforcement.


Sec.  686.545  What is Job Corps' zero tolerance policy?

    (a) All center operators must comply with Job Corps' zero tolerance 
policy as established by the Secretary. Job Corps has a zero tolerance 
policy for infractions including but not limited to:
    (1) Acts of violence, as defined by the Secretary;
    (2) Use, sale, or possession of a controlled substance, as defined 
at 21 U.S.C. 802;
    (3) Abuse of alcohol;
    (4) Possession of unauthorized goods; or
    (5) Other illegal or disruptive activity.
    (b) As part of this policy, all students must be tested for drugs 
as a condition of participation.
    (c) The zero tolerance policy specifies the offenses that result in 
the separation of students from the Job Corps. The center director is 
expressly responsible for determining when there is a violation of this 
policy.


Sec.  686.550  How does Job Corps ensure that students receive due 
process in disciplinary actions?

    The center operator must ensure that all students receive due 
process in disciplinary proceedings according to procedures developed 
by the Secretary. These procedures must include center fact-finding and 
behavior review boards, a code of sanctions under which the penalty of 
separation from Job Corps

[[Page 56452]]

might be imposed, and procedures for students to submit an appeal to a 
Job Corps regional appeal board following a center's decision to 
discharge involuntarily the student from Job Corps.


Sec.  686.555  What responsibilities do Job Corps centers have in 
assisting students with child care needs?

    (a) Job Corps centers are responsible for coordinating with 
outreach and admissions agencies to assist applicants, whenever 
feasible, with making arrangements for child care. Prior to enrollment, 
a program applicant with dependent children who provides primary or 
custodial care must certify that suitable arrangements for child care 
have been established for the proposed period of enrollment.
    (b) Child development programs may be located at Job Corps centers 
with the approval of the Secretary.


Sec.  686.560  What are the center's responsibilities in ensuring that 
students' religious rights are respected?

    (a) Centers must ensure that a student has the right to worship or 
not worship as he or she chooses.
    (b) Students who believe their religious rights have been violated 
may file complaints under the procedures set forth in 29 CFR part 38.
    (c) Requirements related to equal treatment of religious 
organizations in Department of Labor programs, and to protection of 
religious liberty of Department of Labor social service providers and 
beneficiaries, are found at subpart D of 29 CFR part 2. See also 
Sec. Sec.  683.255 and 683.285 of this chapter; 29 CFR part 38.


Sec.  686.565  Is Job Corps authorized to conduct pilot and 
demonstration projects?

    Yes, the Secretary may undertake experimental, research and 
demonstration projects related to the Job Corps program according to 
WIOA sec. 156(a), provided that such projects are developed, approved, 
and conducted in accordance with policies and procedures developed by 
the Secretary.

Subpart F--Student Support


Sec.  686.600  Are students provided with government-paid 
transportation to and from Job Corps centers?

    Yes, Job Corps provides for the transportation of students between 
their homes and centers as described in policies and procedures issued 
by the Secretary.


Sec.  686.610  When are students authorized to take leaves of absence 
from their Job Corps centers?

    (a) Job Corps students are eligible for annual leaves, emergency 
leaves and other types of leaves of absence from their assigned centers 
according to criteria and requirements issued by the Secretary. 
Additionally, enrollees in Civilian Conservation Centers may take leave 
to provide assistance in addressing national, State, and local 
disasters, consistent with current laws and regulations, including 
child labor laws and regulations.
    (b) Center operators and other service providers must account for 
student leave according to procedures issued by the Secretary.


Sec.  686.620  Are Job Corps students eligible to receive cash 
allowances and performance bonuses?

    (a) Yes, according to criteria and rates established by the 
Secretary, Job Corps students receive cash living allowances, 
performance bonuses, and allotments for care of dependents. Graduates 
receive post-separation transition allowances according to Sec.  
686.750.
    (b) In the event of a student's death, any amount due under this 
section is paid according to the provisions of 5 U.S.C. 5582 governing 
issues such as designation of beneficiary, order of precedence, and 
related matters.


Sec.  686.630  Are student allowances subject to Federal payroll taxes?

    Yes, Job Corps student allowances are subject to Federal payroll 
tax withholding and social security taxes. Job Corps students are 
considered to be Federal employees for purposes of Federal payroll 
taxes.


Sec.  686.640  Are students provided with clothing?

    Yes, Job Corps students are provided cash clothing allowances and/
or articles of clothing, including safety clothing, when needed for 
their participation in Job Corps and their successful entry into the 
work force. Center operators and other service providers must issue 
clothing and clothing assistance to students according to rates, 
criteria, and procedures issued by the Secretary.

Subpart G--Career Transition and Graduate Services


Sec.  686.700  What are a Job Corps center's responsibilities in 
preparing students for career transition services?

    Job Corps centers must assess and counsel students to determine 
their competencies, capabilities, and readiness for career transition 
services.


Sec.  686.710  What career transition services are provided for Job 
Corps enrollees?

    Job Corps career transition services focus on placing program 
graduates in:
    (a) Full-time jobs that are related to their career technical 
training and career pathway that lead to economic self-sufficiency;
    (b) Postsecondary education;
    (c) Advanced training programs, including registered apprenticeship 
programs; or
    (d) The Armed Forces.


Sec.  686.720  Who provides career transition services?

    The one-stop delivery system must be used to the maximum extent 
practicable in placing graduates and former enrollees in jobs. Multiple 
other resources also may provide post-program services, including but 
not limited to Job Corps career transition service providers under a 
contract or other agreement with the Department of Labor, and State 
vocational rehabilitation agencies for individuals with disabilities.


Sec.  686.730  What are the responsibilities of career transition 
service providers?

    (a) Career transition service providers are responsible for:
    (1) Contacting graduates;
    (2) Assisting them in improving skills in resume preparation, 
interviewing techniques and job search strategies;
    (3) Identifying job leads or educational and training opportunities 
through coordination with Local WDBs, one-stop operators and partners, 
employers, unions and industry organizations;
    (4) Placing graduates in jobs, registered apprenticeship, the Armed 
Forces, or postsecondary education or training, or referring former 
students for additional services in their local communities as 
appropriate; and
    (5) Providing placement services for former enrollees according to 
procedures issued by the Secretary.
    (b) Career transition service providers must record and submit all 
Job Corps placement information according to procedures established by 
the Secretary.


Sec.  686.740  What services are provided for program graduates?

    According to procedures issued by the Secretary, career transition 
and support services must be provided to program graduates for up to 12 
months after graduation.


Sec.  686.750  Are graduates provided with transition allowances?

    Yes, graduates receive post-separation transition allowances 
according to policies and procedures established by

[[Page 56453]]

the Secretary. Transition allowances are incentive-based to reflect a 
graduate's attainment of academic credentials and those associated with 
career technical training such as industry-recognized credentials.


Sec.  686.760  What services are provided to former enrollees?

    (a) Up to 3 months of employment services, including career 
services offered through a one-stop center, may be provided to former 
enrollees.
    (b) According to procedures issued by the Secretary, other career 
transition services as determined appropriate may be provided to former 
enrollees.

Subpart H--Community Connections


Sec.  686.800  How do Job Corps centers and service providers become 
involved in their local communities?

    (a) The director of each Job Corps center must ensure the 
establishment and development of mutually beneficial business and 
community relationships and networks. Establishing and developing 
networks includes relationships with:
    (1) Local and distant employers;
    (2) Applicable one-stop centers and Local WDBs:
    (3) Entities offering apprenticeship opportunities, including 
registered apprenticeships, and youth programs;
    (4) Labor-management organizations and local labor organizations;
    (5) Employers and contractors that support national training 
programs and initiatives; and
    (6) Community-based organizations, non-profit organizations, and 
intermediaries providing workforce development-related services.
    (b) Each Job Corps center also must establish and develop 
relationships with members of the community in which it is located. 
Members of the community must be informed of the projects of the Job 
Corps center and changes in the rules, procedures, or activities of the 
center that may affect the community. Events of mutual interest to the 
community and the Job Corps center must be planned to create and 
maintain community relations and community support.


Sec.  686.810  What is the makeup of a workforce council and what are 
its responsibilities?

    (a) Each Job Corps center must establish a workforce council, 
according to procedures established by the Secretary. The workforce 
council must include:
    (1) Non-governmental and private sector employers;
    (2) Representatives of labor organizations (where present) and of 
employees;
    (3) Job Corps enrollees and graduates; and
    (4) In the case of a single-State local area, the workforce council 
must include a representative of the State WDB constituted under Sec.  
679.110 of this chapter.
    (b) A majority of the council members must be business owners, 
chief executives or chief operating officers of nongovernmental 
employers or other private sector employers, or their designees, who 
have substantial management, hiring or policy responsibility and who 
represent businesses with employment opportunities in the local area 
and the areas in which students will seek employment.
    (c) The workforce council may include, or otherwise provide for 
consultation with, employers from outside the local area who are likely 
to hire a significant number of enrollees from the Job Corps center.
    (d) The workforce council must:
    (1) Work with all applicable Local WDBs and review labor market 
information to determine and provide recommendations to the Secretary 
regarding the center's career technical training offerings, including 
identification of emerging occupations suitable for training;
    (2) Review all relevant labor market information, including related 
information in the State Plan or the local plan, to:
    (i) Recommend in-demand industry sectors or occupations in the area 
in which the center operates;
    (ii) Determine employment opportunities in the areas in which 
enrollees intend to seek employment;
    (iii) Determine the skills and education necessary to obtain the 
identified employment; and
    (iv) Recommend to the Secretary the type of career technical 
training that must be implemented at the center to enable enrollees to 
obtain the employment opportunities identified; and
    (3) Meet at least once every 6 months to reevaluate the labor 
market information, and other relevant information, to determine and 
recommend to the Secretary any necessary changes in the career 
technical training provided at the center.


Sec.  686.820  How will Job Corps coordinate with other agencies?

    (a) The Secretary issues guidelines for the national office, 
regional offices, Job Corps centers and operational support providers 
to use in developing and maintaining cooperative relationships with 
other agencies and institutions, including law enforcement, educational 
institutions, communities, and other employment and training programs 
and agencies.
    (b) The Secretary develops polices and requirements to ensure 
linkages with the one-stop delivery system to the greatest extent 
practicable, as well as with other Federal, State, and local programs, 
and youth programs funded under title I of WIOA. These linkages enhance 
services to youth who face multiple barriers to employment and must 
include, where appropriate:
    (1) Referrals of applicants and students;
    (2) Participant assessment;
    (3) Pre-employment and work maturity skills training;
    (4) Work-based learning;
    (5) Job search, occupational, and basic skills training; and
    (6) Provision of continued services for graduates.
    (c) Job Corps is identified as a required one-stop partner. 
Wherever practicable, Job Corps centers and operational support 
contractors must establish cooperative relationships and partnerships 
with one-stop centers and other one-stop partners, Local WDBs, and 
other programs for youth.

Subpart I--Administrative and Management Provisions


Sec.  686.900  Are damages caused by the acts or omissions of students 
eligible for payment under the Federal Tort Claims Act?

    Yes, students are considered Federal employees for purposes of the 
FTCA. (28 U.S.C. 2671 et seq.) Claims for such damage must be filed 
pursuant to the procedures found in 29 CFR part 15, subpart D.


Sec.  686.905  Are loss and damages that occur to persons or personal 
property of students at Job Corps centers eligible for reimbursement?

    Yes, the Job Corps may pay students for valid claims under the 
procedures found in 29 CFR part 15, subpart D.


Sec.  686.910  If a student is injured in the performance of duty as a 
Job Corps student, what benefits may the student receive?

    (a) Job Corps students are considered Federal employees for 
purposes of the Federal Employees' Compensation Act (FECA) as specified 
in sec. 157(a)(3) of WIOA. (29 U.S.C. 2897(a)(3))
    (b) Job Corps students may be entitled to benefits under FECA as 
provided by

[[Page 56454]]

5 U.S.C. 8143 for injuries occurring in the performance of duty.
    (c) Job Corps students must meet the same eligibility tests for 
FECA benefits that apply to all other Federal employees. The 
requirements for FECA benefits may be found at 5 U.S.C. 8101, et seq. 
and part 10 of this title. The Department of Labor's Office of Workers' 
Compensation Programs (OWCP) administers the FECA program; all FECA 
determinations are within the exclusive authority of the OWCP, subject 
to appeal to the Employees' Compensation Appeals Board.
    (d) Whenever a student is injured, develops an occupationally 
related illness, or dies while in the performance of duty, the 
procedures of the OWCP, at part 10 of this title, must be followed. To 
assist OWCP in determining FECA eligibility, a thorough investigation 
of the circumstances and a medical evaluation must be completed and 
required forms must be timely filed by the center operator with the 
Department's OWCP. Additional information regarding Job Corps FECA 
claims may be found in OWCP's regulations and procedures available on 
the Department's Web site located at https://www.dol.gov/.


Sec.  686.915  When is a Job Corps student considered to be in the 
performance of duty?

    (a) Performance of duty is a determination that must be made by the 
OWCP under FECA, and is based on the individual circumstances in each 
claim.
    (b) In general, residential students may be considered to be in the 
``performance of duty'' when:
    (1) They are on center under the supervision and control of Job 
Corps officials;
    (2) They are engaged in any authorized Job Corps activity;
    (3) They are in authorized travel status; or
    (4) They are engaged in any authorized offsite activity.
    (c) Non-resident students are generally considered to be ``in 
performance of duty'' as Federal employees when they are engaged in any 
authorized Job Corps activity, from the time they arrive at any 
scheduled center activity until they leave the activity. The standard 
rules governing coverage of Federal employees during travel to and from 
work apply. These rules are described in guidance issued by the 
Secretary.
    (d) Students are generally considered to be not in the performance 
of duty when:
    (1) They are Absent Without Leave (AWOL);
    (2) They are at home, whether on pass or on leave;
    (3) They are engaged in an unauthorized offsite activity; or
    (4) They are injured or ill due to their own willful misconduct, 
intent to cause injury or death to oneself or another, or through 
intoxication or illegal use of drugs.


Sec.  686.920  How are students protected from unsafe or unhealthy 
situations?

    (a) The Secretary establishes procedures to ensure that students 
are not required or permitted to work, be trained, reside in, or 
receive services in buildings or surroundings or under conditions that 
are unsanitary or hazardous. Whenever students are employed or in 
training for jobs, they must be assigned only to jobs or training which 
observe applicable Federal, State and local health and safety 
standards.
    (b) The Secretary develops procedures to ensure compliance with 
applicable Department of Labor Occupational Safety and Health 
Administration regulations and Wage and Hour Division regulations.


Sec.  686.925  What are the requirements for criminal law enforcement 
jurisdiction on center property?

    (a) All Job Corps property which would otherwise be under exclusive 
Federal legislative jurisdiction is considered under concurrent 
jurisdiction with the appropriate State and locality with respect to 
criminal law enforcement. Concurrent jurisdiction extends to all 
portions of the property, including housing and recreational 
facilities, in addition to the portions of the property used for 
education and training activities.
    (b) Centers located on property under concurrent Federal-State 
jurisdiction must establish agreements with Federal, State and local 
law enforcement agencies to enforce criminal laws.
    (c) The Secretary develops procedures to ensure that any searches 
of a student's person, personal area, or belongings for unauthorized 
goods follow applicable right-to-privacy laws.


Sec.  686.930  Are Job Corps operators and service providers authorized 
to pay State or local taxes on gross receipts?

    (a) A private for-profit or a non-profit Job Corps service provider 
is not liable, directly or indirectly, to any State or subdivision for 
any gross receipts taxes, business privilege taxes measured by gross 
receipts, or any similar taxes in connection with any payments made to 
or by such service provider for operating a center or other Job Corps 
program or activity. The service provider is not liable to any State or 
subdivision to collect or pay any sales, excise, use, or similar tax 
imposed upon the sale to or use by such deliverer of any property, 
service, or other item in connection with the operation of a center or 
other Job Corps program or activity.
    (b) If a State or local authority compels a center operator or 
other service provider to pay such taxes, the center operator or 
service provider may pay the taxes with Federal funds, but must 
document and report the State or local requirement according to 
procedures issued by the Secretary.


Sec.  686.935  What are the financial management responsibilities of 
Job Corps center operators and other service providers?

    (a) Center operators and other service providers must manage Job 
Corps funds using financial management information systems that meet 
the specifications and requirements of the Secretary.
    (b) These financial management systems must:
    (1) Provide accurate, complete, and current disclosures of the 
costs of their Job Corps activities;
    (2) Ensure that expenditures of funds are necessary, reasonable, 
allocable, and allowable in accordance with applicable cost principles;
    (3) Use account structures specified by the Secretary;
    (4) Ensure the ability to comply with cost reporting requirements 
and procedures issued by the Secretary; and
    (5) Maintain sufficient cost data for effective planning, 
monitoring, and evaluation of program activities and for determining 
the allowability of reported costs.


Sec.  686.940  Are center operators and service providers subject to 
Federal audits?

    (a) Yes, Center operators and service providers are subject to 
Federal audits.
    (b) The Secretary arranges for the survey, audit, or evaluation of 
each Job Corps center and service provider at least once every 3 years, 
by Federal auditors or independent public accountants. The Secretary 
may arrange for more frequent audits.
    (c) Center operators and other service providers are responsible 
for giving full cooperation and access to books, documents, papers and 
records to duly appointed Federal auditors and evaluators.


Sec.  686.945  What are the procedures for management of student 
records?

    The Secretary issues guidelines for a system for maintaining 
records for each student during enrollment and for disposition of such 
records after separation.

[[Page 56455]]

Sec.  686.950  What procedures apply to disclosure of information about 
Job Corps students and program activities?

    (a) The Secretary develops procedures to respond to requests for 
information or records or other necessary disclosures pertaining to 
students.
    (b) Department disclosure of Job Corps information must be handled 
according to the Freedom of Information Act and according to Department 
regulations at 29 CFR part 70.
    (c) Job Corps contractors are not ``agencies'' for Freedom of 
Information Act purposes. Therefore, their records are not subject to 
disclosure under the Freedom of Information Act or 29 CFR part 70.
    (d) The regulations at 29 CFR part 71 apply to a system of records 
covered by the Privacy Act of 1974 maintained by the Department or to a 
similar system maintained by a contractor, such as a screening agency, 
contract center operator, or career transition service provider on 
behalf of the Job Corps.


Sec.  686.955  What are the reporting requirements for center operators 
and operational support service providers?

    The Secretary establishes procedures to ensure the timely and 
complete reporting of necessary financial and program information to 
maintain accountability. Center operators and operational support 
service providers are responsible for the accuracy and integrity of all 
reports and data they provide.


Sec.  686.960  What procedures are available to resolve complaints and 
disputes?

    (a) Each Job Corps center operator and service provider must 
establish and maintain a grievance procedure for filing complaints and 
resolving disputes from applicants, students and/or other interested 
parties about its programs and activities. A hearing on each complaint 
or dispute must be conducted within 30 days of the filing of the 
complaint or dispute. A decision on the complaint must be made by the 
center operator or service provider, as appropriate, within 60 days 
after the filing of the complaint, and a copy of the decision must be 
immediately served, by first-class mail, on the complainant and any 
other party to the complaint. Except for complaints under Sec.  686.470 
or complaints alleging fraud or other criminal activity, complaints may 
be filed within 1 year of the occurrence that led to the complaint.
    (b) The procedure established under paragraph (a) of this section 
must include procedures to process complaints alleging violations of 
sec. 188 of WIOA, consistent with Department nondiscrimination 
regulations implementing sec. 188 of WIOA at 29 CFR part 38 and Sec.  
686.985.


Sec.  686.965  How does Job Corps ensure that complaints or disputes 
are resolved in a timely fashion?

    (a) If a complaint is not resolved by the center operator or 
service provider in the time frames described in Sec.  686.960, the 
person making the complaint may request that the Regional Director 
determine whether reasonable cause exists to believe that WIOA or 
regulations for this part of WIOA have been violated. The request must 
be filed with the Regional Director within 60 days from the date that 
the center operator or service provider should have issued the 
decision.
    (b) Following the receipt of a request for review under paragraph 
(a) of this section, the Regional Director must determine within 60 
days whether there has been a violation of WIOA or the WIOA 
regulations. If the Regional Director determines that there has been a 
violation of WIOA or WIOA regulations, (s)he may direct the operator or 
service provider to remedy the violation or direct the service provider 
to issue a decision to resolve the dispute according to the service 
provider's grievance procedures. If the service provider does not 
comply with the Regional Director's decision within 30 days, the 
Regional Director may impose a sanction on the center operator or 
service provider for violating WIOA or WIOA regulations, and/or for 
failing to issue a decision. Decisions imposing sanctions upon a center 
operator or service provider may be appealed to the Department of Labor 
Office of Administrative Law Judges under Sec.  683.800 or Sec.  
683.840 of this chapter.


Sec.  686.970  How does Job Corps ensure that centers or other service 
providers comply with the Workforce Innovation and Opportunity Act and 
the WIOA regulations?

    (a) If the Department receives a complaint or has reason to believe 
that a center or other service provider is failing to comply with the 
requirements of WIOA or WIOA regulations, the Regional Director must 
investigate the allegation and determine within 90 days after receiving 
the complaint or otherwise learning of the alleged violation, whether 
such allegation or complaint is true.
    (b) As a result of such a determination, the Regional Director may:
    (1) Direct the center operator or service provider to handle a 
complaint through the grievance procedures established under Sec.  
686.960; or
    (2) Investigate and determine whether the center operator or 
service provider is in compliance with WIOA and WIOA regulations. If 
the Regional Director determines that the center or service provider is 
not in compliance with WIOA or WIOA regulations, the Regional Director 
may take action to resolve the complaint under Sec.  686.965(b), or 
will report the incident to the Department of Labor Office of the 
Inspector General, as described in Sec.  683.620 of this chapter.


Sec.  686.975  How does Job Corps ensure that contract disputes will be 
resolved?

    A dispute between the Department and a Job Corps contractor will be 
handled according to the Contract Disputes Act and applicable 
regulations.


Sec.  686.980  How does Job Corps resolve disputes between the U.S. 
Department of Labor and the U.S. Department of Agriculture regarding 
the operation of Job Corps centers?

    Disputes between the U.S. Department of Labor and the U.S. 
Department of Agriculture regarding operating a center will be handled 
according to the interagency agreement between the two agencies.


Sec.  686.985  What Department of Labor equal opportunity and 
nondiscrimination regulations apply to Job Corps?

    Nondiscrimination requirements, procedures, complaint processing, 
and compliance reviews are governed by, as applicable, provisions of 
the following Department of Labor regulations:
    (a) Regulations implementing sec. 188 of WIOA for programs 
receiving Federal financial assistance under WIOA found at 29 CFR part 
38;
    (b) Title 29 CFR part 33 for programs conducted by the Department 
of Labor; and
    (c) Title 41 CFR chapter 60 for entities that have a Federal 
government contract.

Subpart J--Performance


Sec.  686.1000  How is the performance of the Job Corps program 
assessed?

    (a) The performance of the Job Corps program as a whole, and the 
performance of individual centers, outreach and admissions providers, 
and career transition service providers, is assessed in accordance with 
the regulations in this part and procedures and standards issued by the 
Secretary, through a national performance management system, including 
the Outcome Measurement System (OMS).
    (b) The national performance management system will include 
measures that reflect the primary

[[Page 56456]]

indicators of performance described in Sec.  686.1010, the information 
needed to complete the Annual Report described in Sec.  686.1040, and 
any other information the Secretary determines is necessary to manage 
and evaluate the effectiveness of the Job Corps program. The Secretary 
will issue annual guidance describing the performance management system 
and outcome measurement system.
    (c) Annual performance assessments based on the measures described 
in paragraph (b) of this section are done for each center operator and 
other service providers, including outreach and admissions providers 
and career transition providers.


Sec.  686.1010  What are the primary indicators of performance for Job 
Corps centers and the Job Corps program?

    The primary indicators of performance for eligible youth are 
described in sec. 116(b)(2)(A)(ii) of WIOA. They are:
    (a) The percentage of program participants who are in education or 
training activities, or in unsubsidized employment, during the second 
quarter after exit from the program;
    (b) The percentage of program participants who are in education or 
training activities, or in unsubsidized employment, during the fourth 
quarter after exit from the program;
    (c) The median earnings of program participants who are in 
unsubsidized employment during the second quarter after exit from the 
program;
    (d) The percentage of program participants who obtain a recognized 
postsecondary credential, or a secondary school diploma or its 
recognized equivalent during participation in or within 1 year after 
exit from the program. Program participants who obtain a secondary 
school diploma or its recognized equivalent will be included in the 
percentage only if they also have obtained or retained employment, or 
are in an education or training program leading to a recognized 
postsecondary credential, within 1 year after exit from the program;
    (e) The percentage of program participants who, during a program 
year, are in an education or training program that leads to a 
recognized postsecondary credential or employment and who are achieving 
measurable skill gains toward such a credential or employment; and
    (f) The indicators of effectiveness in serving employers 
established by the Secretaries of Education and Labor, pursuant to sec. 
116(b)(2)(A)(iv) of WIOA.


Sec.  686.1020  What are the indicators of performance for Job Corps 
outreach and admissions providers?

    The Secretary establishes performance indicators for outreach and 
admission service providers serving the Job Corps program. They 
include, but are not limited to:
    (a) The number of enrollees recruited, compared to the established 
goals for such recruitment, and the number of enrollees who remain 
committed to the program for 90 days after enrollment;
    (b) The percentage and number of former enrollees, including the 
number dismissed under the zero tolerance policy described in sec. 
152(b) of WIOA and Sec.  686.545;
    (c) The maximum attainable percent of enrollees at the Job Corps 
center that reside in the State in which the center is located, and the 
maximum attainable percentage of enrollees at the Job Corps center that 
reside in the State in which the center is located and in surrounding 
regions, as compared to the percentage targets established by the 
Secretary for the center for each of those measures;
    (d) The cost per enrollee, calculated by comparing the number of 
enrollees at the center in a program year to the total budget for such 
center in the same program year; and
    (e) Additional indicators of performance, as necessary.


Sec.  686.1030  What are the indicators of performance for Job Corps 
career transition service providers?

    The Secretary establishes performance indicators for career 
transition service providers serving the Job Corps program. These 
include, but are not limited to, the following:
    (a) The primary indicators of performance for eligible youth in 
WIOA sec. 116(b)(2)(A)(ii), as listed in Sec.  686.1010;
    (b) The number of graduates who entered the Armed Forces;
    (c) The number of graduates who entered registered apprenticeship 
programs;
    (d) The number of graduates who entered unsubsidized employment 
related to the career technical training received through the Job Corps 
program;
    (e) The number of graduates who entered unsubsidized employment not 
related to the education and training received through the Job Corps 
program;
    (f) The percentage and number of graduates who enter postsecondary 
education;
    (g) The average wage of graduates who entered unsubsidized 
employment:
    (1) On the first day of such employment; and
    (2) On the day that is 6 months after such first day; and
    (h) Additional indicators of performance, as necessary.


Sec.  686.1040  What information will be collected for use in the 
Annual Report?

    The Secretary will collect and submit in the Annual Report 
described in sec. 159(c)(4) of WIOA, which will include the following 
information on each Job Corps center, and the Job Corps program as a 
whole:
    (a) Information on the performance, based on the performance 
indicators described Sec.  686.1010, as compared to the expected level 
of performance established under Sec.  686.1050 for each performance 
indicator;
    (b) Information on the performance of outreach service providers 
and career transition service providers on the performance indicators 
established under Sec. Sec.  686.1020 and 686.1030, as compared to the 
expected levels of performance established under Sec.  686.1050 for 
each of those indicators;
    (c) The number of enrollees served;
    (d) Demographic information on the enrollees served, including age, 
race, gender, and education and income level;
    (e) The number of graduates of a Job Corps center;
    (f) The number of graduates who entered the Armed Forces;
    (g) The number of graduates who entered registered apprenticeship 
programs;
    (h) The number of graduates who received a regular secondary school 
diploma;
    (i) The number of graduates who received a State recognized 
equivalent of a secondary school diploma;
    (j) The number of graduates who entered unsubsidized employment 
related to the career technical training received through the Job Corps 
program and the number who entered unsubsidized employment not related 
to the education and training received;
    (k) The percentage and number of former enrollees, including the 
number dismissed under the zero tolerance policy described in Sec.  
686.545;
    (l) The percentage and number of graduates who enter postsecondary 
education;
    (m) The average wage of graduates who enter unsubsidized 
employment:
    (1) On the first day of such employment; and
    (2) On the day that is 6 months after such first day;
    (n) The maximum attainable percent of enrollees at a Job Corps 
center that reside in the State in which the center is located, and the 
maximum attainable percentage of enrollees at a Job Corps center that 
reside in the State in which the center is located and in surrounding

[[Page 56457]]

regions, as compared to the percentage targets established by the 
Secretary for the center for each of those measures;
    (o) The cost per enrollee, which is calculated by comparing the 
number of enrollees at the center in a program year to the total budget 
for such center in the same program year;
    (p) The cost per graduate, which is calculated by comparing the 
number of graduates of the center in a program year compared to the 
total budget for such center in the same program year;
    (q) Information regarding the state of Job Corps buildings and 
facilities, including a review of requested construction, 
rehabilitation, and acquisition projects, by each Job Corps center, and 
a review of new facilities under construction;
    (r) Available information regarding the national and community 
service activities of enrollees, particularly those enrollees at 
Civilian Conservation Centers; and
    (s) Any additional information required by the Secretary.


Sec.  686.1050  How are the expected levels of performance for Job 
Corps centers, outreach and admissions providers and career transition 
service providers established?

    (a) The Secretary establishes expected levels of performance for 
Job Corps centers, outreach and admissions providers and career 
transition service providers and the Job Corps program relating to each 
of the primary indicators of performance described in Sec. Sec.  
686.1010, 686.1020, and 686.1030.
    (b) As described in Sec.  686.1000, the Secretary will issue annual 
guidance describing the national performance management system and 
outcomes measurement system, which will communicate the expected levels 
of performance for each primary indicator of performance for each 
center, and each indicator of performance for each outreach and 
admission provider, and for each career transition service provider. 
Such guidance also will describe how the expected levels of performance 
were calculated.


Sec.  686.1060  How are center rankings established?

    (a) The Secretary calculates annual rankings of center performance 
based on the performance management system described in Sec.  686.1000 
as part of the annual performance assessment described in Sec.  
686.1000(c).
    (b) The Secretary will issue annual guidance that communicates the 
methodology for calculating the performance rankings for the year.


Sec.  686.1070  How and when will the Secretary use performance 
improvement plans?

    (a) The Secretary establishes standards and procedures for 
developing and implementing performance improvement plans.
    (1) The Secretary will develop and implement a performance 
improvement plan for a center when that center fails to meet the 
expected levels of performance described in Sec.  686.1050.
    (i) The Secretary will consider a center to have failed to meet the 
expected level of performance if the center:
    (A) Is ranked among the lowest 10 percent of Job Corps centers for 
the most recent preceding program year according to the rankings 
calculated under Sec.  686.1060; and
    (B) The center fails to achieve an average of 90 percent of the 
expected level of performance for all of the primary indicators.
    (ii) For any program year that precedes the implementation of the 
establishment of the expected levels of performance under Sec.  
686.1050 and the application of the primary indicators of performance 
for Job Corps centers identified in Sec.  686.1010, the Secretary will 
consider a center to have failed to meet the expected levels of 
performance if the center:
    (A) Is ranked among the lowest 10 percent of Job Corps centers for 
the most recent preceding program year according to the rankings 
calculated under Sec.  686.1060; and
    (B) The center's composite OMS score for the program year is 88 
percent or less of the year's OMS national average.
    (2) The Secretary also may develop and implement additional 
performance improvement plans, which will require improvements for a 
Job Corps center that fails to meet criteria established by the 
Secretary other than the expected levels of performance.
    (b) A performance improvement plan will require action be taken to 
correct identified performance issues within 1 year of the 
implementation of the plan, and it will identify criteria that must be 
met for the center to complete the performance improvement plan.
    (1) The center operator must implement the actions outlined in the 
performance improvement plan.
    (2) If the center fails to take the steps outlined in the 
performance improvement plan or fails to meet the criteria established 
to complete the performance improvement plan after 1 year, the center 
will be considered to have failed to improve performance under a 
performance improvement plan detailed in paragraph (a) of this section.
    (i) Such a center will remain on a performance improvement plan and 
the Secretary will take action as described in paragraph (c) of this 
section.
    (ii) If a Civilian Conservation Center fails to meet expected 
levels of performance relating to the primary indicators of performance 
specified in Sec.  686.1010, or fails to improve performance under a 
performance improvement plan detailed in paragraph (a) of this section 
after 3 program years, the Secretary, in consultation with the 
Secretary of Agriculture, must select an entity to operate the Civilian 
Conservation Center on a competitive basis, in accordance with the 
requirements of Sec.  686.310.
    (c) Under a performance improvement plan, the Secretary may take 
the following actions, as necessary:
    (1) Providing technical assistance to the center;
    (2) Changing the management staff of a center;
    (3) Changing the career technical training offered at the center;
    (4) Replacing the operator of the center;
    (5) Reducing the capacity of the center;
    (6) Relocating the center; or
    (7) Closing the center in accordance with the criteria established 
under Sec.  686.200(b).

0
20. Add part 687 to read as follows:

PART 687--NATIONAL DISLOCATED WORKER GRANTS

Sec.
687.100 What are the types and purposes of National Dislocated 
Worker Grants under the Workforce Innovation and Opportunity Act?
687.110 What are major economic dislocations or other events which 
may qualify for a National Dislocated Worker Grant?
687.120 Who is eligible to apply for National Dislocated Worker 
Grants?
687.130 When must applications for National Dislocated Worker Grants 
be submitted to the Department?
687.140 What activities are applicants expected to conduct before a 
National Dislocated Worker Grant application is submitted?
687.150 What are the requirements for submitting applications for 
National Dislocated Worker Grants?
687.160 What is the timeframe for the Department to issue decisions 
on National Dislocated Worker Grant applications?
687.170 Who is eligible to be served under National Dislocated 
Worker Grants?
687.180 What are the allowable activities under National Dislocated 
Worker Grants?
687.190 How do statutory and regulatory waivers apply to National 
Dislocated Worker Grants?

[[Page 56458]]

687.200 What are the program and administrative requirements that 
apply to National Dislocated Worker Grants?

    Authority:  Secs. 170, 189, 503, Pub. L. 113-128, 128 Stat. 1425 
(Jul. 22, 2014).


Sec.  687.100  What are the types and purposes of National Dislocated 
Worker Grants under the Workforce Innovation and Opportunity Act?

    There are two types and purposes of National Dislocated Worker 
Grants (DWGs) under sec. 170 of WIOA: Employment Recovery DWGs and 
Disaster Recovery DWGs.
    (a) Employment Recovery DWGs provide employment and training 
activities for dislocated workers and other eligible populations. They 
are intended to expand service capacity temporarily at the State and 
local levels, by providing time-limited funding assistance in response 
to major economic dislocations or other events that affect the U.S. 
workforce that cannot be accommodated with WIOA formula funds or other 
relevant existing resources.
    (b) Disaster Recovery DWGs allow for the creation of disaster 
relief employment to assist with clean-up and recovery efforts from 
emergencies or major disasters and the provision of employment and 
training activities, in accordance with Sec.  687.180(b).


Sec.  687.110  What are major economic dislocations or other events 
which may qualify for a National Dislocated Worker Grant?

    (a) Qualifying events for Employment Recovery DWGs include:
    (1) Plant closures or mass layoffs affecting 50 or more workers 
from one employer in the same area;
    (2) Closures and realignments of military installations;
    (3) Plant closures or layoffs that have significantly increased the 
total number of unemployed individuals in a community;
    (4) Situations where higher-than-average demand for employment and 
training activities for dislocated members of the Armed Forces, 
dislocated spouses of members of the Armed Forces on active duty (as 
defined in 10 U.S.C. 101(d)(1)), or members of the Armed Forces 
described in Sec.  687.170(a)(1)(iii), exceeds State and local 
resources for providing such activities; and
    (5) Other events, as determined by the Secretary.
    (b) Qualifying events for Disaster Recovery DWGs include:
    (1) Emergencies or major disasters, as defined in paragraphs (1) 
and (2), respectively, of sec. 102 of the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act (42 U.S.C. 5122(1) and (2)) which 
have been declared eligible for public assistance by the Federal 
Emergency Management Agency (FEMA);
    (2) An emergency or disaster situation of national significance, 
natural or man-made, that could result in a potentially large loss of 
employment, as declared or otherwise recognized and issued in writing 
by the chief official of a Federal Agency with jurisdiction over the 
Federal response to the emergency or disaster situation; and
    (3) Situations where a substantial number of workers from a State, 
tribal area, or outlying area in which an emergency or disaster has 
occurred relocate to another State, tribal area, or outlying area.


Sec.  687.120  Who is eligible to apply for National Dislocated Worker 
Grants?

    (a) For Employment Recovery DWGs, the following entities are 
eligible to apply:
    (1) States or outlying areas, or a consortium of States;
    (2) Local Workforce Development Boards (WDBs), or a consortium of 
WDBs;
    (3) An entity described in sec. 166(c) of WIOA (relating to Indian 
and Native American programs);
    (4) Other entities determined to be appropriate by the Governor of 
the State or outlying area involved; and
    (5) Other entities that demonstrate to the Secretary the capability 
to respond effectively to circumstances relating to particular 
dislocations.
    (b) For Disaster Recovery DWGs, the following entities are eligible 
to apply:
    (1) States;
    (2) Outlying areas; and
    (3) Indian tribal governments as defined by the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122(6)).


Sec.  687.130  When must applications for National Dislocated Worker 
Grants be submitted to the Department?

    (a) Applications for Employment Recovery DWGs may be submitted at 
any time during the year and must be submitted to respond to eligible 
events as soon as possible when:
    (1) The applicant receives a notification of a mass layoff or a 
closure as a result of a Worker Adjustment and Retraining Notification 
(WARN) Act notice, a general announcement, or some other means, or in 
the case of applications to address situations described in Sec.  
687.110(a)(4), when higher-than-average demand for employment and 
training activities for those members of the Armed Forces and military 
spouses exceeds State and local resources for providing such 
activities;
    (2) Worker need and interest in services has been determined 
through Rapid Response, or other means, and is sufficient to justify 
the need for a DWG; and
    (3) A determination has been made, in collaboration with the 
applicable local area, that State and local formula funds are 
inadequate to provide the level of services needed by the affected 
workers.
    (b) Applications for Disaster Recovery DWGs to respond to an 
emergency or major disaster must be submitted as soon as possible when:
    (1) As described in Sec.  687.110(b)(1), FEMA has declared that the 
affected area is eligible for public assistance;
    (2) A situation as described in Sec.  687.110(b)(2) occurs. The 
applications must indicate the applicable Federal agency declaration, 
describe the impact on the local and/or State economy, and describe the 
proposed activities; or
    (3) A situation as described in Sec.  687.110(b)(3) occurs, and 
interest in services has been determined and is sufficient to justify 
the need for a DWG.


Sec.  687.140  What activities are applicants expected to conduct 
before a National Dislocated Worker Grant Application is submitted?

    Prior to submitting an application for DWG funds, applicants must:
    (a) For Employment Recovery DWGs:
    (1) Collect information to identify the needs and interests of the 
affected workers through rapid response activities (described in Sec.  
682.330 of this chapter), or other means;
    (2) Provide appropriate services to eligible workers including 
other rapid response activities, based on information gathered as 
described in paragraph (a)(1) of this section; and
    (3) Coordinate with the Local WDB and chief elected official(s) of 
the local area(s) in which the proposed DWG project is to operate.
    (b) For Disaster DWGs:
    (1) Conduct a preliminary assessment of the clean-up and 
humanitarian needs of the affected areas;
    (2) Reasonably ascertain that there is a sufficient population of 
eligible individuals to conduct the planned work; and
    (3) Coordinate with the Local WDB and chief elected official(s) of 
the local area(s) in which the proposed project is to operate.


Sec.  687.150  What are the requirements for submitting applications 
for National Dislocated Worker Grants?

    The Department will publish guidance on the requirements for 
submitting applications for DWGs.

[[Page 56459]]

Requirements may vary depending on the DWG. A project implementation 
plan must be submitted after receiving the DWG award, unless otherwise 
specified.


Sec.  687.160  What is the timeframe for the Department to issue 
decisions on National Dislocated Worker Grant applications?

    The Department will issue a final decision on a DWG application 
within 45 calendar days of receipt of an application that meets the 
requirements of this part. Applicants are encouraged to review their 
DWG application submissions carefully and consult with the appropriate 
Employment and Training Administration Regional Office to ensure their 
applications meet the requirements established in this part and those 
that may be set forth in guidance.


Sec.  687.170  Who is eligible to be served under National Dislocated 
Worker Grants?

    (a) For Employment Recovery DWGs:
    (1) In order to receive employment and training activities, an 
individual must be:
    (i) A dislocated worker within the meaning of sec. 3(15) of WIOA;
    (ii) A person who is either:
    (A) A civilian employee of the Department of Defense or the 
Department of Energy employed at a military installation that is being 
closed or will undergo realignment within 24 months after the date of 
determination of eligibility; or
    (B) An individual employed in a non-managerial position with a 
Department of Defense contractor determined by the Secretary of Defense 
to be at risk of termination from employment as a result of reductions 
in defense expenditures and whose employer is converting from defense 
to non-defense applications in order to prevent worker layoffs; or
    (iii) A member of the Armed Forces who:
    (A) Was on active duty or full-time National Guard duty;
    (B) Is involuntarily separated from active duty or full-time 
National Guard duty (as defined in 10 U.S.C. 1141), or is separated 
from active duty or full-time National Guard duty pursuant to a special 
separation benefits program under 10 U.S.C. 1174a, or the voluntary 
separation incentive program under 10 U.S.C. 1175;
    (C) Is not entitled to retired or retained pay incident to the 
separation described in paragraph (a)(1)(iii)(B) of this section; and
    (D) Applies for employment and training assistance under this part 
before the end of the 180-day period beginning on the date of the 
separation described in paragraph (a)(1)(iii)(B) of this section.
    (iv) For Employment Recovery DWGs awarded for situations described 
in Sec.  687.110(a)(4), a person who is:
    (A) A dislocated member of the Armed Forces or member of the Armed 
Forces described in paragraph (a)(1)(iii) of this section; or
    (B) The dislocated spouse of a member of the Armed Forces on active 
duty (as defined in 10 U.S.C. 101(d)(1)).
    (2) [Reserved]
    (b) For Disaster Recovery DWGs:
    (1) In order to be eligible to receive disaster relief employment 
under sec. 170(b)(1)(B)(i) of WIOA, an individual must be:
    (i) A dislocated worker;
    (ii) A long-term unemployed individual;
    (iii) An individual who is temporarily or permanently laid off as a 
consequence of the emergency or disaster; or
    (iv) An individual who is self-employed and becomes unemployed or 
significantly underemployed as a result of the emergency or disaster.
    (2) In order to be eligible to receive employment and training 
activities and in rare instances, disaster relief employment under sec. 
170(b)(1)(B)(ii) of WIOA, an individual must have relocated or 
evacuated from an area as a result of a disaster that has been declared 
or otherwise recognized, and be:
    (i) A dislocated worker;
    (ii) A long-term unemployed individual;
    (iii) An individual who is temporarily or permanently laid off as a 
consequence of the emergency or disaster; or
    (iv) An individual who is self-employed and becomes unemployed or 
significantly underemployed as a result of the emergency or disaster.
    (c) For Disaster Recovery DWG funds, individuals described in 
paragraph (b)(2) of this section are eligible to receive services 
provided with DWG funds in the State, tribal area, or outlying area in 
which the disaster occurred or the State, tribal area, or outlying area 
to which they have relocated. In certain cases determined by the 
Secretary, individuals described in paragraph (b)(2) of this section 
are eligible to receive services in both the State, tribal area, or 
outlying area in which the disaster occurred and the State, tribal 
area, or outlying area to which they have relocated.


Sec.  687.180  What are the allowable activities under National 
Dislocated Worker Grants?

    (a) For Employment Recovery DWGs:
    (1) Employment and training assistance, including those activities 
authorized at secs. 134(c) through (d) and 170(b)(1) of WIOA. The 
services to be provided in a particular project are negotiated between 
the Department and the grantee, taking into account the needs of the 
target population covered by the grant, and may be changed through 
grant modifications, if necessary.
    (2) DWGs may provide for supportive services, including needs-
related payments (subject to the restrictions in sec. 134(d)(3) of 
WIOA, where applicable, and the terms and conditions of the grant) to 
help workers who require such assistance to participate in the 
activities provided for in the grant. Generally, the terms of a grant 
must be consistent with local policies governing such financial 
assistance under its formula funds (including the payment levels and 
duration of payments). The terms of the grant agreement may diverge 
from established local policies, in the following instances:
    (i) If unemployed dislocated workers served by the project are not 
able to meet the 13 or 8 weeks enrollment in training requirement 
established by sec. 134(d)(3)(B) of WIOA because of the lack of formula 
or DWG funds in the State or local area at the time of the dislocation, 
such individuals may be eligible for needs-related payments if they are 
enrolled in training by the end of the 6th week following the date of 
the DWG award; or
    (ii) Under other circumstances as specified in guidance governing 
DWG application requirements.
    (b) For Disaster DWGs: Funds provided under sec. 170(b)(1)(B) of 
WIOA can support a different array of activities, depending on the 
circumstances surrounding the situation for which the grant was 
awarded:
    (1) For DWGs serving individuals in an emergency or disaster area 
declared eligible for public assistance by FEMA, disaster relief 
employment is authorized to support projects that provide food, 
clothing, shelter, and other humanitarian assistance for emergency and 
disaster victims, and projects regarding demolition, cleaning, repair, 
renovation, and reconstruction of damaged and destroyed structures, 
facilities, and lands located within the disaster area and in offshore 
areas related to the emergency or disaster in coordination with the 
Administrator of FEMA. Employment and training activities also may be 
provided, as appropriate. An individual's disaster relief employment is 
limited to 12 months or less for work related to

[[Page 56460]]

recovery from a single emergency or disaster. The Secretary may extend 
an individual's disaster relief employment for up to an additional 12 
months, if it is requested and sufficiently justified by an entity 
described in Sec.  687.120(b).
    (2) For DWGs serving individuals who have relocated from an 
emergency or disaster area, only employment and training activities 
will be authorized, except where disaster relief employment is 
appropriate.
    (3) For DWGs awarded to States for events that have designations 
from Federal agencies (other than FEMA) that recognize an emergency or 
disaster situation as one of national significance that could result in 
a potentially large loss of employment, disaster relief employment and/
or employment and training activities may be authorized, depending on 
the circumstances associated with the specific event.
    (c) Disaster Recovery DWG funds may be expended through public and 
private agencies and organizations engaged in the activities described 
in this paragraph (b) of this section.


Sec.  687.190  How do statutory and regulatory waivers apply to 
National Dislocated Worker Grants?

    (a) For DWGs, utilization of statutory or regulatory waivers is 
limited to waivers already approved by the Department under sec. 189(i) 
of WIOA, separate from the DWG process. WIOA sec. 189(i) gives the 
Department the authority to waive provisions under subtitles A, B, and/
or E of WIOA; requirements of DWGs in WIOA subtitle D cannot and will 
not be waived.
    (b) A grant application must include a description of the approved 
waiver and request that the waiver be applied to the DWG. The 
Department will consider such requests as part of the overall DWG 
application review and decision process; however, applicants may not 
use this process to request new waivers.
    (c) If during the operation of a DWG, the grantee wishes to utilize 
a statutory or regulatory waiver that the Department has already 
approved under sec. 189(i), but it was not included in the grantee's 
original DWG application, the grantee must submit a grant modification 
that describes the waiver and requests application of the waiver to the 
DWG. Grantees may not use this process to request new waivers.


Sec.  687.200  What are the program and administrative requirements 
that apply to National Dislocated Worker Grants?

    (a) Unless otherwise authorized in a DWG agreement, the financial 
and administrative rules contained in part 683 of this chapter apply to 
awards under this part.
    (b) Exceptions include:
    (1) Funds provided in response to a disaster may be used for 
temporary job creation in areas declared eligible for public assistance 
by FEMA, and, in some instances, areas impacted by an emergency or 
disaster situation of national significance, as provided in Sec.  
687.110(b)(2), and subject to the limitations of sec. 170(d) of WIOA, 
this part, and any guidance issued by the Department;
    (2) Per sec. 170(d)(4) of WIOA, in extremely limited instances, as 
determined by the Secretary or the Secretary's designee, any Disaster 
Recovery DWG funds that are available for expenditure under any grant 
awarded under this part may be used for additional disasters or 
situations of national significance experienced by an entity described 
in Sec.  687.120(b) in the same program year the funds were awarded;
    (3) DWG funds may be used to pay an appropriate level of 
administrative costs based on the design and complexity of the project. 
The Department will negotiate administrative costs with the applicant 
as part of the application review and grant award and modification 
processes. Administrative cost limits will be calculated against the 
amount of the grant awarded;
    (4) The period of availability for expenditure of funds under a DWG 
is specified in the grant agreement;
    (5) The Department may establish supplemental reporting, 
monitoring, and oversight requirements for DWGs. The requirements will 
be identified in the grant application instructions or the grant 
document; and
    (6) The Department may negotiate and fund projects under terms 
other than those specified in this part where it can be clearly 
demonstrated that such adjustments will achieve a greater positive 
benefit for the workers and/or communities being assisted.

0
21. Add part 688 to read as follows:

PART 688--PROVISIONS GOVERNING THE YOUTHBUILD PROGRAM

Subpart A--Purpose and Definitions
Sec.
688.100 What is YouthBuild?
688.110 What are the purposes of the YouthBuild program?
688.120 What definitions apply to this part?
Subpart B--Funding and Grant Applications
Sec.
688.200 How are YouthBuild grants funded and administered?
688.210 How does an eligible entity apply for grant funds to operate 
a YouthBuild program?
688.220 How are eligible entities selected to receive grant funds?
688.230 What are the minimum requirements to apply for YouthBuild 
funds?
688.240 How are eligible entities notified of approval for grant 
funds?
Subpart C--Program Requirements
Sec.
688.300 Who is an eligible participant?
688.310 Are there special rules that apply to veterans?
688.320 What eligible activities may be funded under the YouthBuild 
program?
688.330 What level of training qualifies a construction project as a 
qualifying work site under the YouthBuild program?
688.340 What timeframes apply to participation?
688.350 What timeframes must be devoted to education and workforce 
investment or other activities?
688.360 What timeframes apply to follow-up services?
688.370 What are the requirements for exit from the YouthBuild 
program?
688.380 What is the role of the YouthBuild grantee in the one-stop 
delivery system?
Subpart D--Performance Indicators
Sec.
688.400 What are the performance indicators for YouthBuild grants?
688.410 What are the required levels of performance for the 
performance indicators?
688.420 What are the reporting requirements for YouthBuild grantees?
688.430 What are the due dates for quarterly reporting?
Subpart E--Administrative Rules, Costs, and Limitations
Sec.
688.500 What administrative regulations apply to the YouthBuild 
program?
688.510 How may grantees provide services under the YouthBuild 
program?
688.520 What cost limits apply to the use of YouthBuild program 
funds?
688.530 What are the cost-sharing or matching requirements of the 
YouthBuild program?
688.540 What are considered to be leveraged funds?
688.550 How are the costs associated with real property treated in 
the YouthBuild program?
688.560 What participant costs are allowable under the YouthBuild 
program?
688.570 Does the Department allow incentive payments in the 
YouthBuild program?
688.580 What effect do payments to YouthBuild participants have on 
eligibility for other Federal needs-based benefits?
688.590 What program income requirements apply under the YouthBuild 
program?
688.600 Are YouthBuild programs subject to the Davis-Bacon Act labor 
standards?
688.610 What are the recordkeeping requirements for YouthBuild 
programs?

[[Page 56461]]

Subpart F--Additional Requirements
Sec.
688.700 What are the safety requirements for the YouthBuild program?
688.710 What are the reporting requirements for youth safety?
688.720 What environmental protection laws apply to the YouthBuild 
program?
688.730 What requirements apply to YouthBuild housing?

    Authority:  Secs. 171, 189, 503, Pub. L. 113-128, 128 Stat. 1425 
(Jul. 22, 2014).

Subpart A--Purpose and Definitions


Sec.  688.100  What is YouthBuild?

    (a) YouthBuild is a workforce development program that provides 
employment, education, leadership development, and training 
opportunities to disadvantaged and low-income youth between the ages of 
16 and 24, most of whom are secondary school drop outs and are either a 
member of a low-income family, a foster care youth, a youth who is 
homeless, an offender, a youth with a disability, a child of an 
incarcerated parent, or a migrant youth.
    (b) Program participants receive education services that may lead 
to either a high school diploma or its State-recognized equivalent. 
Further, they receive occupational skills training and are encouraged 
to pursue postsecondary education or additional training, including 
registered apprenticeship and pre-apprenticeship programs. The program 
is designed to create a skilled workforce either in the construction 
industry, through the rehabilitation and construction of housing for 
homeless and low-income individuals and families, as well as public 
facilities, or in other in-demand industries or occupations. The 
program also benefits the larger community because it provides 
increased access to affordable housing.


Sec.  688.110  What are the purposes of the YouthBuild program?

    The overarching goal of the YouthBuild program is to provide 
disadvantaged and low-income youth the opportunity to obtain education 
and employment skills in local in-demand jobs to achieve economic self-
sufficiency. Additionally, the YouthBuild program has as goals to:
    (a) Enable disadvantaged youth to obtain the education and 
employment skills necessary to achieve economic self-sufficiency 
through employment in in-demand occupations and pursuit of 
postsecondary education and training opportunities;
    (b) Provide disadvantaged youth with opportunities for meaningful 
work and service to their communities;
    (c) Foster the development of employment and leadership skills and 
commitment to community development among youth in low-income 
communities;
    (d) Expand the supply of permanent affordable housing for homeless 
individuals and families, homeless youth, and low-income families by 
utilizing the talents of disadvantaged youth. The program seeks to 
increase the number of affordable and transitional housing units 
available to decrease the rate of homelessness in communities with 
YouthBuild programs; and
    (e) Improve the quality and energy efficiency of community and 
other non-profit and public facilities, including those that are used 
to serve homeless and low-income families.


Sec.  688.120  What definitions apply to this part?

    In addition to the definitions at sec. 3 of the Workforce 
Innovation and Opportunity Act (WIOA) and Sec.  675.300 of this 
chapter, the following definitions apply:
    Adjusted income means, with respect to a family, the amount (as 
determined by the Housing Development Agency) of the income of the 
members of the family residing in a dwelling unit or the persons on a 
lease, after any income exclusions as follows:
    (1) Mandatory exclusions. In determining adjusted income, a Housing 
Development Agency must exclude from the annual income of a family the 
following amounts:
    (i) Elderly and disabled families. $400 for any elderly or disabled 
family.
    (ii) Medical expenses. The amount by which three percent of the 
annual family income is exceeded by the sum of:
    (A) Unreimbursed medical expenses of any elderly family or disabled 
family;
    (B) Unreimbursed medical expenses of any family that is not covered 
under paragraph (1)(ii)(A) of this definition, except that this 
paragraph (1)(ii)(B) only applies to the extent approved in 
appropriation Acts; and
    (C) Unreimbursed reasonable attendant care and auxiliary apparatus 
expenses for each handicapped member of the family, to the extent 
necessary to enable any member of such family (including such 
handicapped member) to be employed.
    (iii) Child care expenses. Any reasonable child care expenses 
necessary to enable a member of the family to be employed or to further 
his or her education.
    (iv) Minors, students, and persons with disabilities. $480 for each 
member of the family residing in the household (other than the head of 
the household or his or her spouse) who is less than 18 years of age or 
is attending school or vocational training on a full-time basis, or who 
is 18 years of age or older and is a person with disabilities.
    (v) Child support payments. Any payment made by a member of the 
family for the support and maintenance of any child who does not reside 
in the household, except that the amount excluded under this clause may 
not exceed $480 for each child for whom such payment is made; except 
that this clause only applies to the extent approved in appropriations 
Acts.
    (vi) Spousal support expenses. Any payment made by a member of the 
family for the support and maintenance of any spouse or former spouse 
who does not reside in the household, except that the amount excluded 
under this clause must not exceed the lesser of the amount that such 
family member has a legal obligation to pay, or $550 for each 
individual for whom such payment is made; except that this clause only 
applies to the extent approved in appropriations Acts.
    (vii) Earned income of minors. The amount of any earned income of a 
member of the family who is not:
    (A) 18 years of age or older; and
    (B) The head of the household (or the spouse of the head of the 
household).
    (2) Permissive exclusions for public housing. In determining 
adjusted income, a Housing Development Agency may, at the discretion of 
the agency, establish exclusions from the annual income of a family 
residing in a public housing dwelling unit. Such exclusions may include 
the following amounts:
    (i) Excessive travel expenses. Excessive travel expenses in an 
amount not to exceed $25 per family per week, for employment or 
education-related travel.
    (ii) Earned income. An amount of any earned income of the family, 
established at the discretion of the Housing Development Agency, which 
may be based on:
    (A) All earned income of the family,
    (B) The amount earned by particular members of the family;
    (C) The amount earned by families having certain characteristics; 
or
    (D) The amount earned by families or members during certain periods 
or from certain sources.
    (iii) Others. Such other amounts for other purposes, as the Housing 
Development Agency may establish.
    Applicant means an eligible entity that has submitted an 
application under Sec.  688.210.

[[Page 56462]]

    Basic skills deficient means an individual:
    (1) Who is a youth, and who has English reading, writing, or 
computing skills at or below the eighth grade level on a generally 
accepted standardized test; or
    (2) Who is a youth or adult, and who is unable to compute or solve 
problems, or read, write, or speak English, at a level necessary to 
function on the job, in the individual's family, or in society.
    Community or other public facility means those facilities which are 
either privately owned by non-profit organizations, including faith-
based and community-based organizations, and publicly used for the 
benefit of the community, or publicly owned and publicly used for the 
benefit of the community.
    Construction Plus means the inclusion of occupational skills 
training for YouthBuild participants in in-demand occupations other 
than construction.
    Eligible entity means a public or private non-profit agency or 
organization (including a consortium of such agencies or 
organizations), including:
    (1) A community-based organization;
    (2) A faith-based organization;
    (3) An entity carrying out activities under this title, such as a 
Local Workforce Development Board (WDB);
    (4) A community action agency;
    (5) A State or local Housing Development Agency;
    (6) An Indian tribe or other agency primarily serving Indians;
    (7) A community development corporation;
    (8) A State or local youth service or conservation corps; and
    (9) Any other entity eligible to provide education or employment 
training under a Federal program (other than the program carried out 
under this section).
    English language learner, when used with respect to a participant, 
means an eligible individual who has limited ability in reading, 
writing, speaking, or comprehending the English language, and:
    (1) Whose native language is a language other than English; or
    (2) Who lives in a family or community environment where a language 
other than English is the dominant language.
    Exit, as used in Sec.  688.400, has the same meaning as in Sec.  
677.150(c) of this chapter.
    Follow-up services include:
    (1) The leadership development and supportive service activities 
listed in Sec. Sec.  681.520 and 681.570 of this chapter;
    (2) Regular contact with a youth participant's employer, including 
assistance in addressing work-related problems that arise;
    (3) Assistance in securing better paying jobs, career development, 
and further education;
    (4) Work-related peer support groups;
    (5) Adult mentoring; and
    (6) Services necessary to ensure the success of youth participants 
in employment and/or postsecondary education.
    Homeless child or youth means an individual who lacks a fixed, 
regular, and adequate nighttime residence and includes a child or youth 
who:
    (1) Is sharing the housing of other persons due to loss of housing, 
economic hardship, or a similar reason;
    (2) Is living in a motel, hotel, trailer park, or campground due to 
the lack of alternative adequate accommodations;
    (3) Is living in an emergency or transitional shelter, is abandoned 
in a hospital, or is awaiting foster care placement;
    (4) Has a primary nighttime residence that is a public or private 
place not designed for or ordinarily used as a regular sleeping 
accommodation for human beings;
    (5) Is living in cars, parks, public spaces, abandoned buildings, 
substandard housing, bus or train stations, or similar settings; or
    (6) Is a migratory child living in circumstances described in this 
definition.
    Homeless individual means an individual who lacks a fixed, regular, 
and adequate nighttime residence and includes an individual who:
    (1) Is sharing the housing of other persons due to loss of housing, 
economic hardship, or similar reason;
    (2) Is living in a motel, hotel, trailer park, or campground due to 
the lack of alternative adequate accommodations;
    (3) Is living in an emergency or transitional shelter;
    (4) Is abandoned in a hospital, or is awaiting foster care 
placement;
    (5) Has a primary nighttime residence that is a public or private 
place not designed for or ordinarily used as regular sleeping 
accommodation for human beings; or
    (6) Is a migratory child living in circumstances described in this 
definition.
    Housing Development Agency means any agency of a Federal, State or 
local government, or any private non-profit organization, that is 
engaged in providing housing for homeless individuals or low-income 
families.
    Income, as defined in the United States Housing Act of 1937 (42 
U.S.C. 1437a(b)(2)), means income is from all sources of each member of 
the household, as determined in accordance with the criteria prescribed 
by the Secretary of Labor, in consultation with the Secretary of 
Agriculture, except that any amounts not actually received by the 
family and any amounts which would be eligible for exclusion under sec. 
1382b(a)(7) of the United States Housing Act of 1937, may not be 
considered as income under this definition.
    In-Demand Industry Sector or Occupation means:
    (1) An industry sector that has a substantial current or potential 
impact (including through jobs that lead to economic self-sufficiency 
and opportunities for advancement) on the State, regional, or local 
economy, as appropriate, and that contributes to the growth or 
stability of other supporting business, or the growth of other industry 
sectors; or
    (2) An occupation that currently has or is projected to have a 
number of positions (including positions that lead to economic self-
sufficiency and opportunities for advancement) in an industry sector so 
as to have a significant impact on the State, regional, or local 
economy, as appropriate.
    Indian, as defined in the Indian Self-Determination and Education 
Assistance Act (25 U.S.C. 450b), means a person who is a member of an 
Indian tribe.
    Indian tribe means any Indian tribe, band, nation, or other 
organized group or community, including any Alaska Native village or 
regional or village corporation as defined in or established pursuant 
to the Alaska Native Claims Settlement Act (85 Stat. 688; 43 U.S.C. 
1601 et seq.), which is recognized as eligible for the special programs 
and services provided by the United States to Indians because of their 
status as Indians.
    Individual with a disability means an individual with a disability 
as defined in sec. 3 of the Americans with Disabilities Act of 1990 (42 
U.S.C. 12102).
    Low-income family means a family whose income does not exceed 80 
percent of the median income for the area unless the Secretary 
determines that a higher or lower ceiling is warranted. This definition 
includes families consisting of one person as defined by 42 U.S.C. 
1437a(b)(3).
    Migrant youth means a youth, or a youth who is the dependent of 
someone who, during the previous 12 months, has:
    (1) Worked at least 25 days in agricultural labor that is 
characterized

[[Page 56463]]

by chronic unemployment or underemployment;
    (2) Made at least $800 from agricultural labor that is 
characterized by chronic unemployment or underemployment, if at least 
50 percent of his or her income came from such agricultural labor;
    (3) Was employed at least 50 percent of his or her total employment 
in agricultural labor that is characterized by chronic unemployment or 
underemployment; or
    (4) Was employed in agricultural labor that requires travel to a 
jobsite such that the farmworker is unable to return to a permanent 
place of residence within the same day.
    Needs-based payments means additional payments beyond regular 
stipends for program participation that are based on defined needs that 
enable a youth to participate in the program.
    Occupational skills training means an organized program of study 
that provides specific vocational skills that lead to proficiency in 
performing actual tasks and technical functions required by certain 
occupational fields at entry, intermediate, or advanced levels. 
Occupational skills training includes training programs that lead to 
recognized postsecondary credentials that align with in-demand industry 
sectors or occupations in the local area. Such training must:
    (1) Be outcome-oriented and focused on an occupational goal 
specified in the individual service strategy;
    (2) Be of sufficient duration to impart the skills needed to meet 
the occupational goal; and
    (3) Result in attainment of a recognized postsecondary credential.
    Offender means an adult or juvenile who:
    (1) Is or has been subject to any stage of the criminal justice 
process, and who may benefit from WIOA services; or
    (2) Requires assistance in overcoming artificial barriers to 
employment resulting from a record of arrest or conviction.
    Participant means an individual who has been determined eligible to 
participate in the YouthBuild program, and who enrolls in the program 
and receives services or training described in Sec.  688.320.
    Pre-apprenticeship, as defined in Sec.  681.480 of this chapter, 
means a program designed to prepare individuals to enter and succeed in 
an apprenticeship program registered under the Act of August 16, 1937 
(commonly known as the ``National Apprenticeship Act''; 50 Stat. 664, 
chapter 663; 29 U.S.C. 50 et seq.) (referred to in this part as a 
``registered apprenticeship'' or ``registered apprenticeship program'') 
and includes the following elements:
    (1) Training and curriculum that aligns with the skill needs of 
employers in the economy of the State or region involved;
    (2) Access to educational and career counseling and other 
supportive services, directly or indirectly;
    (3) Hands-on, meaningful learning activities that are connected to 
education and training activities, such as exploring career options, 
and understanding how the skills acquired through coursework can be 
applied toward a future career;
    (4) Opportunities to attain at least one industry-recognized 
credential; and
    (5) A partnership with one or more registered apprenticeship 
programs that assists in placing individuals who complete the pre-
apprenticeship program in a registered apprenticeship program.
    (6) YouthBuild programs that receive funding under this part are 
considered pre-apprenticeship programs under this definition.
    Recognized postsecondary credential means a credential consisting 
of an industry-recognized certificate or certification, a certificate 
of completion of a registered apprenticeship, a license recognized by 
the State involved or Federal government, or an associate or 
baccalaureate degree.
    Registered apprenticeship program means an apprenticeship program 
that:
    (1) Is registered under the Act of August 16, 1937 (commonly known 
as the ``National Apprenticeship Act'' (50 Stat. 664; 20 U.S.C. 50 et 
seq.)); and
    (2) Meets such other criteria as the Secretary may establish.
    School dropout means an individual who no longer attends any school 
and who has not received a secondary school diploma or its State-
recognized equivalent.
    Secondary school means a nonprofit institutional day or residential 
school, including a public secondary charter school, that provides 
secondary education, as determined under State law, except that the 
term does not include any education beyond grade 12.
    Section 3 means a program described in sec. 3 of the Housing and 
Urban Development Act of 1968, as amended by the Housing and Community 
Development Act of 1992.
    Supportive services for youth, as defined in Sec.  681.570 of this 
chapter, are services that enable an individual to participate in WIOA 
activities. These services include, but are not limited to, the 
following:
    (1) Linkages to community services;
    (2) Assistance with transportation;
    (3) Assistance with child care and dependent care;
    (4) Referrals to child support;
    (5) Assistance with housing;
    (6) Needs-related payments;
    (7) Assistance with educational testing;
    (8) Reasonable accommodations for youth with disabilities;
    (9) Referrals to health care;
    (10) Assistance with uniforms or other appropriate work attire and 
work-related tools, including such items as eyeglasses and protective 
eye gear;
    (11) Assistance with books, fees, school supplies, and other 
necessary items for students enrolled in postsecondary education 
classes; and
    (12) Payments and fees for employment and training-related 
applications, tests, and certifications.
    Transitional housing means housing provided to ease the movement of 
individuals and families experiencing homelessness to permanent housing 
within 24 months or such longer period.
    YouthBuild program means any program that receives assistance under 
this part and provides disadvantaged youth with opportunities for 
employment, education, leadership development, service to the 
community, and training through the rehabilitation (which, for purposes 
of this part, includes energy efficiency enhancements) or construction 
of housing for homeless individuals and low-income families, and public 
facilities.
    Youth in foster care, as defined in Sec.  681.210 of this chapter, 
means an individual in foster care or who has aged out of the foster 
care system or who has attained 16 years of age and left foster care 
for kinship, guardianship, or adoption; or a child eligible for 
assistance under sec. 477 of the Social Security Act (42 U.S.C. 677), 
or in an out-of-home placement.

Subpart B--Funding and Grant Applications


Sec.  688.200  How are YouthBuild grants funded and administered?

    The Secretary uses funds authorized for appropriation under WIOA 
sec. 171(i) to administer YouthBuild as a national program under title 
I, subtitle D of WIOA. YouthBuild grants are awarded to eligible 
entities, as defined in Sec.  688.120, through the competitive 
selection process described in Sec.  688.210.


Sec.  688.210  How does an eligible entity apply for grant funds to 
operate a YouthBuild program?

    The Secretary announces the availability of grant funds through a

[[Page 56464]]

Funding Opportunity Announcement (FOA). The FOA contains instructions 
for what the Department requires in the grant application, describes 
eligibility requirements, the rating criteria that the Department will 
use in reviewing grant applications, and special reporting requirements 
to operate a YouthBuild project. The FOA, along with the requisite 
forms needed to apply for grant funds, can be found at http://www.doleta.gov/grants/find_grants.cfm.


Sec.  688.220  How are eligible entities selected to receive grant 
funds?

    In order to receive funds under the YouthBuild program, an eligible 
entity must meet selection criteria established by the Secretary which 
include:
    (a) The qualifications or potential capabilities of an applicant;
    (b) An applicant's potential to develop a successful YouthBuild 
program;
    (c) The need for an applicant's proposed program, as determined by 
the degree of economic distress of the community from which 
participants would be recruited (measured by indicators such as 
poverty, youth unemployment, and the number of individuals who have 
dropped out of secondary school) and of the community in which the 
housing and community and public facilities proposed to be 
rehabilitated or constructed are located (measured by indicators such 
as incidence of homelessness, shortage of affordable housing, and 
poverty);
    (d) The commitment of an applicant to provide skills training, 
leadership development, counseling and case management, and education 
to participants;
    (e) The focus of a proposed program on preparing youth for local 
in-demand sectors or occupations, or postsecondary education and 
training opportunities;
    (f) The extent of an applicant's coordination of activities to be 
carried out through the proposed program with:
    (1) Local WDBs, one-stop center operators, and one-stop partners 
participating in the operation of the one-stop delivery system 
involved, or the extent of the applicant's good faith efforts, as 
determined by the Secretary, in achieving such coordination;
    (2) Public education, criminal justice, housing and community 
development, national service, or postsecondary education or other 
systems that relate to the goals of the proposed program; and
    (3) Employers in the local area;
    (g) The extent to which a proposed program provides for inclusion 
of tenants who were previously homeless individuals or families in the 
rental of housing provided through the program;
    (h) The commitment of additional resources to the proposed program 
(in addition to the funds made available through the grant) by:
    (1) An applicant;
    (2) Recipients of other Federal, State, or local housing and 
community development assistance who will sponsor any part of the 
rehabilitation, construction, operation and maintenance, or other 
housing and community development activities undertaken as part of the 
proposed program; or
    (3) Entities carrying out other Federal, State, or local activities 
or activities conducted by Indian tribes, including vocational 
education programs, adult and language instruction educational 
programs, and job training using funds provided under WIOA;
    (i) An applicant's ability to enter partnerships with:
    (1) Education and training providers including:
    (i) The kindergarten through twelfth grade educational system;
    (ii) Adult education programs;
    (iii) Community and technical colleges;
    (iv) Four-year colleges and universities;
    (v) Registered apprenticeship programs; and
    (vi) Other training entities;
    (2) Employers, including professional organizations and 
associations. An applicant will be evaluated on the extent to which 
employers participate in:
    (i) Defining the program strategy and goals;
    (ii) Identifying needed skills and competencies;
    (iii) Designing training approaches and curricula;
    (iv) Contributing financial support; and
    (v) Hiring qualified YouthBuild graduates;
    (3) The workforce development system which may include:
    (i) State and Local WDBs;
    (ii) State workforce agencies; and
    (iii) One-stop centers and their partner programs;
    (4) The juvenile and adult justice systems, and the extent to which 
they provide:
    (i) Support and guidance for YouthBuild participants with court 
involvement;
    (ii) Assistance in the reporting of recidivism rates among 
YouthBuild participants; and
    (iii) Referrals of eligible participants through diversion or 
reentry from incarceration;
    (5) Faith-based and community organizations, and the extent to 
which they provide a variety of grant services such as:
    (i) Case management;
    (ii) Mentoring;
    (iii) English as a Second Language courses; and
    (iv) Other comprehensive supportive services, when appropriate;
    (j) The applicant's potential to serve different regions, including 
rural areas and States that may not have previously received grants for 
YouthBuild programs; and
    (k) Such other factors as the Secretary determines to be 
appropriate for purposes of evaluating an applicant's potential to 
carry out the proposed program in an effective and efficient manner.
    (l) The weight to be given to these factors will be described in a 
FOA issued under Sec.  688.210.


Sec.  688.230  What are the minimum requirements to apply for 
YouthBuild funds?

    At minimum, applications for YouthBuild funds must include the 
following elements:
    (a) Labor market information for the relevant labor market area, 
including both current data (as of the date of submission of the 
application) and projections on career opportunities in construction 
and in-demand industry sectors or occupations;
    (b) A request for the grant, specifying the amount of the grant 
requested and its proposed uses;
    (c) A description of the applicant and a statement of its 
qualifications, including a description of the applicant's relationship 
with Local WDBs, one-stop operators, employers, local unions, entities 
carrying out registered apprenticeship programs, other community 
groups, and the applicant's past experience with rehabilitation or 
construction of housing or public facilities (including experience with 
programs through the U.S. Department of Housing and Urban Development 
(HUD) under sec. 3 of the Housing and Urban Development Act of 1968 (12 
U.S.C. 1701u)), and with youth education and employment training 
programs);
    (d) A description of the proposed site for the proposed program;
    (e) A description of the educational and job training activities, 
work opportunities, postsecondary education and training opportunities, 
and other services that will be provided to participants, and how those 
activities, opportunities, and services will prepare youth for 
employment in in-demand

[[Page 56465]]

industry sectors or occupations in the labor market area described in 
paragraph (a) of this section;
    (1) A description of the proposed activities to be undertaken under 
the grant related to rehabilitation or construction, and, in the case 
of an applicant requesting approval from the Secretary to carry out 
additional activities related to in-demand industry sectors or 
occupations, a description of such additional activities.
    (2) The anticipated schedule for carrying out all activities 
proposed under paragraph (f) of this section;
    (f) A description of the manner in which eligible youth will be 
recruited and selected as participants, including a description of 
arrangements that will be made with Local WDBs, one-stop operators, 
faith and community-based organizations, State education agencies or 
local education agencies (including agencies of Indian tribes), public 
assistance agencies, the courts of jurisdictions, agencies that serve 
youth who are homeless individuals (including those that operate 
shelters), foster care agencies, and other appropriate public and 
private agencies;
    (g) A description of the special outreach efforts that will be 
undertaken to recruit eligible young women (including young women with 
dependent children) as participants;
    (h) A description of the specific role of employers in the proposed 
program, such as their role in developing the proposed program and 
assisting in service provision and placement activities;
    (i) A description of how the proposed program will be coordinated 
with other Federal, State, and local activities conducted by Indian 
tribes, such as workforce investment activities, career and technical 
education and training programs, adult and language instruction 
educational programs, activities conducted by public schools, 
activities conducted by community colleges, national service programs, 
and other job training provided with funds available under WIOA, in 
particular how programs will coordinate with local Workforce 
Development funds outlined in WIOA sec. 129(c)(2);
    (j) Assurances that there will be a sufficient number of adequately 
trained supervisory personnel in the proposed program;
    (k) A description of the level of performance to be achieved with 
respect to primary indicators of performance for eligible youth as 
described in Sec.  688.410;
    (l) The organization's past performance under a grant issued by the 
Secretary to operate a YouthBuild program;
    (m) A description of the applicant's relationship with local 
building trade unions regarding their involvement in training to be 
provided through the proposed program, the relationship of the proposed 
program to established registered apprenticeship programs and 
employers, the ability of the applicant to grant an industry-recognized 
certificate or certification through the program, and the quality of 
the program leading to the certificate or certification;
    (n) A description of activities that will be undertaken to develop 
leadership skills of participants;
    (o) A detailed budget and description of the system of fiscal 
controls, and auditing and accounting procedures, that will be used to 
ensure fiscal soundness for the proposed program;
    (p) A description of the commitments for any additional resources 
(in addition to funds made available through the grant) to be made 
available to the proposed program from:
    (1) The applicant;
    (2) Recipients of other Federal, State, or local housing and 
community development assistance that will sponsor any part of the 
rehabilitation or construction, operation or maintenance, or other 
housing and community development activities undertaken as part of the 
proposed program; or
    (3) Entities carrying out other Federal, State or local activities 
conducted by Indian tribes, including career and technical education 
and training programs, and job training provided with funds under WIOA;
    (q) Information identifying and describing of, the financing 
proposed for any:
    (1) Rehabilitation of the property involved;
    (2) Acquisition of the property; or
    (3) Construction of the property;
    (r) Information identifying and describing of, the entity that will 
manage and operate the property;
    (s) Information identifying and describing of, the data collection 
systems to be used;
    (t) A certification, by a public official responsible for the 
housing strategy for the State or unit of general local government 
within which the proposed program is located, that the proposed program 
is consistent with the housing strategy;
    (u) A certification that the applicant will comply with 
requirements of the Fair Housing Act (42 U.S.C. 3601 et seq.) and will 
affirmatively further fair housing; and
    (v) Any additional requirements that the Secretary determines are 
appropriate.


Sec.  688.240  How are eligible entities notified of approval for grant 
funds?

    The Secretary will, to the extent practicable, notify each eligible 
entity applying for funds no later than 5 months from the date the 
application is received, whether the application is approved or 
disapproved. In the event additional funds become available, the 
Employment and Training Administration (ETA) reserves the right to use 
such funds to select additional grantees from applications submitted in 
response to a FOA.

Subpart C--Program Requirements


Sec.  688.300  Who is an eligible participant?

    (a) Eligibility criteria. Except as provided in paragraph (b) of 
this section, an individual is eligible to participate in a YouthBuild 
program if the individual is:
    (1) Not less than age 16 and not more than age 24 on the date of 
enrollment;
    (2) A school dropout or an individual who has dropped out of school 
and has subsequently reenrolled; and
    (3) Is one or more of the following:
    (i) A member of a low-income family;
    (ii) A youth in foster care;
    (iii) An offender;
    (iv) A youth who is an individual with a disability;
    (v) The child of a current or formerly incarcerated parent; or
    (vi) A migrant youth.
    (b) Exceptions. Not more than 25 percent of the participants in a 
program, under this section, may be individuals who do not meet the 
requirements of paragraph (a)(2) or (3) of this section, if such 
individuals:
    (1) Are basic skills deficient, as defined in Sec.  688.120, 
despite attainment of a secondary school diploma or its recognized 
State equivalent (including recognized certificates of attendance or 
similar documents for individuals with disabilities); or
    (2) Have been referred by a local secondary school for 
participation in a YouthBuild program leading to the attainment of a 
secondary school diploma if such referral is to a YouthBuild program 
offering a secondary school diploma.


Sec.  688.310  Are there special rules that apply to veterans?

    Special rules for determining income for veterans are found in 
Sec.  683.230 of this chapter and for the priority of service 
provisions for qualified persons are found in 20 CFR part 1010. Those 
special rules apply to covered persons who are eligible to participate 
in the YouthBuild program.

[[Page 56466]]

Sec.  688.320  What eligible activities may be funded under the 
YouthBuild program?

    Grantees may provide one or more of the following education and 
workforce investment and other activities to YouthBuild participants:
    (a) Eligible education and workforce activities including:
    (1) Work experience and skills training (coordinated, to the 
maximum extent feasible, with registered apprenticeship programs), 
including:
    (i) Supervision and training for participants in the rehabilitation 
or construction of housing, including residential housing for homeless 
individuals or low-income families, or transitional housing for 
homeless individuals and in additional in-demand industry sectors or 
occupations in the region in which the program operates (as approved by 
the Secretary);
    (ii) Supervision and training for participants in the 
rehabilitation or construction of community and other public 
facilities, except that not more than 15 percent of grant funds-
appropriated to carry out this section may be used for this activity; 
and
    (iii) Supervision and training for participants in in-demand 
industry sectors or occupations in the region in which the program 
operates, if such activity is approved by the Secretary;
    (2) Occupational skills training;
    (3) Other paid and unpaid work experiences, including internships 
and job shadowing;
    (4) Services and activities designed to meet the educational needs 
of participants, including:
    (i) Basic skills instruction and remedial education;
    (ii) Language instruction educational programs for participants who 
are English language learners;
    (iii) Secondary education services and activities, including 
tutoring, study skills training, and school dropout prevention and 
recovery activities, designed to lead to the attainment of a secondary 
school diploma or its recognized equivalent (including recognized 
certificates of attendance or similar documents for individuals with 
disabilities);
    (iv) Counseling and assistance in obtaining postsecondary education 
and required financial aid; and
    (v) Alternative secondary school services;
    (5) Counseling services and related activities, such as 
comprehensive guidance and counseling on drug and alcohol abuse, 
referrals to mental health services, and referrals to victim services;
    (6) Activities designed to develop employment and leadership 
skills, which may include community service and peer-centered 
activities encouraging responsibility, interpersonal skills, and other 
positive social behaviors, and activities related to youth policy 
committees that participate in decision-making related to the program;
    (7)(i) Supportive services and needs-based payments necessary to 
enable individuals to participate in the program and to assist 
individuals, for a period of time not to exceed 12 months after the 
completion of training, in obtaining or retaining employment or 
applying for and transitioning to postsecondary education or training;
    (ii) To provide needs-based payments, a grantee must have a written 
policy which:
    (A) Establishes participant eligibility for such payments;
    (B) Establishes the amounts to be provided;
    (C) Describes the required documentation and criteria for payments; 
and
    (D) Applies consistently to all program participants; and
    (8) Job search and assistance;
    (b) Payment of the administrative costs of the applicant, including 
recruitment and selection of participants, except that not more than 10 
percent of the amount awarded under Sec.  688.210 may be used for such 
costs;
    (c) Adult mentoring;
    (d) Provision of wages, stipends, or benefits to participants in 
the program;
    (e) Ongoing training and technical assistance that is related to 
developing and carrying out the program; and
    (f) Follow-up services.


Sec.  688.330  What level of training qualifies a construction project 
as a qualifying work site under the YouthBuild program?

    At a minimum, in order to qualify as a work site for the purposes 
of the YouthBuild program, a work site must:
    (a) Provide participants with the opportunity to have hands-on 
training and experience in two or more modules, each within a different 
skill area, in a construction skills training program that offers an 
industry-recognized credential;
    (b) Be built or renovated for low-income individuals or families;
    (c) Have a restrictive covenant in place that only allows for 
rental or resale to low-income participants as required by Sec.  
688.730; and
    (d) Adhere to the allowable construction and other capital asset 
costs applicable to the YouthBuild program.


Sec.  688.340  What timeframes apply to participation?

    An eligible individual selected for participation in the program 
must be offered full-time participation in the program for not less 
than 6 months and not more than 24 months.


Sec.  688.350  What timeframes must be devoted to education and 
workforce investment or other activities?

    YouthBuild grantees must structure programs so that participants in 
the program are offered:
    (a) Education and related services and activities designed to meet 
educational needs, such as those specified in Sec.  688.320(a)(4) 
through (7), during at least 50 percent of the time during which they 
participate in the program; and
    (b) Workforce and skills development activities, such as those 
specified in Sec.  688.320(a)(1) through (3), during at least 40 
percent of the time during which they participate in the program.
    (c) The remaining 10 percent of the time of participation may be 
used for the activities described in paragraphs (a) and (b) of this 
section and/or for leadership development and community service 
activities.


Sec.  688.360  What timeframes apply to follow-up services?

    Grantees must provide follow-up services to all YouthBuild 
participants for a period of 12 months after a participant successfully 
exits a YouthBuild program.


Sec.  688.370  What are the requirements for exit from the YouthBuild 
program?

    At a minimum, to be a successful exit, the Department of Labor 
requires that:
    (a) Participants receive hands-on construction training or hands-on 
training in another industry or occupation, in the case of Construction 
Plus grantees; and
    (b) Participants meet the exit policies established by the grantee.
    (1) Such policies must describe the program outcomes and/or 
individual goals that must be met by each participant in order to 
successfully complete the program; and
    (2) Grantees must apply the policies consistently to determine when 
a successful exit has occurred.


Sec.  688.380  What is the role of the YouthBuild grantee in the one-
stop delivery system?

    In those local areas where the grantee operates its YouthBuild 
program, the grantee is a required partner of the local one-stop 
delivery system and is subject to the provisions relating to such 
partners described in part 678 of this chapter.

[[Page 56467]]

Subpart D--Performance Indicators


Sec.  688.400  What are the performance indicators for YouthBuild 
grants?

    The performance indicators for YouthBuild grants include:
    (a) The percentage of program participants who are in education and 
training activities, or in unsubsidized employment, during the second 
quarter after exit from the program;
    (b) The percentage of program participants who are in education or 
training activities, or in unsubsidized employment, during the fourth 
quarter after exit from the program;
    (c) The median earnings of program participants who are in 
unsubsidized employment during the second quarter after exit from the 
program;
    (d) The percentage of program participants who obtain a recognized 
postsecondary credential or secondary school diploma or its recognized 
equivalent (and for those achieving the secondary diploma or its 
recognized equivalent, such participants also have obtained or retained 
employment or are in an education or training program leading to a 
recognized postsecondary credential within 1 year after exit from the 
program);
    (e) The percentage of program participants who, during a program 
year, are in an education and training program that leads to a 
recognized postsecondary credential or employment and who are achieving 
measurable skill gains toward such a credential or employment;
    (f) The indicator of effectiveness in serving employers described 
at Sec.  677.155(c)(6) of this chapter; and
    (g) Other indicators of performance as may be required by the 
Secretary.


Sec.  688.410  What are the required levels of performance for the 
performance indicators?

    (a) The Secretary must annually establish expected levels of 
performance for YouthBuild programs relating to each of the primary 
indicators of performance. The expected levels of performance for each 
of the performance indicators are national standards that are provided 
in separately issued guidance. Short-term or other performance 
indicators will be provided in separately issued guidance or as part of 
the FOA or grant agreement. Performance level expectations will be 
based on available YouthBuild data and data from similar WIOA youth 
programs and may change from one grant competition to another. The 
expected national levels of performance will take into account the 
extent to which the levels promote continuous improvement in 
performance.
    (b) The levels of performance established will at a minimum:
    (1) Be expressed in an objective, quantifiable, and measurable 
form; and
    (2) Indicate continuous improvement in performance.


Sec.  688.420  What are the reporting requirements for YouthBuild 
grantees?

    Each grantee must provide such reports as are required by the 
Secretary in separately issued guidance, including:
    (a) The quarterly performance report;
    (b) The quarterly narrative progress report;
    (c) The financial report; and
    (d) Such other reports as may be required by the grant agreement.


Sec.  688.430  What are the due dates for quarterly reporting?

    (a) Quarterly reports are due no later than 45 days after the end 
of the reporting quarter, unless otherwise specified in the reporting 
guidance issued under Sec.  688.420; and
    (b) A final financial report is required 90 days after the 
expiration of a funding period or the termination of grant support.

Subpart E--Administrative Rules, Costs, and Limitations


Sec.  688.500  What administrative regulations apply to the YouthBuild 
program?

    Each YouthBuild grantee must comply with the following:
    (a) The regulations found in this part;
    (b) The general administrative requirements found in part 683 of 
this chapter, except those that apply only to the WIOA title I, 
subtitle B program and those that have been modified by this section;
    (c) The Department's regulations on government-wide requirements, 
which include:
    (1) The regulations codifying the Office of Management and Budget's 
(OMB) government-wide grants requirements at 2 CFR parts 200 and 2900, 
as applicable;
    (2) The Department's regulations at 29 CFR part 38, which implement 
the nondiscrimination provisions of WIOA sec. 188;
    (3) The Department's regulations at 29 CFR parts 93, 94, and 98 
relating to restrictions on lobbying, drug free workplace, and 
debarment and suspension; and
    (4) The audit requirements of the Office of Management and Budget 
at 2 CFR parts 200 and 2900, as applicable; and
    (d) Relevant State and local educational standards.


Sec.  688.510  How may grantees provide services under the YouthBuild 
program?

    Each recipient of a grant under the YouthBuild program may provide 
the services and activities described in these regulations either 
directly or through subgrants, contracts, or other arrangements with 
local educational agencies, postsecondary educational institutions, 
State or local housing development agencies, other public agencies, 
including agencies of Indian tribes, or private organizations.


Sec.  688.520  What cost limits apply to the use of YouthBuild program 
funds?

    (a) Administrative costs for programs operated under YouthBuild are 
limited to 10 percent of the grant award. The definition of 
administrative costs can be found in Sec.  683.215 of this chapter.
    (b) The cost of supervision and training for participants involved 
in the rehabilitation or construction of community and other public 
facilities is limited to no more than 15 percent of the grant award.


Sec.  688.530  What are the cost-sharing or matching requirements of 
the YouthBuild program?

    (a) In addition to the rules described in paragraphs (b) through 
(f) of this section, the cost-sharing or matching requirements 
applicable to a YouthBuild grant will be addressed in the grant 
agreement.
    (b) The value of construction materials used in the YouthBuild 
program is an allowable cost for the purposes of the required non-
Federal share or match.
    (c) The value of land acquired for the YouthBuild program is not an 
allowable cost-sharing or match.
    (d) Federal funds may not be used as cost-sharing or match 
resources except as provided by Federal law.
    (e) The value of buildings acquired for the YouthBuild program is 
an allowable match, provided that the following conditions apply:
    (1) The purchase cost of buildings used solely for training 
purposes is allowable; and
    (2) For buildings used for training and other purposes, the 
allowable amount is determined based on the proportionate share of the 
purchase price related to direct training activities.
    (f) Grantees must follow the requirements of Uniform Guidance at 2 
CFR parts 200 and 2900 in the accounting, valuation, and reporting of 
the required non-Federal share.


Sec.  688.540  What are considered to be leveraged funds?

    (a) Leveraged funds may be used to support allowable YouthBuild 
program

[[Page 56468]]

activities and consist of payments made for allowable costs funded by 
both non-YouthBuild Federal, and non-Federal, resources which include:
    (1) Costs which meet the criteria for cost-sharing or match in 
Sec.  688.530 and are in excess of the amount of cost-sharing or match 
resources required;
    (2) Costs which would meet the criteria in Sec.  688.530 except 
that they are paid for with other Federal resources; and
    (3) Costs which benefit the grant program and are otherwise 
allowable under the cost principles but are not allowable under the 
grant because of some statutory, regulatory, or grant provision, 
whether paid for with Federal or non-Federal resources.
    (b) The use of leveraged funds must be reported in accordance with 
Departmental instructions.


Sec.  688.550  How are the costs associated with real property treated 
in the YouthBuild program?

    (a) As provided in paragraphs (b) and (c) of this section, the 
costs of the following activities associated with real property are 
allowable solely for the purpose of training YouthBuild participants:
    (1) Rehabilitation of existing structures for use by homeless 
individuals and families or low-income families or for use as 
transitional housing;
    (2) Construction of buildings for use by homeless individuals and 
families or low-income families or for use as transitional housing; and
    (3) Construction or rehabilitation of community or other public 
facilities, except, as provided in Sec.  688.520(b), only 15 percent of 
the grant award is allowable for such construction and rehabilitation.
    (b) The costs for acquisition of buildings that are used for 
activities described in paragraph (a) of this section are allowable 
with prior grant officer approval and only under the following 
conditions:
    (1) The purchase cost of buildings used solely for training 
purposes is allowable; and
    (2) For buildings used for training and other purposes, the 
allowable amount is determined based on the proportionate share of the 
purchase cost related to direct training.
    (c) The following costs are allowable to the extent allocable to 
training YouthBuild participants in the construction and rehabilitation 
activities specified in paragraph (a) of this section:
    (1) Trainees' tools and clothing including personal protective 
equipment (PPE);
    (2) On-site trainee supervisors;
    (3) Construction management;
    (4) Relocation of buildings; and
    (5) Clearance and demolition.
    (d) Architectural fees, or a proportionate share thereof, are 
allowable when such fees can be related to items such as architectural 
plans or blueprints on which participants will be trained.
    (e) The following costs are unallowable:
    (1) The costs of acquisition of land; and
    (2) Brokerage fees.


Sec.  688.560  What participant costs are allowable under the 
YouthBuild program?

    Allowable participant costs include:
    (a) The costs of payments to participants engaged in eligible work-
related YouthBuild activities;
    (b) The costs of payments provided to participants engaged in non-
work-related YouthBuild activities;
    (c) The costs of needs-based payments;
    (d) The costs of supportive services; and
    (e) The costs of providing additional benefits to participants or 
individuals who have exited the program and are receiving follow-up 
services, which may include:
    (1) Tuition assistance for obtaining college education credits;
    (2) Scholarships to a registered apprenticeship or technical 
education program; and
    (3) Employer- or Government-sponsored health programs.


Sec.  688.570  Does the Department allow incentive payments in the 
YouthBuild program?

    (a) Grantees are permitted to provide incentive payments to youth 
participants for recognition and achievement directly tied to training 
activities and work experiences. Grantees must tie the incentive 
payments to the goals of the specific grant program and outline such 
goals in writing prior to starting the program that makes incentive 
payments.
    (b) Prior to providing incentive payments, the organization must 
have written policies and procedures in place governing the awarding of 
incentives, and the incentives provided under the grant must align with 
these organizational policies.
    (c) All incentive payments must comply with the requirements in 
Uniform Guidance at 2 CFR part 200.


Sec.  688.580  What effect do payments to YouthBuild participants have 
on eligibility for other Federal needs-based benefits?

    Under Sec.  683.275(d) of this chapter, the Department does not 
consider allowances, earnings, and payments to individuals 
participating in programs under title I of WIOA as income for purposes 
of determining eligibility for and the amount of income transfer and 
in-kind aid furnished under any Federal or Federally-assisted program 
based on need other than as provided under the Social Security Act (42 
U.S.C. 301).


Sec.  688.590  What program income requirements apply under the 
YouthBuild program?

    (a) Except as provided in paragraph (b) of this section, program 
income requirements, as specified in the applicable Uniform 
Administrative Requirements at 2 CFR parts 200 and 2900, apply to 
YouthBuild grants.
    (b) Revenue from the sale of buildings rehabilitated or constructed 
under the YouthBuild program to homeless individuals and families and 
low-income families is not considered program income. Grantees are 
encouraged to use that revenue for the long-term sustainability of the 
YouthBuild program.


Sec.  688.600  Are YouthBuild programs subject to the Davis-Bacon Act 
labor standards?

    (a) YouthBuild programs and grantees are subject to Davis-Bacon 
labor standards requirements under the circumstances set forth in 
paragraph (b) of this section. In those instances where a grantee is 
subject to Davis-Bacon requirements, the grantee must follow applicable 
requirements in the Department's regulations at 29 CFR parts 1, 3, and 
5, including the requirements contained in the Davis-Bacon contract 
provisions set forth in 29 CFR 5.5.
    (b) YouthBuild participants are subject to Davis-Bacon Act labor 
standards when they perform Davis-Bacon-covered laborer or mechanic 
work, defined at 29 CFR 5.2(m), on Federal or Federally-assisted 
projects that are subject to the Davis-Bacon Act labor standards. The 
Davis-Bacon prevailing wage requirements apply to hours worked on the 
site of the work.
    (c) YouthBuild participants who are not registered and 
participating in a training program approved by the ETA must be paid 
not less than the applicable wage rate on the wage determination for 
the classification of work actually performed.


Sec.  688.610  What are the recordkeeping requirements for YouthBuild 
programs?

    (a) Grantees must follow the recordkeeping requirements specified 
in the Uniform Administrative Requirements, at 29 CFR 95.53 and 97.42, 
as appropriate.

[[Page 56469]]

    (b) Grantees must maintain such additional records related to the 
use of buildings constructed or rehabilitated with YouthBuild funds as 
specified in the grant agreement or in the Department's guidance.

Subpart F--Additional Requirements


Sec.  688.700  What are the safety requirements for the YouthBuild 
program?

    (a) YouthBuild Grantees must comply with Sec.  683.280 of this 
chapter, which applies Federal and State health and safety standards to 
the working conditions under WIOA-funded projects and programs. These 
health and safety standards include ``hazardous orders'' governing 
child labor at 29 CFR part 570.
    (b) YouthBuild grantees are required to:
    (1) Provide comprehensive safety training for youth working on 
YouthBuild construction projects;
    (2) Have written, jobsite-specific safety plans overseen by an on-
site supervisor with authority to enforce safety procedures;
    (3) Provide necessary personal protective equipment to youth 
working on YouthBuild projects; and
    (4) Submit required injury incident reports.


Sec.  688.710  What are the reporting requirements for youth safety?

    YouthBuild grantees must ensure that YouthBuild program sites 
comply with the Occupational Safety and Health Administration's (OSHA) 
reporting requirements in 29 CFR part 1904. A YouthBuild grantee is 
responsible for sending a copy of OSHA's injury incident report form to 
the ETA within 7 days of any reportable injury suffered by a YouthBuild 
participant. The injury incident report form is available from OSHA and 
can be downloaded at http://www.osha.gov/recordkeeping/RKforms.html. 
Reportable injuries include those that result in death, days away from 
work, restricted work or transfer to another job, medical treatment 
beyond first aid, or loss of consciousness.


Sec.  688.720  What environmental protection laws apply to the 
YouthBuild program?

    YouthBuild program grantees are required, where applicable, to 
comply with all environmental protection statutes and regulations.


Sec.  688.730  What requirements apply to YouthBuild housing?

    (a) YouthBuild grantees must ensure that all residential housing 
units which are constructed or rehabilitated using YouthBuild funds 
must be available solely for:
    (1) Sale to homeless individuals and families or low-income 
families;
    (2) Rental by homeless individuals and families or low-income 
families;
    (3) Use as transitional or permanent housing for the purpose of 
assisting in the movement of homeless individuals and families to 
independent living. In the case of transitional housing, the unit(s) 
must be occupied no more than 24 months by the same individual(s); or
    (4) Rehabilitation of homes for low-income homeowners.
    (b) For rentals of residential units located on the property which 
are constructed or rehabilitated using YouthBuild funds:
    (1) The property must maintain at least a 90 percent level of 
occupancy for low-income families. The income test will be conducted 
only at the time of entry for each available unit or rehabilitation of 
occupant-owned home. If the grantee cannot find a qualifying tenant to 
lease the unit, the unit may be leased to a family whose income is 
above the income threshold to qualify as a low-income family but below 
the median income for the area. Leases for tenants with higher incomes 
will be limited to not more than 2 years. The leases provided to 
tenants with higher incomes are not subject to the termination clause 
that is described in paragraph (b)(2) of this section.
    (2) The property owner must not terminate the tenancy or refuse to 
renew the lease of a tenant occupying a residential rental housing unit 
constructed or rehabilitated using YouthBuild funds except for serious 
or repeated violations of the terms and conditions of the lease, for 
violation of applicable Federal, State, or local laws, or for good 
cause. Any termination or refusal to renew the lease must be preceded 
by not less than a 30-day written notice to the tenant specifying the 
grounds for the action. The property owner may waive the written notice 
requirement for termination in dangerous or egregious situations 
involving the tenant.
    (c) All transitional or permanent housing for homeless individuals 
or families or low-income families must be safe and sanitary. The 
housing must meet all applicable State and local housing codes and 
licensing requirements in the jurisdiction in which the housing is 
located.
    (d) For sales or rentals of residential housing units constructed 
or rehabilitated using YouthBuild funds, YouthBuild grantees must 
ensure that owners of the property record a restrictive covenant at the 
time that an occupancy permit is issued against such property which 
includes the use restrictions set forth in paragraphs (a), (b), and (c) 
of this section and incorporates the following definitions at Sec.  
688.120: Homeless individual, Low-income family, and Transitional 
housing. The term of the restrictive covenant must be at least 5 years 
from the time of the issuance of the occupancy permit, unless a time 
period of more than 5 years has been established by the grantee. The 
Department advises that any additional stipulations imposed by a 
grantee or property owner be clearly stated in the covenant.
    (e) Any conveyance document prepared in the 5-year period of the 
restrictive covenant must inform the buyer of the property that all 
residential housing units constructed or rehabilitated using YouthBuild 
funds are subject to the restrictions set forth in paragraphs (a) 
through (d) of this section.

    Signed at Washington, DC, this 29th day of June 2016.
Thomas E. Perez,
Secretary of Labor.
[FR Doc. 2016-15975 Filed 8-8-16; 11:15 am]
BILLING CODE 4510-FR-P; 4510-FT-P