[Federal Register Volume 85, Number 48 (Wednesday, March 11, 2020)]
[Rules and Regulations]
[Pages 14294-14392]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-03605]



[[Page 14293]]

Vol. 85

Wednesday,

No. 48

March 11, 2020

Part II





 Department of Labor





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





29 CFR Part 29





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





 Apprenticeship Programs, Labor Standards for Registration, Amendment 
of Regulations; Final Rule

  Federal Register / Vol. 85, No. 48 / Wednesday, March 11, 2020 / 
Rules and Regulations  

[[Page 14294]]


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

DEPARTMENT OF LABOR

29 CFR Part 29

RIN 1205-AB85


Apprenticeship Programs, Labor Standards for Registration, 
Amendment of Regulations

AGENCY: Employment and Training Administration, Labor.

ACTION: Final rule.

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

SUMMARY: To address America's skills gap and to rapidly increase the 
availability of high-quality apprenticeship programs in sectors where 
apprenticeship opportunities are not widespread, the U.S. Department of 
Labor (DOL or the Department) is issuing this final rule under the 
authority of the National Apprenticeship Act (NAA). This final rule 
establishes a process for the DOL's Office of Apprenticeship (OA) 
Administrator (Administrator), or any person designated by the 
Administrator, to recognize qualified third-party entities, known as 
Standards Recognition Entities (SREs), which will, in turn, evaluate 
and recognize Industry-Recognized Apprenticeship Programs (IRAPs). This 
final rule describes what entities may become recognized SREs; outlines 
the responsibilities and requirements for SREs, as well as the 
standards of the high-quality Industry-Recognized Apprenticeship 
Programs the SREs will recognize; and sets forth how the Administrator 
will oversee SREs.

DATES: This final rule is effective May 11, 2020.

FOR FURTHER INFORMATION CONTACT: John V. Ladd, Administrator, Office of 
Apprenticeship, U.S. Department of Labor, 200 Constitution Avenue NW, 
Room C-5311, Washington, DC 20210; telephone (202) 693-2796 (this is 
not a toll-free number).
    Individuals with hearing or speech impairments may access the 
telephone number above via TTY by calling the toll-free Federal 
Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

Preamble Table of Contents

I. Background
    A. Purpose of This Regulation
    B. Legal Authority
    C. General Comments Received on the Notice of Proposed 
Rulemaking
II. Section-by-Section Analysis of the Final Rule
    A. Subpart A--Registered Apprenticeship Programs
    B. Subpart B--Standards Recognition Entities of Industry-
Recognized Apprenticeship Programs
III. Agency Determinations
    A. Executive Orders 12866 (Regulatory Planning and Review) and 
13563 (Improving Regulation and Regulatory Review)
    B. Regulatory Flexibility Act, Small Business Regulatory 
Enforcement Fairness Act of 1996, and Executive Order 13272 (Proper 
Consideration of Small Entities in Agency Rulemaking)
    C. Paperwork Reduction Act
    D. Executive Order 13132 (Federalism)
    E. Unfunded Mandates Reform Act of 1995
    F. Executive Order 13175 (Indian Tribal Governments)

I. Background

A. Purpose of This Regulation

    On June 25, 2019, the Department published a Notice of Proposed 
Rulemaking (NPRM) in the Federal Register (84 FR 29970), proposing to 
amend 29 CFR part 29 (Labor Standards for the Registration of 
Apprenticeship Programs) by authorizing the Administrator to recognize 
SREs who meet the criteria outlined herein. These SREs would, in turn, 
evaluate and recognize IRAPs \1\ that satisfied the standards and 
guidelines for program quality described in the NPRM. The NPRM invited 
written comments from the public concerning this proposed rulemaking. 
These comments may be viewed at http://www.regulations.gov by entering 
docket number ETA-2019-0005.
---------------------------------------------------------------------------

    \1\ In the NPRM for this regulation, the Department also 
referred to industry-recognized apprenticeship programs as 
``Industry Programs.'' In the text of this final rule, however, the 
Department has opted to utilize the acronym ``IRAP'' to refer to 
this new apprenticeship model.
---------------------------------------------------------------------------

    After careful consideration of the comments received, the 
Department is adopting this final rule, which supplements the existing 
system of registered apprenticeships with a flexible, industry-led 
model--one that will be capable of rapidly increasing the availability 
of apprenticeships in emerging, high-growth sectors.
    Since its enactment, the Department has implemented the NAA by 
registering individual apprenticeship programs and apprentices. The 
registration of programs and apprentices occurs either directly under 
the auspices of the Department's OA, or through recognized State 
Apprenticeship Agencies (SAAs). While registered apprenticeships have 
been successful in certain sectors, in particular construction and its 
allied trades, the existing registered apprenticeship model has not 
increased the availability of apprenticeships in other rapidly-
expanding sectors of the economy. The proportion of apprentices 
constitutes only about 0.2 percent of the U.S. workforce.\2\ 
Additionally, a 2017 Harvard Business School study identified nearly 50 
occupations as ripe for apprenticeship expansion.\3\
---------------------------------------------------------------------------

    \2\ See Robert I. Lerman, ``Proposal 7: Expanding Apprenticeship 
Opportunities in the United States,'' The Hamilton Project, 
Brookings Institution, 2014, http://ow.ly/UlDmN.
    \3\ Joseph B. Fuller and Matthew Sigelman, ``Room to Grow: 
Identifying New Frontiers for Apprenticeships,'' Nov. 2017, 3, 
https://www.hbs.edu/managing-the-future-of-work/Documents/room-to-grow.pdf.
---------------------------------------------------------------------------

    The United States is also experiencing an economic challenge: a 
discrepancy between the occupational competencies that businesses need 
and the job skills of aspiring workers. There were 6.4 million job 
openings in the United States at the end of 2019.\4\ Some of these jobs 
are going unfilled because employers have not been able to locate 
enough workers with the skills required to perform them. This pervasive 
skills gap has posed a serious impediment to job growth and 
productivity.\5\ A recent report issued by the National Federation of 
Independent Businesses reinforced that a shortage of qualified, skilled 
workers is inhibiting small business hiring growth.\6\ Another recent 
report produced jointly by Deloitte and the Manufacturing Institute 
projected that the skills gap may leave an estimated 2.4 million 
positions unfilled in the manufacturing sector between 2018 and 2028, 
placing more than $2.5 trillion in U.S. manufacturing output at risk 
during that period, if the skills shortage is not addressed 
effectively.\7\
---------------------------------------------------------------------------

    \4\ U.S. Bureau of Labor Statistics (BLS), ``Job Openings and 
Labor Turnover--December 2019,'' Feb. 11, 2020, https://www.bls.gov/news.release/archives/jolts_02112020.pdf.
    \5\ See, e.g., Task Force on Apprenticeship Expansion, ``Final 
Report to the President of the United States,'' May 10, 2018, 16 
(citing 2018 report from National Federation of Independent 
Business); Business Roundtable, ``Closing the Skills Gap,'' https://www.businessroundtable.org/policy-perspectives/education-workforce/closing-the-skills-gap (last visited Dec. 7, 2019); cf. Deloitte and 
the Manufacturing Institute, ``2018 Deloitte and The Manufacturing 
Institute Skills Gap and Future of Work Study,'' Nov. 2018, 2 
(estimating manufacturing jobs that may go unfilled due to skills 
gap), http://www.themanufacturinginstitute.org/~/media/
E323C4D8F75A470E8C96D7A07F0A14FB/
DI_2018_Deloitte_MFI_skills_gap_FoW_study.pdf.
    \6\ See National Federation of Independent Businesses, 
``September 2019 Jobs Report,'' Sept. 2019, https://www.nfib.com/foundations/research-center/monthly-reports/jobs-report/.
    \7\ Deloitte and the Manufacturing Institute, ``2018 Deloitte 
and The Manufacturing Institute Skills Gap and Future of Work 
Study,'' Nov. 2018, 3-5.
---------------------------------------------------------------------------

    In their comments on the NPRM, several industry groups highlighted 
that the skills gap has led to a lack of qualified candidates, which 
has stalled business growth and undermined competitiveness in the 
global marketplace. Another commenter stated

[[Page 14295]]

that failure to close the skills gaps ``risks ceding U.S. technology 
leadership to other countries, with broad consequences for our nation's 
economic [sic] and even national security.'' Other commenters stated 
that they recognize the need for an expanded, well-crafted 
apprenticeship program in order to address the skills gap in multiple 
industries. A member of Congress also commented that IRAPs will equip 
additional Americans with the necessary skills to contribute to and 
benefit from a prosperous economy.
    In light of these challenges, in January 2017--within days of 
assuming office--President Donald J. Trump and his Administration began 
promoting apprenticeships as a critical component of addressing the 
skills gap. On June 15, 2017, President Trump signed Executive Order 
(E.O.) 13801, ``Expanding Apprenticeships in America'' (82 FR 28229), 
which charged the Secretary of Labor (Secretary) with considering the 
issuance of regulations that promote the development of apprenticeship 
programs by third parties. Specifically, the proposed regulations would 
reflect an assessment of determining how qualified third parties may 
provide recognition to high-quality apprenticeship programs.\8\
---------------------------------------------------------------------------

    \8\ E.O. 13801, Expanding Apprenticeships in America, 82 FR 
28229 (June 15, 2017), sec. 4(a).
---------------------------------------------------------------------------

    Section 8 of the E.O. directed the Secretary to establish a Task 
Force on Apprenticeship Expansion (Task Force), to identify strategies 
and proposals to promote apprenticeships, especially in sectors where 
they are insufficient. During its 6 months of deliberations, the Task 
Force developed recommendations for improving the educational and 
credentialing aspects of apprenticeship; attracting more businesses to 
apprenticeship; expanding public awareness of, and access to, 
apprenticeships; and developing administrative and regulatory 
strategies to expand apprenticeship.\9\
---------------------------------------------------------------------------

    \9\ See Task Force on Apprenticeship Expansion, ``Final Report 
to the President of the United States,'' May 10, 2018, 10-11.
---------------------------------------------------------------------------

    On May 10, 2018, the Task Force transmitted its final report to 
President Trump. The report explained that many employers choose to 
establish apprenticeship programs outside of the registered 
apprenticeship program, in part because of the paperwork and process 
involved in registering a program. In addition, the report noted that 
there is insufficient flexibility in program requirements within the 
registered apprenticeship program to meet the varying needs of 
different industries. The report pointed out that IRAPs would provide a 
new apprenticeship pathway that gives industry organizations and 
employers more autonomy and authority to identify high-quality 
apprenticeship programs and opportunities.\10\
---------------------------------------------------------------------------

    \10\ Id. at 34.
---------------------------------------------------------------------------

    The issuance of this final rule fulfills E.O. 13801's mandate 
concerning IRAPs and implements key recommendations contained in the 
Task Force report. The final rule also reflects input from the large 
number of commenters who offered substantive recommendations for the 
refinement and improvement of the proposed rulemaking.
    In this final rule, the Department has modified 29 CFR part 29 by 
creating two subparts--one governing the operation of registered 
apprenticeship programs (subpart A), and the other establishing quality 
guidelines for DOL-recognized SREs and IRAPs (subpart B). The existing 
regulatory language of 29 CFR part 29, setting forth the labor 
standards for the registration of apprenticeship programs, has been 
fully retained within the new subpart A, with minor conforming edits to 
accommodate the addition of the new subpart B. Subpart B establishes 
the process for organizations to apply to become DOL-recognized SREs of 
IRAPs. Once recognized by the Department, these SREs will work with 
employers and other entities to establish, recognize, and monitor high-
quality IRAPs. The final rule includes measures and guidelines to 
facilitate the recognition of these high-quality IRAPs, and it sets out 
how the Department will oversee SREs. The final rule also adopts 
changes suggested by commenters that increase the Department's role in 
program oversight, clarify the requirements to become a recognized SRE, 
and heighten SRE and IRAP program transparency.
    The Department expects that the issuance of this final rule will 
accelerate the expansion of quality apprenticeships by introducing a 
flexible, market-based, industry-led model that is capable of expanding 
apprenticeships in emerging, high-growth sectors while also reaching 
underserved populations. By establishing a supplementary apprenticeship 
pathway that addresses the varying needs of different industries, the 
final rule seeks to address the skills gap in the U.S. labor force 
while promoting the growth of high-quality, sustainable jobs for the 
American workforce.
    This final rule is considered an E.O. 13771 regulatory action. 
Details on the estimated costs of this final rule can be found in the 
rule's economic analysis.

B. Legal Authority

    As relevant to this final rule, the NAA authorizes the Department 
to: (1) Formulate labor standards to safeguard the welfare of 
apprentices and to encourage their inclusion in apprenticeship 
contracts; (2) bring together employers and labor for the formulation 
of programs of apprentices; and (3) cooperate with State agencies 
engaged in the formulation and promotion of standards of 
apprenticeship. 29 U.S.C. 50.
    This final rule implements the NAA's direction that the Secretary 
``bring together employers and labor for the formulation of programs of 
apprenticeship'' by creating a flexible, industry-driven model for 
apprenticeship designed to bring together diverse groups of employers 
and prospective apprentices in industries and occupations that do not 
have a robust presence in the registered apprenticeship system. The 
final rule further implements the NAA's direction by establishing 
standards for this apprenticeship model that are designed to safeguard 
the welfare of apprentices. As discussed in more detail below, all 
IRAPs must comply with the standards for high-quality apprenticeships 
contained in the regulation, and with their respective SRE's policies 
and procedures, and must provide apprentices with a written 
apprenticeship agreement outlining the conditions of employment and 
training consistent with their respective SRE's requirements (which 
would include those required by this regulation).
    Several commenters contended that the NPRM was inconsistent with 
the NAA, referring to the legislative history and purpose of the NAA. 
Commenters highlighted congressional comments about Federal 
intervention to halt manipulative and dishonest apprenticeship training 
programs that failed to train apprentices.
    The Department has determined that it has authority under the NAA 
to establish this program. The NAA provides a general authorization and 
direction for the Secretary to create and promote standards of 
apprenticeship, including through contracts, and to interface with 
employers, labor, and States to create apprenticeships and 
apprenticeship standards. See 29 U.S.C. 50. This final rule does not 
exceed or conflict with the broad authority granted by Congress in the 
NAA. The NAA does not mandate or require that the current registered 
apprenticeship system be the exclusive apprenticeship system 
administered by the Department, nor does it suggest that the Department

[[Page 14296]]

is limited to one approach in executing the NAA.
    One commenter stated that the NAA does not authorize the IRAP model 
because the legislative history of the NAA indicates it was meant ``to 
bring Government oversight to apprenticeship, and that it did so by 
directing DOL, in concert with the states, to establish minimum 
standards to protect apprentices from exploitation.'' Commenters argued 
that the IRAP model does not match this history because it places trust 
in private actors who could manipulate and mislead apprentices without 
government oversight.
    In response to these particular comments, the Department notes that 
this regulation establishes the broad standards under which apprentices 
will work and train, including the requirement that apprentices enter 
into an apprenticeship agreement that discloses the terms and 
conditions of the program. In addition, the Department maintains a 
robust oversight role over SREs, and has a number of tools at its 
disposal should it determine that a recognized SRE or an SRE's 
recognized IRAP is not in compliance with the standards laid out in the 
regulation.
    The Department further notes that while the NAA establishes that 
the Federal Government may help develop and encourage the adoption of 
apprenticeship standards, the text of the NAA does not require that any 
apprenticeship programs receive Department approval or use the 
standards developed by the Department--participation in the IRAP model, 
as with registered apprenticeship, is voluntary. Had Congress meant for 
the Department to mandate standards for all U.S. apprenticeships, it 
surely would have used stronger language than it did. Phrases like 
``formulate and promote,'' ``encourage[e] the inclusion,'' ``bring 
together,'' and ``cooperate,'' are not how Congress typically 
establishes universal mandates. Cf., e.g., 29 U.S.C. 654(a) (``Each 
employer . . . shall furnish to each of his employees employment and a 
place of employment . . . free from recognized hazards that are causing 
or likely to cause death or serious physical harm to his employees . . 
. [and] shall comply with occupational safety and health standards 
promulgated under this Act.''). This reading of the text is supported 
by the NAA's legislative history. The NAA's legislative history states 
that the Department has no authority ``to compel adherence to its 
recommendations'' for apprenticeship standards but could encourage 
their inclusion in contracts, as well as the provision of technical 
assistance to employers and labor. See S. Rep. No. 75-1078, at 3. The 
legislative history of the NAA further indicates that Congress intended 
to give the Secretary multiple tools to improve the quality of American 
apprenticeship. It speaks not only of the importance of formulating 
standards for training and safety to ensure quality apprenticeship 
opportunities, but the need for Federal assistance in expanding the 
number of apprenticeship programs to fill the skills needs of industry. 
See H. Rep. No. 75-945, at 2-3.
    Commenters also argued that the statutory text prohibits the IRAP 
model. One commenter argued that DOL could only create the IRAP model 
if Congress passed a new law, because DOL cannot deviate from the 
standards of registered apprenticeship. Another commenter stated that 
DOL must comply with the authorizations and directions of the NAA at 
the same time and that the proposed rule did not do so, because it did 
not provide for the welfare of apprentices.
    As noted, the NAA does not dictate the terms of how the Department 
takes these steps or restrict the Department to only one particular 
approach, nor does the NAA require the Department to establish one set 
of standards. The NAA ``is written in very broad terms'' and ``contains 
a wide grant of authority to the Secretary of Labor.'' Gregory Elec. 
Co. v. U.S. Dep't of Labor, 268 F. Supp. 987, 991 (D.S.C. 1967). As 
discussed below, the final rule sets out an extensive list of 
requirements and protections in Sec.  29.22 that are designed to 
safeguard the welfare of apprentices and to require quality training, 
progressively-advancing skills, and industry-relevant credentials. 
Further, unlike the commenter who suggested all provisions of the NAA 
must be met at the same time, the Department reads the NAA as simply 
listing the various activities that Congress has authorized and 
directed the Department to engage in. The NAA authorizes the Department 
to formulate and promote apprenticeship standards, to encourage the 
inclusion of those standards in contracts of apprenticeship, to bring 
employers and labor together, to cooperate with State agencies in the 
formulation of State standards of apprenticeship, and to cooperate with 
the Secretary of Education. As a practical matter, these activities may 
be carried out independently of each other, and nothing in the statute 
suggests that any particular activity engaged in by the Department must 
include all five activities to be a valid activity under the NAA. With 
that said, as discussed below, the final rule sets out an extensive 
list of requirements and protections in Sec.  29.22 that are designed 
to safeguard the welfare of apprentices and to require quality 
training, progressively advancing skills, and industry-relevant 
credentials.
    Many commenters contended that the proposed rule was problematic 
because it lacks specificity or does not involve States. Other 
commenters argued that the NAA does not authorize the proposed rule, 
because the rule did not provide as detailed or comprehensive a set of 
requirements as the Department's registered apprenticeship regulations. 
Several states submitted comments either opposed to the rule or urging 
greater State involvement in the IRAP initiative.
    The NAA does not require the Department to promulgate highly 
specific apprenticeship standards, only those standards formulated by 
the Department that are necessary to safeguard the welfare of 
apprentices, which, as discussed above and below, the final rule 
accomplishes. The Department disagrees that the rule lacks specificity, 
as the final rule provides many requirements for IRAPs and SREs--
including detailed performance metrics not required of registered 
apprenticeship programs. And while the NAA encourages cooperation with 
States in the development of their standards of apprenticeship, there 
is no requirement that DOL consult or operate its apprenticeship 
initiatives through States, nor a requirement that States participate 
directly in the development of this regulation or any other 
apprenticeship standards the Department has or may develop. Many states 
submitted comments on the proposed rule and the Department considered 
these comments in developing this final rule.

C. General Comments Received on the Notice of Proposed Rulemaking

    The Department received a total of 326,798 public comments, of 
which 17,671 were unique. The majority of the remainder were letters 
associated with 290 form-letter campaigns. Almost all of the form-
letter campaigns addressed the exclusion of the construction industry 
from the Department's proposed approach to IRAPs. This issue is 
discussed at length in the section-by-section discussion of Sec.  29.30 
of this final rule (Sec.  29.31 in the proposed rule).
    The commenters represented a range of stakeholders from the public, 
private, and non-profit sectors. Public sector commenters included 
Federal, State, and local government agencies and

[[Page 14297]]

elected officials. Private sector commenters included employers/
business owners, construction and building trades firms, and trade or 
industry organizations. Non-profit sector commenters included national 
and local labor unions, professional associations, and educational and 
training organizations. The majority of public comments received in 
response to the proposal were from private citizens, including current 
and former apprentices.
General Support for and Opposition to the IRAP Framework
    Many commenters expressed general support for the Department's 
efforts in the proposed rule to establish a framework for IRAPs. Some 
commenters noted that there is room for more than one pathway to 
achieving successful apprenticeship programs. Another commenter stated 
that IRAPs and registered apprenticeship programs can operate in 
parallel, commenting that by allowing industry groups to recognize 
IRAPs, DOL is empowering the private sector to create more 
apprenticeship programs in a more efficient fashion. Commenters stated 
that IRAPs will equip Americans with the necessary skills to contribute 
to the booming economy and would allow workers to be trained for 
flexibility in performing their jobs and other duties. One commenter 
expressed support for the brevity and simplicity of the proposed rule. 
Another commenter remarked that workers' choice to participate in 
apprenticeship programs should not be restricted by the presence of a 
union-sponsored program in the geographical location where they would 
choose to attend an IRAP. Several commenters also stated that the 
proposed rule is beneficial because it could help cut through 
bureaucratic red tape to put businesses and employees at the center of 
the conversation; allow businesses to meet labor-market needs; allow 
small businesses to focus on serving program participants while also 
protecting apprentices from discrimination; and help industries adjust 
to and face changes, boost incomes, and curb student debt.
    Other commenters contended that the IRAP model does not operate in 
the best interests of the apprentice because the model has not adopted 
minimum standards for IRAPs, such as formal apprentice contracts, 
progressive wage increases, fair discipline and proper supervision, 
standards for instructors' education, independent oversight, statewide 
uniformity, safety standards, and protection of apprentices against 
discrimination and harassment. Multiple commenters indicated that the 
IRAP model ``takes a macroeconomic view of the industry and workforce 
development and exhibits only a superficial investment in the interests 
of the apprentice.'' A few commenters predicted that the IRAP model 
would fail in a few years because the model enables ``profit-driven'' 
organizations to ``cut corners'' in order to boost profits at the 
expense of their workers. A commenter stated that the market-driven 
approach to scaling the apprenticeship model damages the skilled 
workforce and apprenticeships by making industry less flexible and 
resilient to economic downturns, and more susceptible to manipulation 
by policymakers and diminishing economic growth. A commenter asserted 
that IRAPs are not apprenticeships at all and, therefore, do not belong 
in 29 CFR part 29.
    The Department appreciates the comments recognizing the benefits of 
IRAPs to the U.S. economy and workforce. The Department shares the view 
of commenters who believe that there is room in the workforce for both 
registered apprenticeship programs and IRAPs. The Department 
acknowledges the concerns articulated by commenters doubting the 
success of IRAPs and questioning the ability of the IRAP model to 
adequately train and safeguard the welfare of apprentices. The 
Department has responded to these concerns, as discussed in detail 
below in the section-by-section analysis. In the final rule, the 
Department has strengthened the standards of high-quality IRAPs to 
provide more detailed training requirements and protections for 
apprentices, enhanced Departmental oversight of SREs and--by 
extension--IRAPs, and included additional requirements on SREs to 
develop processes that support IRAPs, hold IRAPs accountable, and 
provide greater protection to apprentices.
    The Department disagrees with commenters who have suggested that 
IRAPs will have a negative effect on the economy and the workforce and 
would be less flexible during economic downturns. On the contrary, the 
purpose of IRAPs is to increase high-quality apprenticeships in a 
manner that ensures industry-relevant training and skills, appropriate 
safeguards for apprentices, and a skilled, adaptable workforce. IRAPs 
could provide additional opportunities for workers during economic 
downturns and assist workers to achieve mobility and transferrable 
skills through industry-relevant training and credentials.
Support for Registered Apprenticeship Programs
    Many commenters expressed general concerns about IRAPs as an 
alternative path to registered apprenticeship programs. Numerous 
commenters urged the Department to withdraw the proposed IRAP model and 
focus on supporting and improving registered apprenticeship programs in 
order to achieve the goal of retaining skilled and qualified 
tradespeople for long-term success. A commenter expressed the view that 
IRAPs would divert resources from DOL that could be used to promote 
registered apprenticeships and would reduce the capacity of DOL to 
ensure high-quality standards in apprenticeship programs. Some 
commenters stated that instead of developing a new program, the 
Department should focus efforts on additional funding of registered 
apprenticeship programs through Federal grants or tax credits. Multiple 
commenters remarked on the significant growth of registered 
apprenticeship and the number of active registered apprentices today as 
compared to the 20-year national average. Other commenters remarked on 
the success of registered apprenticeships in ``apprenticeable 
occupations.'' Some commenters urged DOL to promote joint labor-
management apprenticeship programs rather than creating a system of 
IRAPs. Many commenters asserted that robust, privately-funded 
registered apprenticeship programs have helped millions of workers 
obtain upward mobility and learn nationally-recognized skills and that 
they have benefited employers by supplying a qualified and highly-
trained workforce, improving safety, and allowing greater productivity. 
Many commenters also provided personal stories and examples of 
professional success gained by completing a registered apprenticeship 
that cultivates safety-oriented, high-performance apprentices in 
middle-class careers. A commenter remarked that high-quality 
apprenticeship programs boost the economy, while another commenter 
stated that existing programs have one of the highest rates of return 
on investment for employers.
    A commenter asserted that, while the registered apprenticeship 
system is in need of some improvements--such as streamlining the 
program approval process, achieving greater diversity, and clarifying 
misperceptions about how apprenticeship operates--the proposed rule 
does not address issues to improve the registered apprenticeship 
system. Some commenters disagreed with the notion that the current 
registered

[[Page 14298]]

apprenticeship system is rigid, inflexible, cumbersome, or burdensome, 
noting instead that their experience was to the contrary and that 
registered apprenticeships are fully adaptable to business needs. Other 
commenters included resolutions from their State apprenticeship 
advisory bodies listing the important attributes of registered 
apprenticeship programs and affirming their support for such programs. 
The resolutions included statements of opposition to the proposed IRAP 
model because of concerns that the new approach would undermine the 
existing registered apprenticeship model.
    The Department appreciates commenters' concerns about IRAPs' effect 
on the registered apprenticeship program. The Department emphasizes, 
however, that IRAPs are not intended to disrupt, supplant, or otherwise 
negatively affect registered apprenticeship programs. The Department 
views IRAPs and registered apprenticeship programs as operating in 
parallel. It further views the market-driven approach with IRAPs as 
designed to encourage growth in use of the apprenticeship model such 
that quality IRAPs would succeed alongside registered apprenticeship 
programs. Moreover, the need to rapidly increase apprenticeships in the 
United States through a new apprenticeship model is evident when one 
considers that the proportion of apprentices in the labor force in 
other countries is considerably greater than in the United States. 
While apprentices account for approximately 0.2 percent of the American 
labor force, they constitute 2.2 percent of the labor force in Canada, 
2.7 percent in the United Kingdom, and 3.7 percent in Germany and 
Australia.\11\
---------------------------------------------------------------------------

    \11\ See Robert I. Lerman, ``Proposal 7: Expanding 
Apprenticeship Opportunities in the United States,'' The Hamilton 
Project, Brookings Institution, 2014, http://ow.ly/UlDmN.
---------------------------------------------------------------------------

    As discussed in more detail below in the Department's explanation 
of Sec.  29.30, the Department has determined that programs that seek 
to train apprentices to perform construction activities, as described 
in Sec.  29.30, will not be recognized as IRAPs. The Department's goal 
in this rulemaking is to expand apprenticeships to new industry sectors 
and occupations. Registered apprenticeship programs are more widespread 
and well-established in the construction sector than in any other 
sector. Further, commenters raised concerns about allowing IRAPs in the 
construction sector in particular. In light of the purpose of this 
rulemaking, there is no need to take the risk, whatever the magnitude, 
of disrupting or displacing registered construction programs.
    The Department intends to continue to promote, improve, and 
increase the availability of registered apprenticeship programs. The 
Department appreciates commenters' support of registered apprenticeship 
programs and, particularly, their view that registered apprenticeship 
programs contain sufficient rigor without creating burdensome 
requirements. The Department also appreciates the numerous success 
stories shared by commenters, and the Department agrees that the earn-
and-learn model of apprenticeship provides numerous benefits to workers 
and employers. Furthermore, the Department is well aware of the high 
rates of return that employers receive from the investment in 
apprenticeship programs. As for the comment that this rule does not 
address improvements to the registered apprenticeship system, this rule 
is not intended to make changes to the registered apprenticeship 
program but rather to establish a separate system of apprenticeship. 
This alternative pathway for apprenticeship is to provide additional 
avenues for addressing the skills gap and creating apprenticeship 
opportunities. The Department will continue to promote and improve the 
registered apprenticeship model through streamlined processes and 
development of electronic tools, among other things. Nevertheless, with 
this rule, the Department is also acknowledging that an industry-led 
alternative model may be better suited to some industries and has 
determined that IRAPs are a valid, parallel option to increase 
apprenticeship opportunities in the United States.
    The Department intends to utilize funds appropriated for registered 
apprenticeship to continue to improve and support registered 
apprenticeship programs. The Department also notes that any available 
grant funding for registered apprenticeships will be announced through 
future funding opportunity announcements. Comments concerning tax 
credits to support apprenticeship are outside the scope of this final 
rule.
The Role of States in IRAPs
    Commenters recommended that the Federal Government should empower 
and appropriately fund all States to operate their own, federally-
approved registered apprenticeship programs. Another commenter 
encouraged the Department to consider a role for States in engaging 
with IRAPs within their State, in addition to the SREs recognizing 
those IRAPs, and to support state-agency capacity for this engagement. 
Multiple commenters expressed concern that IRAPs would bypass the SAA 
system and States would not have oversight of the apprenticeship 
programs operating within their borders. A commenter expressed concern 
about creating a parallel system with no role for SAAs. Another 
commenter stated that SAAs have been at the forefront of increasing 
opportunities for apprenticeship in new industries, occupations, and 
populations. A commenter asserted that the proposed rule could 
jeopardize its State's history of success in maintaining superior 
buildings, worksite safety, and family wage jobs in the construction 
sector. Multiple commenters suggested that IRAPs would undermine their 
States' longstanding registered apprenticeships in the building trades. 
One commenter questioned the proposed funding scheme for IRAPs and 
asked whether there would be any fiscal impact on State labor 
departments.
    The Department appreciates the role of SAAs in the registered 
apprenticeship program and will continue to support and promote such 
engagement. The Department also notes that this rule allows States and 
local government agencies or entities to participate as SREs; 
therefore, States may serve such a role if they so choose and fulfill 
the regulatory requirements. The Department appreciates the concern 
that a State may not have oversight of IRAPs within its borders. The 
Department notes, however, that various parts of the rule require IRAPs 
to abide by State and local laws, and State enforcement mechanisms 
would apply to employers offering IRAPs as to other employers operating 
within the State. The Department encourages SAA States to continue 
supporting and promoting registered apprenticeships, and the Department 
intends to continue to support and promote registered apprenticeships 
in both SAA and non-SAA States. Concerning the comments about the 
construction sector's superior buildings, worksite safety, family wage 
jobs, and State registered apprenticeships in the building trades, the 
Department has included in the final rule at Sec.  29.30 an exclusion 
from this subpart for programs that seek to train apprentices to 
perform construction activities. This means that SREs may not recognize 
as IRAPs programs that seek to train apprentices to perform 
construction activities as defined in Sec.  29.30. The Department does 
not anticipate that this rule generally will have a fiscal impact on 
State labor

[[Page 14299]]

departments, but the Department also notes that State labor 
departments, or any other State agencies or entities, may choose to 
become recognized SREs as set forth in Sec. Sec.  29.20 and 29.21.
Distinction Between Registered Apprenticeship Programs and IRAPs
    Several commenters stated that the distinction between registered 
apprenticeships and IRAPs should be emphasized given that, according to 
the commenters, registered apprenticeships have rigorous standards and 
are not profit-driven. Multiple commenters asserted that IRAP and 
registered apprenticeship contractors would often be indistinguishable 
to the public, who might choose less qualified personnel without 
recognizing the difference. Multiple commenters recommended that the 
terms ``apprentice'' or ``apprenticeship'' not be used for IRAPs to 
prevent confusion with registered apprenticeships. A commenter 
expressed support for DOL's statement in the NPRM that recognition as 
an IRAP is different from registration as a Registered Apprenticeship 
Program. Numerous commenters argued that a ``bright line distinction'' 
is warranted, particularly in the construction industry, because, 
according to them, registered apprenticeship programs are rigorously 
reviewed and operate at a higher level of commitment to training than 
the proposed IRAPs would. Commenters also approved of a bright line 
distinction as applied to the ability to apply for Federal funding 
given that, in their view, IRAPs would not have the same requirements 
for standards and quality of instruction and protection of apprentices. 
Another commenter asserted that it is unrealistic to expect an IRAP to 
invest the capital and resources that a labor union already ``invests 
as part of its commitment to producing well and broadly trained'' 
employees ``with years of rigorous classroom, field, and on the job 
preparation.''
    The Department acknowledges commenters' statements that there 
should be a bright-line distinction between registered apprenticeship 
programs and IRAPs. The Department has determined that the IRAP model 
sufficiently diverges from the registered apprenticeship model so that 
a bright line distinction exists without a need for a regulatory 
change. The Department disagrees with the premise that IRAPs are 
inherently less safe or rigorous, given the detailed requirements set 
forth below. Additionally, because construction activities are excluded 
from the subpart, as discussed further below in the Department's 
explanation of Sec.  29.30, there is no need for any bright-line 
distinction for apprenticeships involving construction activities.
    Regarding Federal funding for IRAPs, it is the Department's view 
that in cases where Federal programs confer categorical eligibility, 
exclusive funding, or special status to registered apprenticeship 
programs, such benefits do not extend to IRAPs. Such benefits were 
designed with the registered apprenticeship programs in mind, and it is 
therefore appropriate to maintain preferential status only for 
registered apprenticeships. In cases where high-quality apprenticeship 
programs are generally eligible for funding, such as in the 
Department's H-1B Job Training Grant Program, the Department maintains 
that IRAPs should be eligible for such funding. With respect to the 
comment that IRAPs may not invest in training to the same degree as 
labor unions, the Department anticipates that employers that chose to 
participate in IRAPs will have every reason to invest in job training. 
The Department anticipates that the establishment of a new 
apprenticeship pathway will incentivize employers to seek innovative 
and high-quality methods for training their employees. This is because 
an employer has every incentive to ensure that its apprenticing 
employees gain the skills necessary to do the tasks the employer needs. 
Presumably that is why an employer would offer an IRAP in the first 
place. Additionally, employers have a market incentive to offer an 
IRAP. It distinguishes these employers in the competition for talent 
from other employers who do not offer an IRAP.\12\
---------------------------------------------------------------------------

    \12\ The Department also believes it is overly simplistic to 
state that registered apprenticeship programs are not profit-driven. 
Many for-profit companies participate in registered programs.
---------------------------------------------------------------------------

Decision Not To Pursue IRAP Pilot Program
    Multiple commenters stated that the proposed rule did not follow 
the Task Force's Recommendation 14 to begin IRAP implementation with a 
pilot program in an industry without well-established registered 
apprenticeship programs. Several commenters said that there was no 
empirical evidence supporting the decision not to implement a pilot 
program. A commenter stated that a pilot program would have helped the 
Department assess the effectiveness of IRAPs before issuing a rule and 
requested that DOL explain the decision not to implement a pilot 
program as well as provide evidence that supports IRAPs' effectiveness.
    Several commenters requested that the Department implement a pilot 
program in the final rule in order to test the program model narrowly 
at first and make adjustments as needed to ensure proper implementation 
and success before applying the program on a larger scale. Other 
commenters opined that determining which occupations should be included 
in a pilot project depends on which occupations are experiencing a 
skills gap, which is hard to identify in any given industry that does 
not already have a training program via registered apprenticeship. One 
of these commenters further stated that, because of insufficient 
reliable data to understand the scope of U.S. apprenticeships, the 
proposed rule should be withdrawn until adequate data are obtained.
    After due consideration of these comments, the Department maintains 
that the large skills gap requires a more immediate response than a 
pilot project would permit. The Department believes that the problems 
posed by the current skills gap necessitate the comprehensive 
implementation of IRAPs, and that a pilot program would by its very 
nature be insufficient to address the current shortage of skilled 
American workers at the scale required. Further, nothing in the NAA 
requires that bringing together ``employers and labor for the 
formulation of programs of apprenticeship'' be done first as a pilot 
program. The Department has discretion under the broad language of the 
NAA to establish the IRAP program as it is done here.
Industry-Driven Apprenticeship Model Framework
    Several commenters suggested that the IRAP framework should 
coordinate with State, local, and regional partners and stakeholders 
(local businesses, workforce and education systems, human services 
organizations, labor and labor-management partnerships, and other 
community-based organizations) to ensure IRAPs are aligned with the 
workforce, education, and human services programming in which Federal, 
State, and local governments and the private sector currently invest.
    One commenter argued that the proposed rule leaves many issues 
unaddressed, such as challenges employers face in navigating the 
apprenticeship system, lack of attention to reciprocity, and 
uncertainty among apprentices about how to evaluate program quality. 
Multiple commenters suggested that each SRE applicant and each IRAP 
should be classified

[[Page 14300]]

according to the North American Industry Classification System (NAICS) 
or Occupational Information Network (O*NET) codes, stating that to do 
otherwise might disrupt the current registered apprenticeship system.
    The Department anticipates that the IRAP model will strike the 
appropriate balance between coordinating at the regional and national 
levels, as will be more practical for large employers, and coordinating 
with State and local governments, as may be more practical for many 
smaller employers. The Department stresses that the IRAP model provides 
flexibility for industries to set the training requirements, program 
structure, and teaching curricula that strikes the ideal balance 
between geographic and industry-wide concerns. This approach, which is 
intended to minimize administrative burdens on adopters of the IRAP 
model, should encourage a more rapid scaling of quality apprenticeships 
across multiple industries where apprenticeships are currently 
underutilized. With respect to NAICS and O*NET codes, the Department 
will be requesting such information from each prospective SRE about the 
IRAPs it will recognize and expects there to be a uniformity in 
classification between IRAPs and registered apprenticeships. The 
Department also acknowledges the concern that employers and prospective 
apprentices may face difficulty in navigating and comparing potential 
apprenticeship options. As discussed in more detail below, the 
Department addressed such concerns by incorporating the enhanced 
metrics listed in Sec.  29.22(h) as well as the reporting required by 
Sec.  29.24 of the final rule.
Requests To Extend the Comment Period
    Ten commenters submitted requests to extend the comment period for 
the proposed rule. Seven commenters requested a 30-day extension of the 
comment period, and three commenters requested a 60-day extension. In 
general, commenters requesting an extension of the comment period cited 
their desire to provide meaningful and comprehensive comments.
    While the Department acknowledges these concerns, the Department 
concluded that the 60-day comment period was reasonable and sufficient 
to provide the public a meaningful opportunity to comment. This 
conclusion is supported by the large volume of complex and thoughtful 
comments received, including detailed comments from all 10 commenters 
requesting an extension, which demonstrates that the public has had 
adequate time to meaningfully participate in the rulemaking. For these 
reasons, the Department declined to extend the 60-day public comment 
period on the NPRM.
Other Suggestions About Public Participation
    A commenter expressed concern that the proposed rule had been 
developed with no consultation with, or input from, SAAs or the 
Advisory Committee on Apprenticeship. Another commenter suggested that 
the Department should work with previously-contracted intermediaries 
for registered apprenticeships that have an understanding of the issues 
within the current system to make changes needed to gain wider adoption 
by the technology sector. A commenter suggested that the Department 
offer the public an additional opportunity for public comment, because 
the proposed rule lacked a discussion of the validity of IRAP-issued 
credentials.
    The Department believes that these concerns are overstated and 
insubstantial. The Department benefitted from input from the Task Force 
Report, which helped inform the development of the proposed rule. The 
Task Force consisted of a wide range of stakeholders, including State 
elected officials, major trade and industry groups, labor unions, and 
concerned citizens. In addition, the Department received several 
comments from SAAs subsequent to the publication of the proposed rule, 
which were taken into consideration during development of the final 
rule.
Administrative Procedure Act
    A commenter raised concerns that the Department has already 
established both the fact that SREs exist and that SREs may be approved 
and awarded a favorable determination before the related regulation is 
finalized. The commenter also asserted that the Department has no 
intention of taking into serious consideration any critical comments 
that will be submitted in response to the NPRM, which it is required to 
do pursuant to the APA.
    The Department notes that Training and Employment Notice (TEN) 3-18 
and TEN 3-18, Change 1 (issued on July 27, 2018, and June 25, 2019, 
respectively) were rescinded on October 22, 2019. Accordingly, the 
Department withdrew the information collection request (ICR) package 
associated with the TEN on October 22, 2019. The TEN provided that a 
potential SRE could apply for a favorable determination from the 
Department as to whether its policies and procedures met the hallmarks 
outlined in the TEN. The favorable determination was not intended to 
provide any benefit or formal recognition to an entity, nor was it 
envisioned as a prerequisite to any activity. And regardless, the form 
from which such a determination would be made was only proposed and 
never went into effect. Conversely, this final rule establishes that a 
potential SRE must apply for recognition by the Department to become a 
recognized SRE. Moreover, the Department will not award a favorable 
determination to an SRE prior to the publication of this final rule. 
The Department takes seriously its obligation under the APA to review 
and respond to all germane comments received from the public concerning 
the NPRM, as amply demonstrated by this final rule release.

II. Section-by-Section Analysis

    The analysis in this section provides the Department's responses to 
public comments received on the proposed rule. The Department received 
a number of comments on the proposed rule that were outside the scope 
of the proposed regulations, and the Department offers no response to 
such comments. The Department also has made some non-substantive 
changes to the regulatory text to correct grammatical and typographical 
errors, in order to improve the readability and conform the document 
stylistically that are not discussed below.

A. Subpart A--Registered Apprenticeship Programs

    Revisions to part 29 account for its division into two subparts. 
Each subpart addresses a different type of apprenticeship program. 
Accordingly, revisions to current part 29--now proposed subpart A--made 
conforming edits to account for subpart B, and for how SREs and IRAPs 
establish a new, distinct pathway for the expansion of apprenticeships.
    The first type of conforming edit in subpart A replaces prior 
references to part 29 with references to subpart A. Second, the final 
rule adds the phrase ``[f]or the purpose of this subpart'' before 
definitions provided in subpart A, Sec.  29.2. This revision clarifies 
the distinction between the current registered apprenticeship system 
and what new subpart B establishes.
    DOL received no comments on conforming edits to subpart A. Revised 
regulatory text will be implemented as proposed.

[[Page 14301]]

B. Subpart B--Standards Recognition Entities of Industry-Recognized 
Apprenticeship Programs

Section 29.20 Standards Recognition Entities, Industry-Recognized 
Apprenticeship Programs, Administrator, and Apprentices
    Section 29.20 of the final rule explains that subpart B establishes 
a new apprenticeship pathway distinct from the registered program 
described in subpart A. This section also defines four key terms used 
in subpart B. These terms are standards recognition entity (SRE), 
Industry-Recognized Apprenticeship Program (IRAP), Administrator, and 
Apprentice. The Department received comments on the definitions of an 
SRE, IRAP, and Apprentice as well as recommendations to define other 
terms used in the proposed rule. A discussion of these comments is 
described in detail below. The Department received no comments on the 
definition of Administrator.
Definition of SRE
    Paragraph (a) of Sec.  29.20 in the final rule defines an SRE as an 
entity that is qualified to recognize apprenticeship programs as IRAPs 
under Sec.  29.21 and that the Department has recognized as an SRE. The 
Department received a few comments related to the proposed definition 
of an SRE in paragraph (a) of Sec.  29.20. Multiple commenters 
requested that the Department propose a regulatory definition for an 
SRE. Another commenter stated that the proposed definition lacked 
defined qualifications to ensure SREs are recognizing programs that 
protect apprentices and provide proper, uniform supervision and 
instruction.
    In response to the comments, the Department notes that it 
established a definition for an SRE in the proposed rule. As stated in 
the proposed rule, an SRE is defined as ``an entity that is qualified 
to recognize apprenticeship programs as [IRAPs] under Sec.  29.21 and 
that has been recognized by [DOL].'' The Department also notes that in 
addition to establishing a definition for an SRE, the proposed rule 
also had provisions for the types of entities that can become a 
recognized SRE in Sec.  29.20(a)(1), the process and criteria in which 
an entity becomes a recognized SRE in Sec.  29.21, and the 
responsibilities and requirements of an SRE in Sec.  29.22 as a means 
of providing the full scope of what being an SRE means.
    The Department believes entities will have sufficient 
qualifications to ensure that they are recognizing high-quality 
programs, and more fully discusses the specific qualifications for SREs 
to recognize high-quality apprenticeship programs in Sec.  29.21 of the 
final regulation. Accordingly, the Department declines to revise the 
definition of an SRE, and the final rule adopts the provision as 
proposed.
    The Department inadvertently designated the types of entities that 
can become a recognized SRE in paragraphs (a)(1)(i) through (vii) under 
Sec.  29.20 in the proposed rule. The Department has corrected this 
designation and proposed Sec.  29.20(a)(1)(i) through (vii) has been 
redesignated as Sec.  29.20(a)(1) through (9) in the final rule. 
Paragraph (a)(1) of Sec.  29.20 in the proposed rule contained a 
nonexhaustive list of the types of entities that can become recognized 
SREs. These entities include but are not limited to: (1) Trade, 
industry, and employer groups or associations; (2) educational 
institutions, such as universities or community colleges; (3) State and 
local government agencies or entities; (4) non-profit organizations; 
(5) unions; (6) joint labor-management organizations; or (7) a 
consortium or partnership of entities such as those above. In the final 
rule, the Department has added two types of entities that can become a 
recognized SRE in Sec.  29.20(a): (1) Corporations and other organized 
entities; and (2) certification and accreditation bodies or entities 
for a profession or industry, to align with the types of eligible 
entities listed in the Industry-Recognized Apprenticeship Program 
Standards Recognition Entity Application (Form ETA-9183). The final 
rule now establishes that the types of entities that can become 
recognized SREs under Sec.  29.20(a) include: (1) Trade, industry, and 
employer groups or associations; (2) corporations and other organized 
entities; (3) educational institutions, such as universities or 
community colleges; (4) State and local government agencies or 
entities; (5) non-profit organizations; (6) unions; (7) joint labor-
management organizations; (8) certification and accreditation bodies or 
entities for a profession or industry; or (9) a consortium or 
partnership of entities such as those above.
    Although the application, as proposed in the NPRM, included 
``companies'' and ``certification and accreditation bodies'' as a type 
of eligible entity that can become a recognized SRE, the Department has 
revised ``companies'' to be ``corporations and other organized 
entities'' and ``certification and accreditation bodies'' to be 
``certification and accreditation bodies or entities for a profession 
or industry'' in the final rule. By revising this text, the Department 
aims to provide greater specificity and additional clarity concerning 
the types of entities that can act as an SRE.
    As noted above, paragraphs (a)(1) through (9) of Sec.  29.20 in the 
final rule contain a nonexhaustive list of the types of entities that 
can serve as SREs. A consortium of these entities can also apply to 
become a recognized SRE. By not limiting the types of entities that may 
receive recognition, the Department aims to encourage the creation of 
SREs in a broad range of industries and occupational areas. 
Accordingly, the Department invited public comment on this approach in 
the proposed rule.
    Several commenters expressed support for establishing a wide list 
of eligible entities that may become recognized SREs. One commenter 
proposed that the types of entities that may become recognized SREs 
should include both individuals and organizations in order to encourage 
innovation. Other commenters argued that the types of entities that can 
become a recognized SRE should be restricted to non-profit 
organizations or exclude individual employers in order to mitigate 
conflicts of interest.
    The Department has considered the various comments received 
pertaining to this section and maintains that retaining a nonexhaustive 
list of the types of entities that can serve as an SRE will encourage 
the development and expansion of apprenticeships, particularly in high-
growth and in-demand industries. A nonexhaustive list of eligible 
entities can also enable building on existing partnerships and 
cultivating new relationships within industries, which could be 
instrumental in ensuring the success of an apprenticeship. To alleviate 
the concerns expressed by commenters requesting that specific types of 
entities be restricted from becoming a recognized SRE, the Department 
has added a requirement in Sec.  29.21(b)(6) of the final rule 
concerning mitigating conflicts. Under this provision, which is 
discussed at greater length below, potential SREs are required to 
demonstrate that they can effectively mitigate any potential or actual 
conflicts of interest as part of their application to becoming a 
recognized SRE. By adding this provision, the Department is taking the 
necessary steps to ensure that each SRE applicant addresses any 
inherent conflicts through specific policies, processes, procedures, 
organizational structures, or a combination thereof, which will be 
evaluated by the Department prior to its recognition as an SRE.
    One commenter stated that the proposed rule does not explicitly 
address strategies to encourage

[[Page 14302]]

organizations to consider forming SREs and may not necessarily motivate 
entities that do not yet participate in apprenticeship partnerships to 
begin doing so in the proposed IRAP framework.
    Although the Department did not explicitly address strategies to 
encourage organizations to consider establishing SREs in the proposed 
rule, the Department recognizes the importance of engaging with 
stakeholders and supports partnership development between employer and 
labor organizations, education and training providers, and others to 
promote and expand apprenticeship opportunities. The Department 
believes that the successful implementation of the IRAP initiative will 
require robust engagement and partnerships to foster the growth and 
innovation of these types of apprenticeships, particularly in 
industries lacking such opportunities.
    Some commenters expressed concern that having multiple SREs within 
an industry may generate significant fragmentation and confusion among 
potential apprentices, employers, and sponsors. One commenter raised 
several questions about how SREs will operate across State lines. 
Specifically, the commenter asked how multiple SREs within a State or 
industry would handle competition over limited resources, and how SREs 
will count apprentices when they operate across States or regions. 
Another commenter opined that SAAs should not be allowed to apply to be 
an SRE, because SAAs are authorized by the Department to recognize 
registered apprenticeship programs, and it would lead to apprentices in 
the same industry receiving inconsistent training, affecting their 
skill level and marketability. In contrast, a different commenter 
provided specific language to amend the proposed regulations to allow 
SAAs to serve as an SRE. The commenter expressed its belief that SAAs 
should be at the forefront of those entities considered as potential 
SREs.
    The Department does not share the concerns raised by commenters 
questioning how multiple SREs within an industry or State would 
function. If apprenticeships are to thrive in emerging industries and 
spread to new and innovative occupational areas, then having multiple 
SREs within any given industry or State would result in an increase in 
the number of apprenticeship programs that are able to effectively 
train individuals for industries and occupations most in need of 
skilled workers. In addition, the presence of multiple SREs will 
provide prospective IRAPs and employers with an opportunity to assess 
and determine which SRE is best suited to meet the needs of their 
program.
    The Department disagrees with the commenter who opined that SAAs 
should not be allowed to apply to become a recognized SRE. The 
Department understands the importance of SAAs and believes that they 
are well positioned to be recognized as an SRE due to their level of 
expertise and experience with identifying quality apprenticeships, not 
only in the private sector but also in the public sector. The 
Department envisions that SAAs and other State and local government 
entities that are recognized by the Department as SREs may decide to 
develop and recognize IRAPs in the public administration sector. The 
Department believes this will result in the expansion of public 
administration apprenticeships, thereby building talent pipelines for 
employers, which will lead to the creation of career opportunities for 
apprentices in State and local government and to future economic growth 
in the United States. The Department also disagrees with another 
commenter's recommendation to amend the regulation so that SAAs are 
specifically added as an eligible entity, as SAAs already fall within 
the scope of ``State and local government agencies or entities.''
Definition of IRAP
    The Department has replaced the term ``Industry Programs'' that was 
used in paragraph (b) of Sec.  29.20 in the proposed rule with 
``IRAPs'' in paragraph (b) of Sec.  29.20 in the final rule. The 
Department made this change in Sec.  29.20(b) (and throughout the final 
rule) to limit confusion among stakeholders since the term ``Industry 
Program'' is used widely in both the public and private sectors. For 
that reason, an employer could potentially establish an apprenticeship 
program on an independent basis and refer to it as an ``Industry 
Program.'' By making this change, the Department will make clear to 
stakeholders that ``IRAP'' is a Department-specific term for an 
apprenticeship model established in accordance with the NAA.
    Paragraph (b) of Sec.  29.20 in the final rule defines IRAPs as 
high-quality apprenticeship programs that are recognized by an SRE, 
wherein an individual obtains workplace-relevant knowledge and 
progressively advancing skills, that include a paid-work component and 
an educational or instructional component, and that result in an 
industry-recognized credential. Under Sec.  29.20(b), an IRAP is 
developed or delivered by entities such as those outlined in Sec.  
29.20(a).
    Many commenters warned that the term ``IRAP'' is defined in a vague 
and overbroad manner and does not provide any meaningful guidance or 
protection for apprentices. One commenter suggested amending the 
definition of ``IRAP'' to add language stating that an apprentice's 
compensation cannot be less than the minimum wage, and that wages must 
increase as work and training benchmarks are achieved. The commenter 
also recommended that the term ``industry-recognized credential'' be 
defined in the final rule since it is referenced in the definition of 
``IRAP.''
    The Department did not make changes in response to the comments 
suggesting that the definition of ``IRAP'' is vague or broadly written. 
In the proposed rule, the Department required in Sec.  29.22(a)(4) that 
a program seeking recognition as an IRAP adhere to standards of high 
quality in order to obtain and maintain recognition by an SRE. The 
standards of high-quality apprenticeships outlined in Sec.  29.22(a)(4) 
served to supplement the definition of ``IRAP'' as proposed in Sec.  
29.20(b). The SRE, in accordance with the parameters established under 
this regulation, is charged with establishing the standards for 
training, structure, and curricula that an IRAP must conform to. The 
Department has determined that refining the definition of ``IRAP'' to 
include wage requirements, other requirements concerning the welfare of 
an apprentice, and the parameters of an industry-recognized credential 
is unnecessary, because these topics are addressed in this final rule 
at Sec.  29.22. Accordingly, the final rule substantively adopts the 
definition as proposed, with nonsubstantive textual edits for clarity 
and to reflect an update to a regulatory citation in accordance with 
the provisions outlined in 29.22(a)(4).
Definition of Administrator
    Paragraph (c) of Sec.  29.20 in the final rule clarifies that the 
``Administrator'' is the Administrator of OA, or any person 
specifically designated by the Administrator. The Department did not 
receive any comments related to the proposed definition of 
``Administrator'' in paragraph (c) of Sec.  29.20 in the proposed rule. 
Accordingly, the final rule adopts the provision as proposed.
Definition of Apprentice
    Paragraph (d) of Sec.  29.20 in the final rule defines an 
``apprentice'' as an individual training in an IRAP under an 
apprenticeship agreement. The Department received some comments 
recommending the revision of the definition of ``apprentice'' in Sec.  
29.20(d) of the proposed rule. One commenter

[[Page 14303]]

stated that the proposed definition of ``apprentice'' should be revised 
by substituting the term ``training'' in place of the term 
``participating.'' Other commenters stated that the definition of 
``apprentice'' should be revised either to align with the definition of 
``apprentice'' in subpart A or should be written in a manner that is as 
robust as the subpart A definition. These commenters asserted that 
aligning the definitions of ``apprentice'' would provide additional 
clarity on the rights and responsibilities of an apprentice and the 
protections that safeguard the welfare of an apprentice, thereby 
ensuring that underage workers are prohibited from participating in an 
IRAP.
    The Department agrees with the commenter's suggestion to revise the 
definition of ``apprentice'' to clarify that an apprentice is an 
individual ``training'' in an IRAP, and accordingly, has revised the 
definition in the final rule. The use of the term ``training'' in place 
of the term ``participating'' in the definition could eliminate 
potential ambiguity, since mentors and related instruction providers 
may also be deemed participants in an IRAP.
    The Department acknowledges the other commenters' recommendation to 
revise the definition of ``apprentice'' so that it aligns with the 
subpart A definition of ``apprentice,'' which references the standards 
of apprenticeship. Although the Department declines to adopt this 
recommendation, the Department has made additional refinements to the 
definition beyond replacing the term ``participating'' with the term 
``training'' as noted above. As discussed below in Sec.  29.22(a)(4)(x) 
of the final rule, IRAPs are now required to have an apprenticeship 
agreement with each apprentice. Accordingly, the Department has added 
the phrase ``under an apprenticeship agreement'' to the definition of 
``apprentice'' in the final rule. Because an apprenticeship agreement 
establishes the conditions of employment between an IRAP and an 
apprentice, and this final rule establishes parameters to protect the 
welfare of all IRAP apprentices as described below in Sec.  29.22, the 
Department does not think it is necessary to revise this definition 
further to create alignment with the subpart A definition. The 
definition comports with the broad discretion the Department possesses 
under the NAA. In addition, IRAPs must comply with all employment and 
age-related laws that apply to their employers, thereby conferring upon 
apprentices the same protections afforded other employees.
Recommendations for Additional Terminology Definitions
    Several commenters recommended adding definitions for other terms. 
These terms include ``accessibility,'' ``accreditation,'' ``categorical 
eligibility,'' ``complex task,'' ``consensus-based process,'' 
``construction,'' ``consultative services,'' ``employer engagement,'' 
``high-quality,'' ``industry-essential skills,'' ``industry expertise/
expert,'' ``industry-recognized credential/credential,'' ``paid work,'' 
``recognition decision/recognize,'' ``sector,'' ``significant 
opportunities,'' ``structured mentorship,'' ``structured work 
experience,'' and ``Universal Design for Learning.'' A commenter 
specifically urged that the proposed rule's lack of definitions in 
proposed subpart B requires a ``re-proposal'' to provide the 
opportunity for comment.
    Of the recommended terms that commenters requested definitions, 
five terms--``accessibility,'' ``categorical eligibility,'' ``employer 
engagement,'' ``industry expertise,'' and ``Universal Design for 
Learning''--were not used in the proposed regulatory text; \13\ two 
terms--``consultative services'' and ``recognition decisions''--were 
used in Sec.  29.22(f) of the proposed regulatory text, but were not 
carried over into the final regulatory text as discussed below in Sec.  
29.22 (under the ``Conflicts of Interest'' heading); and one term--
``significant opportunities''--was used in Sec.  29.31 of the proposed 
regulatory text, but was not carried over into the final regulatory 
text. The Department has determined that these terms do not require 
definitions, because they are not included in the final rule's 
regulatory text. Although the term ``construction'' was not used in the 
proposed regulatory text, the proposed rule incorporated a long-
standing definition of the building and construction industry from case 
law as part of the Department's approach in determining which entities 
and programs are eligible to participate in the IRAP framework. 
However, after reviewing many comments concerning the need to define 
``construction,'' the Department has revised its construction exclusion 
in Sec.  29.30 of this final rule, as discussed in detail below.
---------------------------------------------------------------------------

    \13\ Three terms did not appear in the preamble discussion of 
the proposed rule either: ``accessibility,'' ``employer 
engagement,'' and ``Universal Design for Learning.''
---------------------------------------------------------------------------

    With regards to the terms that were used in the proposed rule and 
are carried over into the final rule, the Department has determined 
that these terms are either discussed in the relevant section of the 
regulation below and can be understood in the context of the 
appropriate section or according to their plain and ordinary meaning. 
Accordingly, defining these terms in this section is not necessary. In 
addition, the Department disagrees with the commenter's assertion that 
the rule would require a reproposal due to a lack of definitions in 
subpart B. The Department has identified the key terms that warrant a 
definition and given sufficient notice and opportunity for comment with 
respect to these definitions, and believes these definitions are 
sufficient for public understanding.
Section 29.21 Becoming a Standards Recognition Entity
    Section 29.21 outlines the process by which an entity may apply for 
Departmental recognition as an SRE, as well as the criteria against 
which the Department will assess applications. The Department will 
recognize entities that show they have the expertise to set standards 
for high-quality apprenticeship programs that result in industry-
recognized credentials and equip apprentices with competencies needed 
for proficiency in specified industries or occupational areas, as would 
be demonstrated through components of the entity's application 
(described in more detail below).
    Several commenters provided suggestions relating to the 
Department's proposed process for reviewing an entity's application to 
serve as an SRE contained in the preamble of the proposed rule. One 
commenter suggested that the proposed panel of reviewers either be 
broadened to include industry training experts from companies and 
schools, or that it be narrowed to include only Department personnel 
who possess the experience in apprenticeship programs necessary to 
adjudicate the application. Another commenter stated that the 
Department should not delegate its decision-making to Federal 
contractors, especially considering that the specific expertise and 
performance standards for the contractors are not defined. A commenter 
expressed concern that the Department's use of contractors to review an 
entity's application could present conflicts of interest. Another 
commenter proposed that DOL instead establish a national advisory 
committee to review and make recommendations regarding SRE applications 
and to serve as a forum for discussion about issues related to the 
recognition of SREs.
    Commenters also suggested that DOL's proposed review of entities' 
applications appeared to be too limited. The commenter noted that 
concerns

[[Page 14304]]

regarding the initial review would also apply to resubmitted 
applications. One commenter expressed concern about the proposed 
panel's limited review of SRE applications in light of the estimate of 
over 200 SREs approved in the first year. Several commenters expressed 
concern that the Department lacks the staffing and funding to review 
the expected number of SRE applications, with one commenter adding that 
the Department struggles to oversee the registered apprenticeship 
system.
    The Department determined that, for at least the first year of its 
evaluating SRE applications, a panel of two contractors and one full-
time federal employee will conduct these evaluations. After reviewing 
the comments received, the Department concluded that limiting SRE 
application review panels to only industry experts or only Department 
staff could lead to a lack of capacity that could be critical in 
translating the needs of industry into this new apprenticeship 
recognition process under the NAA. The Department has concluded that 
this mix of federal, industry, and credentialing experts would be 
essential to implementing this rulemaking as quickly and effectively as 
possible. The Department may adjust the ratio of federal staff, 
industry experts, and credentialing experts as it continues to 
implement and refine the review process.
    As with all of its programs, the Department will continuously 
review this process to find the best, most-efficient way of 
implementing these rules. Additionally, the Department may alter the 
composition of the panel depending on the nature and breadth of sectors 
and occupations covered by a particular application, although it 
expects that three will be the minimum number of reviewers for the 
initial stages of the evaluation to include Departmental expertise, 
industry expertise, and credentialing expertise. The Department agrees 
that the panel of reviewers should include industry experts, rather 
than consistently relying on two contractors from the credentialing 
community as proposed. The Department otherwise anticipates following 
the process outlined in the proposed rule to review entity's 
applications.
    The Department will take all steps necessary to prevent contractors 
from reviewing applications for which they have a stake in the outcome; 
furthermore, regardless of the composition of the panel, the 
Administrator or the Administrator's designee will make the final 
decision on recognition. In response to comments calling for a national 
advisory committee review of SRE applications, the Department 
determined that assembling such a committee and coordinating its review 
would be difficult and could impose unnecessary burdens on entities 
applying to be SREs. Accordingly, it will not take this approach for 
reviewing applications. The Department made no change to the regulatory 
text in response to these comments, and it has not included regulatory 
text addressing the composition of an evaluation panel to maintain 
flexibility to find the best, most efficient way to handle SRE 
applications.
    Regarding the concern that application review appears limited, the 
Department notes that its proposed process provides for multiple layers 
of review. The Department also notes that it has made every effort to 
reduce the burden of applying to be an SRE without sacrificing quality. 
The Department notes that review of an initial application and an 
application for re-recognition are based on the same criteria and thus 
will necessarily follow similar review processes. The Department 
acknowledges that its staffing and resources are limited, but it 
anticipates being able to utilize available appropriated funds to 
review SRE applications.
Application Process--Sec.  29.21(a)
    Paragraph (a) of Sec.  29.21 states that an entity must submit an 
application to the Administrator to become a recognized SRE. The 
Department will review the application to determine whether the entity 
is qualified to be an SRE. This determination will depend in large part 
on the scope and nature of the IRAPs the SRE seeks to recognize. 
Accordingly, the application would give the Department information 
about the industry(ies) and occupational area(s) for which programs 
would train apprentices.
    Numerous commenters suggested that applications should be required 
to go through notice and comment before receiving approval. Commenters 
stated that requiring notice and comment on entities' applications may 
provide for transparency and ensure that the needs of apprentices and 
industry are met. Commenters also suggested that notice-and-comment 
review of applications would increase the efficacy, credibility, and 
appropriateness of the standards that SREs recognize. One commenter 
suggested that public comment from a wide range of sources would ensure 
that SREs have the expertise necessary to ensure the creation of high-
quality IRAPs and to ensure that apprentices receive sought-after 
competencies and industry-recognized credentials. The commenter 
suggested that confidential business information not be shared, but 
that other portions of an entity's application be made available for 
public comment. Another commenter suggested that an SRE's standards 
should be required to go through a notice-and-comment process.
    Other commenters proposed that applications be shared with industry 
groups so that these groups may raise concerns or provide input to the 
Department as part of the application process. Many commenters 
expressed concern that allowing multiple SREs with differing standards 
to operate in the same occupations and the same geographic area would 
lead to confusion. A commenter characterized such potential for 
confusion as ``massive'' and representative of a major change to 
apprenticeship. One commenter proposed that the rule should incorporate 
a standard of reasonable consistency to ensure that training results in 
transferable skills. The commenter suggested that reasonable 
consistency could be achieved by allowing industry groups to object to 
an SRE's training and structures if they are not reasonably consistent 
with the training and requirements of programs in the same occupation 
and same area. Another commenter stated that SREs should be required to 
coordinate with any registered apprenticeship programs in their 
industry or occupations in which they are certifying programs in order 
to ensure the programs and standards are complementary and do not 
undercut each other.
    The Department determined that requiring SRE applications to 
undergo a notice-and-comment period would be a large and unnecessary 
burden and would not be the best use of Department resources. Such a 
process would require additional Departmental staff resources to post 
applications for public comment; review, reconcile, and consider 
comments; and compare comments concerning an entity's application. The 
Department further believes that the time required to perform such a 
process for each entity's application would produce a backlog of 
applications. In response to the comment proposing that an entity's 
standards should go through notice and comment, the Department 
determined that such a requirement would be likely to produce a similar 
strain on Departmental resources, and a similar potential for delays 
and backlogs. The Department is confident its expertise combined with 
the expertise of the panelists will enable the

[[Page 14305]]

Administrator or the Administrator's designee to assess an entity's 
application to determine whether the entity will be able to serve as an 
effective SRE. Notably, many of the application requirements, such as 
possessing sufficient financial resources and not being debarred from 
conducting business with the Federal Government, are criteria that turn 
on data not readily available to members of the public.
    Similarly, the Department determined that sharing applications with 
industry groups would present unnecessary burdens and potential delays 
similar to those described above. To become recognized SREs, entities 
must demonstrate that they have the expertise to set standards through 
a consensus-based process involving industry experts, and the 
Department thus expects that entities will demonstrate broad-based 
support from industry. This places the burden on applicants to 
demonstrate that they have consensus on how to train apprentices in a 
way appropriate to the industry. It does not mean, however, that SREs 
must demonstrate that they have adopted the only approach for training 
apprentices in an industry. Accordingly, the Department has determined 
it unnecessary for it to identify and consult industry experts on an 
applicant's qualifications, as the application must demonstrate, in the 
Department's evaluation, that an applicant has built consensus and 
garnered expertise to set training standards in an industry. A 
successful SRE application will contain all the information necessary 
for the Department to independently determine whether a prospective SRE 
developed its curricula and requirements through a consensus-based 
approach. Requiring that entities share their applications with other 
industry groups that may include potential competitors could also raise 
issues of privacy and confidentiality. To the extent that the 
Department requires outside expertise to assess an entity's 
application, the Department may rely on the expertise of credentialing 
experts and industry experts as explained above. The Department's 
review will be limited to only the application, and the Department will 
not approve applications that are ambiguous.
    The Department does not anticipate that multiple SREs operating in 
the same industry or occupational area will lead to confusion. The 
Department notes that standards and training plans associated with 
IRAPs in the same industry or occupational area may understandably vary 
depending on the industry-recognized credentials obtained by 
apprentices. The Department determined that requiring reasonable 
consistency between IRAPs operating in the same occupation and area 
would be unworkable and would unnecessarily restrict employer choice 
Such a standard could stifle apprenticeship expansion by requiring SREs 
to achieve ``reasonable consistency'' in areas or occupations where 
such consistency does not exist. Similarly, while SREs are welcome to 
coordinate with registered apprenticeship programs in the same 
occupation, the Department determined that it would be most appropriate 
to allow SREs the flexibility to choose with whom to consult.
    Several commenters stated that the attestation-based model of 
certification is neither rigorous nor transparent. According to one 
commenter, the H-2B Temporary Worker Visa program demonstrated that an 
attestation-based process invites fraud. The commenter suggested that 
the rule be amended to require on-site review in-line with the 
Nationally Recognized Testing Laboratory program. A different commenter 
proposed that the application process mirror that of the American 
National Standards Institute (ANSI), which the commenter characterized 
as the ``gold standard'' for private industry. This process involves a 
detailed application, opportunity for public comment, and a multi-
layered review that involves both Department of Education staff and an 
advisory committee of industry professionals. Another commenter noted 
that the rule incorporates no method by which the Department will 
independently verify the information and supporting documentation 
contained in an entity's application. Even if an application is 
rejected, the commenter noted that the entity could seemingly correct 
its application, reapply, and be approved in two business days.
    A few commenters suggested that, in addition to the Administrator, 
SAAs also should be permitted to assess entities' applications. One 
commenter noted that under a newly-passed state law, SREs must be 
certified to operate in-state, and the commenter requested that the 
rule be amended to allow the Administrator to delegate to SAAs the 
authority to approve SRE applications. One commenter noted that the 
lack of a role for States makes this subpart unique among education and 
workforce development programs and could lead to significant confusion 
for both training providers and businesses if training is not aligned 
with State priorities under other workforce and education plans. A 
commenter recommended that the Department coordinate with other Federal 
agencies including the Bureau of Land Management, the Bureau of 
Reclamation, the National Park Service, the Fish and Wildlife Service, 
and the U.S. Forest Service to encourage unique public-private 
partnership. A commenter proposed that third-party accreditors such as 
ANSI should review and assess entities' applications rather than the 
Department.
    The Department notes that the application process provided for is 
not solely attestation-based, because paragraph (b) of Sec.  29.21 
requires that the applicant demonstrate its qualifications by 
submitting various required documents that include processes and 
procedures. Paragraph (a) of Sec.  29.21 was also amended to require a 
prospective SRE to provide a written attestation that all information 
and documentation provided is true and accurate. Notably, many or all 
of the attestations in the proposed rule were contained in the proposed 
form, which was eliminated from the final rule, as explained below. The 
Department determined that conducting on-site assessments of SREs would 
offer few insights into an SRE's application while requiring 
significant time and resources from the Department. The process for 
reviewing entities' applications involves multiple layers, including 
processing by program analysts, panel review, a panel meeting, and 
review by the Administrator or the Administrator's designee. Though 
this process does not involve the same layers as the ANSI process, the 
Department is confident that it will result in effective assessment 
given the rigorous review.
    The Department does not anticipate independently verifying all 
information submitted in conjunction with entities' applications, as 
proposed by one commenter. However, the Department will be able to 
identify errors in applications through careful review. The Department 
will request clarifying information from entities if portions of an 
entity's application seem to contain potential errors because of 
unclear or inconsistent information included in the application. In 
addition, willfully making materially false statements or 
representations to the Federal Government in an application may 
constitute a crime under 18 U.S.C. 1001. If an entity were to correct 
an error and resubmit its application, the Department sees it as a 
potential benefit that the application may be timely reviewed and 
approved. Indeed, the Department expressly encourages such resubmission 
in Sec.  29.21(d)(2). The Department notes, of course, that not every 
deficiency in an application may be readily corrected. The Department 
will exercise particular

[[Page 14306]]

care in evaluating applications that contradict previously-provided 
financial information or descriptions of an entity's subsidiaries, as 
one example.
    The final rule does not permit the Administrator to delegate the 
approval of SREs to States or SAAs. Given the nature of the 
applications and the possibility that SREs operate on a regional or 
national scale, the Department is in the best position to assess 
applications from entities given its national reach and expertise. For 
this same reason, the Department declined to provide for the assessment 
of applications by third parties. The Department notes that State and 
local government agencies or entities are eligible under Sec.  
29.21(a)(1) to apply to become recognized SREs. No change to the rule 
was made in response to these comments.
    Several commenters requested that the Department work to minimize 
the burdens in the application approval process. Multiple commenters 
suggested that the process to be recognized as an SRE appeared more 
burdensome than the registration process under subpart A. A commenter 
suggested that the application process imposes unnecessary and 
unjustified requirements, including the requirements to establish a 
consensus-based process, demonstrate capacity and quality assurance 
processes, and the requirement to apply for re-recognition. The 
commenter described such burdens as disincentives to apprenticeship 
expansion.
    In response to comments, the Department has made every effort to 
minimize burdens while still ensuring that the Department collects the 
information necessary to recognize high-quality IRAPs. The Department 
determined that the information required to be provided to the 
Department by Sec.  29.21 is needed to accurately assess SREs. As part 
of this effort, the Department revised the proposed form to better 
align the information collected with the information required. The 
Department determined that the form had the potential to cause 
confusion, because some parts of the proposed form contained language 
that varied slightly from the substantive requirements in proposed 
Sec.  29.21. The Department, therefore, deleted the form from the 
regulatory text. The Department also revised paragraph (a) of Sec.  
29.21 to clarify that the application must be in a form prescribed by 
the Administrator.
Required Qualifications To Become a Recognized SRE--Sec.  29.21(b)
    Paragraph (b) of Sec.  29.21 describes the criteria against which 
an SRE application will be assessed. The Department received no 
comments relating directly to the first sentence in paragraph (b) that 
as proposed read, ``[a]n entity is qualified to be a[n] [SRE] if it 
demonstrates in its application that . . .'' The Department edited 
Sec.  29.21(b) to remove the words ``in its application that'' to align 
paragraph (b) of this section with the clarification in paragraph (a) 
of Sec.  29.21 that the application is in a form prescribed by the 
Administrator.
    The proposed rule set forth the requirements to become a recognized 
SRE in three paragraphs that were numbered Sec.  29.21(b)(1) through 
(3). In response to the comment received, this final rule has been 
revised so that there are eight paragraphs numbered Sec.  29.21(b)(1) 
through (8), integrating some requirements that were previously in the 
form included in the proposed rule.
    Paragraph (b)(1) of Sec.  29.21 of the proposed rule provided that 
an entity must demonstrate that it has the expertise to set standards, 
through a consensus-based process involving industry experts, for the 
requisite training, structure, and curricula for apprenticeship 
programs in the industry(ies) or occupational area(s) in which the 
entity seeks to be an SRE. An SRE should demonstrate sufficient support 
and input from industry authorities to give confidence in the SRE's 
expertise, given where its IRAPs will operate. This standards-setting 
process will, in turn, inform and guide the IRAPs the SRE recognizes, 
so that those programs impart the competencies and skills apprentices 
need to operate successfully in their respective industries or 
occupational areas.
    A number of commenters responded to the Department's request for 
comments on whether SREs should set competency-based standards for 
training, structure, and curricula, rather than focus on potentially 
superficial requirements such as seat time. Many commenters expressed 
support for empowering SREs to set competency-based standards. 
Commenters noted benefits of competency-based standards, including 
those focusing on competency-based standards will allow IRAPs to train 
apprentices in the most efficient manner possible, and that some 
apprentices receive proficiency on an accelerated timeline using 
competency-based standards. A commenter also warned that 
apprenticeships need flexibility to maximize positive results for both 
apprentices and employers, meaning that apprentices should not be bound 
to a certain number of hours, but instead progress through the program 
to gain a specific skill set and then perform these skills in a real 
industry setting. Other commenters expressed concern that traditional 
time-based programs are well established and that SREs are likely to 
use time-based standards. Also, some credentials may be tied to a 
minimum amount of seat time. One commenter proposed that the Department 
impose a minimum competency baseline, while another requested that the 
Department impose transparency requirements with respect to the 
competencies that will be attained.
    The Department agrees with numerous commenters who noted the 
various benefits of competency-based programs, and paragraph (b)(1) of 
Sec.  29.21 is accordingly revised to expressly require that entities 
have the expertise to set competency-based standards, through a 
consensus-based process involving industry experts, for the requisite 
training, structure, and curricula for apprenticeship programs in the 
industry(ies) or occupational area(s) in which it seeks to be an SRE. 
The Department has concluded that requiring SREs to develop competency-
based standards that measure an apprentice's skill acquisition through 
the apprentice's successful demonstration of acquired skills and 
knowledge is consistent with ensuring that IRAPs offer innovative and 
high-quality training.
    Though the Department is requiring competency-based standards, the 
Department does not intend to restrict SREs in using their expertise in 
designing those standards, and SREs are not precluded from including 
time-based requirements as a function of or in addition to competency-
based standards. For example, an SRE might determine that time-based 
requirements are necessary for apprentices to achieve competency. 
Accordingly, SREs will retain the flexibility to decide how competency 
is achieved, which may include the utilization of time-based measures.
    Requiring SREs to set competency-based standards will ensure that 
IRAPs and apprentices benefit as much as possible from the knowledge of 
each SRE's industry experts. Requiring that standards be competency 
based will further ensure that apprentices gain a specific skill set 
and perform such skills in a real industry setting, as proposed by one 
commenter. In addition, requiring SREs to develop competency-based 
standards is consistent with

[[Page 14307]]

Recommendations 1 and 5 of the Task Force on Apprenticeship Expansion 
Final Report to the President of the United States. Included in 
Recommendation 5 was the suggestion that technical instruction be 
competency-based, not seat-time based, and that technical instruction 
be directly aligned with the knowledge, skills, and abilities needed on 
the job. The Department does not intend for the requirement that 
standards be competency-based to preclude SREs from tracking time 
towards any minimum requirements that must be met to receive a 
particular industry-recognized credential. The Department agrees that 
transparency regarding competencies is important and notes that 
language was added in Sec.  29.22(a) that requires IRAPs to provide 
apprentices with a written training plan.
    The Department determined not to set a minimum time requirement for 
IRAPs, because the standards developed by SREs are required to be 
competency-based and may include any time-based requirements the SREs 
deem necessary for apprentices to achieve competency.
    A commenter requested clarification regarding how the Department 
will review standards. One commenter proposed that if competency-based 
standards are developed using Federal funding, then SREs should be 
required to release such competency-based standards to the public so 
that they become part of the public domain. The commenter suggested 
that spending taxpayer money on multiple competing competency-based 
standards would be an example of wasteful spending.
    The Department will use the combined expertise of Department staff 
and outside contractors to review entities' applications to assess the 
expertise and the sufficiency of the process by which the entities 
would develop standards. The Department declines to require that 
standards be made part of the public domain. In the event that the 
Department enters into grants, contracts, or cooperative agreements to 
use Federal funding for the creation of standards, the ownership of 
such standards will be addressed in such agreements. No changes were 
made to the regulatory text in response to these comments.
    Several commenters responded to DOL's question in the preamble to 
the proposed rule regarding whether additional requirements are needed 
in paragraph (b)(1) to guarantee that the standards-setting processes 
of SREs will align the skills that apprentices receive to the needs of 
employers in a given region. One commenter proposed that DOL should 
weigh an applicant's history of developing and operating under the 
workforce development model using data collected under the Workforce 
Innovation and Opportunity Act (WIOA). Conversely, the commenter 
suggested that when considering SRE applications from entities with 
existing standards-setting processes, the Department should consider 
how the processes may increase employment outcomes for those with 
barriers to employment. Another commenter proposed that SREs be 
required to consult with both industry experts and State Workforce 
Development Boards, which the commenter suggested are well-suited to 
identify the industry-recognized credentials needed to meet labor-
market demand. Several commenters suggested that allowing multiple 
entities to act as SREs, each with their own unique standards, would 
create confusion. A commenter proposed that SREs must demonstrate 
significant industry engagement at national and local levels and 
evaluate whether industry programs align with activities of industries.
    A commenter recommended focusing on the continuity of standards. 
Without continuity, the commenter suggested, there would be significant 
risk for apprentices in finding employment outside of the first 
sponsoring employer.
    Other commenters requested that no geographic approach be 
incorporated into the final rule. One commenter noted that a small 
hotel chain might operate in multiple States but still require one 
comprehensive solution to the hotel chain's workforce needs. Several 
commenters suggested that this subpart might be interpreted at a local 
level with no consistency from state to state or even city to city, 
creating varying levels of IRAP program quality.
    Some commenters also suggested that ``expertise'' and ``experts,'' 
as used in this paragraph, was vague and should be more specific or 
should be defined. A proposed clarification was that expertise could be 
demonstrated by having the support, commitment, and buy-in from 
multiple employers. Other commenters proposed that the Department 
specify the qualifications necessary to demonstrate such expertise. A 
different commenter proposed that the Department attempt to ensure that 
industry experts are truly representative of their industries, rather 
than leaving the selection of experts up to the SRE. A commenter 
suggested that unless the term ``expert'' were defined, the 
Department's review panel would have little basis by which to make a 
consistent assessment, thereby leading to the inclusion of experts of 
any stripe. Another commenter requested that the Department provide 
additional clarification regarding how SRE applicants will be expected 
to show their expertise in setting standards, impartiality, and 
credentialing in establishing IRAPs.
    Other commenters proposed alternatives to demonstrating expertise. 
One commenter proposed that the paragraph be amended to allow for an 
SRE to have the expertise to set standards through a consensus-based 
process involving industry experts, or that it ``possesses the ability 
to convene a body of industry experts.'' Several commenters suggested 
that an applicant's history with workforce development programs should 
be a possible alternative to demonstrating input from industry experts. 
A group of commenters noted that ``consensus-based process'' is vague 
and undefined. One commenter proposed that the Department define the 
concept of consensus standards and also questioned whether consensus 
standards for a given industry are any different from a work process 
schedule required in Sec.  29.5 of subpart A.
    A commenter requested that quantitative and qualitative measures 
carry equal weight in an entity's application.
    The Department agrees that weighing an entity's experience 
operating under the workforce development system would be relevant 
information that should be provided in an entity's application if the 
entity possesses such experience. However, the Department has 
determined that requiring all applicants provide metrics measured under 
WIOA may exclude potentially qualified entities from applying. As 
discussed below, the Department declines to establish minimum 
experience requirements for entities to apply to become recognized 
SREs. The Department agrees that a proven track record of positive 
outcomes for those with barriers to employment would be a relevant and 
persuasive point of discussion in an entity's application for entities 
that have such experience. However, the Department declines to require 
that entities demonstrate the likelihood of expanding opportunities for 
those with barriers to employment in their applications as it would 
create a different application standard for applicants experienced in 
handling such issues. Additionally, the final rule maintains 
flexibility to allow entities to design programs most responsive to 
their workforce and economic needs. Additionally, while WIOA is 
directed in large part toward those with barriers to employment as 
defined by that statute, the NAA is directed toward apprentices

[[Page 14308]]

broadly and generally; consistent with the NAA, the industry-led 
apprenticeship model envisioned by this rule is intended to serve 
apprentices in a variety of industries and with a variety of 
backgrounds, not just those who are currently experiencing barriers to 
employment as that term is used in WIOA. While input from one or more 
State Workforce Development Boards could demonstrate valuable knowledge 
and expertise on the part of an applicant, the Department declines to 
require that every applicant consult with every relevant State 
Workforce Development Board.
    As discussed above, the Department does not share the concern that 
a variety of SREs will lead to confusion and inconsistent IRAP program 
quality. To the contrary, the Department expects that any SREs 
complying with the requirements of this subpart will only recognize 
IRAPs that provide high-quality training. The Department views slight 
variations in approach that will occur between SREs as a net benefit 
that will provide apprentices and employers with increased options to 
meet the training needs of their workforce. Furthermore, the Department 
anticipates that many entities that may be interested in becoming 
recognized SREs already have standards-setting processes that reflect 
well-established and high-quality training, and the Department does not 
anticipate that expanding access to such programs will lead to 
confusion.
    In response to the comment that SREs must be able to demonstrate 
significant industry engagement at national and local levels, the 
Department notes that coordination with industry experts is an existing 
requirement in paragraph (b)(1) of Sec.  29.21. The Department also 
notes that it would be difficult and burdensome for SREs to list in 
their applications every local area in which it anticipates recognizing 
IRAPs.
    The Department appreciates the concern with focusing on the 
continuity of standards to ensure the employability of completing 
apprentices. Notably, as discussed above, apprentices will train 
according to competency-based standards that reflect the consensus of 
experts and thereby convey consistency and employability. In addition, 
as discussed below, SREs will report on credential attainment and 
employment outcomes of their IRAPs, thereby demonstrating continuity of 
training and employability.
    The Department disagrees with the concern that allowing SREs to 
adjust their practices for each State and city in which they certify 
programs could lead to varying levels of certification quality, and 
therefore, has declined to prohibit such an approach. To the contrary, 
the Department envisions that SREs will make these adjustments as a 
matter of necessity to successfully operate in a State or region. For 
example, an apprentice working in automotive body repair in the 
southwestern United States may not need to achieve competency in 
repairing damage caused by road salt that may be common in other 
regions of the country. The Department notes, however, SREs must ensure 
that IRAPs lead to apprentices receiving industry-recognized 
credentials, and some State by State credentialing and licensing 
requirements are inevitable and will need to be considered by SREs.
    The Department intends for the term ``expert'' as used in Sec.  
29.21(b)(1) to mean a person who has comprehensive knowledge of a 
particular area. The Department declines to set minimum experience or 
qualification requirements as such qualifications may necessarily vary 
across industries. A worker with in-depth knowledge of his or her 
occupation or related occupations and an instructor with extensive 
knowledge in credentialing may both bring valuable expertise to an SRE 
and could conceivably be included among the SRE's experts. The 
selection of experts must necessarily be left up to the SRE as the 
Department would not be in a position to require consultation with 
specific industry experts. The Department declines to adopt suggested 
alternative approaches to demonstrating expertise, such as possessing 
experience with workforce development, as that would impinge on the 
flexibility the Department believes SREs should be given.
    The ability to set competency-based standards through a consensus-
based process involving industry experts is essential to ensuring that 
the SRE recognizes only high-quality IRAPs. The requirement that 
standards be the result of a consensus-based process is intended to 
ensure that an SRE's experts agree that the standards will result in 
high-quality IRAPs that convey industry-recognized credentials 
consistent with the requirements in this subpart. Entities are required 
to identify in their applications the industry expertise on which they 
will rely and the processes by which the entity will develop standards. 
Once recognized, the SRE must rely on the opinion of experts as 
described in the entity's application, but need not rely on any 
particular expert(s) identified on the application. The Department 
anticipates that the ability to convene a body of industry experts 
could serve as part, though not all, of an entity's consensus-based 
process. The Department therefore declines to make the ability to 
convene a body of experts an alternative to establishing a consensus-
based process. Although a history of working with the workforce 
development system could potentially demonstrate an entity's expertise, 
the Department does not consider such experience as an alternative to 
establishing a consensus-based process.
    The Department intends for the term ``consensus-based process'' to 
require that the competency-based standards developed are the product 
of agreement by experts in the fields. Regarding the comment 
questioning whether consensus standards are the same as a ``work 
process schedule'' as those terms are used in subpart A, the Department 
agrees that the two concepts are comparable. The Department expects 
that SREs will organize their competency-based standards such that 
IRAPs and apprentices will clearly understand the skills and knowledge 
that must be demonstrated in order to complete the program. Although 
the idea of a work process schedule is a common method of describing 
knowledge and skill attainment under subpart A, the Department is not 
requiring the establishment of work process schedules under this 
subpart.
    The Department anticipates that qualitative measures of 
demonstrating qualifications may be more common in entities' 
applications as the applications must demonstrate expertise and 
describe competencies. Quantitative measures will be relevant for 
entities with extensive experience in training apprentices and such 
measures will also be assessed in the re-recognition process as 
described in Sec.  29.21(c)(1)(ii). No change was made in the 
regulatory text in response to these comments.
    Paragraph (b)(1)(i) of Sec.  29.21 clarifies that the requirements 
in Sec.  29.21(b)(1) may be met by an entity's past or current 
standard-setting activities, and need only engender new activity if 
necessary to comply with this rule. This paragraph accounts for how 
some prospective SREs already have standards-setting processes that 
reflect well-established, industry-, occupation-, and employer-specific 
needs and skills. Rather than requiring those prospective SREs to alter 
their approach to setting standards, the Department seeks to clarify 
its expectation that such entities' processes for setting standards 
likely meet the requirements of this proposed rule, and need only 
change if necessary to comply with it.
    One commenter suggested that this paragraph as drafted would 
properly

[[Page 14309]]

account for an entity's past efforts in standard setting. A different 
commenter questioned whether DOL anticipated grandfathering in existing 
standards-setting entities and suggested such a practice would be 
inappropriate. The Department agrees that the paragraph as proposed 
appropriately accounts for entities already setting standards based on 
the consensus of industry experts; the text is adopted as proposed. The 
Department does not intend to grandfather in existing standards-setting 
entities--such entities still must apply to become recognized SREs and 
will need to alter their processes and procedures as necessary to 
comply with this subpart.
    Although paragraph (b)(1)(ii) of Sec.  29.21 is reserved, one 
commenter proposed that text be added at this paragraph to clarify that 
SAAs in good standing receive automatic recognition as SREs. While 
State entities are eligible to apply to become recognized SREs, the SAA 
evaluation process is significantly different than the process the 
Department has designed for evaluating SREs. Accordingly, the 
Department has determined it necessary that any SAA that seeks SRE 
recognition to goes through the application process prescribed in this 
subpart to ensure it has the processes and procedures in place to 
recognize high-quality IRAPs. This paragraph remains reserved as 
proposed.
    Paragraph (b)(2) of Sec.  29.21 states that the entity must 
demonstrate that it has the capacity and quality assurance processes 
and procedures sufficient to comply with paragraph Sec.  29.22(a)(4), 
given the scope of the IRAPs to be recognized. That paragraph 
authorizes SREs to recognize and maintain recognition of only high-
quality apprenticeship programs.
    Paragraph (b)(3) of Sec.  29.21, as proposed, noted that 
prospective SREs must demonstrate they meet the other requirements of 
the subpart, in particular those outlined in Sec.  29.22. The 
Department received no comments on this proposed paragraph. However, 
the paragraph was renumbered as (b)(8) to account for the additional 
application requirements as follows. The final text was changed from 
``[i]t meets the other requirements of this subpart'' to ``[i]t meets 
any other applicable requirements of this subpart.'' The change was 
made to clarify that not every requirement of this subpart would be an 
eligibility requirement at the time of application.
    The new paragraph (b)(3) of Sec.  29.21 in the final rule 
incorporates a requirement that an entity indicate that it has the 
resources to operate as an SRE for a 5-year period, and to report any 
bankruptcies during the previous five years. This requirement is taken 
from the proposed form that required an entity to demonstrate its 
ability to operate for the next five years and provide a financial 
statement. The form is not included in the final rule for the reasons 
discussed above. The text of the final rule is intended to ensure the 
future financial stability of an SRE to the greatest extent possible. 
The Department's recognition signals to prospective IRAP sponsors about 
the operational health of an SRE and thus a sense of security in the 
sustainability of the SRE. Additionally, this approach minimizes the 
burden on applicants as requested by several commenters.
    A commenter noted that, in its view, a financially unstable 
training program will not safeguard the welfare of apprentices. 
Multiple commenters noted, in their view, the importance of verifying 
that the credential provider remains financially viable. One such 
commenter added that apprentices may not receive the benefit of 
industry-recognized credentials if the credential issuer later becomes 
defunct. Another commenter suggested that measures to ensure the 
financial viability of SREs be strengthened to ensure that SREs have 
sufficient financial contributions from IRAPs to operate successfully. 
One commenter noted that the proposed form seemed to indicate that the 
Department lacks confidence in prospective SREs, because it asked 
prospective SREs to address their financial stability over the next 
five years.
    Several commenters pointed to the potential for financial 
conflicts. Multiple commenters suggested that SREs will have a 
financial incentive to recognize as many IRAPs as possible. One such 
commenter suggested that SREs provide a plan for how they will sustain 
losses from reduced fees if the SRE must derecognize IRAPs. The 
commenter suggested that such a financial tension has been a central 
challenge for the higher education accreditation system.
    The Department agrees that an SRE's financial viability is crucial 
to ensuring safety and ensuring the long-term value of industry-
recognized credentials, and the Department has included the new 
paragraph (b)(3) of Sec.  29.21 in the final rule in response to these 
comments. The bankruptcy or dissolution of an SRE could also disrupt 
apprentices' training, as the SRE's IRAPs would have to apply for 
recognition from a different SRE. The Department has determined that an 
entity should demonstrate its financial viability for five years, which 
is intended to capture at least one full recognition cycle for the SRE. 
SREs are in the best position to determine whether to charge fees, and 
if so, to set the fees necessary to support their operations. As 
explained in more detail below, the Department has not set minimum or 
maximum levels of fees that SREs may charge.
    The Department also agrees that demonstrating financial stability 
at the application stage will ensure that SREs' financial viability is 
not based on recognizing as many IRAPs as possible without heeding to 
program quality, and that SREs will be able to absorb lost fees if some 
IRAPs must be derecognized.
    New paragraph (b)(4) of Sec.  29.21 requires that an entity 
disclose relationships with subsidiaries or other related entities that 
could reasonably impact its impartiality. The requirement is taken from 
the proposed form, which requested lists of related bodies, such as 
parent or subordinate organizations, as well as a list of confirmed or 
potential partners. The Department received one comment related to this 
paragraph, which was that conflict of interest provisions related to an 
SRE offering consultative services should be extended to related 
entities or subsidiaries.
    The Department agrees that potential conflicts of interest 
involving subsidiaries or related entities could be imputed to the SRE, 
and paragraph (b)(4) of Sec.  29.21 has been added in part to address 
such concerns. Proposed 29.22(e) and (f) have also been amended in 
response to this and other comments, as explained below. Paragraph 
(b)(4) also requires that the entity describe the roles of confirmed or 
potential partners. In addition, such information may provide context 
related to an entity's ability to perform the required functions of an 
SRE.
    Paragraph (b)(5) of Sec.  29.21 has been added to the final rule 
and requires entities to demonstrate that they are not currently 
suspended or debarred from conducting business with the U.S. Federal 
Government. The debarment restriction is intended to exclude entities 
that have carried out bad acts that would call into serious doubt their 
ability to effectively function as an SRE. The debarment restriction is 
taken from the proposed form, which requested that entities affirm they 
have no relevant injunctions, debarments, or other restrictions that 
would prevent them from doing business with the Federal Government or 
members of their industry sector. The final text has been changed from 
the language in the proposed form to clarify that relevant debarments 
are those that would prevent the entity from conducting

[[Page 14310]]

business with the U.S. Federal Government, as the term ``debarment'' is 
commonly understood. The Department received no comments related to the 
debarment question in the proposed form that is carried forward in this 
paragraph.
    Paragraph (b)(6) of Sec.  29.21 has been added to the final rule 
and requires entities to mitigate any actual or potential conflicts of 
interest, including, but not limited to, conflicts that may arise from 
the entity recognizing its own apprenticeship programs and conflicts 
relating to providing services to actual or prospective IRAPs. Such 
actual or potential conflicts must be addressed through specific 
policies, processes, procedures, structures, or a combination thereof. 
The requirements in this paragraph are replacing those proposed in 
paragraphs (e) and (f) of Sec.  29.22 in the proposed rule. As 
discussed in greater detail in the Sec.  29.22 discussion below, this 
revision is meant to strengthen the conflict of interest provisions by 
moving the requirement from Sec.  29.22 of the proposed rule to Sec.  
29.21 of the final rule. By moving the requirements to Sec.  
29.21(b)(6), every entity is required to address potential conflicts of 
interest through specific policies, procedures, organizational 
structures, or a combination thereof that will be assessed by the 
Department before the entity may be recognized as an SRE. This change 
was made in response to numerous commenters who suggested the proposed 
rule insufficiently addressed conflicts of interest. The Department 
also has broadened the requirement to include recognizing an SRE's own 
IRAPs or offering services to actual or prospective IRAPs as non-
exhaustive examples of the types of actual or potential conflicts that 
must be addressed. This change was made in response to several 
commenters who noted that other conflicts may exist. The comments on 
conflicts of interest are addressed in the Sec.  29.22 discussion 
below, because that is the provision in which those requirements were 
initially proposed (as Sec.  29.22(e) and (f)). Relatedly, as discussed 
in further detail below, proposed Sec.  29.22 also requires that an 
SRE's recognition procedures assure that IRAPs receive equitable 
treatment and are evaluated based on their merits, and this requirement 
was carried forward in Sec.  29.22(d) of the final rule.
    Paragraph (b)(7) of Sec.  29.21 was added to the final rule and 
requires that an entity demonstrate that it has the appropriate 
knowledge and resources to recognize IRAPs in the sectors and 
occupations in the intended geographic area, which may be nationwide or 
limited to a region, State, or local area. This requirement was taken 
from the proposed form that in Section I asked entities where they 
planned to recognize IRAPs. Obtaining such information is necessary to 
ensure that the Department can refer prospective apprentices or IRAPs 
to nearby SREs or IRAPs in the relevant sector or occupation. As noted 
in the final regulatory text, the knowledge and expertise that an 
entity would need to demonstrate would necessarily vary if the entity 
is interested in recognizing IRAPs in a single State versus nationwide.
Consideration of Commenters' Suggestions for Additional SRE Eligibility 
Requirements
    A few commenters proposed additional eligibility requirements for 
entities to become recognized SREs. One commenter proposed that the 
Department limit SRE eligibility to well-established, industry-
recognized associations or non-profit organizations. Another commenter 
suggested that entities should have experience in the area in which 
they are seeking recognition in order to set standards. The commenter 
suggested that a community college, for-profit institution, or non-
profit organization should not be able to set standards for a trade in 
which the entities do not perform such work. A commenter proposed that 
the Department consider requiring that agencies have a minimum of two 
years of experience to demonstrate that the entity is effective in 
assessing the quality of workforce programs. Alternatively, the 
commenter suggested that the Department limit the scope of operations 
of SREs that lack such experience. One commenter suggested that 
applicants with accreditation experience should receive priority 
processing, because such experience would help to maintain consistency 
across IRAPs.
    The Department declines to set minimum experience requirements for 
entities to apply to become recognized SREs. Notably, Sec.  29.20 
addresses the eligibility of a partnership or consortia of entities 
applying to become recognized SREs in light of the diverse expertise 
required of SREs. The Department declined to limit eligibility to well-
established entities, as a start-up SRE or a new partnership or 
consortium of entities may be equally well-positioned to serve as 
effective SREs. Furthermore, it would disadvantage cutting-edge 
industries and stifle the expansion of apprenticeship to require that 
all SREs be well established. The Department similarly declined to 
require that SREs perform the work of an industry or occupation. The 
Department notes that SREs must possess a variety of abilities beyond 
establishing training plans and recognizing standards. SREs must also 
perform quality-control functions, receive and address complaints, and 
collect and report data. Moreover, universities and community colleges 
may possess expertise in classroom instruction and credentialing and 
licensing that is also required by the subpart. Although an entity 
possessing actual experience ensuring the quality of workforce programs 
would be well-positioned to meet the requirements of this paragraph, 
the Department also anticipates that many entities may not possess such 
experience but may, nevertheless, be able to demonstrate that they 
possess the required capacity. For example, an entity without such 
experience may be able to demonstrate its capacity and quality 
assurance processes by hiring quality assurance personnel or by 
implementing industry best-practices. The Department decided not to 
make SRE approval conditional or limited at the outset. Notably, SREs 
are expected to comply with the requirements of this subpart 
immediately upon recognition. The Department made no changes in 
response to the comments.
Applications for Re-Recognition--Sec.  29.21(c)(1)
    Paragraph (c) of Sec.  29.21 indicates that the Administrator will 
recognize an entity as an SRE if the applicant is qualified, and also 
provides additional details about recognition. This paragraph ensures 
that the Administrator undertakes adequate review of SREs, both over 
time and following any significant changes that would affect the SRE's 
qualification or ability to recognize IRAPs.
    Section 29.21(c)(1) indicates that SREs will be recognized for 5 
years. An SRE must reapply if it seeks continued recognition. The 
Department proposed a 5-year time period to be consistent with best 
practices in the credentialing industry and to ensure that already-
recognized SREs continue to account for the development and evolution 
in competencies needed within their industries. Changes were also made 
in response to comments to clarify that an SRE must reapply at least 6 
months before its recognition is set to expire.
    Numerous commenters stated that, in their view, a 5-year 
recognition period is too long. Several commenters suggested that SREs 
should be recognized for a 1-year probationary period and then be 
reassessed as part of a process that would be similar to

[[Page 14311]]

Sec.  29.3(g) in subpart A. A commenter argued that it would be unfair 
for SREs to receive 5-year approval whereas a registered apprenticeship 
program could only be registered provisionally for 1 year. One 
commenter suggested that the criteria for approval are not stringent 
enough to result in recognition for 5 years. Another commenter 
questioned why an entity with no proven track record of high-quality 
training would be recognized for 5 years. One commenter urged that 
approval for a shorter period would allow SREs to better keep pace with 
rapid changes in industry. Conversely, multiple commenters agreed that 
approval for 5 years is consistent with the practices in the 
credentialing industry.
    A commenter suggested that SREs should be recognized for 5 years, 
but that they should be required to apply for re-recognition before the 
5-year period ends in order to ensure that IRAPs not be approved and 
monitored by SREs with expired recognition. A different commenter 
proposed that an SRE should be recognized for 5 years, unless the SRE 
is an SAA, in which case the recognition should last indefinitely.
    Another commenter proposed that re-recognition should take into 
consideration a measure of employer uptake. The commenter explained 
that employer uptake would measure the extent to which employers in a 
given sector emulate or adopt the standards recognized by an SRE.
    As discussed above, the Department strengthened the recognition 
requirements by adding five new paragraphs to paragraph (b) of Sec.  
29.21. During the approval period, the Department has broad discretion 
to conduct both compliance assistance reviews under Sec.  29.23 as well 
as reviews under Sec.  29.26 that may lead to suspension or 
derecognition. Such reviews may be conducted at any time, including 
before the 1-year mark after initial recognition. This oversight 
ability will allow the Department to monitor SREs for compliance with 
its regulations. Further, SREs will be able to adapt to rapid changes 
in industry by amending their recognition process and notifying the 
Administrator as required under paragraph (c)(2) of Sec.  29.21, 
discussed below. These measures are more than sufficient to meet the 
broad and general directives of the NAA, which do not require the 
Department to adopt precisely the same procedures used in the 
Registered Apprenticeship program for other programs, nor establish 
specific time periods of any sort. Rather, the Department is only 
directed to ``bring together employers and labor for the formulation of 
programs of apprenticeship'' and to ``formulate and promote the 
furtherance of labor standards necessary to safeguard the welfare of 
apprentices,'' which this regulation does.
    The Department agrees that allowing SREs to apply for re-
recognition on the date of expiration could lead to confusion during 
the time in which the Department is adjudicating the SRE's application. 
In response to this comment, the Department amended Sec.  29.21(c)(1) 
to require an SRE to apply for re-recognition at least 6 months before 
its current recognition is set to expire. In response to the comment 
suggesting that SAAs should receive indefinite recognition if they are 
recognized as SREs, the Department declines to establish different 
recognition periods for different types of entities because of the 
potential for confusion.
    Paragraph (c)(1)(i) of Sec.  29.21 was added to clarify that an SRE 
must apply for re-recognition by submitting an updated application to 
the Administrator in a form prescribed by the Administrator. This 
paragraph was added to mirror the changes made to paragraph Sec.  
29.21(a) that explain the initial application process.
    Paragraph (c)(1)(ii) of Sec.  29.21 was added to establish the 
standard against which an application for re-recognition is assessed. 
It provides that the information contained in the application will be 
evaluated for compliance with Sec.  29.21(b)(1) through (8) in much the 
same manner as an initial application. In addition, the paragraph 
recognizes that the SRE will have reported data pursuant to Sec.  
29.22(h) that will reflect the outcomes of the IRAPs the SRE has 
recognized.
    An SRE applying for re-recognition must submit its quality 
assurance processes and procedures that will ensure compliance with 
Sec.  29.22(a)(4), as required by Sec.  29.21(b)(2). The Department 
will also review data provided by the SRE to ensure that the 
quantifiable requirements of this subpart were and are being achieved. 
The Department does not intend for Sec.  29.21(c)(1)(ii) to establish 
minimum benchmarks that SREs must meet to receive re-recognition. 
Rather, the Department intends to use all available relevant data to 
enhance quality assurance and ensure that the processes and procedures 
submitted as required by Sec.  29.21 are resulting in the recognition 
of high-quality IRAPs that meet the requirements of Sec.  29.22(a)(4). 
Thus, for example, the SRE's application for re-recognition must 
demonstrate policies and procedures that will ensure its IRAPs will 
provide apprentices with a safe working environment and industry-
recognized credential(s) during participation or upon completion of the 
program, among other requirements. If, however, the same SRE's data 
submitted pursuant to Sec.  29.22(h) indicated that apprentices are 
completing the SRE's requirements and are not earning industry-
recognized credentials, such data may well reveal that an SRE's quality 
assurance processes and procedures are and were inadequate.
Obligation To Notify the Administrator of Substantive Change--Sec.  
29.21(c)(2)
    Paragraph (c)(2) of Sec.  29.21 requires that an SRE notify the 
Administrator and provide all related material information about any 
major change that could affect the operations of the recognition 
program. The requirement that an SRE notify the Administrator if the 
SRE makes a substantive change to its recognition processes was not 
carried forward in the final rule in light of the requirement added to 
Sec.  29.22(p), discussed below, that requires an SRE to notify the 
Administrator when an SRE makes a significant change to its policies or 
procedures. Changes under Sec.  29.21(c)(2) would include involvement 
in lawsuits that materially affect the SRE; changes in legal status; or 
any other change that materially affects the SRE's ability to function 
in its recognition capacity. Likewise, the SRE must notify the 
Administrator and provide all related material information if it seeks 
to recognize apprenticeship programs in new sectors or occupations. 
Paragraph (c)(3) of Sec.  29.21 further states an SRE must notify the 
Administrator of major changes that could affect its recognition 
program, prior to their implementation. Such changes include seeking to 
recognize IRAPs in new sectors or geographical areas. In light of the 
information received, the Administrator will evaluate whether the SRE 
remains qualified for recognition under Sec.  29.21(b).
    The Department received one comment on this paragraph. The 
commenter suggested that language be added stating that conflicts of 
interest arising after recognition should be considered substantive 
changes that must be submitted to the Administrator. In addition, the 
commenter suggested that major expansions of programs, major changes to 
the type of program offered, or changes to the type of credential 
offered should be considered substantive changes.
    The Department appreciates the concern that a conflict of interest 
could constitute a material change. The Department addressed this 
concern by

[[Page 14312]]

moving the conflict of interest requirement to Sec.  29.21(b)(6) and 
thus requiring all SREs to submit processes, procedures, organizational 
structures, or a combination thereof that mitigate actual or potential 
conflicts of interest. Once recognized by the Department, SREs must 
comply with their own policies and procedures as stated in Sec.  
29.22(p), discussed below. Notably, as explained, Sec.  29.22(p) 
contains a requirement that the Administrator be notified if the SRE 
makes significant changes to its processes or procedures, which would 
require the SRE to notify the Department about changes in procedures 
that address conflicts of interest.
    The Department agrees that changes to the type of credential 
offered would constitute major changes that affect the operation of the 
SRE and thus require notification to the Administrator.
    Because all SREs are required to develop competency-based 
standards, changes from one type of apprenticeship program to another, 
such as a change from a time-based program to a competency-based 
program, are no longer permissible. Thus, an SRE could revise its 
competency-based standards without notifying the Department if the SRE 
developed the standards using its existing processes and procedures. 
If, however, the SRE changed its processes and procedures for setting 
competency-based standards, Sec.  29.22(p) would require that the 
Administrator be notified of the change in process.
    The Department made no changes to this paragraph in response to the 
comment. The Department did, however, add the word ``calendar'' to 
Sec.  29.21(c)(2)(iii) to clarify that days are calculated as calendar 
days. This change was made throughout the rule.
Denials of Recognition--Sec.  29.21(d)
    Paragraph (d) of Sec.  29.21 outlines the requirements associated 
with any denials of recognition after the Department receives a 
prospective SRE's application. The Administrator's denial must be in 
writing and must state the reason(s) for denial. The denial must also 
specify the remedies that must be undertaken prior to consideration of 
a resubmitted application and must state that a request for 
administrative review may be made within 30 calendar days of receipt of 
the notice. Under the final rule, the denial must also explain that a 
request for administrative review made by the applicant must comply 
with 29 CFR part 18's service requirements. Additionally, the final 
rule clarifies that the appeal procedures in Sec.  29.29 apply to 
appeals under Sec.  29.21(d).
    The Department received no comments on this paragraph and added 
clarifying language to the first sentence stating that the requirements 
for denials of recognition ``are as follows.'' The Department also 
edited Sec.  29.21(d)(2) to clarify that notice to the Office of 
Administrative Law Judges must comply with the service requirements 
contained in 29 CFR part 18. This change is intended to account for any 
future change to the regulations promulgated by the Office of 
Administrative Law Judges.
Section 29.22 Responsibilities and Requirements of Standards 
Recognition Entities
    Section 29.22 describes the responsibilities of and requirements 
for SREs, including recognizing high-quality IRAPs, developing policies 
and procedures on a range of issues, reporting data to the Department 
and the public, and giving notice to the public of complaints and fees. 
The Department received many comments on this section, as described in 
detail below, and made several changes in response to those comments. 
In particular, the Department clarified some of the standards of high-
quality apprenticeship programs in Sec.  29.22(a)(4) and strengthened 
the SRE's requirement that an SRE validate and attest, in Sec.  
29.22(b), both at initial recognition and on an annual basis, that its 
IRAPs meet the standards of Sec.  29.22(a)(4) and any other SRE 
requirements. The Department also included a requirement in Sec.  
29.22(d) that the SRE disclose to the Administrator its policies and 
procedures for ensuring consistent assessments of IRAPs for recognition 
and compliance with subpart B.
    As explained in the earlier discussion of Sec.  29.21, the 
Department moved paragraphs (e) and (f) concerning conflicts of 
interest from Sec.  29.22 to Sec.  29.21 and relettered the paragraphs 
in Sec.  29.22 accordingly. Therefore, within Sec.  29.22 of the final 
rule, paragraph (g) regarding 5-year recognition of IRAPs is now 
paragraph (e); paragraph (h) regarding the quality-control relationship 
between the SRE and its IRAPs is now paragraph (f); paragraph (i) 
regarding joint employer status is now paragraph (g); paragraph (j) 
regarding SRE reporting of IRAP data is now paragraph (h); and 
paragraph (k) regarding equal employment opportunity (EEO) policies and 
procedures is now paragraph (i).
    The Department also added two additional requirements to the 
quality-control relationship between the SRE and the IRAP in Sec.  
29.22(f) (previously (h)) and included additional reporting 
requirements in Sec.  29.22(h) (previously (j)), requiring information 
to be made publicly available and reported to the Department. The 
Department received comments to other sections of the rule concerning 
complaints against SREs and IRAPs and derecognition of SREs. These 
comments resulted in the Department's decision to add paragraphs (j) 
through (m) to Sec.  29.22. Among other things, these paragraphs 
clarify the notice an SRE must give of the right to file a complaint 
against an SRE or an IRAP and of SRE derecognition. The Department also 
added Sec.  29.22(n) to require that the SRE make publicly available 
any fees that it charges to IRAPs, Sec.  29.22(o) to ensure that 
records relating to IRAP recognition and compliance are maintained, and 
Sec.  29.22(p) to clarify that the SRE must follow its own policies and 
procedures and notify the Administrator when it makes significant 
changes to either.
SRE Requirements for Recognizing High-Quality IRAPs
    Paragraph (a) of Sec.  29.22 describes various obligations of SREs 
and identifies the characteristics of high-quality apprenticeship 
programs. The Department received numerous comments about this 
paragraph, particularly regarding the characteristics of high-quality 
apprenticeships set forth in Sec.  29.22(a)(4). Many commenters 
contrasted the requirements of paragraph (a) of Sec.  29.22 with the 
requirements for registered apprenticeship programs. Others detailed 
the successes of their registered apprenticeship programs and the 
importance of safeguarding the welfare of apprentices. Some commenters 
faulted the rule for providing the SREs with too much discretion, 
stating that the rule did not provide adequate protection against 
exploitation because IRAPs would admit ``apprentices'' yet provide 
limited or inadequate training and pay them less than the prevailing 
wage rates. Commenters expressed concern about industry providing 
inadequate training and substandard working conditions to create a low-
skilled, low-wage labor pool.
    Other commenters expressed support for the rule's flexibility and 
for allowing SREs to set industry-relevant requirements. They praised 
the rule's approach of ensuring high-quality apprenticeships and 
adequate protection for apprentices while at the same time providing 
flexibility to allow for increasing apprenticeships and promoting 
innovation in industries that may not yet have robust apprenticeship 
programs. Commenters favorably remarked that IRAPs would create

[[Page 14313]]

healthy competition with registered programs, would not be restricted 
by the presence of union-sponsored programs, and would encourage 
modernization of and investment in training by SREs, IRAPs, and 
registered apprenticeships.
    These comments and the Department's responses and changes to the 
final rule are detailed in the paragraph-by-paragraph section below. 
Among other things, the Department's changes enhance its oversight of 
SREs by adding additional reporting requirements for SREs and quality 
assurance measures. The changes also strengthen the requirements for 
the quality-control relationship between an SRE and its IRAPs, the 
protections for apprentices by enhancing the requirements for high-
quality IRAPs, the SREs' oversight of IRAPs, and further adding 
measures concerning SRE responsibilities. The Department also received 
comments that it deemed not applicable or appropriate to address in 
this rule, such as a suggestion to require employers to use e-Verify 
for the employment eligibility of apprentices and a suggestion to 
specify whether SREs would be eligible for State-specific funding or 
benefits.
Timeliness of SRE Recognition
    Paragraph (a)(1) of Sec.  29.22 provides that SREs must recognize 
or reject apprenticeship programs seeking recognition in a timely 
manner. The Department received comments suggesting that IRAP 
applications be subject to a public comment period of 60 days before an 
SRE's recognition of the IRAP. Commenters noted that this would ensure 
transparency and the quality of the IRAPs by allowing industry 
participation before IRAP recognition. Commenters also stated that a 
notice-and-comment period would allow the public to verify that the 
IRAP is not for an occupation in the construction industry. Other 
commenters suggested that the Department require a firm deadline by 
which IRAPs would be notified of their recognition status, noting that 
the Department imposes such a deadline on SRE recognition. A commenter 
also recommended requiring SREs to provide a clear reason for rejecting 
an IRAP.
    The Department acknowledges the comments about ensuring 
transparency and high quality. The Department has determined, however, 
that public notice and an opportunity to comment on the recognition of 
IRAPs is not necessary. SREs are best positioned to determine whether 
an IRAP meets the standards of a high-quality apprenticeship program, 
in accordance with the parameters of this rule. The Department has 
prescribed the standards of a high-quality apprenticeship program in 
Sec.  29.22(a)(4) and has taken steps elsewhere in the rule to 
strengthen existing oversight measures. SREs are responsible for 
ensuring that IRAPs meet the standards of a high-quality apprenticeship 
program established by the Department, and both SREs and IRAPs are 
subject to the quality-control requirements established in this rule. 
The SRE is responsible for ensuring that its IRAPs continue to meet the 
requirements of this rule, and this SRE responsibility, coupled with 
the Department's oversight of SREs, provides the apprentices with 
protection against low-quality or exploitative IRAPs. The SRE may 
derecognize IRAPs that fail to meet the requirements of a high-quality 
apprenticeship program set forth in Sec.  29.22(a)(4), and the 
Department may derecognize SREs for failure to comply with the 
requirements of this subpart.
    Further, the Department determined that a notice-and-comment period 
for the recognition of each IRAP is not necessary as the SRE itself 
must conduct a thorough vetting process to ensure that potential IRAPs 
meet the requirements of Sec.  29.22(a)(4). As discussed in Sec.  29.21 
above, SREs must demonstrate that they have the expertise to set 
standards for apprenticeship programs in the industries or occupational 
areas for which they seek recognition, and SREs must also demonstrate 
that they have the capacity and quality assurance processes and 
procedures to comply with the requirements of Sec.  29.22(a)(4). SREs' 
responsibilities as contemplated by this rule require due diligence and 
thorough vetting of prospective IRAPs.
    With respect to concerns about IRAPs in the construction sector, as 
discussed in greater detail below, the Department has revised proposed 
Sec.  29.31 (finalized as Sec.  29.30). The Department will not 
recognize SREs that recognize IRAPs engaged in any construction 
activities as described in Sec.  29.30, and the Department prohibits 
SREs from recognizing as IRAPs programs that train apprentices in 
construction activities as described in Sec.  29.30. The Department has 
determined the responsibilities of both the Department and the SRE are 
sufficient to prevent the recognition of IRAPs that would train 
apprentices in construction activities as defined in Sec.  29.30, 
obviating the need for a public notice-and-comment period for IRAP 
recognition.
    The Department notes the requirement in Sec.  29.22(d) that the SRE 
must disclose to the Administrator its policies and procedures for 
ensuring consistent assessment of IRAPs for recognition. The Department 
anticipates such policies and procedures will include the timeframe for 
IRAP recognition and how the SRE will notify prospective IRAPs of 
recognition or rejection. The Department declines to require a certain 
timeframe or requirement for SRE notice to prospective IRAPs given the 
different types and needs of SREs and IRAPs.
    The Department has revised several other sections of Sec.  29.22 to 
incorporate concerns about the quality and transparency of IRAPs. For 
example, as explained in detail below, the Department added language to 
strengthen some of the components of high-quality programs, such as a 
training plan, a mentorship program with experienced mentors, and an 
apprenticeship agreement. The Department also added sections concerning 
the quality-control relationship between SREs and IRAPs, the 
Department's oversight of SREs, and the Department's ability to collect 
and evaluate data concerning the performance of IRAPs and SREs. The 
Department added the phrase ``as an IRAP'' to clarify that the program 
is seeking recognition as an IRAP from the SRE. Otherwise, the final 
rule adopts paragraph (a)(1) of Sec.  29.22 as proposed.
Informing the Administrator of IRAP Recognition
    Paragraph (a)(2) of Sec.  29.22 requires an SRE to inform the 
Administrator within 30 calendar days if it has recognized a new IRAP 
or suspended or derecognized an existing IRAP. The SRE must also inform 
the Administrator of the name and contact information of the IRAP. This 
information will assist the Administrator in fulfilling his or her 
obligations under Sec.  29.24 (Publication of Standards Recognition 
Entities and Industry-Recognized Apprenticeship Programs).
    The Department changed the phrase ``terminated the recognition of'' 
to ``derecognized'' for clarity and consistency. Finally, the 
Department added the term ``calendar'' to the requirement for the SRE 
to inform the Administrator within 30 calendar days to clarify the 
relevant timeframe.
    Some commenters asked about transparency regarding SRE decisions to 
decline to recognize or terminate the recognition of an IRAP. One 
commenter suggested that an SRE be required to inform the Administrator 
when the SRE declines to recognize a new IRAP, in addition to giving 
notice to the Administrator of approval or termination of approval. The 
commenter also suggested that the SRE be required to inform the 
Administrator of the

[[Page 14314]]

reason for declining to recognize or terminating the recognition of an 
existing IRAP. The commenter stated that the Administrator would 
benefit from such information to determine the effect on the safety and 
welfare of apprentices and to ensure objective and impartial decision-
making with respect to recognition of IRAPs. Commenters also raised 
concerns that the public would not be aware of IRAP recognition until 
months after recognition because the SRE is required to notify only the 
Administrator within 30 calendar days of the recognition. Otherwise, 
the SRE is only required to inform the public about the IRAPs it 
recognizes on an annual basis under paragraph (h) of Sec.  29.22.
    The Department acknowledges commenters' concerns about SRE 
transparency in its decisions concerning IRAP recognition. However, as 
explained below in the discussion of Sec.  29.22(d), the Department 
decided to require each SRE to submit to the Department its policies 
and procedures for assessing IRAPs in a consistent manner. The 
Department will have the opportunity to review these policies and 
procedures during the SRE recognition process. The Department declines 
to require additional information concerning an SRE's decision not to 
recognize an IRAP or the reasons for an SRE's derecognition of an IRAP. 
Rather, the Administrator can rely on Sec.  29.23 to request such 
information if needed. If, for example, the Department receives 
complaints about an SRE's conduct with respect to recognition of IRAPs 
or if a compliance assistance review reveals irregularities in the 
SRE's processes or procedures, the Department may request further 
information as necessary. Further, the Department may initiate 
suspension or derecognition proceedings, if warranted.
    Regarding the concern that the public would not be aware of the 
existence of IRAPs in a timely manner, the Department notes that, as 
discussed in further detail in Sec.  29.24, it plans to regularly 
update its publicly available list of SREs and IRAPs. Thus, the public 
will have access to timely information on the Department's website. The 
Department also expects that SREs and IRAPs will themselves publicize 
the existence of new IRAPs in order to inform the public and recruit 
prospective apprentices.
SRE Requirement To Provide Information to Administrator
    Paragraph (a)(3) of Sec.  29.22 requires SREs to provide to the 
Administrator any data or information the Administrator is expressly 
authorized to collect under this subpart. This rule identifies the 
specific circumstances under which the Administrator is authorized to 
collect from SREs any information related to the requirements of this 
subpart, including the documentation identified in this subpart or 
required to be maintained under this subpart. This provision will 
enable the Administrator to request information, as needed, to 
ascertain SREs' conformity to the subpart under Sec.  29.23 (Quality 
Assurance). The Department did not receive any substantive comments on 
this section. The final rule adopts the provision as proposed.
Standards for High-Quality IRAPs
    Paragraph (a)(4) of Sec.  29.22 states that SREs may only recognize 
and maintain the recognition of IRAPs that meet certain requirements, 
which the Department determined are standards of high-quality 
apprenticeship programs. These standards of high quality include paid 
work; work-based learning; mentorship; education and instruction; 
obtaining industry-recognized credentials; a written training plan and 
apprenticeship agreement; safety and supervision; and adherence to EEO 
obligations. In addition to the requirements that IRAPs must meet, 
SREs, in consultation with their industry experts, must set competency-
based standards for the training, structure, and curricula of the 
industries or occupational areas in which they are recognized.
General Discussion About High-Quality IRAPs
    The Department received a number of comments asking for additional 
clarity as to what constitutes a ``high-quality'' IRAP generally. 
Commenters suggested specific changes to the rule, such as further 
defining certain terms as addressed above in the discussion of Sec.  
29.20; including a progressive wage structure; enhancing safety and 
welfare protections; and requiring evaluation and enhanced quality 
control. Some commenters disagreed with the Department's proposal that 
SREs be responsible for recognizing IRAPs, suggesting that the 
Department is abdicating its responsibility to safeguard apprentices 
under the NAA. Other commenters expressed concern about the possibility 
that multiple, diverse training standards would exist within a single 
industry, which would lead to a ``balkanization'' of credentials that 
would confuse the markets. Some commenters remarked that the lack of 
clarity and specificity of requirements would discourage the 
development of IRAPs and worker participation in them. Commenters also 
expressed concern that IRAPs seem similar to internships that already 
exist in industries such as the technology industries.
    Other commenters expressed support for greater flexibility for 
industry participation and an industry-driven apprenticeship model that 
can both expand apprenticeship in new industries while also tailoring 
apprenticeship programs to best serve industries' needs for a skilled 
workforce. A commenter suggested that the Department set standards for 
IRAPs that parallel the registered apprenticeship system and include: 
(1) Written classroom and on-the-job training requirements; (2) 
established wage progressions; (3) journeyworker to apprentice ratios; 
(4) mandatory safety training for apprentices; (5) instructors who are 
subject matter experts trained in educational methods; and (6) 
nondiscrimination in the operation of the program.
    The Department made changes to certain paragraphs in Sec.  
29.22(a)(4), as described in further detail below, to clarify some of 
the high-quality requirements for IRAPs that satisfy the NAA's 
direction that the Department formulate and promote labor standards 
that safeguard the welfare of apprentices. The Department also made 
changes to other sections of Sec.  29.22 to address comments about the 
quality-control relationship between SREs and the IRAPs they recognize, 
data collection by the Department and the SREs, and assessment of 
performance. As for the industry-driven model envisioned by this rule, 
the Department has determined that empowering SREs to recognize IRAPs 
allows the flexibility necessary to encourage more apprenticeships in 
new industry sectors while also ensuring that apprenticeships meet the 
standards of high quality determined by the Department. Further, this 
rule intentionally diverges from the registered apprenticeship program 
requirements. The Department considers IRAPs separate and distinct from 
registered apprenticeship programs because of the industry-driven 
characteristics of the programs, as determined by SREs rather than the 
Department. Although the Department has drawn from some of the 
characteristics of the registered apprenticeship model, it declines 
commenters' suggestions to model IRAPs after registered apprenticeship 
programs. Rather, as reflected in the discussion of specific sections 
below, the Department has established a rigorous framework for SRE and 
IRAP recognition while at the same time providing the needed 
flexibility to allow industry-driven innovation. The

[[Page 14315]]

Department acknowledges commenters' concerns about the possibility of 
varying standards within industries, but views SREs and their industry 
experts as best-positioned to set standards consistent with the 
requirements in this rule in accordance with market conditions. The 
Department views variances in standards and programs to be a benefit in 
increasing the competitiveness and utility of IRAPs.
    The Department has addressed several of the commenters' concerns in 
various parts of the final rule. As discussed below, the Department 
added language to proposed Sec.  29.22(a)(4)(ii), (v), (vi), and (vii) 
to clarify the standards of a high-quality apprenticeship program and 
strengthen requirements to better safeguard the welfare of apprentices. 
The Department has also added Sec.  29.22(a)(4)(x), which requires 
IRAPs to have an apprenticeship agreement with each apprentice that 
establishes the employment relationship and sets forth the terms and 
conditions of the apprentice's employment and training. The Department 
has also added measures concerning quality assurance (Sec. Sec.  
29.22(f), 29.23), data collection (Sec.  29.22(h)), and performance 
assessment (Sec. Sec.  29.22(h), 29.23). The changes are discussed in 
further detail in each paragraph below. It bears repeating that the NAA 
is written in general and discretionary terms, and directs that the 
Department only formulate and promote labor standards that safeguard 
the welfare of apprentices. The Department has used its expertise and 
policy judgment in making these particular changes, which it believes 
well-exceed the NAA's standard.
    A commenter suggested that the Department make IRAP recognition 
contingent upon a process for the IRAP to use data to identify program 
strengths and necessary improvements.
    The Department has declined to affirmatively require that IRAP 
recognition by an SRE be contingent upon a process for the IRAP to use 
data to identify program strengths and necessary improvements. However, 
this could be required by an SRE, as the Department anticipates that 
the SRE would make a decision about any such requirements through its 
own processes and procedures and its quality-control relationship with 
its IRAPs, as provided in Sec.  29.22(f). The Department notes that 
there is no such requirement on registered apprenticeship programs. 
Further, the Department's data and reporting requirements set forth in 
Sec.  29.22(h) include program-level data and performance outcomes for 
IRAPs, which allows the Department, the SREs, the IRAPs, and the public 
to review and assess IRAP performance.
    Commenters suggested that Universal Design for Learning (UDL) \14\ 
be included as a core component of high-quality industry-recognized 
apprenticeships. A commenter observed that UDL could ensure that more 
people successfully transition to well-paying and meaningful 
occupations through apprenticeship training because of UDL's focus on 
designing training and employment opportunities for a broader range of 
learners. Two commenters suggested adding to Sec.  29.22(a)(4) a 
requirement that an IRAP ``ensure[ ] digital material and technology 
accessibility in work experiences and classroom or related instruction, 
including information and communication technology (ICT) and 
websites.'' The commenters noted that the Department has already 
adopted UDL as a requirement for Trade Adjustment Assistance Community 
College and Career Training grant funds. They also noted that the 
Department selected a pilot site focused on universally designing 
apprenticeship pathways in advanced manufacturing as part of the 
Apprenticeship Inclusion Models grant and provided funding for 
YouthBuild, which uses UDL to increase young people's engagement in 
STEM careers.
---------------------------------------------------------------------------

    \14\ UDL is defined in 20 U.S.C. 1003 as:
    [A] Scientifically valid framework for guiding educational 
practice that--
    (A) provides flexibility in the ways information is presented, 
in the ways students respond or demonstrate knowledge and skills, 
and in the ways students are engaged; and
    (B) reduces barriers in instruction, provides appropriate 
accommodations, supports, and challenges, and maintains high 
achievement expectations for all students, including students with 
disabilities and students who are limited English proficient.
---------------------------------------------------------------------------

    Under this rule, SREs and IRAPs would be free to include UDL in 
their apprenticeship programs, and the Department expects some may 
choose to do so to the extent UDL is useful and allows them to reach a 
broader pool of potential apprentices. The Department also notes that 
IRAPs are required to adhere to Federal, State, and local EEO laws and 
that SREs are required to have policies and procedures that reflect 
comprehensive outreach strategies to reach diverse populations. 
However, the Department declines to make UDL a requirement for IRAPs. 
The Department views the SREs as better positioned to determine the 
appropriate training models and approaches for their programs and to 
provide the necessary support to their IRAPs in implementation.
    Other comments submitted on this section are discussed in the 
paragraph-by-paragraph discussion below. The Department changed Sec.  
29.22(a)(4) to clarify that SREs must only recognize ``as IRAPs'' and 
maintain ``such'' recognition of ``apprenticeship programs'' that meet 
the requirements set forth in (i)-(x). The Department made a change 
throughout Sec.  29.22(a)(4) to use the term ``program'' rather than 
``Industry Program'' or ``IRAP'' to refer to an apprenticeship program 
that is seeking recognition as an IRAP from an SRE.
1. IRAP Training Requirements--Sec.  29.22(a)(4)(i)
    Paragraph (a)(4)(i) of Sec.  29.22 states that a program must train 
apprentices for employment in jobs that require specialized knowledge 
and experience and involve the performance of complex tasks. The 
Department sought comments on these requirements and on whether it 
should set a minimum skill level or competency baseline for IRAPs 
similar to the registered apprenticeship program's requirement that 
apprentices gain ``manual, mechanical, or technical'' skills.
    Several commenters saw the need for the Department to include 
defined apprenticeship durations in IRAP training requirements to 
ensure the necessary time and support to gain mastery of key 
competencies. Commenters also stated a need for a minimum skill level 
or competency baseline for training requirements akin to the registered 
apprenticeship program requirements. Some commenters argued that the 
lack of uniform standards for competencies by the Department could 
result in exploitation of apprentices, a lack of meaningful and 
substantive work experiences, and confusion about industry standards. 
In contrast, other commenters recommended that there be no minimum-
skill or competency levels set for IRAPs because of the varying needs 
of diverse and growing industries.
    The Department has determined that the proposed text struck a 
permissible balance, containing sufficient detailed requirements while 
allowing flexibility for the needs of specific industries. The 
Department has considered and determined to not set minimum-skill or 
baseline-competency standards because they would not be uniformly 
applicable within or across industries. The requirement that IRAPs 
``must train apprentices for employment in jobs that require 
specialized knowledge and experience and involve the performance of 
complex tasks'' sets a functional yet sufficiently rigorous standard by 
which IRAPs gain recognition.

[[Page 14316]]

    Though there are no prescriptive requirements to provide a certain 
baseline of skills or competency, the rule sets the overall framework 
within which IRAPs may structure their apprenticeship programs. This is 
to ensure that IRAPs do not simply provide training for roles that 
require only general knowledge and minimal or no skill. In other words, 
an IRAP should provide apprentices with training beyond general skills 
and knowledge that most or all potential workers would already have 
(e.g., rudimentary computer literacy or basic job etiquette such as 
promptness). Rather, the purpose is to equip the apprentice with 
marketable skills that are sought by employers. Though there is freedom 
within this framework to create innovative IRAPs, the requirement 
remains that these apprenticeship programs be designed to impart 
specialized skills that are industry-essential and meet the high-
quality requirements set forth in this subpart.
    The requirements of specialized knowledge and the performance of 
complex tasks are reinforced by Sec.  29.22(a)(4)(ii). That provision 
requires IRAPs to be high quality and to provide apprentices with 
progressively advancing and industry-essential skills. For example, an 
IRAP that trains an apprentice to become a water treatment technician 
would not only impart the basic scientific knowledge but also train the 
apprentice on the methods for water treatment, safe working practices, 
water testing, data analysis, and other specialized skills necessary to 
perform such testing in various settings and for various purposes.
    The Department views the SRE as best positioned to decide any 
minimum-skill and baseline-competency requirements for each particular 
industry or occupational area in which it is recognized, in a manner 
that best suits the needs and characteristics of the industry or 
occupational area. Similarly, and as discussed in the preamble, the 
Department has determined that the SRE is best suited to set the 
requisite standards for its industry(ies) or occupational area(s). 
Thus, the final rule adopts the provision as proposed.
2. IRAP Training Plan--Sec.  29.22(a)(4)(ii)
    Paragraph (a)(4)(ii) of Sec.  29.22 states that a program must have 
a written training plan, consistent with its SRE's requirements and 
standards as developed pursuant to the process set forth in Sec.  
29.21(b)(1). The written training plan must detail the program's 
structured work experiences and appropriate related instruction, be 
designed so that apprentices demonstrate competency and earn 
credential(s), and provide apprentices progressively advancing 
industry-essential skills.
    The final rule departs from the proposed rule's original language 
that the apprenticeship program has ``structured work experiences, and 
appropriate classroom or related instruction adequate to help 
apprentices achieve proficiency and earn credential(s); involves an 
employment relationship; and provides apprentices progressively 
advancing industry-essential skills.'' As discussed below, the 
Department has changed this paragraph to address suggestions by 
commenters for further clarity for both IRAPs and apprentices. The 
training plan must be provided to an apprentice prior to beginning an 
IRAP. While the proposed language was more than sufficient under the 
NAA, this change better protects the welfare of the apprentice by 
making it clear to the apprentice exactly what the apprenticeship 
program entails, what skills the apprentice should be mastering through 
the program, and the ultimate outcome of the apprenticeship program.
    Several commenters suggested that this section include a 
requirement for a written training plan describing each program's in-
class and on-the-job training requirements. A number of commenters 
requested that an apprenticeship agreement be required to ensure that 
IRAPs and apprentices are in an ``employment relationship'' with clear 
and specific terms, and some commenters argued that an apprenticeship 
agreement would allow SREs to monitor IRAPs more effectively.
    The Department agrees with the comments that it would be beneficial 
to require apprenticeship agreements and to provide additional 
specificity regarding training opportunities for apprentices. The 
Department has revised the text to include a requirement for the 
program to have a written training plan, consistent with the 
requirements set by the SRE and with the standards developed or adopted 
by the SRE. The written training plan must also ``detail the program's 
structured work experiences and appropriate related instruction, be 
designed so that apprentices demonstrate competency and earn 
credential(s), and provide apprentices progressively advancing 
industry-essential skills.'' Because the program's training plan must 
be consistent with its SRE's requirements and standards set for the 
industry or occupational area, the Department anticipates that the 
requirement for a training plan will create industry consistency while 
providing apprentices valuable information about the training and work 
components of the apprenticeship program. Further, the finalized 
regulatory text clarifies that the training plan must be designed so 
that the apprentice both demonstrates competency and earns one or more 
credentials. As discussed above, the Department has determined that 
SREs should set competency-based standards for their IRAPs; therefore, 
the Department has included the requirement that the training plan be 
designed so that apprentices demonstrate competency.
    The Department has revised this section by striking the language 
``classroom or'' from the phrase ``classroom or related instruction.'' 
The Department does not intend to create a separate classroom 
instruction requirement apart from ``related instruction'' and views 
the inclusion of this term as unnecessary, because classroom 
instruction is a type of related instruction. The exact form of the 
related instruction will depend on the nature of the industry or 
occupation and will be dictated by how the program uses related 
instruction to complement structured work experiences and develop an 
apprentice's progressively advancing skills.
    The Department also removed the phrase ``involves an employment 
relationship'' and instead added a new requirement, in Sec.  
29.22(a)(4)(x), that IRAPs have an apprenticeship agreement with each 
apprentice, consistent with the requirements of this subpart. The 
apprenticeship agreement sets forth the terms and conditions of the 
employment and training of the apprentice. The Department expects that 
apprenticeship agreements will include the duration of the 
apprenticeship, wages and any wage progression, any costs or expenses 
charged to apprentices, and the competencies and industry-recognized 
credential(s) to be attained during the program or by completion. The 
Department has concluded that having a separate requirement regarding 
the apprenticeship agreement will provide greater clarity about the 
``employment relationship'' requirement previously included in this 
paragraph.
    A commenter suggested that apprenticeships should include 
structured, supervised training in addition to work-based training. 
Commenters remarked that the absence of required standards related to 
minimum related instruction hours, minimum on-the-job training hours, 
test validations, and progressive wage steps would cause a ``race to 
the bottom'' for

[[Page 14317]]

employers and industries without meaningful and helpful training for 
the trainees. Similarly, other commenters requested that the Department 
establish minimum on-the-job learning and related technical instruction 
requirements. Some commenters proposed that training content should 
include interpersonal and soft skills in addition to technical skills. 
A commenter cautioned against training apprentices in occupations that 
may become obsolete in the near future due to technology and 
automation. Others questioned the meaning of certain phrases, such as 
``progressively advancing'' and ``industry-essential'' skills, as vague 
and needing definition. A commenter expressed concern that, in the 
commenter's view, the rule does not ensure that apprentices gain 
proficiency in all aspects of their trade, rather than training on a 
specific task within their trade. A commenter questioned how ``related 
instruction'' would be monitored and evaluated. Another commenter noted 
that there was no requirement for the ``structured work experience'' to 
be full-time employment. Commenters also expressed concern that there 
were no requirements regarding the qualifications of IRAP instructors 
or trainers. One commenter suggested that the Department emulate a 
State model of using ``training agents'' to provide training and 
supervision to apprentices and subject such agents to sanctions, such 
as an inability to train apprentices or bid on public construction 
projects, if they fail to meet certain requirements. Other commenters 
faulted the rule for not containing apprentice-to-journeyworker ratios 
and suggested a one-to-one or two-to-one ratio for on-the-job training.
    Other commenters cautioned against adding further requirements on 
IRAPs in order to allow flexibility to make industry- and occupation-
specific decisions. Commenters suggested that any progressively 
advancing skills requirement should be consistent with industry 
determinations, rather than set by the Department, because of evolving 
workplaces and the differing skills needed across industries. A 
commenter stated that including Department-set standards requirements 
would be duplicative, because SREs must already engage in a process to 
ensure that the programs they recognize impart the skills and 
competencies apprentices need to succeed in their industry. Some 
commenters expressed support for the proposed language's balance of 
ensuring high-quality programs while also providing flexibility for 
SREs and employers to develop apprenticeship programs for a wide 
variety of jobs and occupational areas. Some commenters also supported 
the Department's proposal to have industry-set standards for IRAPs, 
because such standards would be tailored to the specific occupations 
and industries.
    The Department has prescribed the standards for high-quality 
apprenticeship programs that IRAPs must meet in order to obtain and 
maintain recognition. The standards are specific and rigorous, and SREs 
are responsible for ensuring that their IRAPs meet each of the 
standards at initial recognition and on an ongoing basis. In addition 
to the Department's standards for IRAP recognition, SREs are required 
to set standards, in consultation with industry experts, for the 
requisite training, structure, and curricula for apprenticeship 
programs as set forth in Sec.  29.21(b)(1). The Department has 
determined that SREs are in the best position to set industry-specific 
skills-attainment levels or competency standards within the parameters 
of this rule. Within the framework prescribed by the Department, SREs 
may establish standards for their IRAPs.
    The Department similarly declines to set minimum requirements for 
``progressively advancing'' and ``industry-essential'' skills, because 
of the flexibility needed to determine what is appropriate for each 
industry and occupational area. The Department is concerned that 
definitions in regulatory text--which would need to be both fixed and 
short--could lack flexibility, fail to accommodate particular 
industries, and become outdated. Accordingly, the Department intends 
the common meaning of the words found in ``progressively advancing 
industry-essential skills'': That the skills taught build upon one 
another such that they lead to an advanced level of skills that are 
relevant in the particular industry of the IRAP and for which the 
credential(s) will be granted. Consistent with that common meaning, the 
rule gives SREs the latitude to set standards for ``progressively 
advancing'' and ``industry-essential'' skills. The Department expects 
that SREs' standards will further develop these terms in a manner that 
is relevant to the particular industry or occupational area. Similarly, 
the Department anticipates that SREs will apply the concept of 
``progressively advancing'' skills based on the characteristics of the 
industry and occupation, such that apprentices build skills throughout 
the program that will result in the competencies necessary for them to 
operate as independent workers in their fields. As discussed above, the 
Department anticipates that adding the requirement of a training plan 
consistent with the SRE's requirements and standards will address many 
of the concerns about the lack of certain standards of apprenticeship 
in the rule. In this regard, the Department notes that subpart A, 
pertaining to registered apprenticeships, similarly does not contain 
occupation- and industry-specific standards or require such highly 
specific standards regarding the training content, test validation, or 
full-time structured work experience that some commenters requested. 
The training plan required by this paragraph, in conjunction with the 
other requirements set forth in Sec.  29.22(a)(4), strikes an 
appropriate balance. It sets forth parameters of IRAPs to make sure 
that apprentices are receiving valuable education and skills training 
in a safe environment without overly prescribing programmatic 
requirements.
    Regarding the concerns about adequate training and supervision and 
apprentice-to-journeyworker ratios, the Department has strengthened the 
mentorship requirement at Sec.  29.22(a)(4)(vi) to require ``ongoing, 
focused supervision and training by experienced instructors and 
employees.'' The Department declines to prescribe further requirements 
concerning trainers or instructors, with the expectation that IRAPs 
will provide the necessary training and supervision needed to meet the 
standards of high-quality apprenticeship in Sec.  29.22(a)(4). The 
Department further emphasizes that the quality-control relationship 
between the SRE and the IRAP, as well as the quality-control 
relationship between the SRE and DOL, as set forth in this subpart, 
will provide an appropriate check on the quality of the instruction and 
training. The SRE must ensure that its IRAPs continue to meet the 
requirements of Sec.  29.22(a)(4), which provides oversight to protect 
against low-quality programming or actions that may harm apprentices. 
The Department also notes that Sec.  29.22(a)(4)(v) requires the IRAPs 
provide a work environment consistent with Federal, State, and local 
safety laws and with any additional safety requirements of the SREs, 
which may include measures concerning ratios. The Department decided 
not to prescribe ratios for mentors or trainers, because ratios would 
not be uniformly applicable across industries. SREs have the ability to 
set ratios for supervision, training, mentorship, or safety purposes if 
they deem such ratios appropriate, and the Department expects SREs to 
determine whether ratios would serve a

[[Page 14318]]

useful function in the industries or occupational areas in which they 
recognize IRAPs.
    Two commenters suggested adding to Sec.  29.22(a)(4)(ii) a 
requirement that classroom or related instruction incorporate UDL. The 
commenters described the policy considerations for UDL and suggested 
these changes to encourage the participation and retention of 
individuals with disabilities in apprenticeship programs.
    As discussed below, IRAPs are required to abide by applicable EEO 
laws and SREs must have policies and procedures that reflect 
comprehensive outreach strategies in order to reach diverse 
populations. The Department anticipates that some SREs and IRAPs may 
adopt additional measures regarding the inclusion and retention of 
individuals with different learning abilities, and would welcome such 
efforts, but the Department declines to impose UDL requirements in the 
final rule for the same reasons it has elsewhere declined to 
incorporate UDL.
    Commenters inquired about the absence of any requirements 
concerning probationary periods for apprentices and faulted the 
proposed rule for not including parameters or limitations on any 
probationary period. Commenters specifically pointed to the registered 
apprenticeship requirements at Sec.  29.5(b)(8) that a probationary 
period not exceed 25 percent of the program or one year, whichever is 
shorter. A commenter expressed concern that IRAPs would have lengthy 
probationary periods in order to ``skew'' completion rates and program 
outcomes. Commenters also suggested that the rule should prohibit IRAPs 
from terminating apprentices without cause after the end of their 
probationary periods and instead only allow termination ``for good 
cause,'' after notice to the apprentice and a reasonable opportunity 
for corrective action. Some commenters also noted that the rule did not 
include any disciplinary standards to ensure a fair work environment. 
Other commenters faulted the rule for lacking protections for 
apprentices against arbitrary termination or suspension.
    The Department acknowledges comments calling for specific 
requirements for probationary periods as in the registered 
apprenticeship program. The Department has decided, however, not to 
prescribe a requirement for a probationary period or the length of 
probationary periods in the requirements of Sec.  29.22(a)(4), nor to 
impose specific requirements regarding disciplinary standards. The 
Department has determined that probationary periods would not be 
suitable for all IRAPs because IRAPs will vary in duration and content. 
For example, a shorter IRAP program that results in a certificate of 
completion should not be required to have a probationary period that a 
multi-year IRAP with multiple credentials may choose to include as a 
part of its program. The Department anticipates that some IRAPs will 
choose to have probationary periods for apprentices while others will 
not include probationary periods as a part of their programs. IRAPs 
must comply with any specific requirements their SREs may require 
concerning probationary periods, termination for cause, or allowing for 
notice and a period of corrective action. The same is true for any SRE 
requirements regarding disciplinary standards and requirements for 
suspensions and termination of apprentices. Given the varying needs of 
IRAPs, the size and nature of the employers offering IRAPs, and the 
possibility that IRAPs will vary greatly by duration, content, and 
other qualities, the Department has determined to allow SREs the 
flexibility of deciding whether additional requirements are industry 
appropriate, what requirements to impose (if any), and how to apply any 
such requirements to their IRAPs.
3. Credit for Prior Knowledge and Experience--Sec.  29.22(a)(4)(iii)
    Paragraph (a)(4)(iii) of Sec.  29.22 requires programs to ensure 
that, where appropriate, apprentices receive credit for prior knowledge 
and experience relevant to the instruction of the program. Such credit 
should be reflected in progress through the program itself, or in any 
coursework, as appropriate.
    Some commenters recommended that credits be granted through written 
tests, practical exams, or demonstrations of competency levels. A 
commenter cautioned about the risk for fraud, and another commenter 
recommended that any prior knowledge should be verified before an 
individual is granted credit. A commenter faulted the rule for failing 
to provide requirements to assess baseline skill level or previously 
learned skills the worker may have gained to reduce instructional 
redundancy. A commenter stated that allowing each SRE to determine how 
to award credit for prior learning could lead to inconsistencies within 
an industry.
    The Department acknowledges the comments asking for greater 
specificity regarding credit for prior knowledge or experience. 
Nevertheless, the Department declines to add specificity because SREs 
and their IRAPs are best positioned to decide how to assess prior 
knowledge and experience and what type of credit to grant each 
individual. Because of the individualized assessment necessary, and the 
varying needs of IRAPs, the Department has concluded that the rule as 
written contains sufficient parameters without overly prescribing 
requirements that would not be generally applicable. The Department 
also notes that subpart A similarly does not impose a more prescriptive 
requirement. Thus, the final rule adopts the provision as proposed.
4. Industry-Recognized Credentials--Sec.  29.22(a)(4)(iv)
    Paragraph (a)(4)(iv) of Sec.  29.22 requires programs to provide 
apprentices with one or more credentials that are industry-recognized 
during participation in or upon completion of the program. The 
Department received comments in support of this paragraph. A commenter 
agreed with the Department's assessment that IRAP credentials will have 
``demonstrable consumer and labor-market value.'' One commenter 
commended the Department's efforts and recommended integration of 
higher education into IRAPs to create for-credit transferable 
credentials and dual enrollment opportunities for high school students 
through the apprenticeship model. A commenter expressed support for 
digital badges in online learning courses as ``portable, verifiable and 
secure.'' Some commenters commended the rule for setting appropriate 
standards for IRAPs without overly prescribing other requirements that 
could inhibit their development or expansion. A commenter also 
expressed that training would be simpler and less time-consuming 
because of the concentration on relevant job skills.
    On the other hand, the Department received several comments 
suggesting that some credentials might be relevant only on a local or 
regional level and could hinder ``journey-level'' status and career 
mobility. Some expressed further concern that certain credentials could 
be of limited utility, because they would be specific to the employer 
only and not recognized by other employers within the industry. A 
commenter recommended that the Department require credentials to be 
``competency-based, industry-recognized, and portable,'' contending 
that industry recognition and portability requirements are both 
essential for industries to attract and retain talent. Another 
commenter suggested that the Department require IRAPs to consult with 
labor-market information entities and State or Local Workforce 
Development Boards, as applicable, in

[[Page 14319]]

developing credentials. Another commenter faulted the proposed rule 
for, in the commenter's view, allowing multiple SREs to set their own 
criteria without regard for the level of respect of the credential or a 
timely, accurate way to measure its value.
    The Department appreciates comments in support of its proposed 
approach to credentials. The Department also acknowledges the comments 
calling for nationally recognized credentials and anticipates that some 
IRAP credentials will achieve clear national recognition. The 
Department does anticipate that IRAPs will provide credentials that are 
portable. For example, an IRAP may require apprentices to pass a 
nationally recognized exam that measures competencies necessary for the 
apprentice's occupation. By requiring that credentials reflect the 
specific competencies needed for any given industry or occupational 
area the Department believes that IRAPs will enhance apprentices' 
mobility. In other words, even if the credential itself includes the 
licensing requirements of a specific area or reflects training specific 
to certain geographic conditions or even the requirements of a specific 
employer, the mastery of the competencies upon which the credential is 
based would result in industry-specific skills that likely could be 
transferred to a new workplace.
    The Department notes that the SRE's role is important with respect 
to credentials, both in recognizing IRAPs that provide credentials that 
are industry-recognized and in its oversight of IRAPs. The Department 
also has oversight of SREs, and by extension their IRAPs, and it will 
collect information from each SRE about each credential offered by its 
IRAPs. These measures address the commenters' concerns that IRAPs may 
simply offer employer-specific credentials that have no broader value 
to other employers. The Department does not share commenters' concerns 
about IRAPs providing credentials with limited value, particularly 
because of the requirements that competency-based standards be set by 
SREs and that credentials be industry-recognized. Additionally, the 
Department is responsible for evaluating each SRE's expertise to set 
competency-based standards, each SRE is responsible for overseeing its 
IRAPs' compliance with this subpart, and each IRAP is responsible for 
meeting the requirements of both the Department and its SRE to provide 
high-quality apprenticeship programs. As for the commenters' suggestion 
that the Department require credentials to be portable by modifying the 
text of the final rule, as discussed above, the Department believes 
that since the credentials are competency-based they will provide value 
regardless of an apprentice's geographic location. The Department 
agrees with the commenters who suggested that IRAPs would benefit from 
consultation with Workforce Development Boards and other entities in 
developing credentials. The Department anticipates that some IRAPs may 
engage in such consultation to ensure that the credentials offered are 
industry-recognized. The Department notes, however, that SREs will 
likely fulfill such a role through their own expertise and engagement 
with industry partners and experts. Thus, the Department declines to 
impose such a consultation requirement upon IRAPs.
    Some commenters suggested specific characteristics as necessary for 
a successful credential program. A commenter remarked that a credential 
as contemplated by this rule does not nearly match the rigor of 
credentials that are certified by third-party organizations. This 
commenter identified, in its view, four characteristics, echoed by 
other commenters, of a successful credential program: (1) Oversight by 
an independent national accrediting body; (2) standards that ensure 
that the program curriculum is comprehensive enough to cover the broad 
range of tasks needed to perform at an entry-level in the field 
anywhere in the country; (3) national recognition to ensure credential 
portability; and (4) continuing education. Another commenter stated 
that a credential should be empirically based, derived from industry 
needs, and include a structured process to identify the knowledge, 
skills, and attributes for a specific job/function. The commenter also 
noted the importance of a valid assessment process that measures an 
individual's knowledge and skills necessary for practice. Another 
commenter contrasted its rigorous certification process, including 
independent third-party testing as an aspect of credentialing, with the 
lack of established processes or standards in the IRAP model. Several 
commenters questioned how the Department would assure the quality of 
credentials. A commenter cautioned that a skills gap does not equate to 
a credentials gap and that the market would dictate the value of the 
credential rather than the IRAP. Other commenters expressed concern 
that a ``certificate of completion'' would result in narrow, employer-
specific training that would not result in a career pathway or economic 
security. One commenter suggested adding that the process for attaining 
credentials ``include front-end, diagnostic assessments for credentials 
that verify an individual's foundational knowledge and skills needed to 
succeed in the industry program.'' A commenter stated that the 
Department should explain that IRAP credentials are not equivalent to 
those issued by an independent body that administers a valid and 
reliable assessment that may include written and practical tests.
    The Department appreciates the insight and efforts of employers 
regarding portable credentials in their industries and successful 
registered apprenticeship programs. The Department has determined that 
SREs should decide how to structure their programs for imparting 
industry-relevant credential(s), and put in place the requirements for 
IRAPs' apprentices achieving such credential(s). The Department's 
requirement that the credential must be industry-recognized is 
specifically designed to ensure that the credentials are relevant 
beyond any individual employer. The Department further disagrees that 
national recognition is required for a credential to be portable. An 
employer in one corner of the country might place value on a credential 
issued by an SRE serving only another portion of the country. The 
Department appreciates suggestions about accrediting or certification 
bodies that would provide a third-party evaluation and assessment of 
credentials and assessment tools that would measure an apprentice's 
knowledge and skills necessary for practice. The Department agrees that 
this may be a useful model for some SREs and IRAPs and envisions that 
SREs may rely upon or provide such structures for their IRAPs. The 
Department declines to mandate such requirements, however, because the 
Department does not view them as broadly applicable to all potential 
IRAPs. The Department also agrees with the comment that some IRAPs may 
have a process for attaining credentials that would include front-end, 
diagnostic assessments to ascertain baseline skills and knowledge but 
does not perceive a need to revise the rule to account for such 
assessments. The Department disagrees with the comment that IRAP 
credentials would not be equivalent to those issued by an independent 
body. As stated above, some SREs may provide for such a credentialing 
process for the IRAPs they recognize.
    Regarding the concerns about the value of credentials, whether it 
be a certificate or any other credential, this

[[Page 14320]]

rule provides SREs with an important role in evaluating credentials in 
order to determine initial and continued recognition for IRAPs. The 
Department notes that certain data and performance metrics elsewhere in 
the rule, including credential attainment and post-apprenticeship 
employment rates, enhance oversight of various aspects of IRAPs as it 
relates to the credentials they provide. Additionally, the Department 
has strengthened the quality-control relationship between the SRE and 
the IRAP, as discussed in Sec.  29.22(f), and the quality-assurance 
mechanisms of the Department, as discussed in Sec.  29.23. Therefore, 
the Department has concluded that the flexibility provided for in this 
paragraph, combined with the enhanced oversight and performance 
assessment in other parts of the rule, would lead to meaningful 
assessment of such programs and the credentials they offer and would 
result in industry adjustments of the IRAP model, and credentials in 
particular, to better suit both industries and apprentices.
    A commenter recommended that the Department offer the public an 
additional opportunity to comment on any subsequent Department 
standards to ensure credential validity. The Department is not issuing 
standards regarding credentials other than what is in the existing 
requirements of this rule.
    Commenters suggested that the absence of a recording requirement 
with a registration agency that would track individuals' credentials 
would mean that the credential would lose its value if the SRE ceased 
to exist. Similarly, a commenter noted that apprentices in registered 
programs receive formal written recognition of their credentials by the 
Federal or State apprenticeship agency, in contrast to the current 
rule.
    The Department understands the concerns expressed by commenters but 
disagrees that a credential would lose its value if an SRE ceases to 
exist. First, the credential is not the only measure of attainment that 
an IRAP will provide, as the IRAP must use competency-based standards 
to equip the apprentice with industry-essential skills. As a result, 
simply completing an IRAP could demonstrate an apprentice's competency 
in the relevant industry or occupation. Second, credentials are not 
tied solely to an SRE. An SRE may provide the credential, but so could 
an IRAP or a third-party certification provider. The credential is 
required to reflect specific competencies needed for any given 
occupation and would continue to be a relevant measure of attainment. 
The Department acknowledges that there is not a State- or Department-
based recognition of the credential, but that is neither the purpose of 
the rule nor a desired outcome, because of this rule's focus on 
industry-driven, not government-driven, measures. Third, as stated 
throughout this preamble, the NAA does not obligate the Department to 
mirror all standards used in the registered program, but only to follow 
the NAA's broad and general direction to formulate and promote 
apprenticeship standards and bring together employers and labor for the 
formulation of programs of apprenticeship. The credentialing provision 
of this rule is within the Department's discretion in implementing the 
NAA.
    A commenter recommended that the Department create a public 
national database of IRAPs, their associated credentials, and the 
portability of those credentials in order to monitor credential value 
on a national level.
    The Department declines to adopt such a specific requirement in the 
rule. The Department notes that it is already required to publish a 
list of SREs and IRAPs under Sec.  29.24. The Department also notes 
that it included a requirement in Sec.  29.22(h) that the SRE make 
publicly available certain data about IRAPs and performance outcomes, 
which it must also submit to the Department. Among the required data 
are the industry-recognized credentials attained by apprentices for 
each IRAP. The Department may decide to centralize and make publicly 
available this information but has determined that it is not necessary 
to revise the language of this rule to do so. Finally, the Department 
notes that portability is not a concept that likely could be identified 
in the manner the commenter suggested, because even credentials 
facially associated with a specific geographic region could be relevant 
to and valued by an employer outside of that region.
    For these reasons, the final rule adopts the provision as proposed.
5. Working Environment Adherence to Safety Laws--29.22(a)(4)(v)
    Paragraph (a)(4)(v) of Sec.  29.22 requires that programs provide a 
working environment for apprentices that adheres to all applicable 
Federal, State, and local safety laws and regulations. The final rule 
adds a requirement that programs must also comply with any additional 
safety requirements of the SRE. The final rule deletes the word 
``safe'' as a modifier for ``working environment'' because the 
Department intends this provision to require programs to provide a 
workplace that adheres to all applicable safety laws, and SRE 
requirements.
    Several comments expressed concern about this paragraph and called 
for increased safety standards, such as a requirement for a 
journeyworker-to-apprentice ratio, regular safety trainings, and other 
safety measures. A commenter questioned how a ``safe working 
environment'' would be defined, who would enforce that standard, 
whether that standard would include a ratio of apprentices to journey-
level workers, and what the methods of investigation and discipline for 
violations would be. Other commenters provided citations connecting 
increased workplace accidents to higher apprentice-to-journeyworker 
ratios. Several commenters expressed concern that SREs and IRAPs would 
be motivated more by profit than safety, in contrast to the registered 
apprenticeship programs. Commenters expressed concerns about increased 
injury to apprentices and lower quality work that would thereby 
increase risk and injuries to the public. One such example was a 
comment about individuals providing energy or water to the public 
without proper certified training requirements. There were several 
comments from the construction industry concerning the need for 
rigorous safety standards, including curriculum, hands-on training, and 
safety courses. Some commenters stated that, in their view, the 
Department was not carrying out what they characterized as a statutory 
duty to safeguard the welfare of apprentices. A commenter also 
suggested that worksites be warranted for safety and that worksites be 
required to adhere to environmental standards. Another commenter noted 
that certain Occupational Safety and Health Administration (OSHA) 
trainings are not mandatory; thus, IRAPs may decide not to offer 
apprentices certain introductory safety training before assignment to a 
job site, to the detriment of the apprentices, yet still be in 
compliance with Federal law.
    The Department agrees that apprenticeships should have adequate 
safety requirements. For this reason, the Department's proposal 
included a requirement that IRAPs provide a working environment for 
apprentices that adheres to all applicable Federal, State, and local 
safety laws and regulations. The Department notes that, in addition to 
any applicable general Federal OSHA standards, OSHA industry-specific 
standards as well as State and local standards may also apply. OSHA 
regulations contain detailed industry-specific standards for industries 
such as maritime (29 CFR parts 1915, 1917-19) and agriculture (29

[[Page 14321]]

CFR part 1928), in addition to its general industry standards (29 CFR 
part 1910). OSHA also has numerous compliance assistance manuals for 
industries that detail how OSHA standards apply to a particular 
industry. The Department's OSHA website contains information for 
employers about the standards that are applicable to them and how to 
obtain compliance assistance. It is incumbent on all employers, 
including employers offering IRAPs, to both know and comply with any 
legally required safety standards applicable to their industry.
    In addition, the Department has changed the proposed text to add a 
requirement to the final rule that IRAPs comply ``with any additional 
safety requirements'' established by their SREs. This requirement 
permits SREs to determine whether additional safety requirements are 
warranted for each of their industries or occupational areas, what 
those requirements should be, and how to best implement them for each 
of their industries and occupational areas.
    The Department has determined in its discretion that this 
additional requirement that IRAPs adhere to any additional safety 
requirements of their SREs is an effective and appropriate way of 
ensuring safety standards that are industry-specific and enforceable 
without imposing requirements across all industries that may not be 
universally applicable, relevant, or necessary. The Department expects 
that SREs will create additional safety measures for industries or 
occupations for which such measures are reasonable to help ensure the 
safety of apprentices and to ensure that IRAPs are aware of any 
industry-specific safety standards that go beyond those imposed by law. 
SREs may develop policies and procedures that include safety 
requirements similar to those found in registered apprenticeships, such 
as journeyworker-to-apprentice ratios, regular safety training, and 
required safety skills-building in the training plan or curriculum. 
Requiring SREs and IRAPs to maintain a working environment that adheres 
to safety laws while giving SREs the option of requiring additional 
safety measures allows SREs to make individualized assessments of the 
characteristics and needs of the IRAPs they recognize without imposing 
requirements that are not relevant or reasonable for the industry. The 
Department expects that SREs associated with new industries and 
occupations, for example, may consider imposing safety requirements 
beyond those required by existing law.
    SREs are best positioned to create additional relevant and 
industry-specific safety requirements, as warranted, which they can 
monitor through their quality-control relationship with their IRAPs. 
Additionally, the Department's quality assurance role allows the 
Department to evaluate the SRE's ability to fulfill its 
responsibilities to ensure that their IRAPs continue to satisfy the 
standards of high-quality apprenticeships, including ensuring a work 
environment for apprentices that adheres to safety laws.
6. Structured Mentorship Opportunities--Sec.  29.22(a)(4)(vi)
    Paragraph (a)(4)(vi) of Sec.  29.22 requires that the program 
provide structured mentorship opportunities so that apprentices have 
guidance on the progress of their training and their employability. 
Mentors support apprentices during their work-based learning 
experience, and can provide guidance on company culture, specific 
position functions, and workplace policies and procedures. Mentors can 
also help develop learning objectives for apprentices, and assist in 
measuring apprentices' progress and proficiency.
    Several commenters suggested that additional language be included 
regarding the characteristics of mentorships. A commenter questioned 
whether mentors would be required to have any direct experience or 
training in adult education. Other commenters compared this paragraph 
to the requirements for registered apprenticeships, noting that it 
lacked similar instructor qualification requirements or periodic 
reviews of apprentices' performance. One commenter suggested that 
mentorship include ``on-going, focused supervision and training by 
experienced instructors and employees.''
    The Department agrees generally with the commenters' suggestions to 
add more specific guidelines for mentorships. The Department has 
included language in this provision describing structured mentorship 
opportunities as ``involving ongoing, focused supervision and training 
by experienced instructors and employees.'' The Department envisions 
that mentors will also play a role in measuring an apprentice's 
progress and providing relevant, timely feedback about an apprentice's 
work. The Department has added this language to ensure that apprentices 
receive quality supervision and feedback by individuals experienced in 
the relevant industry and occupation, such as those who have attained a 
mastery of industry-essential skills and competencies. The level of 
experience may vary widely--for example, a mentor in an emerging 
industry or occupation may have a different level or type of experience 
than a mentor in a well-established industry or occupation. The 
Department also expects that the mentorship opportunities may vary by 
industry but intends for ``ongoing'' mentorship to mean that IRAPs will 
have to establish and maintain mentorship opportunities throughout the 
duration of the apprenticeship program that provide consistent and 
meaningful mentorship for apprentices by individuals who are 
experienced in their industries. The Department added clarifying 
regulatory text to confirm this intent.
7. Apprentice Wages--Sec.  29.22(a)(4)(vii)
    Paragraph (a)(4)(vii) of Sec.  29.22 requires that programs ensure 
apprentices are paid at least the applicable Federal, State, or local 
minimum wage. The program must also provide a written notice to 
apprentices of what wages apprentices will receive and under what 
circumstances apprentices' wages will increase. The final rule added 
the requirement that the program's charging of costs or expenses to 
apprentices ``must comply with all applicable Federal, State, or local 
wage laws and regulations, including but not limited to the Fair Labor 
Standards Act [(FLSA)] and its regulations.'' It also added the 
following language: ``This rule does not purport to alter or supersede 
an employer's obligations under any such laws and regulations.''
    Some commenters expressed concern with the IRAP's ability to charge 
costs to apprentices, as suggested in paragraph (a)(4)(ix), and thereby 
either saddle apprentices earning minimum wage with debt or reduce 
wages to below minimum wage, or both. A commenter noted that there is 
nothing in the rule preventing an IRAP from charging apprentices costs 
or expenses and then closing their operations before the apprentices 
have the opportunity to earn the sought-after credential(s). One 
commenter urged the Department to prohibit ``that any membership, 
periodic dues or other fees be payable to any private organization such 
as a [sic] labor unions or trade associations as a condition of 
continuing training in the IRAP or securing a post-program job.''
    The Department added language to the final rule to make clear that 
any ``costs or expenses,'' such as the ``costs related to tools or 
educational materials'' referenced in paragraph (a)(4)(ix) of Sec.  
29.22, that are charged to apprentices must comply ``with all 
applicable Federal, State, or local wage laws and regulations, 
including but not

[[Page 14322]]

limited to [FLSA] and its regulations.'' The revised language further 
provides, ``This rule does not purport to alter or supersede an 
employer's obligations under any such laws and regulations.'' When 
applicable, the FLSA restricts costs that employers may pass along to 
their employees. In general, if a cost is primarily for the benefit or 
convenience of the employer, the employer may not charge the employee 
for such costs if doing so would decrease the employee's wages below 
minimum wage or allow the employer to avoid overtime obligations. 
Because of the fact-specific nature of this inquiry, the Department 
expects SREs and IRAPs to scrutinize any costs or expenses charged to 
apprentices for compliance with the FLSA, where applicable. For 
example, FLSA regulations state that ``tools of the trade'' are 
primarily for the benefit of the employer. Therefore, the costs of 
purchasing or renting tools used in the employee's work may not reduce 
an employee's wage below the minimum wage for all hours worked in a 
workweek. See 29 CFR 531.3(d) and 531.32(c). Whether ``educational 
materials'' would primarily benefit the employer or employee would be a 
fact-based inquiry depending on the nature of the education and the 
materials. In addition to the FLSA, State and local minimum wage laws 
may have their own additional restrictions. Accordingly, the language 
added to the final rule clarifies that employers charging costs or 
expenses to apprentices must comply with applicable Federal, State, and 
local wage laws. And notably, workplaces that employ apprentices, 
including those under IRAPs, are subject to government and private 
enforcement for violations of wage-and-hour laws. This rule does not 
affect those generally applicable and enforceable obligations. The 
Department declines to add any other requirements regarding dues, 
memberships, or other fees, as they may vary by industry or 
unnecessarily limit potential apprentices' choice of IRAPs.
    In addition to the legal considerations, the Department also 
anticipates that SREs and IRAPs will consider market forces and the 
competitiveness of their program offerings, which will serve as checks 
against unnecessarily passing along costs to apprentices. The 
Department expects SREs to conduct appropriate quality control with 
regard to any costs or expenses charged to apprentices. Further, both 
the quality-control relationship between the SRE and the IRAP and the 
apprenticeship agreement between the IRAP and the apprentice provide 
protection to the apprentice against an IRAP charging costs or expenses 
and then failing to deliver on its program.
    Several commenters suggested the rule should require apprentices be 
paid prevailing wage rather than minimum wage. Many commenters 
expressed concern about the lack of a progressive wage requirement and, 
in their words, potential exploitation of apprentices. A commenter 
described the benefits of a progressive wage structure in attracting 
higher quality craftworkers to the field, giving apprentices an 
incentive to improve their skills, and ensuring that contractors are 
paying what they termed a fair wage commensurate with the increasing 
skills of more advanced apprentices. Another commenter expressed 
concern that requiring adherence only to the minimum wage would drive 
down area wage rates and weaken the middle class. The same commenter 
remarked that the lack of a progressive wage structure would result in 
cheap and fast training and industries flooded with low-wage workers 
moonlighting as ``apprentices.'' A commenter similarly remarked that 
substandard wages without a guarantee of benefits could create a 
spiraling effect and eventual ``race to the bottom'' across industry. 
Another commenter urged the Department to require wage increases 
commensurate with skill attainment. A commenter noted the importance of 
appropriately incentivizing continued participation in the program with 
a predictable wage and increasing wages on pace with actual or 
anticipated skill development. The commenter expressed concern that the 
absence of a progressive wage could leave apprentices financially 
unable to complete their programs and therefore at a disadvantage in 
the labor market. Another commenter noted that substandard contractors 
would avoid paying apprentices prevailing wages in order to be more 
competitive in their bids on construction projects.
    Other commenters expressed support for the Department's proposal. A 
commenter stated that other factors might outweigh wage progression in 
certain industries. The commenter offered the examples of retention, 
career advancement, and access to increased benefits programs, such as 
tuition subsidies. The commenter also noted that the wages of 
apprentices may vary based on geographic location and the size of the 
employer. Another commenter also expressed support for empowering IRAPs 
to determine ``what wages apprentices will receive and under what 
circumstances apprentices' wages will increase.'' The commenter noted 
that having the IRAPs be in control of wages is important to scaling 
the apprenticeship model. The commenter also noted that various 
factors, including geography, would make a standardized wage 
progression model difficult to adopt and would serve as a barrier to 
apprenticeship expansion.
    The Department acknowledges commenters' concerns about the lack of 
a wage progression as a hallmark of a high-quality IRAP. As clearly 
articulated in the rule, IRAPs must ensure that apprentices are paid at 
least the applicable Federal, State, or local minimum wage and must 
notify apprentices of circumstances under which wages will increase. 
Thus, apprentices will have the information necessary to make informed 
decisions about IRAPs and compare wage offerings of different IRAPs. 
The Department anticipates that some IRAPs will choose to implement a 
progressive wage structure for their apprentices--for example, in a 
multi-year apprenticeship program. As commenters noted, there could be 
benefits to the IRAP and the apprentice in clearly delineating a wage 
structure that would allow apprentices to earn more as they advance in 
skill. The Department has determined, however, that SREs and IRAPs are 
more closely attuned to market conditions in their industries and 
geographic areas and therefore better positioned to make decisions 
about how to structure their wages. Further, in order for IRAPs to be 
competitive and attract talent to their programs, they will want to 
incentivize apprentice participation by distinguishing their programs 
from others and offering wages and the possibility for wage increases 
that are both competitive in the relevant market and attractive to 
apprentices.
    The Department declines to require a progressive wage structure, 
primarily because of the expectation that IRAPs will vary in duration 
and will represent a broad spectrum of industries with different market 
wage trends. Further, a progressive wage structure could limit employer 
participation in IRAPs, particularly for employers that would offer 
IRAPs that are limited in duration. This, by extension, could reduce or 
eliminate choices for individuals seeking apprenticeship opportunities. 
The Department expects SREs will be able to determine the contours of a 
progressive wage structure, if any, as it specifically relates to the 
industries in which it will be recognizing IRAPs. The Department 
anticipates that any consideration of a progressive wage structure will 
take into account local market industry wages, employer size,

[[Page 14323]]

and other benefits offered by IRAPs. The Department emphasizes that 
there is a requirement in Sec.  29.22(a)(4)(ix) that the IRAP disclose 
to the apprentices any costs or expenses prior to the apprentice's 
agreement to participate in the program. This information will allow 
apprentices to make informed choices about which IRAPs to consider and 
to consider market wages as compared to what the IRAP is offering in 
their decision-making. Also, as discussed further below, the Department 
has added Sec.  29.22(a)(4)(x) to require apprenticeship agreements 
that will set forth the terms and conditions of employment, to include 
wages and any wage progression and any costs or expenses charged to 
apprentices. Finally, with respect to concerns about the potential for 
unfair competition in the construction sector due to lower apprentice 
wages, such concerns are moot given that the Department has decided for 
other reasons to exclude construction activities from this subpart, as 
explained in detail in this preamble's discussion of Sec.  29.30.
    Some commenters suggested that the Department clarify that IRAP 
participants are not ``apprentices'' for purposes of meeting the Davis-
Bacon Act's wage requirements. Commenters cited 29 CFR 5.5(a)(4)(i), 
which refers to a narrow exception to the prevailing wage requirement 
for apprentices, whereby apprentices working on a Federal construction 
contract may be paid less than the Davis-Bacon prevailing wage if they 
are in a registered apprenticeship program, and only if the program's 
apprentice-to-journeyworker ratios are maintained. The commenters urged 
the Department to exclude IRAPs from the Davis-Bacon apprentice 
exception. Commenters also questioned how State prevailing wage laws 
would apply to apprentices. Commenters also expressed concerns about 
the different requirements for IRAP wages, EEO, and safety as compared 
to the registered apprenticeship programs. Another commenter further 
expressed concern about unfair competition for those contractors that 
have already invested heavily in creating first-rate registered 
apprenticeship programs. The commenter requested that the final rule 
clearly specify that IRAP apprentices are not eligible for the 
exception from Davis-Bacon and State prevailing wages as recommended by 
Task Force Recommendation 17. The commenter further stated that 
ineligibility should also extend to any IRAP that applies for and is 
subsequently granted official status as a registered apprenticeship 
program under the expedited process set forth in proposed Sec.  29.25.
    The Department acknowledges the concerns raised by commenters with 
respect to the Davis-Bacon exception. The Department is confident, 
however, that the text of the regulation at issue, 29 CFR 5.5(a)(4)(i), 
is sufficiently clear that it only applies to registered apprenticeship 
programs registered by OA or by an SAA recognized to register programs 
for Federal purposes (and not state agencies acting as SREs). See 29 
CFR 5.5(a)(4)(i) (restricting the exception to apprentices who are 
employed ``in a bona fide apprenticeship program registered with the 
U.S. Department of Labor, Employment and Training Administration, 
Office of Apprenticeship Training, Employer and Labor Services, or with 
a State Apprenticeship Agency recognized by the Office''). IRAPs are, 
by definition, not registered apprenticeship programs. The regulation 
further states that ``[t]he allowable ratio of apprentices to 
journeymen on the job site in any craft classification shall not be 
greater than the ratio permitted to the contractor as to the entire 
work force under the registered program,'' which also helps clarify 
that 29 CFR 5.5(a)(4)(i) is not applicable to IRAPs. Given that 29 CFR. 
Sec.  5.5(a)(4)(i) clearly only applies to registered apprenticeship 
programs, the Department sees no need to insert language in this rule 
that the Davis-Bacon exception does not apply to IRAPs.\15\
---------------------------------------------------------------------------

    \15\ Likewise, apprentices in IRAPs do not fit within the 
``trainee'' exception to the Davis-Bacon prevailing wage 
requirement. 29 CFR 5.5(a)(4)(ii). A trainee must be ``registered 
and receiving on-the-job training in a construction occupation under 
a program which has been approved in advance by [ETA] as meeting its 
standards for on-the-job training programs and which has been so 
certified by that Administration.'' 29 CFR 5.2(n)(2). Although the 
Administrator will recognize SREs under this final rule, IRAPs 
themselves will not be recognized or approved by the Administrator 
and apprentices under such programs therefore do not qualify for the 
``trainee'' exception. No regulatory changes are necessary to 
clarify this point.
---------------------------------------------------------------------------

    Additionally, the Department declines to opine on the applicability 
of State prevailing wage laws to IRAP apprentices because whether an 
IRAP apprentice would qualify as an apprentice under a State prevailing 
wage law depends on the specific State law at issue and the extent to 
which such laws track the Federal Davis-Bacon Act varies. Finally, as 
discussed below, the Department has removed from the final rule 
proposed Sec.  29.25, which allowed for expedited registration for 
IRAPs to become registered apprenticeship programs. However, any IRAP 
that subsequently registers its program under subpart A would qualify 
as a registered program for purposes of the Davis-Bacon Act.
    Thus, other than clarification regarding compliance with the FLSA 
and all other applicable Federal, State, or local wage laws and 
regulations with respect to any costs or expenses charged to 
apprentices, the final rule adopts the provision as proposed.
8. EEO Requirements--Sec.  29.22(a)(4)(viii)
    Paragraph (a)(4)(viii) of Sec.  29.22 requires that programs affirm 
their adherence to all applicable Federal, State, and local laws and 
regulations pertaining to EEO. Many commenters expressed concern that 
the Department did not propose a similar requirement for IRAPs as for 
registered apprenticeships, as set forth in 29 CFR part 30. These 
commenters stated that, in their view, the proposed rule would create 
two vastly different sets of EEO standards for apprenticeships and 
suggested that the Department require IRAPs to comply with 29 CFR part 
30. Others argued that certain parts of 29 CFR part 30, such as the 
requirement for Uniform Guidelines on Employee Selection Procedures in 
29 CFR 30.10, should apply to IRAPs. Many commenters stated that the 
Department's proposal would lead to fewer apprenticing women, veterans, 
and minorities, because of inherent gaps in EEO laws and the failure to 
include robust affirmative action requirements. Some commenters 
suggested that the adherence to EEO laws would not protect apprentices 
against discrimination on the bases of age, disability, sexual 
orientation, and genetic information. Other commenters expressed 
concern that Title VII of the Civil Rights Act of 1964 would only apply 
to apprentices/training programs controlled by joint labor-management 
committees. Several commenters pointed out specific differences between 
the proposed rule for IRAPs and the requirements of 29 CFR part 30, 
such as an EEO pledge, anti-harassment training, and affirmative action 
plans. Commenters also expressed concern that not holding IRAPs to the 
same 29 CFR part 30 requirements would hurt women, minorities, 
veterans, and people with disabilities.
    On the other hand, a commenter agreed with the Department's general 
approach to EEO requirements. The commenter suggested that IRAPs should 
be held responsible for their noncompliance with EEO requirements, 
rather than the SREs, because SREs should not be expected to enforce 
human resources policies and Federal laws. Another commenter cautioned

[[Page 14324]]

against the ``mission creep'' of subjecting SREs and IRAPs to a regime 
similar to EEO oversight performed by the Department's Office of 
Federal Contract Compliance Programs (OFCCP). The commenter supported 
the Department's decision to give SREs the responsibility of ensuring 
that EEO requirements are met to allow small business to focus on 
serving program participants while at the same time protecting 
apprentices from discrimination.
    The Department has determined that requiring compliance with 
Federal, State, and local EEO laws is a reasonable means of formulating 
and promoting standards to safeguard the welfare of apprentices. And by 
referencing legal requirements generally, rather than codifying 
particular steps and requirements, this regulation seamlessly 
accommodates future developments in EEO laws while providing clear 
guidelines in the present. This approach is a policy choice that 
accords with the final rule's aim to encourage a flexible yet rigorous 
apprenticeship model.
    As discussed in the preamble, apprentices are employees that 
benefit from the same protections during the employment relationship as 
any other employees of the employer offering the IRAP. The Department 
notes that Federal EEO laws are not limited to title VII and include 
all Federal anti-discrimination laws enforced by the Equal Employment 
Opportunity Commission (EEOC), including the Age Discrimination in 
Employment Act, the Americans with Disabilities Act, the Equal Pay Act, 
and the Genetic Information Nondiscrimination Act. Many States and 
local jurisdictions have additional EEO requirements, with enforcement 
mechanisms similar to the EEOC. SREs, IRAPs, employers, and educational 
institutions are also free to implement EEO policies that go beyond 
legal requirements. Further, EEO protections are not limited to 
apprentices in programs controlled by joint labor-management 
committees; any ``covered'' employer, as defined by applicable Federal, 
State, and local EEO laws, would be required to adhere to those laws 
during the employment relationship with the apprentice. Additionally, 
if an IRAP is a Federal contractor or subcontractor covered by 
Executive Order 11246, section 503 of the Rehabilitation Act, or the 
Vietnam Era Veterans' Readjustment Assistance Act, then it is also 
subject to the nondiscrimination and affirmative action provisions 
enforced by OFCCP. Requiring IRAPs to adhere to well-established anti-
discrimination laws also provides apprentices statutory remedies for 
EEO violations.
    Additionally, as discussed in the preamble, the Department has 
clarified its oversight responsibilities for SREs and strengthened the 
requirements for the quality-control relationship between the SRE and 
its IRAPs. This means that the Department has a mechanism to 
derecognize an SRE, and an SRE has a mechanism to derecognize an IRAP, 
for violations of this subpart, including EEO violations. The statutory 
remedies provided by existing EEO laws, in conjunction with oversight 
of SREs and IRAPs, thus provide the necessary framework for both 
individual remedies and institutional accountability.
    The Department's approach to affirmative action is set forth in 
Sec.  29.22(i), which creates the requirement for SREs to ensure a 
comprehensive outreach strategy to prospective apprentices. The 
Department has concluded that this is a useful approach, permitted but 
not mandated by the NAA, because smaller IRAPs would benefit from the 
SRE's capacity for such outreach. An SRE can structure its policies and 
procedures to ensure comprehensive outreach strategies that are 
consistent with and tailored to its nature, size, network, and 
geographic reach, as well as the nature and size of the recognized 
IRAPs and the scope of the SRE's relationships with those IRAPs. The 
Department recognizes the comments requesting additional affirmative 
action provision akin to those in 29 CFR part 30. The Department also 
recognizes comments cautioning against additional requirements similar 
to those in 29 CFR part 30. The Department declines to add any 
additional requirements beyond what is in Sec.  29.22(i) as discussed 
further below. The Department views the requirements to adhere to 
Federal, State, and local EEO laws and regulations to be both 
sufficient and clear. Thus, the final rule adopts this provision as 
proposed.
9. IRAP Disclosure of Costs and Expenses to Apprentices--Sec.  
29.22(a)(4)(ix)
    Paragraph (a)(4)(ix) of Sec.  29.22 requires that the programs 
disclose to apprentices, before they agree to participate in the 
program, any costs or expenses that will be charged to them (such as 
costs related to tools or educational materials). Disclosure of such 
costs is necessary before apprentices agree to begin a program so that 
apprentices can accurately calculate their anticipated earnings. The 
final rule clarified that such disclosure must be ``to apprentices'' 
and ``before they agree to participate in the program.''
    Several commenters opposed charging costs and expenses to 
apprentices. A commenter asserted that passing on such costs to 
apprentices defeated the purpose of the NAA and urged the Department to 
require that any expenses be limited such that they would not 
effectively reduce apprentices' hourly pay below the minimum wage. 
Another commenter argued that the prospect of unregulated costs is 
contrary to apprenticeships' basic nature as ``earn and learn 
programs.'' A commenter asked whether there would be a cap on costs and 
requested clarification about when in the process IRAPs would be 
required to disclose them to apprentices. Commenters also suggested 
that IRAPs be required to disclose all costs and expenses to 
apprentices rather than only ``ancillary'' costs and expenses.
    The Department agrees with the commenters' suggestions to require 
disclosure of all costs and expenses, rather than only ``ancillary'' 
costs and expenses. The Department has struck the term ``ancillary'' 
from the final rule.
    Regarding the concerns about charging any costs or expenses to 
apprentices, as discussed in Sec.  29.22(a)(4)(vii) above, the 
Department has explicitly stated that any costs and expenses must 
comply with all applicable Federal, State, or local wage laws and 
regulations. The Department also has clarified the language of Sec.  
29.22(a)(4)(ix) to require that an IRAP must disclose the costs and 
expenses ``to apprentices, before they agree to participate in the 
program,'' thereby protecting the apprentice from being subjected to 
onerous fees without his or her prior knowledge. The Department 
anticipates that the additional requirement for an apprenticeship 
agreement, discussed below, will result in further disclosure of costs 
and expenses charged to apprentices, if any, throughout the course of 
the apprenticeship program. The Department neither requires nor 
prohibits IRAPs from charging costs or expenses to apprentices, except 
that, as noted, the final rule prohibits the charging of such costs or 
expenses if doing so would violate any applicable Federal, State, or 
local wage laws or regulations. The Department does, however, expect 
SREs and IRAPs would consider carefully whether to impose such costs, 
given the nature of the relevant industries and occupations. The 
Department also expects that market forces and competition for 
apprentices will keep costs down.

[[Page 14325]]

10. Apprenticeship Agreement--Sec.  29.22(a)(4)(x)
    As discussed above, and in response to several comments on the 
topic, the Department has added a new paragraph in Sec.  
29.22(a)(4)(x), that requires programs to maintain a written 
apprenticeship agreement for each apprentice that outlines the terms 
and conditions of the apprentice's employment and training. The 
apprenticeship agreement must be consistent with its SRE's 
requirements.
    In addition to many comments urging the Department to consider 
requiring apprenticeship agreements, commenters provided specific 
suggestions regarding the content of such agreements. The Department 
received comments requesting that an apprenticeship agreement 
incorporate the requirements for registered apprenticeships, such as 
the number of hours to be spent in related instruction in technical 
subjects related to the occupation; a statement setting forth a 
schedule of the work processes in the occupation or industry divisions 
in which the apprentice is to be trained and the approximate time to be 
spent at each process; a statement of the wages to be paid to the 
apprentice and whether the required related instruction is compensated; 
a statement regarding the duration of a probationary period; a 
statement concerning the circumstances under which an apprenticeship 
agreement may be canceled, to include termination for good cause, 
notice to the apprentice, and an opportunity for corrective action; an 
equal opportunity statement; ratios of apprentices-to-journey level 
workers; and information about dispute resolution concerning the 
apprenticeship agreement. A commenter also suggested adding a statement 
concerning safe equipment, facilities, and training, and adding a 
request for demographic data, to include the apprentice's race, sex, 
and ethnicity, in addition to disability status.
    The Department agrees with the suggestion of many commenters that 
an apprenticeship agreement between the apprentice and the program will 
clearly set out expectations for both, consistent with the requirements 
of this subpart. Accordingly, an apprenticeship agreement must contain 
the terms and conditions of the apprentice's employment and training, 
which the Department expects will include topics such as the duration 
of the apprenticeship, wages and any wage progression, costs or 
expenses charged to the apprentice, and the competencies and industry-
recognized credential(s) to be attained by completion. The Department 
expects this provision to take the place of the phrase ``involves an 
employment relationship'' that was previously in Sec.  29.22(a)(4)(ii), 
because the apprenticeship agreement will contain the specific 
parameters of the employment relationship in a way that provides 
structure and clarity to the IRAP and the apprentice. Further, the 
Department anticipates that this provision will complement the 
requirement in Sec.  29.22(a)(4)(ii) for a written training plan that 
describes structured work experience and related instruction, leads to 
competencies and credential(s), and provides progressively advancing 
industry-essential skills, and that some IRAPs may choose to 
incorporate the training plan into the apprenticeship agreement either 
explicitly or by reference.
    The Department expects that specifics of the apprenticeship 
agreement will vary, based on the SRE's requirements and the particular 
circumstances of each IRAP. Therefore, the Department declines to 
specify the content of apprenticeship agreements. This provision is not 
intended to, nor is it required to, mirror the requirements for an 
apprenticeship agreement set forth in subpart A. Rather, the agreement 
required by this section is intended to be a written agreement defining 
the employment relationship and containing the terms and conditions of 
employment that would memorialize the understanding and expectations of 
both the IRAP and the apprentice, similar to how employers and other 
types of workers engage in written contracts. This will allow 
prospective apprentices to understand what they are signing up for 
before joining an IRAP.
    The Department also declines to require that certain demographic 
data be a part of the apprenticeship agreement and notes that it has 
added an SRE reporting requirement on this point at Sec.  29.22(h)(10). 
With respect to other comments about adding to apprenticeship 
agreements statements regarding a safe working environment and EEO 
protections, the Department notes that these are mandatory requirements 
for IRAPs under Sec.  29.22(a)(4). IRAPs may choose to include such 
statements in their apprenticeship agreements, and the Department views 
such statements as beneficial to give apprentices notice of their 
rights in the workplace. Employers offering IRAPs, however, would be 
bound by these requirements regardless of whether they explicitly 
mention them in an apprenticeship agreement. The Department further 
notes that employers must comply with all mandatory workplace-notice 
requirements set forth in Federal, State, and local laws.
SRE Validation of High-Quality Programs
    Paragraph (b) of Sec.  29.22 states that an SRE must validate that 
IRAPs it recognizes comply with paragraph (a)(4). This means that the 
SRE must in fact validate IRAP compliance, and affirm to the 
Administrator that an IRAP it recognizes is a high-quality program, as 
reflected by its conformity to what (a)(4) and the SRE require. 
Validation under Sec.  29.22(b) should be conducted at initial 
recognition and prior to the attestation provided to the Administrator 
under Sec.  29.22(a)(2), when an SRE informs the Administrator that it 
has recognized an IRAP. Validation under Sec.  29.22(b) should also be 
conducted on an annual basis after recognition, with an attestation 
provided to the Administrator annually.
    Multiple commenters questioned the Department's use of the term 
``validate'' in the context of this section. Although not specifically 
tied to this section, and as described in various other parts of the 
preamble, several commenters also questioned the Department's oversight 
of SREs and expressed that, in their view, the proposed rule did not 
containing sufficient requirements to safeguard the welfare of 
apprentices.
    In the context of this paragraph, the requirement that the SRE must 
``validate'' its IRAPs' compliance with paragraph (a)(4) of Sec.  29.22 
and the requirements of its SRE means that the SRE must affirm to the 
Administrator that an IRAP it recognizes is a high-quality program as 
reflected by its conformance to the requirements of Sec.  
29.22(a)(4)(i) through (x) and any other requirements of the SRE. In 
response to the concerns regarding the term ``validate'' and comments 
received generally about the need for ongoing oversight, the Department 
included a requirement that the SRE validate compliance and provide a 
written attestation of the IRAP's compliance with the requirements of 
Sec.  29.22(a)(4), both at the time of recognition and on an annual 
basis thereafter. This enhances the requirement to ``validate,'' which 
some commenters remarked was insufficiently vague, and also adds an 
ongoing requirement to ensure continued compliance with Sec.  
29.22(a)(4) and the SRE's requirements. The Department anticipates that 
the quality-control relationship between the SRE and its IRAPs as 
required by Sec.  29.22(f), will consist of an ongoing assessment of 
the IRAP's compliance with Sec.  29.22(a)(4) that would facilitate an 
annual attestation to the Department.

[[Page 14326]]

The Department has determined that requiring an SRE to attest to IRAP 
compliance annually creates additional protection of apprentices and 
Departmental monitoring of SRE oversight of IRAPs. Finally, as with 
other provisions, if the Administrator determines that an SRE's IRAPs 
are not in compliance despite the SRE's attestation, the Administrator 
has the option to take appropriate action against the SRE under this 
subpart.
SRE Disclosure of Credential(s) To Be Attained
    Paragraph (c) of Sec.  29.22 requires SREs to publicly disclose the 
credentials that apprentices will earn during their participation in or 
upon completion of an IRAP, as is the norm in the private sector. An 
SRE could disclose these credentials on its website, for example. The 
Department received a comment suggesting that the credential be 
disclosed to the apprentice in an apprenticeship agreement. The 
Department acknowledges this comment and anticipates that an 
apprenticeship agreement, added to the final rule at Sec.  
29.22(a)(4)(x), could include the credential(s) attained during or at 
the completion of the program. The Department also notes that the 
training plan in Sec.  29.22(a)(4)(ii) will likely include the 
credential(s) to be attained. The Department removed the word 
``successful'' as a modifier for ``participation'' to make this 
paragraph consistent with Sec.  29.22(a)(4)(iv). The Department has 
also added the word ``publicly'' to clarify that the SRE must disclose 
the credentials to the public so that the public has a way to assess 
what IRAPs are offering. Otherwise, the Department has adopted this 
provision as proposed.
SRE Policies and Procedures for Recognizing IRAPs
    Proposed paragraph (d) of Sec.  29.22 stated that SREs' ``policy 
and procedures for recognizing Industry Programs must be sufficiently 
detailed that programs will be assured of equitable treatment, and will 
be evaluated based on their merits. A Standards Recognition Entity must 
ensure that its decisions are based on objective criteria, and are 
impartial and confidential.'' The Department has revised this paragraph 
for clarity and included a requirement that SREs provide to the 
Administrator its policies and procedures at the time of application. 
The final rule provides: ``An SRE must establish policies and 
procedures for recognizing, and validating compliance of, programs that 
ensure that SRE decisions are impartial, consistent, and based on 
objective and merit-based criteria; ensure that SRE decisions are 
confidential except as required or permitted by this subpart, or 
otherwise required by law; and are written in sufficient detail to 
reasonably achieve the foregoing criteria. An SRE must submit these 
policies and procedures to the Administrator.'' The Department has 
clarified that SREs are required to have sufficiently detailed policies 
and procedures in place for recognition of IRAPs and validating their 
compliance with this subpart. This is to ensure that the decisions of 
SREs are based on the quality of entities' programs, not other factors. 
By requiring confidentiality, this provision also respects the privacy 
of entities seeking recognition, since seeking recognition could entail 
providing confidential business information.
    A commenter questioned the confidential nature of the decisions, 
stating that the Department or the public could benefit from learning 
about the reasons for the SRE's decision-making without a disclosure of 
confidential business information. Another commenter faulted the rule 
for the lack of specificity in the SRE's recognition of IRAPs other 
than the requirement that policies and procedures are ``sufficiently 
detailed'' so IRAPs ``will be assured of equitable treatment'' and 
evaluated ``based on their merits.''
    The Department acknowledges the commenters' concerns and has added 
the requirement that the SRE submit its policies and procedures to the 
Administrator at the time of application. This is intended to add 
transparency and accountability in crafting impartial merit-based 
policies and procedures. It allows the Department to evaluate, both at 
initial recognition and re-recognition, these policies and procedures 
for fair evaluation based on the merits. Though the NPRM's proposed 
regulatory text did not explicitly contain the requirement that these 
policies and procedures be submitted to the Administrator with the 
SRE's application, the form embedded in the NPRM specifically requested 
descriptions of policies and procedures related to IRAP recognition and 
assessment. The Department intends for such policies and procedures to 
be reviewed prior to recognition as an SRE because SREs must 
demonstrate that they are capable of recognizing IRAPs and fairly 
assessing IRAPs for compliance with this subpart. The Department also 
notes that the SRE must notify the Administrator of any significant 
changes to these policies or procedures, in accordance with Sec.  
29.22(p). For example, a change in the evaluation criteria would 
constitute a significant change, and an SRE would need to notify the 
Administrator when it makes these changes.
    As for the concern about the confidentiality of the process, the 
Department does not intend for any statement about confidentiality to 
inhibit the Department from seeking or obtaining necessary information 
to discharge its own obligations under this subpart but rather to 
protect confidential business information from unnecessary disclosure. 
Thus, the Department has clarified the limitations on confidentiality 
to provide that that SRE decisions are confidential ``except as 
required or permitted by this subpart, or otherwise required by law.''
SRE Recognition of an IRAP
    The Department has redesignated Sec.  29.22(g) in the proposed rule 
as Sec.  29.22(e) in the final rule. In addition, paragraphs (e) and 
(f) of Sec.  29.22 in the proposed rule concerning conflicts of 
interest were not adopted as part of Sec.  29.22 of the final rule. To 
streamline the final rule, the Department has determined that the 
provisions contained in paragraphs (e) and (f) of Sec.  29.22 in the 
proposed rule should be revised and relocated to Sec.  29.21 in the 
final rule. This realignment was adopted because Sec.  29.21 of the 
final rule focuses on whether a potential SRE would be qualified to act 
in the capacity of an SRE as recognized by the Department, while Sec.  
29.22 of the final rule focuses on an SRE's oversight duties with 
respect to an IRAP once the SRE has been recognized. Paragraph (e) of 
Sec.  29.22 of the final rule requires that SREs must not recognize 
IRAPs for longer than 5 years at a time, and prohibits SREs from 
automatically renewing recognition.
    Some commenters argued that, in their view, the proposed rule did 
not require a formal, clear, rigorous process for recognition or 
monitoring of IRAPs. Two commenters expressed that the 5-year timeframe 
for an IRAP's recognition may be too long. One commenter stated that 
permitting ``hundreds of untested SREs and thousands of untried and 
unproven IRAPs to be created and operate for five years is an 
abrogation of the Department's responsibility to protect apprentices.'' 
But a different commenter agreed with the Department's assessment that 
a 5-year time period ``is appropriate for ensuring that already-
recognized SREs continue to account for the development and evolution 
in competencies needed within the industries and occupations to which 
their standards relate.'' Some commenters suggested that IRAP

[[Page 14327]]

recognition be provisional, for a period of 1 year, after which the SRE 
would evaluate the IRAP for continued recognition.
    A commenter stated that there were no pathways in the proposed rule 
to transfer an apprentice to another comparable program if the IRAP is 
not re-recognized or goes out of business before the apprentice 
completes and receives a credential. Two commenters argued that the 
proposed rule did not address how SREs would monitor their IRAPs or how 
SREs would be held accountable for programs that do not achieve 
positive results for apprentices. A commenter supported the flexibility 
granted to SREs in the design, policies, and procedures for monitoring 
IRAPs because SREs are knowledgeable about their industries.
    The Department acknowledges the suggestions provided by the 
commenters concerning the oversight and monitoring of IRAPs but has 
opted not to include these in the final rule. The Department believes 
the rule strikes an appropriate balance between required SRE oversight 
and flexibility to choose how to operate. Under Sec.  29.22(a)(4) of 
the final rule, the SRE is charged with only recognizing and 
maintaining the recognition of IRAPs that meet the specific 
requirements in Sec.  29.22(a)(4)(i) through (x). Given these 
requirements, the Department maintains that 5 years is a reasonable 
amount of time for an IRAP's recognition. The 5-year time period 
provides the SRE with a comprehensive body of longitudinal data 
concerning the IRAP's consistency in maintaining minimum standards for 
each apprentice's safety and welfare. In addition, the 5-year timeframe 
seeks to balance factors such as the transactional costs of IRAP re-
recognition, the rapidly changing nature of industries and occupations, 
the value of occupational credentials, and the need to monitor and 
assess IRAP operations on a regular basis.
    In addition, the Department declines to mandate a provisional 
recognition period of 1 year for IRAPs. SREs are required to attest 
annually to an IRAP's compliance with the requirements set forth in 
this final rule, as discussed in Sec.  29.22(b). SREs are also required 
to make publicly available and report to the Department certain IRAP-
related data and outcomes on an annual basis, as discussed in Sec.  
29.22(h) of the final rule. These requirements, as well as the quality-
control relationship between the SRE and its IRAP, provide SREs with 
the necessary information to determine whether to derecognize an IRAP 
or provide additional support and guidance in an effort to bring the 
IRAP into compliance. Although the Department does not require a 
provisional recognition period, the SRE may decide to provisionally 
recognize an IRAP, or provide additional monitoring or assistance 
during this period.
    Accordingly, apart from the redesignation of this provision as 
Sec.  29.22(e) in the final rule and the addition of nonsubstantive 
textual edits for clarity, the Department adopts this provision as 
proposed.
Quality Control Relationship Between the SRE and Its IRAPs
    Paragraph (f) of Sec.  29.22, which was proposed as Sec.  29.22(h), 
requires that SREs and IRAPs be in an ongoing quality-control 
relationship and provides general guidelines for that requirement. The 
specific means and nature of the relationship between the SRE and an 
IRAP will be defined by the SRE, provided that the relationship: (1) 
Results in reasonable and effective quality control that includes as 
appropriate, consideration of apprentices' credential attainment, 
program completion, retention rates, and earnings; (2) does not prevent 
the IRAP from receiving recognition from another SRE; and (3) does not 
conflict with this subpart or violate any applicable law. The final 
rule added two more requirements to the quality-control relationship: 
That it involve periodic compliance reviews and include policies and 
procedures for suspension or derecognition of IRAPs.
    Several commenters argued that the proposed rule should have 
included specific quality-control requirements for SREs to oversee 
IRAPs effectively. Some commenters requested that there be precise 
monitoring requirements, such as annual or biannual compliance reviews. 
A commenter questioned whether SREs are expected to conduct site 
visits, require documentation from their IRAPs, or provide technical 
assistance to their IRAPs and under what circumstances an SRE would 
place an IRAP on an improvement plan. Another commenter argued that the 
key to effective quality control is a program standard approved by the 
Department or a State. A commenter recommended that the Department 
delineate requirements for the quality-control relationship, such as 
using the SRE's assessment of apprentices' post-program earnings, job 
placement, test scores, or apprentice or employer satisfaction as 
useful data points for evaluating programs. The same commenter also 
encouraged the Department to explore enforcement and monitoring 
mechanisms for the SRE's quality-control relationship with the IRAPs it 
recognizes.
    The Department appreciates the comments received on this topic and 
has further clarified the quality-control relationship between the SRE 
and the IRAPs it recognizes. The Department has added two requirements 
to the quality-control relationship between the SRE and the IRAP. The 
quality-control relationship must involve ``periodic compliance reviews 
by the SRE of its IRAP to ensure compliance with the requirements of 
[Sec.  29.22(a)(4)] and the SRE's requirements'' and must include 
``policies and procedures for the suspension or derecognition of an 
IRAP that fails to comply with the requirements of [Sec.  29.22(a)(4)] 
and its SRE's requirements.'' Although the Department declines to 
prescribe the frequency with which an SRE must conduct compliance 
reviews, the Department anticipates that SRE compliance reviews will 
occur on at least an annual basis. SREs have an annual data reporting 
requirement under Sec.  29.22(h) and are required to submit an annual 
attestation under Sec.  29.22(b) that the IRAPs they recognize continue 
to meet the requirements of Sec.  29.22(a)(4), and the Department 
anticipates that the SRE will take all steps necessary to accurately 
report this information to the Department given the consequences if it 
does not do so. The Department anticipates that SREs will engage in a 
combination of quality-control measures, such as requiring 
documentation and providing technical assistance. Although the 
Department has not prescribed the situations under which an IRAP would 
be suspended or derecognized, the Department instead requires that the 
SRE develop policies and procedures to take such actions. The SRE may 
also develop policies and procedures for performance improvement plans 
or corrective action plans if it deems appropriate. The Department 
views these additions to the quality-control relationship as enhancing 
IRAPs' accountability for providing high-quality training and 
safeguarding the welfare of apprentices.
    One commenter suggested that many IRAPs may have a single 
individual in charge of quality assurance and the quality of the IRAP 
could potentially suffer if the individual leaves the program.
    The Department recognizes that smaller IRAPs may be unable to 
maintain multiple individuals tasked with quality-assurance 
responsibilities, but the Department has determined that an IRAP is 
responsible for its personnel, including personnel turnover that may 
occur, and is responsible for continuing

[[Page 14328]]

to comply with the requirements of a high-quality apprenticeship 
program. The Department declines to attempt to regulate IRAPs' 
personnel matters and expects that IRAPs will continue to fulfill their 
obligations under this subpart regardless of personnel changes. The 
Department notes that an IRAP may seek assistance from its SRE and 
utilize the SRE's expertise to comply with its responsibilities under 
this subpart. If the IRAP does not continue to fulfill its obligations, 
the SRE will hold the IRAP accountable as appropriate under the 
framework established by the Department.
Joint Employment Relationship
    The Department has redesignated Sec.  29.22(i) in the proposed rule 
as Sec.  29.22(g) in the final rule. In addition, paragraphs (e) and 
(f) of Sec.  29.22 in the proposed rule concerning conflicts of 
interest were not adopted as part of Sec.  29.22 of the final rule. As 
noted above, paragraphs (e) and (f) of Sec.  29.22 in the proposed rule 
were revised and relocated to Sec.  29.21 in the final rule to 
streamline the rule. Accordingly, the Department has redesignated Sec.  
29.22(g), Sec.  29.22(h), and Sec.  29.22(i) in the proposed rule as 
Sec.  29.22(e), Sec.  29.22(f), and Sec.  29.22(g) in the final rule, 
respectively. Paragraph (g) of Sec.  29.22 in the final rule makes 
clear that an entity's participation as an SRE of an IRAP does not make 
the SRE a joint employer with the entity(ies) that develop or deliver 
IRAPs.
    The Department did not receive any comments related to paragraph 
(i) of Sec.  29.22 in the proposed rule. Accordingly, the final rule 
retains the provision as proposed. However, as noted above, this 
provision has been redesignated as paragraph (g) of Sec.  29.22 in the 
final rule.
SRE Data Publication and Reporting
Sec.  29.22(h)--General Overview
    Proposed Sec.  29.22(j) of the NPRM (now redesignated as Sec.  
29.22(h) in this final rule) stipulated that an SRE must make publicly 
available on an annual basis the following information on each IRAP it 
recognizes: (1) Up-to-date contact information for each program; (2) 
the total number of apprentices annually enrolled in each program; (3) 
the total number of apprentices who successfully completed the program 
annually; (4) the annual completion rate for apprentices; (5) the 
median length of time for program completion; and (6) the post-
apprenticeship employment rate of apprentices at completion. The 
preamble of the NPRM explained that the publication of this information 
would provide employers and prospective apprentices the details 
necessary to make informed decisions about IRAPs. However, the preamble 
also invited public comment on which performance measures would be most 
helpful in assessing IRAP impact and quality assurance, and 
specifically stated that ``the Department is considering setting 
performance measures related to post-apprenticeship employment and 
wages and employer retention.'' The preamble also emphasized that 
``[t]he Department has a keen interest in minimizing burden [sic] on 
SREs and [IRAPs], and therefore also solicits comment on the most 
efficient approach to data collection.''
    In response to its request for public comments concerning the 
addition of performance measures to evaluate the success of IRAPs 
recognized by SREs, the Department received substantial input from a 
wide range of commenters. None of the comments received specifically 
advocated the deletion or modification of the information initially 
proposed by the Department in the NPRM at Sec.  29.22(j)(1) (IRAP 
contact information), Sec.  29.22(j)(2) (the total number of 
apprentices annually enrolled in each IRAP), Sec.  29.22(j)(3) (annual 
total of apprentices who successfully completed an IRAP), or Sec.  
29.22(j)(5) (the median length of time for IRAP completion). While 
there was broad support for retaining the six initial provisions on 
IRAPs proposed in Sec.  29.22(j) of the NPRM, a number of commenters 
expressed support for refining or expanding the number of data and 
outcomes metrics in order to better assess the size, scope, and 
effectiveness of IRAPs, while others expressed concern that the 
collection of additional data from SREs and IRAPs would impose 
unwarranted burdens on these parties.
    In discussing the preamble text for Sec.  29.22(h) of this final 
rule, the Department first describes the addition of a reporting 
requirement in the introductory clause of Sec.  29.22(h); it then 
discusses (in order of appearance) those paragraphs of Sec.  29.22(h) 
where changes were adopted based on comments received (Sec.  
29.22(h)(6), (7), (8), (9) and (10)); it proceeds to discuss those 
sections of Sec.  29.22(h) where changes were made to the text 
administratively (Sec.  29.22(h)(2) and (4)); and it then refers to the 
paragraphs of Sec.  29.22(h) where no changes were made to the text as 
it appeared in the NPRM (Sec.  29.22(h)(1), (3), and (5)). The final 
paragraphs of the Sec.  29.22(h) preamble discussion summarize those 
comments and suggestions that the Department has declined to adopt in 
this final rule.
    The Department notes that both SREs and the IRAPs they recognize 
are free to collect and publish data relating to program outcomes 
beyond the specific metrics that are stipulated in Sec.  29.22(h) of 
this final rule; indeed, such additional voluntary collection 
initiatives could provide the chief beneficiaries of these programs 
(i.e., potential apprentices and employers) with valuable performance 
information that may encourage broader participation by these parties 
in IRAPs. The Department believes that employer participation in IRAPs 
will be a key indicator of success showing that the program is 
beneficial to both employers and apprentices. As participation in IRAPs 
increases, the Department may consider additional performance measures.
1. Adding an SRE Reporting Requirement to DOL on IRAP Outcomes at Sec.  
29.22(h)
    Multiple commenters suggested that the Department require SREs to 
submit outcomes data on the IRAPs they recognize directly to the agency 
on a regular basis, in addition to making it publicly available. One of 
these commenters opined that the requirement in the NPRM that SREs 
``make publicly available'' certain information about an IRAP was 
``insufficient to rigorously assess the size, scope, and 
effectiveness'' of these programs, while another commenter maintained 
that the Department cannot hope to provide meaningful quality assurance 
without requiring SREs to collect information on the outcomes of the 
IRAPs they oversee. However, another commenter took the position that 
the Department should not require SREs to provide specific information 
as part of a reporting requirement, but rather should require SREs to 
simply submit a plan for such reporting in their applications for 
recognition by the Department. One commenter argued that the Department 
should consider the potential burdens and negative ramifications of a 
performance and reporting system for IRAPs, while another commenter 
expressed the view that the Department should refrain from requiring 
SREs to meet overly burdensome reporting and data requirements similar 
to those of the current registered apprenticeship system. A commenter 
reasoned that, in their view, because SREs may tailor their programming 
to distinct populations for industries with which they have a strong 
relationship, the Department should refrain from setting specific 
performance measures for IRAPs.

[[Page 14329]]

    The Department agrees with those commenters who suggested that 
requiring SREs to report IRAP data and outcomes directly to the 
Department on a regular basis will help the Department monitor and 
evaluate these programs and entities. Accordingly, in addition to 
retaining the requirement that SREs make publicly available certain 
outcomes information concerning the IRAPs they recognize, the provision 
of the final rule that addresses program data and outcomes (which has 
been redesignated as Sec.  29.22(h) in the final rule) has been 
modified to stipulate that SREs must also report this same information 
directly to the Department. The final rule also clarifies that SREs 
must both publish this IRAP data and report it to the Department on an 
annual basis. The format for SREs to publish and report industry 
program data will be prescribed by the Administrator in subsequent sub-
regulatory guidance; the Department anticipates that the prescribed 
format will allow electronic publishing and reporting to reduce SREs' 
time and paperwork burdens. The Department also intends to work with 
SREs to explore the use of administrative data sources to collect 
required outcome information. Such sources offer the chance to collect 
information in a more valid, consistent manner and at a lower cost. In 
determining what types of IRAP data and outcomes are most appropriate 
for collection, reporting, and publication by SREs, this final rule 
balances the potential benefits to the public of gaining access to 
additional program-level data against the legitimate concerns raised by 
some commenters that requiring SREs and IRAPs to provide outcomes data 
beyond that specified in the NPRM could impose undue burdens.
    Subsequent to the publication of this final rule, the Department 
intends to issue a Federal Register notice requesting public comment on 
the information collections required under Sec.  29.22(h) and submit an 
ICR to the Office of Management and Budget (OMB) for review and 
approval in accordance with the PRA. This ICR will provide further 
details concerning the IRAP outcomes and metrics that are stipulated in 
Sec.  29.22(h).
2. Sec.  29.22(h)(6)--Post-Apprenticeship Employment and Retention 
Rates
    As previously noted, Sec.  29.22(j)(6) of the NPRM proposed that 
SREs should make publicly available ``[t]he post-apprenticeship 
employment rate of apprentices at completion.'' One commenter suggested 
that the Department expand the list of outcomes metrics in the final 
rule to include post-program employment rates at the second and fourth 
quarters following a former apprentice's completion of an IRAP; this 
commenter further suggested that the post-employment data be 
disaggregated by race, ethnicity, gender, disability status, and other 
characteristics to measure equitable impact across these populations. 
Two other commenters agreed that the Department should require SREs to 
collect information on the post-program employment status of former 
apprentices who completed IRAPs. One of these commenters recommended 
that the text of the NPRM's proposed Sec.  29.22(j)(6) should be 
refined so that SREs would collect information on the post-
apprenticeship employment rate of former apprentices at 6- and 12-month 
intervals after IRAP completion. This commenter further opined that the 
collection of this data would facilitate performance comparisons 
between IRAPs, registered apprenticeship programs, and other work-based 
learning models.
    A number of commenters recommended that IRAPs should be assessed 
according to their retention rates. One of these commenters expressed 
its view that it would be reasonable for Department to require SREs to 
collect information from the IRAPs they recognize concerning ``the 
post-completion hire rate at the sponsoring company.'' A commenter also 
opined that the collection of both employment and retention data 
(measured up to 6 months after learners exit a training program) are 
two of the four core outcomes metrics for measuring the success of 
workforce programs under WIOA. However, another commenter stated that 
retention rates after defined periods of time post-completion are more 
likely to be subject to circumstances beyond the apprenticeship 
program's control and less likely to reflect on the quality and 
effectiveness of the program and, therefore, should be excluded.
    As noted above, the Department expressed its willingness to 
consider post-apprenticeship retention rates as an additional 
performance metric in the preamble of the NPRM. After considering the 
comments proposing the addition of a new data point to assess an 
employer's retention of the apprentices they trained, the Department 
has concluded that the inclusion of such outcomes information in the 
final rule would be useful to potential apprentices in evaluating the 
quality of IRAPs. Accordingly, the Department is modifying the outcomes 
metric contained in this provision (now redesignated as Sec.  
29.22(h)(6) of the final rule) to require that SREs make publicly 
available--and also report to the Department on an annual basis--the 
post-apprenticeship employment retention rate, calculated at 6- and 12-
month intervals after program completion.
3. Attainment of Industry-Recognized Credentials--Sec.  29.22(h)(7)
    Several commenters suggested that the Department should expand the 
program outcome data in the final rule to include information on the 
attainment of industry-recognized credentials for each IRAP. One of 
these commenters noted that credential attainment is one of the four 
core outcomes metrics for measuring the success of workforce programs 
under WIOA. Another commenter opined that the Department should require 
SREs to make public the number of credentials attained per year by IRAP 
apprentices, and the success rates of apprentices on final 
examinations, including the overall success rate, first attempt success 
rate, and second attempt success rate. A commenter further suggested 
that SREs should require IRAPs to disclose data on credential status 
and the acceptance by employers of credentials received, along with 
information on the value of being credentialed as opposed to being un-
credentialed.
    After considering the relative value of these credential-related 
data points to potential apprentices in assessing the relative quality 
of IRAPs, the Department agrees with the inclusion of some, but not 
all, of the outcome metrics recommended by the commenters. Accordingly, 
the Department has revised the text of the final rule (at Sec.  
29.22(h)(7)) to require that SREs make publicly available--and also 
report to the Department on an annual basis--information about the 
attainment of industry-recognized credentials by apprentices in each of 
the IRAPs that they have recognized. The final rule also stipulates 
that SREs must, on an annual basis, make publicly available and report 
to the Department data on the number of industry-recognized credentials 
that are conferred by each of the IRAPs they have recognized. However, 
the Department declines to adopt the suggestions made by various 
commenters requesting the collection, reporting, and publication of 
data on apprentice success rates on IRAP examinations, on the 
acceptance by employers of credentials attained, or on the relative 
value of being credentialed or un-credentialed. The Department is 
concerned that the procurement of such

[[Page 14330]]

outcomes data by SREs and IRAPs would prove unduly burdensome, and may 
discourage such programs and entities from participating in this 
initiative while providing minimal benefit to the Department and 
prospective apprentices.
4. Post-Program Wages--Sec.  29.22(h)(8)
    A wide range of commenters suggested that the Department should 
require the collection of the average wage rates of former apprentices 
upon program completion as an additional outcomes metric in the final 
rule. As noted above, the Department expressed its willingness to 
consider post-apprenticeship wages as an additional program performance 
metric in the preamble of the NPRM. One of the commenters observed that 
the collection of wage data (measured up to 6 months after learners 
exit a training program) is one of the four core outcomes metrics for 
measuring the success of workforce programs under WIOA. Another 
commenter further proposed that the Department collect wage rates paid 
to IRAP graduates upon completion, as well as the employment and wage 
rates of such individuals at 1- and 5-year intervals after program 
completion. However, a commenter expressed the view that the Department 
should not include post-completion wage rates as a performance measure, 
because wage rates do not include overtime hours and benefits, and 
because wage information is often embedded in the confidential terms of 
an employment contract.
    After considering the relevancy and value of this post-program wage 
information to potential IRAP participants, the Department agrees 
substantially with those commenters who advocated for the collection of 
this key outcomes data point. Accordingly, the Department has included 
in the final rule (at Sec.  29.22(h)(8)) a requirement that SREs make 
publicly available--and also report to the Department on an annual 
basis--information about the average wage rates of an IRAP's former 
apprentices, calculated 6 months after program completion. However, the 
Department takes the position that requiring the collection of wage 
data at 1- and 5-year intervals after IRAP completion--as one of the 
commenters suggested--does not align with WIOA data-collection 
requirements, and would also impose lengthy and burdensome collection, 
reporting, and publication duties upon SREs and the IRAPs that they 
recognize. The Department is also concerned that that the imposition of 
more protracted administrative requirements with respect to the 
collection of post-completion wage data could discourage the 
participation of potential SREs and IRAPs in this initiative.
5. Training Cost per Apprentice--Sec.  29.22(h)(9)
    In recommending that the Department not set a program-wide average 
fee for SREs, a commenter opined that each industry, occupation, and 
SRE will have different costs. However, another commenter expressed 
concern that the NPRM did not contain cost estimates for the training 
component of IRAPs. This commenter expressed the view that with the 
substantial recent growth in registered apprenticeships, there is a 
large body of data available from such programs concerning yearly 
training costs.
    After considering the comments received pertaining to IRAP training 
costs, the Department has determined to include an additional outcomes 
metric (at Sec.  29.22(h)(9) of the final rule) for SREs to collect, 
report, and publish information about the training cost per apprentice 
for each of the IRAPs that the SRE recognizes. The Department believes 
that the availability of such data would be useful to the public in 
evaluating the efficiency and cost-effectiveness of private-sector 
IRAPs relative to other workforce training and development programs 
that are taxpayer-funded. Such information also may help employers 
considering the IRAP model decide to participate, given the 
efficiencies and expertise that SREs are expected to bring.
6. Basic Demographic Information on IRAP Participants--Sec.  
29.22(h)(10)
    Multiple commenters suggested that DOL should require the 
collection of demographic data on IRAP apprentices. After considering 
these comments, the Department has decided to include an additional 
reporting requirement (at Sec.  29.22(h)(10) of the final rule) for 
SREs to collect, report, and publish basic demographic information 
about the apprentices participating in the IRAP that the SRE recognizes 
(which may include, for example, the voluntary provision of data on the 
sex, race, and ethnicity of apprentices). The Department believes that 
the availability of such demographic data--which SREs must publish on 
an aggregated basis to protect the privacy of apprentices--will be 
useful to the public in evaluating whether IRAPs have been successful 
in attracting populations that have historically been underrepresented 
in apprenticeship programs. In this regard, the Department has 
determined that the potential benefits to consumers of gaining access 
to such data outweigh the potential administrative burden associated 
with the collection of such data by SREs and IRAPs.
7. Technical Modifications to Sec.  29.22(h)(2) and (4)
    In addition to incorporating an IRAP program outcomes data 
reporting requirement for SREs and adding to (or modifying) the 
outcomes metrics originally listed in the NPRM, the Department has made 
minor technical adjustments to certain other program measures that are 
now contained in Sec.  29.22(h) of the final rule. For example, Sec.  
29.22(j)(2) of the NPRM proposed that SREs make publicly available 
``[t]he total number of apprentices annually enrolled in each 
program''; in the corresponding provision of the final rule at Sec.  
29.22(h)(2), the Department has added language clarifying that, in 
tallying the number of apprentices in an IRAP, both new and continuing 
apprentices should be counted. In addition, the word ``enrolled'' in 
Sec.  29.22(j)(2) of the NPRM has been deleted in the corresponding 
provision of the final rule at Sec.  29.22(h)(2) and replaced with the 
word ``training'' to more accurately reflect the nature of an 
apprentice's experience in an IRAP.
    In addition, Sec.  29.22(j)(4) of the NPRM proposed an SRE make 
publicly available ``[t]he annual completion rate for apprentices'' for 
each IRAP it recognizes; in the corresponding provision of the final 
rule at Sec.  29.22(h)(4), the requirement for SREs to report and 
publish the annual completion rate for apprentices in the IRAPs that 
they recognize has been modified to include a mathematical formula for 
calculating this rate. While the Department did not receive any 
comments suggesting this particular textual modification, one commenter 
suggested that any future Federal funding for IRAPs should be made 
contingent on such programs meeting certain minimum standards, 
including a minimum completion rate. The Department was also concerned 
that the absence of a clear definition of the term ``completion rate'' 
could lead to the reporting and publication by SREs of IRAP completion 
rates that are not readily comparable, because they may have been 
computed differently across IRAPs (e.g., apprentices that withdrew from 
an IRAP could be treated differently than apprentices that transferred 
between IRAPs). In addition, because the term ``completion rate'' is 
already defined with respect to its application to registered 
apprenticeship programs in subpart A of the final rule, providing a 
clear definition for that

[[Page 14331]]

same term in the context of IRAPs is warranted under the circumstances.
    It should also be noted that the original proposed text contained 
in Sec.  29.22(j)(1), (3), and (5) of the NPRM (which correspond to 
Sec.  29.22(h)(1), (3), and (5) of the final rule) has not been amended 
in the final rule.
8. Other Comments Received Concerning Sec.  29.22(h)
    Several commenters also recommended a variety of additional 
outcomes metrics that the Department should adopt to evaluate the 
effectiveness of SREs and the IRAPs that they recognize. For example, a 
commenter recommended adding measures for the IRAP participation of 
members of special populations to bring the regulation into conformity 
with the Strengthening Career and Technical Education for the 21st 
Century Act, Public Law 115-224 (2018) (as codified at 20 U.S.C. 2301 
et seq.). A commenter urged DOL to encourage SREs to make use of 
existing State longitudinal data systems and/or other such sources of 
labor-market information to make determinations on the IRAPs they 
recognize. Multiple commenters recommended that DOL promote integration 
at the State level of information about incomes with such State 
longitudinal data systems. Several other commenters suggested that DOL 
should consider aligning publicly reported information collections with 
core indicators of performance under WIOA.
    After considering these comments, the Department takes the view 
that requiring SREs to utilize State labor-market information or 
longitudinal data systems in making determinations on IRAP 
recognitions, or adjusting the final rule to require SREs and IRAPs to 
align publicly reported information collections with core indicators of 
performance under WIOA, would impose unnecessary or unworkable 
administrative burdens on these parties, and may discourage them from 
pursuing the IRAP option for apprenticeship expansion. Accordingly, the 
Department declines to adopt these recommendations.
    A commenter suggested that SREs and IRAPs should be required to 
collect and make publicly available the same program and apprentice 
information as the DOL Registered Apprenticeship Partners Information 
Data System (RAPIDS) database does, including the collection of 
individual and aggregated data on apprentice demographic information, 
education level, current apprenticeship program enrollment status 
(including information concerning participation in and duration of on-
the-job learning and related instruction), the employer identification 
number (EIN) of the entity employing the apprentice, apprentice wage 
rates at enrollment and completion of the IRAP, apprenticeship 
completion rates, attainment of industry-recognized credentials, and 
complaints and grievances filed (e.g., EEO complaints). Another 
commenter opined that RAPIDS or a similar system should be used to 
ensure that States know which programs are available to participants, 
which will help States oversee the SREs and programs operating within 
their borders. Other commenters urged DOL to align any data collection 
protocols established for IRAPs with the data collection and evaluation 
requirements of registered apprenticeship programs. Multiple commenters 
recommended that SREs and IRAPs should be required to publicly 
disclose, at a minimum, the information required of American 
Apprenticeship Initiative (AAI) grant recipients.
    In response to these comments, the Department observes that many 
aspects of the new and more flexible IRAP model of apprenticeship are 
distinctive; these features do not align closely with the requirements 
of the existing registered apprenticeship framework, nor are they 
required to do so. As noted previously, requiring SREs to report IRAP 
data and outcomes directly to the Department on a regular basis will 
help the Department effectively monitor and evaluate these new programs 
and entities. Accordingly, the Department declines to adopt these 
suggestions with respect to data alignment.
    Multiple commenters recommended that the Department maintain a 
public, online database with information about SREs and the IRAPs they 
recognize. One of these commenters recommended that this database 
include the complete application submitted by entities seeking to be 
recognized as SREs, all submissions to the Administrator by SREs 
regarding the recognition of IRAPs, and the complete performance data 
submitted to the Administrator regarding each IRAP recognized by the 
SRE. Another commenter advised that the database include information 
about the credentials offered by IRAPs, and the portability of these 
credentials. A commenter recommended that, in addition to disclosing 
performance metrics, IRAPs should be required to use these performance 
metrics to conduct self-evaluations, and that these self-evaluations 
should be made public. A commenter suggested that DOL should require 
SREs to assess apprentices' post-program earnings, along with pre-
program earnings.
    After considering these comments, the Department takes the view 
that the Department need not establish an online database of IRAP 
program information when the final rule (at Sec.  29.24) already 
provides that SREs will make information on IRAPs publicly available. 
The Department also believes that it would be unnecessarily intrusive 
to require SREs to make public their applications for recognition, 
along with information concerning the SRE's recognition of IRAPs. 
Similarly, the Department believes that requiring IRAPs to utilize 
their performance data to conduct and publicize self-evaluations, or to 
collect information on an apprentice's pre-program earnings, would 
discourage many employers from establishing such programs. And as noted 
above, portability is not a concept that likely could be identified in 
the manner the commenter suggested, because even credentials facially 
associated with a specific geographic region could be relevant to and 
valued by an employer outside of that region.
    A commenter encouraged the conduct of additional research about 
IRAP programs' returns on investment. Another commenter opined that the 
Department should allow room for variation in required performance 
measures among industries. A commenter suggested that multiple ways to 
report performance data, including an online form, should be instituted 
in order to minimize the data collection burden on SREs as well as 
IRAPs.
    The Department is committed to reducing paperwork burdens on SREs 
and IRAPs by making available electronic methods for the reporting and 
transmittal of data concerning these programs. Accordingly, the 
Department intends to develop an online reporting form for use by SREs 
to facilitate the transmittal of the IRAP program information described 
in Sec.  29.22(h) of the final rule. The Department also intends to 
work with SREs to explore the use of administrative data sources to 
collect required outcome information. Such sources offer the chance to 
collect information in a more valid, consistent manner and at a lower 
cost. The Department is also interested in conducting research studies 
after the publication of this final rule to assess the effectiveness 
and cost effectiveness of IRAPs, particularly when compared with 
publicly financed workforce training and development programs.

[[Page 14332]]

SRE Policies and Procedures for IRAPs' EEO Requirements
    Paragraph (i) of Sec.  29.22, which was proposed as Sec.  29.22(k), 
generally requires SREs to have policies and procedures that would 
require IRAPs to protect apprentices from discrimination, as well as 
assist in recruiting for and maximizing participation in 
apprenticeships. The SRE must also assign responsibility to an 
individual to assist IRAPs with matters relating to this provision.
    Commenters questioned whether apprentices and their mentors, 
trainers, and others working with them during the IRAP would be 
required to have anti-harassment training similar to the requirements 
of 29 CFR part 30. Many commenters urged the Department to apply the 
anti-harassment requirements of 29 CFR part 30 to IRAPs. Commenters 
noted that registered apprenticeship programs are required to implement 
procedures for addressing complaints of harassment and intimidation. 
Other commenters suggested that SREs and IRAPs be required to have 
policies and procedures, modeled by the Department, for: Anti-
harassment training in compliance with 29 CFR part 30, HIPAA 
compliance, whistleblower protections, conflicts of interest, 
intellectual property, complaints, lobbying, expenses, investments, and 
gifts and entertainment. Another commenter attached sample policies and 
procedures regarding discrimination and harassment.
    The Department has carefully considered these comments. The NAA 
does not expressly mandate any particular EEO or outreach requirements. 
Rather, the NAA's directions are broad, general, and purposely leave a 
great deal to the Department's discretion. The final rule's EEO 
provisions--both what they include and what the Department has declined 
to include--reflect the Department's policymaking judgment and 
expertise based on weighing numerous factors, detailed below, including 
already existing legal protections, additional measures that may be 
helpful to apprentices and employers, sensitivity to administrative 
burdens, the need to preserve SREs' and IRAPs' flexibility, and the 
recognition of differences in industries and geographic areas.
    As discussed in relation to Sec.  29.22(a)(4)(viii), above, the 
Department has determined that adopting the EEO protections codified in 
applicable Federal, State, and local laws are appropriate for IRAPs--
which protect apprentices just as other types of workers--is a 
reasonable way to formulate and promote standards safeguarding the 
welfare of apprentices. The Department notes that the SRE is 
responsible for developing policies and procedures that both require 
IRAP adherence to applicable Federal, State, and local EEO laws and 
facilitate such adherence. Regarding the latter, the Department intends 
SREs to develop policies and procedures that take into account their 
IRAPs' needs for compliance assistance and complaints resolution. In 
the rule, the Department lists the requirement that SREs have policies 
and procedures regarding potential harassment, intimidation, and 
retaliation, such as the provision of anti-harassment training and a 
process for handling EEO and harassment complaints from apprentices. 
The Department has determined that this is an appropriate role for SREs 
and in line with both its compliance-assistance function and SREs' 
quality-control relationships with IRAPs. By explicitly identifying 
anti-harassment training in the rule, the Department requires SREs to 
ensure that such training is provided, whether the training is provided 
by the SRE, by an SRE partner, or by the employer offering the IRAP. 
Similarly, the Department requires the SRE or the employer to have a 
complaint mechanism for addressing discrimination and harassment 
complaints. For example, an SRE may assist a smaller employer offering 
an IRAP by providing centralized anti-harassment training and 
establishing a mechanism for receiving complaints from apprentices 
concerning discrimination. Larger employers with well-established EEO 
processes and procedures may not need such SRE assistance. By not 
prescribing specific processes, the Department seeks to maximize an 
SRE's ability to satisfy this provision in ways that best serve the 
IRAPs and employers that the SRE works with.
    The Department declines commenters' suggestions for additional 
requirements on SREs and IRAPs for policies and procedures related to 
HIPAA, whistleblower protections, conflicts of interest, intellectual 
property, complaints, lobbying, expenses, investments, and gifts and 
entertainment. As an initial matter, conflicts of interest and 
complaints are already addressed in this rule. Additionally, IRAPs are 
required to comply with any Federal, State, or local laws applicable to 
them, including HIPAA and whistleblower protections, regardless of any 
specific requirement in this rule. The Department notes that subpart A 
does not include such provisions, and declines to include such 
provisions in subpart B.
    Many commenters questioned the Department's departure from the 
affirmative action requirements of 29 CFR part 30. A commenter remarked 
that the Department is providing a weak requirement to recruit 
underserved groups and contrasted it with the robust requirements for 
registered apprenticeships. The commenter urged the Department to apply 
the same set of requirements to IRAPs as to registered apprenticeship 
programs. Many other commenters similarly argued that the Department 
should apply the affirmative action requirements of 29 CFR part 30 to 
IRAPs. Several commenters provided statistics about the numbers of 
women, veterans, and minorities in apprenticeship programs and 
highlighted their intentional and sustained efforts to increase 
diversity through affirmative action plans. Another commenter similarly 
noted it requires sustained and aggressive effort to recruit women, 
minorities, and individuals with disabilities to apprenticeships in 
some industries. One commenter observed that SREs are only required to 
have policies for outreach strategies, but IRAPs are under no 
obligation to implement such strategies. A commenter stated that the 
Department's NPRM did not require that the SRE approve an IRAP's 
selection procedure for apprentices or require that any selection 
procedure comply with the Uniform Guidelines on Employee Selection 
Procedures. The same commenter stated that, in its view, there was no 
required analysis by the SRE or the IRAP to determine if any part of 
the recruitment and selection process is creating a barrier to the 
entry of qualified women and minorities into the apprenticeship 
program.
    A commenter argued that innovation is not necessary in Federal 
civil rights protections, urging the Department to provide more 
proactive education and assistance to IRAPs on outreach to diverse 
populations. Another commenter noted that there are no requirements for 
an SRE to report on the demographic characteristics of IRAP 
apprentices. A commenter encouraged the Department to task SREs with 
verifying that IRAP programs conduct outreach and recruitment 
activities to all potential workers in a program's region, consistent 
with 29 CFR 30.3(b)(3). The commenter stated that this would improve 
alignment between IRAPs and the workforce system by empowering local 
workforce stakeholders to leverage WIOA-funded referral services. The 
commenter also

[[Page 14333]]

argued that requiring SREs to ensure IRAPs engage in this same 
recruitment and outreach as in 29 CFR 30.3(b)(3) would ensure 
efficiency in workforce investments in a local area, bolstering access 
to work-based learning programs for a diverse set of workers and 
ensuring businesses have the broadest pipeline of potential candidates 
to fill open positions.
    The Department acknowledges the comments asking for additional 
affirmative action requirements. Nevertheless, the Department has 
determined that the requirements in this section, in conjunction with 
the EEO requirements at Sec.  29.22(a)(4)(viii), impose sufficient 
obligations on both IRAPs and SREs to ensure compliance with EEO laws 
and further impose an obligation on SREs to have policies and 
procedures that reflect comprehensive outreach strategies. The 
Department views SREs as better positioned than the Department to 
decide how to structure their policies and procedures to ensure 
comprehensive outreach strategies, which could depend on the nature and 
size of the SREs, their networks and geographic reach, the nature and 
size of the IRAPs they recognize, and the SREs' relationship with their 
IRAPs. The Department declines to incorporate the affirmative action 
provisions of 29 CFR part 30 into this subpart.
    The Department disagrees with the commenter's concern about IRAPs 
not being required to implement SRE outreach strategies. The rule is 
drafted so as to place the responsibility on the SRE to have policies 
and procedures that reflect comprehensive outreach strategies to reach 
diverse populations that may participate in IRAPs--this includes 
articulating what role, if any, the IRAPs will play in such outreach 
strategies. IRAPs would then be required to follow the policies and 
procedures of the SRE, should the SRE deem it appropriate to impose 
specific requirements on IRAPs. Paragraphs 29.22(f)(4) and (5) 
regarding the quality-control relationship between the SRE and the IRAP 
make clear that an SRE must ensure the IRAP's compliance with the SRE's 
requirements and must have policies and procedures for suspension or 
derecognition of an IRAP that fails to comply with the SRE's 
requirements.
    The Department acknowledges that it is not requiring SREs to 
monitor IRAPs' apprentice selection processes or to apply the Uniform 
Guidelines on Employee Selection Procedures. The SRE may develop 
policies and procedures to address apprentice selection processes if it 
so chooses. The Department declines to impose specific requirements 
because IRAPs must follow Federal, State, and local EEO laws, which 
prohibit discrimination in hiring, and because SREs must have policies 
and procedures in place to ensure that IRAPs do so. Similarly, though 
the Department is not requiring SREs to conduct barrier analyses for 
women and minorities, an SRE may choose to do so. Further, as discussed 
in Sec.  29.22(h), the Department is requiring SREs both to report to 
the Department and to make publicly available aggregate demographic 
information (such as sex, race, ethnicity) about participants. By 
collecting, reporting, and publishing such information, SREs will 
benefit from understanding the populations they are reaching through 
their outreach efforts and can adjust their efforts accordingly, 
including by providing additional support to IRAPs if they opt to do 
so. The Department may also request any information under Sec.  29.23 
that it deems necessary to determine whether the requirements of this 
paragraph are met. The Department has determined that these 
requirements, in conjunction with the quality-control and quality-
assurance processes set forth in this rule, are sufficiently robust to 
ensure that IRAPs have additional support and assistance to understand 
and comply with their legal obligations--though regardless of 
participation as IRAPs these employers should already be complying with 
applicable laws. Simultaneously, IRAPs will benefit from an SRE's 
ability to conduct more extensive outreach efforts to diverse 
populations and to offer any needed support and assistance.
    With respect to requiring SREs to verify that IRAPs conduct 
outreach and recruitment activities to all potential workers in a 
program's region, as mandated by 29 CFR 30.3(b)(3), the Department 
declines to impose such a requirement. As discussed above, the SRE is 
the entity primarily responsible for determining in what manner 
comprehensive outreach will be conducted and by whom. The SRE itself 
may decide to be responsible for outreach, rather than placing such 
responsibility on its IRAPs.
    Additionally, the Department declines to apply the language of 29 
CFR 30.3(b)(3) to SREs because the prescriptive nature of 29 CFR 
30.3(b)(3)'s requirements for universal outreach and recruitment may 
not be universally applicable to or feasible for SREs given the 
potential diversity of SREs in terms of size, the industry(ies) in 
which they will be recognizing IRAPs, how many IRAPs they will be 
recognizing, and their geographic reach. The Department determined that 
the exact requirements for recruitment and outreach are best determined 
by the SRE within the framework and requirements set forth by the 
Department.
    A State Agency commented that it is in a better position than SREs 
to provide training and outreach to promote IRAPs, noting that the 
responsibility placed on SREs could be burdensome and potentially pose 
a conflict of interest for an entity focused on approving IRAPs. 
Similarly, a commenter stated that Workforce Development Boards could 
serve a brokering role in helping SREs establish relationships and 
referral processes with existing community-based providers. The 
commenter supported the Department's position to require SREs to engage 
in recruitment, stating that SRE outreach would increase the chances 
that IRAPs result in apprenticeship programs that reflect the 
communities in which they are located. Another commenter also supported 
the Department's decision to make SREs responsible for ensuring that 
EEO requirements are met, noting the Department's approach allows small 
businesses to focus on serving apprentices while also ensuring that 
their apprentices are protected from discrimination. Other commenters 
urged outreach to community-based organizations and education 
providers.
    The Department agrees with commenters' observations that SREs can 
partner with others, such as States, networks, community partners, and 
industry partners, to create and implement comprehensive outreach 
strategies to reach diverse populations that may participate in IRAPs. 
The rule allows for such flexibility, and the Department encourages 
SREs to draw upon their relationships to conduct broad outreach and 
thereby increase participation in apprenticeships, especially in light 
of the skills gap and the opportunity it presents to involve previously 
sidelined workers. The Department anticipates that SREs' policies and 
procedures would largely reflect the needs of the employers offering 
IRAPs. For example, an SRE that primarily works with large corporations 
may devolve requirements for outreach to the extent fulsome recruiting 
programs already exist at these corporations. An SRE that works with 
smaller employers may itself create promotional materials and circulate 
opportunities within its network, schools, community organizations, and 
other membership groups that have not historically considered 
apprenticeships. With respect to the concern that SREs are not as well-
positioned to be tasked with outreach responsibilities, the Department 
anticipates that SREs will

[[Page 14334]]

structure their policies and procedures in a way that utilizes their 
existing partnerships and resources.
    A commenter recommended that the Department not impose any outreach 
requirements on the SRE. Rather, the commenter recommended that the SRE 
impose such requirements on the IRAPs by requiring them to attest or 
provide written documentation that they are adhering to Federal, State, 
and local laws pertaining to EEO, are proactively seeking ``to reach 
diverse populations that may participate'' in the IRAP program, and 
have established policies against ``harassment, intimidation, and 
retaliation.'' The commenter urged the Department to place the 
responsibility for compliance with EEO requirements on the IRAP rather 
than the SRE because the SRE should serve a compliance and assistance 
role rather than function as an enforcer of human resources policies 
and EEO laws. The commenter expressed concern about SREs bearing 
liability for the conduct of their IRAPs. Another commenter also 
cautioned the Department against prescribing any additional EEO 
requirements in this rule.
    The Department intentionally placed outreach obligations on the 
SRE, because it anticipates that the SRE may have a broader reach and 
more resources to provide outreach to diverse populations on behalf of 
all of its IRAPs, which would be especially beneficial for smaller 
employers. The Department emphasizes that SREs bear the responsibility 
for complying with this paragraph, including having policies and 
procedures that require IRAPs' adherence to applicable Federal, State, 
and local laws pertaining to EEO. The SRE must facilitate such 
adherence through its policies and procedures regarding potential 
harassment, intimidation, and retaliation. Regarding the concern that 
SREs will be held responsible for their IRAPs' actions, the Department 
notes that the employer offering the IRAP, not the SRE, has the 
employment relationship with the apprentice, as discussed in Sec.  
29.22(a)(4)(x) and (g). Depending on relevant law, the employer would 
incur liability for violations of any applicable EEO laws just as it 
might for other types of workers. The Department emphasizes, however, 
that it could take action to suspend or derecognize an SRE if it deems 
that the SRE has failed to substantially comply with its 
responsibilities under this subpart, as discussed in Sec.  29.27, 
including any failure to comply with the requirements of Sec.  
29.22(i). The Department intends that an SRE tailor its assistance to 
IRAPs based on the reasonably known needs of the employers offering 
IRAPs recognized by the SRE.
    Finally, the SRE is also required to assign responsibility to an 
individual to assist IRAPs with matters relating to this paragraph. For 
example, an SRE could designate a staff member in its human resources 
department to address questions from employers participating in its 
IRAPs. The Department did not receive any specific comments on this 
clause other than comments already discussed above. Thus, the 
Department has adopted Sec.  29.22(i) as proposed.
SRE Policies and Procedures for Addressing Complaints Against IRAPs
    Paragraph (j) of Sec.  29.22 was added to the final rule. This 
paragraph requires that an SRE have policies and procedures for 
addressing complaints against IRAPs. Complaints may be filed by 
apprentices, prospective apprentices, an apprentice's authorized 
representative, a personnel certification body, or an employer. SREs 
must make publicly available a list of the aggregated number of 
complaints pertaining to each IRAP in a format and frequency prescribed 
by the Administrator.
    Several commenters suggested that the rule be amended to allow 
complaints to be filed against IRAPs. One commenter noted that there is 
no reason that an apprentice would have a basis to file a complaint 
against the SRE, and that complaints are much more likely to concern 
IRAPs. Another commenter stated that an apprenticeship program requires 
an evolving environment, which is often driven by complaints from 
apprentices and training agents. Another commenter raised concerns that 
an apprentice would have no recourse to resolve a complaint against an 
IRAP if the SRE were improperly influenced by bribes or other 
inducements. The commenter suggested that procedures be implemented to 
allow apprentices to file complaints against an IRAP in a manner that 
parallels Sec.  29.12(c) in subpart A. Several commenters proposed that 
a process similar to proposed Sec.  29.26 (finalized as Sec.  29.25) be 
implemented that would allow for apprentices to file complaints 
regarding an IRAP with the Department. A commenter proposed that the 
Department publish a description of all complaints filed against IRAPs 
and the result of the complaint.
    The proposed form contained a requirement for SREs to have a 
complaint and appeals process, but the proposed form was removed from 
the final rule for the reasons described above. The Department agrees 
with commenters that the final rule should include a process to file 
complaints against an IRAP, and therefore has added Sec.  29.22(j) to 
the final rule. The Department also agrees with the commenters who 
noted that apprentices are more likely to have complaints against IRAPs 
than SREs, and that apprenticeship programs may improve on the basis of 
complaints filed and feedback given. The Department weighed these 
concerns in adding paragraph (k) to the final rule. The Department 
determined, however, that SREs would be in the best position to resolve 
complaints involving IRAPs, because SREs recognize IRAPs and are 
responsible for remaining in a quality-control relationship with the 
IRAP consistent with the requirements of this rule. The Department has 
no reason to believe that bribes or inducements would be offered to 
SREs to impact the outcome of complaints against IRAPs. An allegation 
of improper conduct on the part of an SRE would be addressed through 
the complaint and review process against SREs in Sec. Sec.  29.25 and 
29.26.
    The Department has determined that publishing a description of all 
complaints and their outcomes would be particularly difficult to 
administer. Many complaints may involve personal identifying 
information or sensitive details. However, the Department agrees that 
the existence of complaints against an IRAP is a useful measure that 
apprentices may weigh in electing to participate in a particular IRAP. 
For that reason, the Department has elected to require that SREs 
publish the aggregated number of complaints against each IRAP in a form 
and frequency prescribed by the Administrator.
Providing Notice of the Right To File Complaints
    Paragraph (k) of Sec.  29.22 has been added the final rule. It 
requires an SRE to notify the public about the right to file a 
complaint with the SRE according to the process provided for in Sec.  
29.22(j) above. This paragraph reincorporates the list of entities in 
paragraph (j) that may file a complaint, as well as the requirement 
that any complainant be associated with the IRAP against which the 
complaint is filed. This requirement has been added to increase 
transparency and to inform the public about who has the right to file a 
complaint.
    One commenter proposed that SREs be required to proactively inform 
apprentices, employers, and others about their rights to file a 
complaint. The Department agrees with the comment and therefore added 
paragraphs (k) and (l) of Sec.  29.22 to the

[[Page 14335]]

final rule. The Department decided to require notification to the 
public to emphasize that complaint procedures should be broadly 
disclosed. As with Sec.  29.22(j) above, an SRE's actual complaint 
processes and procedures must only extend to apprentices, prospective 
apprentices, an apprentice's authorized representative, a personnel 
certification body, or employers that are associated with the IRAP for 
the reasons explained above.
    Paragraph (l) of Sec.  29.22 was added to the final rule. It 
requires that an SRE notify the public about the right to file a 
complaint against it with the Administrator as set forth in Sec.  
29.25. The requirement was added because SREs were determined to be in 
the best position to publicize the right to file such complaints.
SRE Notice of Derecognition
    Paragraph (m) of Sec.  29.22 is a new paragraph that was added to 
the final rule. This paragraph requires an SRE that has received notice 
of derecognition pursuant to Sec.  29.27(c)(1)(ii) or (3) to inform 
IRAPs and the public of its derecognition status. As discussed below in 
Sec.  29.28, Derecognition's Effect on Industry-Recognized 
Apprenticeship Programs, a few commenters expressed concern over lack 
of specific notification to IRAPs and impacted apprentices when the 
Department derecognizes an SRE. One commenter suggested that the 
Department should notify not just the SRE but also the IRAPs and 
associated apprentices under the SRE of this action.
    The Department shares commenters' general concerns regarding 
notification to IRAPs and impacted apprentices when an SRE has been 
derecognized. As discussed below in Sec.  29.28, Derecognition's Effect 
on Industry-Recognized Apprenticeship Programs, the final rule requires 
the Administrator to update the publicly available list of SRE status 
to include derecognition, and to notify impacted IRAPs. Additionally, 
to maximize opportunities for impacted IRAPs and the public to learn 
about an SRE's derecognition status, the Department has added 
requirements for SREs regarding notification about derecognition. Final 
Sec.  29.28(m) requires SREs to notify impacted IRAPs and to inform the 
public of their derecognition status. The Department may issue 
instructions that provide operational details for an SRE's notification 
of IRAPs and the public. Any such instructions will be available on a 
Departmental website so that SREs, IRAPs, and the general public can 
easily access the information.
SRE Notice of Fees Charged to IRAPs
    Paragraph (n) of Sec.  29.22 was added to the final rule. This 
paragraph requires an SRE to publicly disclose any fees it charges to 
IRAPs. The fee information should be in an electronic format that is 
easily accessible to the public; for example, an SRE could provide this 
information on its website. This requirement was not in the proposed 
rule. In the proposed rule, the Department stated in the economic 
analysis that it anticipates that SREs may charge a fee to IRAPs to 
help offset their costs, and that such a fee is ``neither required nor 
prohibited.''
    Multiple commenters expressed concern about the lack of 
transparency and oversight of SREs and urged the Department to include 
stronger transparency and oversight provisions in the final rule.
    The Department took the recommendations for greater transparency 
under advisement, and under paragraph (n) is requiring SREs to publicly 
disclose their fee information because this information will increase 
transparency and help IRAPs make informed decisions. Information about 
SRE fees should help potential IRAPs decide whether to participate in 
the program, and if so, from which SRE to seek recognition.
    One commenter expressed appreciation for the Department's 
introduction of a ``fee structure'' and recommended that the Department 
not set a program-wide average fee because each industry, occupation, 
and SRE will have different costs. Another commenter stated that the 
lack of a requirement for IRAPs to make a financial contribution to the 
operation of SREs ``raises serious concerns regarding the long-term 
viability of this system.'' In contrast, a commenter encouraged the 
Department to prohibit SREs from charging fees, arguing that such fees 
may lead to a ``pay to play'' apprenticeship system. Two commenters 
questioned why the Department proposed an apprenticeship system that 
will allow SREs to charge fees, thereby creating a significant burden 
for employers, when OA charges no fees for the same services. A 
commenter argued that SRE fees might block participation by employers 
in distressed areas with fewer resources. Several commenters expressed 
concern that, in their view, allowing SREs to charge fees would create 
a potential access barrier for small businesses. A commenter similarly 
expressed concern that some associations are unlikely to ask their 
members to pay an additional application fee that would fall outside 
other membership costs, thereby resulting in substantially higher costs 
for such entities should they choose to participate as SREs.
    In light of the wide variety of entities that may become recognized 
SREs and the wide variation in costs SREs will incur, the Department 
has maintained its stance in the final rule of neither requiring nor 
prohibiting SRE fees and allowing each SRE to set its own fees. The 
IRAP is designed to be a market-driven program. In the credentialing 
industry, many credentialing entities charge an application fee, an 
annual fee, or both to recoup their expenses. Likewise, some SREs may 
find it necessary to charge fees to recoup their expenses. In contrast, 
some SREs may already charge a membership fee unrelated to this 
program, and therefore choose not to charge an additional fee directly 
tied to the recognition of IRAPs. Since participation in the IRAP is 
not compulsory, any costs incurred by SREs and IRAPs will be incurred 
voluntarily.
    A commenter questioned ``the ethics'' of requiring local partners 
such as community colleges, high schools, and non-profit organizations, 
to pay fees to SREs for program approval.
    Given that this is designed to be a market-driven program, the 
Department is neither requiring nor prohibiting SRE fees. Accordingly, 
an SRE may choose not to charge a fee to any IRAP or it may choose to 
waive its fees for educational institutions or non-profit 
organizations. And, based on the presence or absence of SRE fees, an 
educational institution or non-profit organization may seek recognition 
from a different SRE or may choose not to participate at all. The 
Department believes this level of flexibility is likely to result in 
higher quality apprenticeships, and in more entities participating in 
IRAP initiatives and seeking to address the skills gap.
    Several commenters expressed concern about potential conflicts of 
interest related to fees and their effect on an SRE's decisions about 
which programs to recognize or derecognize.
    To alleviate concerns about conflicts of interest, the Department 
has added a provision in Sec.  29.21(b)(6) that requires prospective 
SREs to demonstrate in their application that they can effectively 
mitigate any potential or actual conflicts of interest. As explained 
above, the Department added this provision in an effort to ensure that 
each SRE applicant addresses any potential conflicts of interest 
through specific policies, processes, procedures, structures, or a 
combination thereof that will be assessed by the Department before the 
entity may be recognized as an SRE.

[[Page 14336]]

    One commenter recommended that the Department require SREs to 
submit information on their business plans, including how they will 
finance the costs of conducting quality assurance activities.
    As described above, paragraph (b)(3) of Sec.  29.21 was amended to 
incorporate a requirement for an entity to indicate in its application 
that it has the financial resources to operate as an SRE. The 
Department anticipates that requiring a prospective SRE to address its 
financial resources at the application stage will help ensure the 
future financial stability of an SRE. In its application, a prospective 
SRE is welcome to mention whether it plans to rely on fees to recoup 
its expenses, and the Department expects that many SREs would rely on 
such fees.
SRE Records Retention Responsibilities
    Paragraph (o) of Sec.  29.22 has been added to the final rule. This 
paragraph requires SREs to ensure that records regarding each IRAP, 
including whether the IRAP has met all applicable requirements of this 
subpart, are maintained for a minimum of 5 years.
    Many commenters argued that the Department lacks authority under 
the NAA to create the IRAP model. The basis for some of these concerns 
is the need for government oversight of apprenticeship. Several 
commenters expressed concern that the proposed rule does not provide 
adequate quality assurance of SREs and IRAPs. While commenters 
generally agree that it is necessary for information to be collected 
for the Department to effectively perform its functions with respect to 
IRAPs, some commenters expressed concerns about establishment of overly 
burdensome reporting or data collection requirements.
    The Department has considered the various comments received and 
agrees that the final rule should clarify the Department's oversight of 
SREs and strengthen the regulatory requirements pertaining to SRE 
record retention. For this reason, the Department made changes to Sec.  
29.22 by adding this paragraph. In the proposed rule, the SRE record 
retention requirement was included in the Industry-Recognized 
Apprenticeship Program Standards Recognition Entity Application Form. 
This record maintenance requirement, in conjunction with the provision 
in Sec.  29.23(c) specifying that the Administrator may use information 
described in Sec.  29.22 to discharge recognition, review, suspension, 
and derecognition duties, clarifies and strengthens the Administrator's 
oversight role with respect to quality assurance. In addition, it helps 
demonstrate that the Department is promoting standards of 
apprenticeship, consistent with the directions in the NAA, by requiring 
additional accountability from SREs. Requiring SREs to retain records 
will significantly aid the Administrator in ensuring that SREs are 
recognizing apprenticeship programs that adhere to the standards of 
high-quality apprenticeships. Similarly, this record retention 
requirement complements and strengthens the reporting requirements 
described in Sec.  29.22(h). As explained earlier in this preamble, the 
Department has broad discretion and authority under the NAA in 
formulating and encouraging apprenticeship standards and programs. The 
record retention requirement is not expressly mandated by the NAA. The 
Department views the record retention requirement, among many other 
requirements promulgated by this final rule, as complying with and 
exceeding the open-ended standards in the NAA.
SRE Requirement To Follow Policies and Procedures and Notify 
Administrator of Significant Changes
    Paragraph (p) of Sec.  29.22 was added to the final rule. This 
paragraph requires SREs to follow any policy or procedure submitted to 
the Administrator or otherwise required by this subpart, and to notify 
the Administrator when it makes significant changes to its policies or 
procedures.
    Many commenters argued that the Department lacks authority under 
NAA to create the IRAP model. The basis for some of these concerns is 
the need for government oversight of apprenticeship. In addition, many 
commenters expressed concern that the proposed rule does not provide 
adequate quality assurance of SREs and IRAPs. Some commenters 
encouraged the Department to coordinate with other Federal agencies to 
align policies and procedures. Moreover, some commenters suggested that 
the Department identify specific policies and procedures. Other 
commenters expressed support for allowing SREs flexibility to customize 
their approach to changing industry needs.
    The Department has considered the various comments received and 
agrees that the final rule should clarify the Department's oversight of 
SREs and strengthen the regulatory requirements pertaining to SRE 
policies and procedures. For this reason, the Department made changes 
to Sec.  29.22 by adding this paragraph. In the proposed rule, the SRE 
policy and procedure requirements were included in the Industry-
Recognized Apprenticeship Program Standards Recognition Entity 
Application Form. The Department agrees with commenter concerns about 
SREs maintaining flexibility to establish policies and procedures. 
Thus, specific requirements were not added to the final rule. Paragraph 
(p)'s policies and procedures requirement, in conjunction with the 
provision in Sec.  29.23(c) specifying that the Administrator may use 
information described in Sec.  29.22 to discharge recognition, review, 
suspension, and derecognition duties, clarifies and strengthens the 
Administrator's oversight role with respect to quality assurance. These 
measures are consistent with and an appropriate way for Department to 
follow the NAA's directive to promote standards of apprenticeship and 
bring together employers and labor for the formulation of programs of 
apprenticeship. By enhancing oversight and accountability of SREs, 
these measures help the Department ensure that SREs are recognizing 
apprenticeship programs that adhere to the standards of high-quality 
apprenticeship.
Conflicts of Interest
    Proposed paragraph (e) of Sec.  29.22 was not carried forward into 
the final rule. As proposed, it would have prohibited SREs from 
recognizing their own apprenticeship programs unless they provide for 
impartiality and mitigate conflicts of interest via specific policies, 
processes, procedures, structures, or a combination thereof. The 
proposed paragraph was revised and moved to Sec.  29.21(b)(6) in 
response to comments, as explained below.
    Numerous commenters suggested that SREs should not be allowed to 
recognize their own programs as IRAPs. One commenter argued that doing 
so would lead to fraud, waste, and abuse, and would compromise program 
integrity. Multiple commenters questioned whether an accreditation 
entity could ever accredit its own programs without introducing bias, 
with one commenter suggesting that the American Bar Association or 
Accreditation Council for Graduate Medical Education would never be 
allowed to own or consult for law or medical schools, respectively. A 
second entity suggested that accreditation bodies should never be in a 
position to regulate their own products. Other commenters argued that 
the proposed rule's suggestion that SREs establish firewalls would be 
insufficient to address conflicts. A commenter stated that an 
apprentice aggrieved by an IRAP may have no recourse other than to file 
a complaint with an SRE that, in some

[[Page 14337]]

cases, could effectively be the same entity.
    Other commenters suggested that the prohibition on an SRE 
recognizing its own IRAPs needed to be strengthened. One commenter 
proposed that Section V.E. of the proposed form needed strengthening 
because it allowed entities to attest that no conflicts were present. A 
different commenter requested that the Department identify the ``bright 
lines'' in relation to the roles of SREs versus employers, institutions 
of higher education, and other partners that are necessary to develop 
high-quality apprenticeships. Several commenters proposed that 
officers, directors, and managers of SREs should be prohibited from 
owning or controlling any entities offering IRAPs. Still other 
commenters requested that the Department impose clear standards 
regarding impartiality and conflict minimization.
    One commenter proposed that in light of proposed Sec.  29.25, an 
SRE could recognize its own program to receive expedited registration 
and benefits under subpart A, including Davis-Bacon wage rates and 
funding under WIOA.
    Several commenters expressed a concern that proposed paragraph (e) 
seemed to allow SREs to approve apprenticeship programs over other 
sponsors who may be competitors. One commenter suggested that allowing 
a self-interested entity to regulate a competitor violates due process.
    Still other commenters suggested that the conflict of interest 
approach in the proposed rule was reasonable. One commenter suggested 
that the approach struck the appropriate balance between putting in 
place meaningful measures to mitigate conflicts while simultaneously 
minimizing burdens. One commenter noted that the Department's 
provisions for demonstrating impartiality appeared similar to those in 
ANSI 17024. Another commenter noted the importance of allowing SREs to 
offer consultative services in order to expand apprenticeship 
opportunities, and the commenter urged the Department to take a 
reasonable approach to meeting the SRE impartiality requirements.
    The Department agrees that an SRE recognizing its own programs 
presents actual or potential conflicts of interest, so the Department 
has decided to require that all SREs demonstrate that they can 
effectively mitigate such conflicts of interest. To accomplish this, 
proposed Sec.  29.22(e) was moved to Sec.  29.21(b)(6) where other 
application requirements to become a recognized SRE are addressed. The 
Department has decided not to prohibit SREs from recognizing their own 
IRAPs, because the Department has found such a prohibition unnecessary 
if an SRE mitigates the inherent conflicts of interest according to the 
policies and procedures submitted with its application for recognition. 
In addition, many types of companies, such as professional services 
firms, routinely mitigate conflicts of interest.
    As part of the application process, the Department intends to 
require, at a minimum, that each entity disclose potential conflicts 
and provide a firewall between SRE and prospective IRAP staff, or 
assign key tasks to an independent third party. The Department expects 
that a firewall would prohibit program designers from involvement in 
recognition decisions and would prohibit SRE personnel who receive 
complaints from reporting through the same supervisory channels as IRAP 
managers. To ensure that SREs are recognizing apprenticeship programs 
that adhere to the standards of high-quality apprenticeships, the 
Department envisions that SREs' processes would further require that 
the recognition, quality-control, and suspension and derecognition 
processes and procedures are designed and administered to treat any 
nonaffiliated IRAPs equitably. DOL intends to enforce such processes, 
procedures, or structures involving potential conflicts of interest 
through the quality assurance process in 29.23 and the review process 
in 29.26.
    The Department shares the concern that the right of an apprentice 
to file a complaint under Sec.  29.22(j) and (k) could be jeopardized 
where the IRAP and the SRE are related entities. The Department 
anticipates that SREs' conflict of interest policies and procedures 
will address this possibility, guarantee fairness, and guarantee an 
apprentice the right to file a complaint without being subject to 
retaliation. An apprentice may also file a complaint against an SRE, in 
accordance with Sec.  29.25, that could lead to the Administrator's 
review of the SRE under Sec.  29.26. Additionally, certain Federal, 
State, and local laws, such as EEO laws, prohibit retaliation for 
filing a complaint and, if applicable, provide apprentices another 
avenue of relief.
    The Department agrees that the conflict-of-interest provisions in 
proposed Sec.  29.22(e) needed strengthening, which the Department has 
accomplished by requiring every SRE to address conflicts of interest in 
their applications. The Department has also eliminated the form in the 
proposed rule that contained an attestation relating to conflicts of 
interest, and has replaced the attestation with the substantive 
requirements now contained in Sec.  29.21(b)(6). The Department agrees 
that officers, directors, and managers of SREs that own or control 
prospective IRAPs would present a potential conflict of interest. The 
Department expects that such conflicts would be disclosed and mitigated 
as part of the application requirement imposed by the final text of 
Sec.  29.21(b)(6).
    In response to the comment concerned with an SRE's ability to 
recognize its own program to receive expedited registration and 
benefits under subpart A, the Department notes that proposed Sec.  
29.25 was not carried forward into the final rule, as explained below. 
Accordingly, IRAPs will not be able to receive expedited registration 
under subpart A.
    The Department does not share the concern that an SRE's ability to 
recognize its own programs would somehow allow SREs to regulate 
competitors. Seeking recognition as an IRAP is a voluntary process, and 
any employer may decide to meet its workforce training needs by using 
registered apprenticeship under subpart A, industry-recognized 
apprenticeship under subpart B, or any other model of the employer's 
choosing. In fact, even without this regulation, the Department expects 
that various entities could--and would, given the nature of the skills 
gap and the opportunities it represents--develop relationships and 
apprenticeship programs to help equip America's workers with the skills 
they need.
    The Department appreciates the opinion of commenters who found the 
Department's proposed approach to put in place meaningful but not 
burdensome protections and who found the Department's proposed approach 
to be similar to impartiality requirements in ANSI 17024. The 
Department has revised the text of proposed Sec.  29.22(e) in the final 
rule, as discussed above, in order to strike a balance between 
minimizing burdens while mitigating conflicts of interest.
    Paragraph (f) of proposed Sec.  29.22 would have required that an 
SRE either not offer services, including consultative and educational 
services for example, to IRAPs that would impact the impartiality of 
the SRE's recognition decisions, or the SRE must provide for 
impartiality, and mitigate any potential conflicts of interest via 
specific policies, processes, procedures, structures, or a combination 
thereof. This proposed paragraph was amended and moved to Sec.  
29.21(b)(6) in response to comments, as explained below.
    Numerous commenters suggested that SREs should be prohibited from 
offering

[[Page 14338]]

consultative services. One commenter suggested that the prohibition on 
offering consultative services should be extended to related entities 
or subsidiaries of the SRE. One commenter proposed that consultative 
services be further defined to make the paragraph clearer. A different 
commenter questioned who would be able to provide consultative services 
to IRAPs, other than SREs.
    One commenter proposed that a conflict of interest that develops 
after an SRE's recognition should constitute a substantive change that 
must be submitted to the Administrator. Several commenters proposed 
that the potential conflicts and the mitigation processes, procedures, 
or structures be subject to a public disclosure requirement. One 
commenter suggested that best practices for preventing conflicts be 
collected in an online repository. Another commenter proposed that all 
communications between SREs and IRAPs be made publicly available.
    Other commenters suggested that evidence of conflicts should 
trigger heightened scrutiny from the Department. A commenter questioned 
how often the Department would identify conflicts of interest.
    Numerous commenters suggested that conflicts beyond those discussed 
in proposed Sec.  29.22(e) and (f) could be present. Several commenters 
pointed to the potential for financial conflicts. Multiple commenters 
suggested that SREs will have a financial incentive to recognize as 
many IRAPs as possible. One such commenter suggested that SREs provide 
a plan for how they will sustain losses from reduced fees if the SRE 
must derecognize IRAPs. The commenter suggested that such a financial 
tension has been a central challenge for the higher education 
accreditation system. A different commenter suggested that subpart B 
may develop into a pay-to-play apprenticeship system whereby only 
employers with significant resources are able to afford recognition. A 
commenter suggested that the financial incentive to seek fees throws 
into question the impartiality and objectivity of an SRE's processes, 
procedures, or structures.
    One commenter suggested that the Department establish conflict of 
interest mitigation requirements specific to the type of organization 
identified in Sec.  29.20(a)(1). One commenter proposed an extensive 
list of proposed revisions to the rule for addressing conflicts of 
interest. Among the proposals were that only non-profit organizations 
should be eligible to become recognized SREs, that all SRE expenses 
related to standards-setting and training be paid by a trust, that SREs 
and IRAPs be required to provide to the Department any documentation 
relating to compliance, and that the Department should develop model 
polices to address anti-harassment, whistleblower protections, HIPAA 
compliance, conflicts of interest, complaints, intellectual property, 
lobbying, expenses, and gifts and entertainment.
    Still other commenters suggested that the conflict of interest 
approach in the proposed rule was reasonable. One commenter suggested 
that the approach strikes the appropriate balance between putting in 
place meaningful measures to mitigate conflicts while simultaneously 
minimizing burdens. One commenter noted that the Department's 
provisions for demonstrating impartiality appeared similar to those in 
ANSI 17024. Another commenter noted the importance of allowing SREs to 
offer consultative services in order to expand apprenticeship 
opportunities, and the commenter urged the Department to take a 
reasonable approach to meeting the SRE impartiality requirements.
    The Department agrees that SREs are likely to be in the best 
position to offer consultative services to IRAPs and therefore decided 
not to prohibit the practice in the final rule. Were SREs to be 
prohibited from offering such services to employers or prospective 
IRAPs, the restriction could stifle the expansion of high-quality 
apprenticeships. In order to strengthen the provisions in proposed 
Sec.  29.22(f), the Department has moved the requirement to Sec.  
29.21(b)(6), thereby requiring every SRE to address conflicts of 
interest arising from offering services in the SRE's application. 
Proposed Sec.  29.22(e) and (f) have been combined into one paragraph 
in Sec.  29.21(b)(6) because proposed Sec.  29.22(e) and (f) addressed 
different potential conflicts, but imposed the same substantive 
requirement of mitigating such conflicts through policies, procedures, 
structures, or a combination thereof. The text of proposed Sec.  
29.22(f) has also been amended to clarify that an SRE certifying its 
own IRAPs or offering consultative services are nonexclusive examples 
of the types of conflicts that an entity applying to be an SRE must 
address. The language in proposed Sec.  29.22(f) has been further 
broadened by clarifying that providing services to actual or 
prospective IRAPs may present a conflict of interest.
    While the Department has determined that related entities or 
subsidiaries need not be prevented from offering services, the 
Department agrees that the actions of entities related to the SRE could 
lead to potential conflicts of interest. To address this concern, the 
Department has added Sec.  29.21(b)(4) to the final rule. This 
paragraph requires entities applying to become recognized SREs to 
disclose relationships with subsidiaries or related entities that could 
impact the SRE's impartiality. The Department intends that such actual 
or potential conflicts would be mitigated by providing processes, 
procedures, structures, or a combination thereof as required by Sec.  
29.21(b)(6).
    The Department agrees that ambiguity existed in the term 
``consultative services.'' The final rule deletes the term 
``consultative'' and instead requires that an SRE address its 
processes, procedures, structures, or a combination thereof for 
providing services to actual or prospective IRAPs. The Department has 
determined that any compensated service that SREs offer to actual or 
prospective IRAPs that is not required by this subpart and not 
described in the SRE's processes and procedures could present a 
potential conflict. The Department intends for ``services'' to be 
broader than ``consultative services'', and to apply to any type of 
advice, assistance, or consultation not required by this subpart for 
which the SRE seeks compensation. Services required by this subpart 
include, for example, recognizing or rejecting applications from IRAPs, 
collecting data from its IRAPs, and remaining in an on-going quality-
control relationship with its IRAPs, as well as any services included 
in the SRE's policies and procedures submitted to the Department. If, 
however, an SRE were to offer employers advice regarding credentialing 
or offer training courses to non-IRAPs, such services would fall within 
Sec.  29.21(b)(6), unless they were required by the processes and 
procedures submitted to the Department.
    The Department agrees with the commenter who suggested that a 
conflict of interest that develops after an SRE is recognized should 
constitute a substantive change that would result in the SRE updating 
its policies and procedures and notifying the Administrator. The 
language in proposed Sec.  29.22(e) and (f) required an SRE to either 
not recognize its own programs and not offer consultative services, or, 
that it describe in detail in its application how it would mitigate any 
potential conflicts of interest. The Department anticipates that some 
SREs may not know during the application process whether an affiliated 
employer, local, or other related entity may wish to apply for 
recognition or request services. The Department resolved this comment 
by requiring that all entities

[[Page 14339]]

mitigate conflicts of interest in their applications to become 
recognized SREs. In addition, the Department added Sec.  29.22(p) to 
the final rule, which requires that SREs follow all policies and 
procedures submitted to the Department and that SREs notify the 
Administrator when they make significant changes to their policies or 
procedures. Accordingly, an SRE could notify the Department in its 
application that the SRE will not recognize any related entity or 
subsidiary as an IRAP. If the SRE unexpectedly received an application 
for recognition from a related entity, but did not have policies and 
procedures in place sufficient to mitigate the conflict of interest, 
the SRE would not be allowed to recognize the prospective IRAP unless 
updated policies and procedures were provided to the Administrator.
    The Department has determined that requiring SREs to publicly 
disclose their conflict of interest procedures for compilation in a 
publicly available repository would be difficult to administer for a 
variety of reasons. The Department anticipates that such policies and 
procedures would be highly individualized such that a State agency's 
procedures would be of little benefit to a non-profit organization. 
Furthermore, such procedures would normally include potentially 
sensitive information about business operations as well as employees or 
officers that would be burdensome to redact on a rolling basis. The 
Department has similarly determined that requiring all communications 
between SREs and IRAPs to be publicly disclosed would constitute an 
immense and unnecessary burden.
    The Department agrees that conflicts of interest may require 
heightened scrutiny of applicants, and the Department strengthened the 
conflict of interest requirements related to the application, as 
explained above. The Department did not establish a cycle for 
identifying conflicts of interest. Most Departmental review of 
potential conflicts of interest subsequent to an SRE's recognition 
would likely occur because an SRE provided updated processes and 
procedures under Sec.  29.22(p), as part of the quality assurance 
processes provided for in Sec.  29.23, and through the review process 
under Sec.  29.26.
    The Department agrees that potential or actual conflicts of 
interest could arise beyond an SRE recognizing its own IRAPs or 
offering services to current or prospective IRAPs. The Department, 
therefore, has amended the regulatory text of the final rule to make 
the list of conflicts that must be addressed nonexhaustive. Regarding 
potential financial conflicts, the Department notes that entities must 
demonstrate their ability to be financially stable for the next 5 years 
under Sec.  29.21(b)(3). The Department will ensure that an entity's 
application accounts for the possibility of having to suspend or 
derecognize IRAPs if necessary, thereby ensuring that its financial 
viability is not based on certifying as many IRAPs as possible at the 
expense of recognizing only high-quality programs.
    The Department removed the attestation in Section V.E. of the 
proposed Industry-Recognized Apprenticeship Program Standards 
Recognition Entity Application Form that would have addressed conflicts 
of interest by requiring an attestation. By replacing the attestation 
in the proposed form with the application requirement in Sec.  
29.21(b)(6), the Department is requiring that entities must address 
actual or potential conflicts of interest in their applications or be 
ineligible for recognition from the Department. In addition, the 
Department requires in Sec.  29.21(a) that all entities attest that 
information provided is true and accurate. Thus, an entity that makes a 
false statement regarding conflicts of interest in its application may 
still be subject to potential criminal penalties under 18 U.S.C. 1001.
    The Department agrees that different types of entities that are 
eligible to become recognized SREs could present different potential 
conflicts of interest. The Department anticipates that applicants will 
be in the best position to identify and mitigate actual or potential 
conflicts of interest that may be unique to the type of entity 
applying. No change to the text has been made in response to this 
comment.
    The Department agrees that SREs should be required to provide 
requested materials to the Administrator, so the wording in Sec.  
29.23(b) has been changed from should to must. However, no change to 
the text has been made to require IRAPs to share information with the 
Department, because the Department collects no information directly 
from IRAPs. The Department declines to limit SRE eligibility to non-
profit organizations or to require that operating expenses be paid from 
a trust. The Department envisions that model policies will necessarily 
be situation-specific and that a model policy for a consortia of 
private entities may not meet the needs of model policies for an 
educational institution or community colleges. Model policies would 
necessarily be dependent on the type of entity, the variety of actual 
and potential conflicts present, and the geographic scope of the 
entity. The Department cannot provide model policies tailored to each 
type of organization and each type of potential conflict in the 
preamble to the final rule.
Section 29.23 Quality Assurance
    Section 29.23 provides that the Administrator may request and 
review materials from an SRE to determine whether the SRE is in 
conformity with the requirements of the subpart and may conduct 
periodic compliance assistance reviews. It also states that SREs must 
provide requested materials, consistent with Sec.  29.22(a)(3), and 
clarifies that the Administrator may use the information described in 
this subpart to recognize, review, suspend, or derecognize SREs.
    Many commenters expressed concern that the proposed rule did not 
provide adequate monitoring and quality assurance of SREs and IRAPs. 
Commenters also warned that the proposed rule did not provide 
sufficient authority to the Department to take action when IRAPs fail 
to protect apprentices. A few commenters stated that the proposed rule 
lacked quality assurance mechanisms to hold IRAPs or SREs accountable 
for poor program outcomes. Other commenters faulted the Department for 
not including a quality assurance mechanism for direct review of IRAPs.
    The Department has made changes to Sec.  29.23(a) and (b) and added 
a new paragraph (c), as discussed further below, to strengthen its 
oversight of SREs. The Department acknowledges commenters' concerns 
about oversight of IRAPs. Nevertheless, the Department declines to add 
additional measures in this section for Departmental oversight of 
IRAPs. The Department believes that SREs, following all the 
requirements of this rule, are best situated to directly monitor IRAPs, 
especially given SREs' responsibilities for recognizing IRAPs, 
developing and implementing policies and procedures applicable to the 
industries and occupational areas in which they will be recognizing 
IRAPs, and ensuring that the IRAPs they recognize continue to meet the 
standards of high-quality apprenticeships as set forth by the 
Department. It is also worth noting that the Department will be 
collecting and assessing data about the performance of IRAPs, as 
discussed in Sec.  29.22(h). Further, as discussed in Sec.  
29.22(a)(4), the Department's standards of high-quality apprenticeship 
set forth the requirements for safeguarding the welfare of apprentices 
and ensuring quality training, progressively advancing skills, and 
industry-relevant credentials. As the rule makes clear, an

[[Page 14340]]

IRAP must comply with the requirements of high-quality apprenticeships 
and with its SRE's policies and procedures. The SRE must also establish 
a quality-control relationship with its IRAPs that meets the 
requirements of Sec.  29.22(f). This rule gives the responsibility of 
monitoring IRAP compliance to the SREs in the first instance; the 
Department then exercises its oversight authority to ensure that SREs 
and, by extension, the IRAPs they recognize are meeting the 
requirements of this subpart. Thus, the Department retains ultimate 
oversight authority of the IRAP program through its oversight of SREs. 
In response to several comments, discussed below, the Department has 
added language to Sec.  29.23 to clarify its quality assurance role.
    Commenters recommended that the Department require regular reviews 
and assessments of SREs and IRAPs by the Administrator. One commenter 
recommended that the Department conduct such assessments on a quarterly 
basis. Another commenter compared SREs to SAAs in the registered 
apprenticeship context and suggested that the Department similarly 
conduct assessments through on-site reviews, self-assessments, and 
reviews of SREs' policies and procedures.
    The Department agrees with commenters' suggestions regarding the 
Administrator's ability to conduct reviews of SREs, but not the 
mandated frequency, and has added that the Administrator ``may conduct 
periodic compliance assistance reviews of [SREs]'' to Sec.  29.23(a). 
The Department intends that these reviews be an assessment of the SRE's 
compliance with this subpart and an opportunity to provide assistance 
that the SRE may need to come into compliance with this subpart. The 
Department envisions engaging in a collaborative process with the SRE, 
as appropriate, to assist the SRE in achieving compliance prior to 
initiating any further review under Sec.  29.26. The Department also 
notes, however, that the results of a compliance assistance review 
could lead to a formal review under Sec.  29.26.
    The Department disagrees with the recommendation to mandate 
quarterly reviews of SREs. The Department believes that the quality 
assurance set forth in this section, including the Administrator's 
ability to request information when necessary, is sufficient. Quarterly 
reviews of SREs would be unduly burdensome, unnecessary, and unlikely 
to yield useful information. Rather, the yearly SRE reporting 
requirements in Sec.  29.22(h), combined with the Department's 
authority under this section to conduct periodic reviews of SREs and 
request information as needed is the most efficient manner for the 
Department to obtain relevant information and monitor compliance. The 
Department may also initiate a review of an SRE under Sec.  29.26 if it 
receives information indicating that the SRE is not in substantial 
compliance with this subpart or that it is no longer capable of 
continuing as an SRE.
    The Department has also made a minor modification to Sec.  29.23(a) 
to improve readability by changing ``to ascertain [SREs]' conformity'' 
to ``to ascertain their conformity.''
    Several commenters noted that the proposed rule only requires that 
the SRE ``should'' provide materials requested by the Administrator, 
suggesting an aspirational goal rather than a requirement to comply 
with the Administrator's requests. The Department has changed the 
language in Sec.  29.23(b) from ``should'' to ``must'' and added ``to 
the Administrator'' to clarify that SREs are required to provide any 
program information to the Administrator upon request.
    Another commenter recommended adding a provision to Sec.  29.23 
requiring that the Administrator regularly evaluate IRAPs using the 
performance data provided by SREs. Other commenters made similar 
suggestions about using data and performance metrics to monitor and 
evaluate IRAPs and SREs. The Department agrees with the commenters' 
recommendation to add an additional provision to Sec.  29.23 concerning 
data and performance information. To address this, the Department has 
added a new provision at paragraph (c): ``The information that is 
described in this subpart may be utilized by the Administrator to 
discharge the recognition, review, suspension, and derecognition duties 
outlined in Sec.  29.21(c)(1), Sec.  29.26, and Sec.  29.27 of this 
subpart.'' The Department has added this provision to clarify that any 
information collected under this subpart, which includes information 
provided to the Department under Sec.  29.22(h), may be used to monitor 
and evaluate SREs at the recognition phase, as a part of the 
Administrator's review of the SRE, or as a part of suspension or 
derecognition. The data and performance requirements detailed in 
29.22(h) also allow the Department to collect and review program-level 
outcomes. In performing quality assurance activities, the Administrator 
may learn or otherwise come into the possession of commercial or 
financial information of SREs, IRAPs, and any other entities serviced 
by these entities. FOIA exemption (b)(4) exempts from mandatory 
disclosure under FOIA trade secrets and certain commercial or financial 
information. The Trade Secrets Act prohibits the disclosure of trade 
secrets and confidential business information without legal authority. 
The Department will keep as private and confidential, and will not 
disclose, unless required by law, any information provided to the 
Department under this section that is ``both customarily and actually 
treated as private by'' the SRE or IRAP. Food Mktg. Inst. v. Argus 
Leader Media, 139 S. Ct. 2356, 2366 (2019).
    As for the comment about regularly assessing the data, the 
Department notes that it will utilize the data at SRE re-recognition, 
every 5 years. Otherwise, the Department may also assess data annually 
upon receipt of the required information from SREs, in response to a 
complaint against an SRE, or upon review of an SRE under Sec.  29.26. 
The Department has determined that there is no additional need to 
specify how frequently the Administrator will be assessing data and 
performance metrics.
Section 29.24 Publication of Standards Recognition Entities and 
Industry-Recognized Apprenticeship Programs
    Section 29.24 requires the Administrator to make publicly available 
a list of SREs and the IRAPs they recognize. Section 28.28 requires the 
Administrator to include an SRE's suspension on this list. As discussed 
below, final Sec.  29.28 now requires the Administrator to include 
derecognized SREs on this publicly available list mandated by Sec.  
29.24.
    A few commenters discussed Sec.  29.24. Commenters primarily sought 
clarification relating to implementation and maintenance of this list. 
Others recommended the Department make publicly available on a website 
many other types of documents associated with the SRE recognition 
process and performance data for IRAPs. Some commenters suggested more 
specificity with regard to how the Department will collect information 
necessary for the list, and the frequency and method by which the 
Department will make this list publicly available.
    The Department added information to expand the usefulness and 
purpose of the list. As discussed below, final Sec.  29.28(b) requires 
the Administrator to update this public list to reflect recognition, 
suspension, and derecognition of SREs and IRAPs. Accordingly, the 
Department has modified Sec.  29.24 to include SREs suspended and 
derecognized under Sec.  29.27, not just SREs favorably

[[Page 14341]]

recognized, as well as IRAPs that an SRE has suspended or derecognized 
under Sec.  29.22. The Department's publication of a list of SREs and 
IRAPs now serves two purposes: To inform the public, including 
apprentices and potential apprentices, of IRAPs that have been 
recognized by an SRE; and to apprise the public and IRAPs of any 
changes to an SRE's recognition status, including suspension and 
derecognition.
    The Department plans to provide SRE and IRAP recognition 
information in an easy-to-access, user-friendly format on the 
Department website. As SRE applications are reviewed and granted 
recognition, the Department will refresh this recognition information 
periodically, clearly noting the date of the most recent update. As 
discussed in Sec.  29.22(h), the Department agrees with commenters' 
concerns about additional transparency and is now requiring performance 
reporting directly to the Department. As for SRE application 
information, the Department responded to a number of concerns from 
commenters regarding the SRE application process in Sec.  29.21 by 
strengthening the required submissions for consideration by the 
Department.
    The Department encourages interested parties to check the 
Department's website frequently for the current list of SREs and IRAPs. 
Any clarifications about this list of SREs and IRAPs will be issued via 
the Department's website.
Proposed Sec.  29.25 (Expedited Process for Recognizing Industry 
Programs as Registered Apprenticeship Programs)
    In the NPRM, Sec.  29.25 proposed a process for the Administrator 
to consider IRAPs for expedited registration under subpart A's 
registered apprenticeship program whereby recognized IRAPs could have 
requested that OA register it within 60 calendar days of the 
Administrator's receiving all information necessary to make a decision. 
In this final rule, the NPRM's proposed provisions are not carried 
forth and are deleted. Accordingly, Sec. Sec.  29.26 through 29.31 of 
the NPRM have been redesignated in this final rule as Sec. Sec.  29.25 
through 29.30.
    While the Department received no comments supporting the proposed 
expedited registration process, some commenters questioned the purpose 
of the expedited registration proposal.
    One commenter asserted that the proposed rule provided no 
explanation as to why, if an IRAP seeks approval to become a registered 
apprenticeship program, it receives special treatment and is handled 
more expeditiously than any other apprenticeship program. Another 
commenter suggested that the final regulations should specify, 
explicitly and clearly, the ineligibility of IRAP participants from 
Davis-Bacon and State prevailing-wage coverage. Other commenters 
asserted that an expedited process for IRAPs would be insufficient to 
ensure IRAPs meet the same quality standards as registered 
apprenticeships, put organizations seeking registration under subpart A 
at a disadvantage, and lessen the apprenticeship opportunities for 
women, minorities, and other protected classes. Other commenters 
suggested that an expedited registration process could interfere with 
registered apprenticeship program management, integrity, and operations 
in States where an SAA is the registration agency for programs 
registered under subpart A. Another commenter suggested that SAAs 
should have the opportunity to approve or reject IRAPs based on 
existing State standards for registered apprenticeships. Numerous 
commenters suggested that the Department should remove the proposal for 
expedited registration.
    E.O. 13801 directed the Department to assess whether proposed 
regulations might provide IRAPs recognized under subpart B with 
expedited and streamlined registration under the Department's 
registered apprenticeship program. Accordingly, the NPRM included 
proposed regulatory text that would permit such an expedited and 
streamlined registration. The NPRM also included some operational 
parameters specifically authorizing the Administrator to request 
additional information and requiring the Administrator to make a 
decision within 60 days of receiving all necessary information. None of 
the public comments supported the proposal permitting the Administrator 
to use an expedited and streamlined process for registration of IRAPs 
to become registered apprenticeship programs. Given this lack of public 
support, and upon consideration of the comments either opposing or 
raising questions about the need for expedited registration, Department 
agrees with the commenters' concerns and is not finalizing the proposal 
regarding expedited registration. As noted in the NPRM's preamble, DOL 
does not expect many, if any, apprenticeship programs to seek 
recognition by an SRE and registration under subpart A. The Department 
has determined that requirements, and associated processes and 
procedures, established under subpart A continue to be appropriate and 
useful in the administration of the registered apprenticeship system by 
the Department and its partners in recognized SAAs.
Section 29.25 Complaints Against Standards Recognition Entities
    Section 29.25 of this final rule (designated as Sec.  29.26 in the 
NPRM) establishes the procedure for reporting complaints against SREs 
arising from SREs' compliance with the subpart. This section provides 
an avenue for the Administrator to learn of relevant information that 
might impact the SRE's continued qualification under Sec.  29.21(b) and 
for potential consideration for any actions taken under Sec.  29.26, 
Sec.  29.27, or both.
    Paragraph (a) of Sec.  29.25 in this final rule provides that a 
complaint arising from an SRE's compliance with this subpart may be 
submitted by an apprentice, the apprentice's authorized representative, 
a personnel certification body, an employer, a Registered Program 
representative (someone authorized to speak on behalf of a registered 
apprenticeship program), or an IRAP. Some commenters suggested that the 
complaint process against an SRE should be open to any interested party 
to ensure that any party with information in regard to an SRE has an 
opportunity to submit information to the Administrator. One commenter 
supported the proposal whereby only the apprentice, the apprentice-
authorized representative, an employer, or an IRAP would be eligible to 
initiate a complaint about an SRE in order to avoid possible conflicts 
of interest that may arise with other entities.
    The Department's position is that an apprentice, an apprentice's 
authorized representative, a personnel certification body, an employer, 
or an IRAP are in the best position to identify potential noncompliance 
on the part of an SRE. While other individuals or entities may seek to 
gain the Department's attention and express interest in the matter, the 
Department may not be able to readily confirm their expertise, 
experience, or association with the SRE, or their particular relevance 
to the filing of a complaint. Nothing precludes these individuals or 
entities from providing the Department with information, if they 
believe it has relevance and usefulness to a complaint against an SRE. 
It is the Department's purview to assess that information and determine 
propriety and relevance. Therefore, the Department declines to expand 
the list of individuals or entities who may file a complaint against an 
SRE.
    Additionally, the final rule deletes ``a registered apprenticeship 
representative'' from the list of individuals or entities that can file 
a

[[Page 14342]]

complaint against an SRE under this section. As detailed above in 
discussion of proposed Sec.  29.25, the Department is removing from the 
final rule the proposal for an expedited registration process for IRAPs 
recognized by an SRE seeking registration under subpart A. Therefore, a 
Registered Program representative will not automatically be in a 
position of knowledge, experience, or expertise with an SRE in the 
context of the IRAP initiative established under subpart B, and for the 
reasons discussed above, cannot file a complaint. Accordingly, Sec.  
29.25(a) of this final rule carries forward the provisions proposed in 
the NPRM as Sec.  29.26(a) but removes references to a Registered 
Program representative.
    Proposed paragraph (b) described the requirements for complaints 
submitted to the Administrator. The proposed language required, among 
other things, that the complaint be in writing and be submitted within 
60 days of the circumstances giving rise to the complaint, contains 
relevant information, and has what is needed to determine whether the 
complaint warrants review under proposed Sec.  29.27 (finalized as 
Sec.  29.26). Numerous commenters stated that the proposal was unduly 
restrictive, because complaints must be filed within 60 days of the 
incident the complaint arises from, not within 60 days of when the 
complainant acquires actual knowledge of the circumstances giving rise 
to the complaint. Some commenters requested the time limit for filing a 
complaint be extended to at least 180 days, which aligns with the time 
limit for filing a discrimination complaint at the EEOC. Another 
commenter suggested a 90-day timeframe for filing a complaint. Finally, 
one commenter recommended the Department provide instructions for 
complaints submission via online portals or specific mailing addresses.
    The Department agrees with concerns that the time period for filing 
a complaint should be expanded and that more specificity is needed. The 
Department has adopted in the final rule two changes recommended by 
commenters. In the final rule the time period is changed from 60 days 
to 180 calendar days, and the starting point for the time period is the 
complainant's actual or constructive knowledge of the circumstances 
giving rise to the complaint, not simply when the circumstances 
occurred. The Department has also removed from paragraph (b) the 
proposed requirement for copies of pertinent documents and 
correspondence to accompany the complaint submission to the 
Administrator. The Administrator can request relevant parties provide 
copies of these documents during the Department's review of the 
complaint. The Department has removed this sentence due to the 
potential legal issues regarding complainants' ability to possess and 
disclose proprietary information. The Department has adjusted final 
Sec.  29.25(b) accordingly. The Department has not adopted the 
recommendation to include instructions for complaint submission via 
online portals or specific mailing addresses into the regulatory text. 
Website and mailing addresses may change and are easier to update on 
the Department's website and in technical assistance materials.
    Paragraph (c) of Sec.  29.25 in this final rule clarifies that the 
Department will address complaints submitted to the Department only 
through the review process outlined in Sec.  29.26. One commenter 
recommended that the process outlined in proposed Sec.  29.26 
(finalized as Sec.  29.25) should not be the only means to resolve a 
complaint against an SRE under this subpart. As discussed below, the 
review of an SRE established by Sec.  29.26 is thorough and ensures a 
fulsome process for hearing and addressing complaints against SREs. 
Adhering to this singular process, rather than permitting the 
possibility of alternative options for handling complaints, will 
maintain uniformity, consistency, and transparency in the Department's 
oversight of SREs and administration of the IRAP program. Additionally, 
the Department notes that complaints or matters regarding SRE conduct 
that are beyond the scope of Sec.  29.25 (such as adherence to 
applicable Federal, State, and local laws for EEO) should be handled by 
the appropriate, applicable authority. Therefore, the Department has 
determined that for the purposes of complaints brought against SREs 
under Sec.  29.25, the Administrator's review of SREs following 
requirements outlined in Sec.  29.26 is adequate and appropriate for 
SREs. No change was made in the regulatory text in response to this 
comment.
    In the NPRM, proposed Sec.  29.26(d) (redesignated as Sec.  
29.25(d) in the final rule) provided that nothing in the section would 
preclude a complainant from pursuing any remedy authorized under 
Federal, State, or local law. The Department did not receive any 
comments on paragraph (d). The final rule adopts the section as 
proposed with the exception of the two changes discussed above in Sec.  
29.25(a) and (b).
Section 29.26 Review of a Standards Recognition Entity
    Section 29.26 of this final rule (designated as Sec.  29.27 in the 
NPRM) outlines the process for the Administrator's review of SREs. It 
allows the Administrator to initiate a review that may ultimately 
result in suspension of the SRE, if the Administrator receives 
information indicating that an SRE is either not in substantial 
compliance with this subpart or may no longer be capable of continuing 
as an SRE. This section also provides an SRE with the opportunity to 
respond to the Administrator with relevant information, which could 
include information showing the SRE has acknowledged and taken steps to 
resolve any deficiency, making suspension unnecessary. The Department 
has made clarifying edits to this section.
    One commenter suggested that proposed Sec.  29.27 (Review of a 
Standards Recognition Entity) would be more accurately titled ``SRE 
application and review process.'' The Department did not change the 
title of proposed Sec.  29.27 (finalized as Sec.  29.26) as suggested 
because a formal review under this section would involve an already-
recognized SRE and not a review of an initial application for 
recognition. The application process to become a recognized SRE is 
addressed in Sec.  29.21.
    Another commenter suggested that complaints about SREs need to be 
heard and appropriately addressed and that a mechanism is needed for 
forcing immediate derecognition of an IRAP found in violation.
    The Department appreciates the concern that complaints against an 
SRE need to be heard and appropriately addressed. The Department has 
determined that this section, with the clarifying edits noted below, 
will ensure that complaints against SREs are heard and appropriately 
addressed. The Department did not incorporate changes into this section 
that would require immediate derecognition of an IRAP found to be in 
violation. The Department notes that this section addresses complaints 
against SREs and not the IRAPs that they recognize. A review under this 
section could be initiated based on an SRE's failure to ensure that its 
IRAPs comply with this subpart. DOL anticipates that SREs would 
ultimately derecognize IRAPs that remain in violation of the SRE's 
requirements or this subpart after appropriate fact-finding is 
conducted. If an SRE allows IRAPs to remain out of compliance with 
Sec.  29.22 or other provisions of this subpart, the SRE itself

[[Page 14343]]

may be suspended or derecognized. No change was made in the regulatory 
text in response.
    Paragraph (a) of Sec.  29.26 in this final rule explains that an 
Administrator may initiate review of an SRE if it receives information 
indicating that the SRE is not in substantial compliance with this 
subpart, or that the SRE is no longer capable of continuing as an SRE. 
For example, the Administrator may learn of such information through an 
SRE's notification of a substantive change under Sec.  29.21(c)(2), a 
complaint under Sec.  29.25, or an SRE's reports under Sec.  29.22(h), 
among other methods. The Department does not intend for the receipt of 
information to be limited to formal channels such as mail or email. The 
Department may initiate reviews if evidence indicating that an SRE may 
not be in substantial compliance is available in the public domain.
    Several commenters suggested that, to be allowed to operate, SREs 
should be required to remain in full compliance with applicable laws 
and regulations, rather than being allowed to be substantially 
compliant. A commenter suggested that full compliance would be in the 
best interest of apprentices. Alternatively, the commenter proposed 
that SREs be permitted to remain in substantial compliance for a 
limited period of time. One commenter proposed that substantial 
compliance be further defined to explain whether the Department 
considers some regulatory requirements to be more important than 
others. The commenter characterized substantial compliance as affording 
leeway, and suggested that the Department is bound to make arbitrary 
decisions if it does not further explain the types of noncompliance 
that will not result in suspension or derecognition.
    A commenter proposed that the Department clarify how it would 
determine that an SRE is no longer capable of functioning. Another 
commenter suggested that reviews should be mandatory and ongoing, 
rather than left to the discretion of the Administrator.
    The Department has determined that it would be most appropriate to 
carry forward the standard of substantial compliance in the final rule. 
However, the Department anticipates that SREs generally will be able to 
achieve full compliance with this subpart. The standard of substantial 
compliance allows the Administrator to suspend or derecognize an SRE 
for failure to fulfill any requirement of this subpart, except for 
minor technical, mathematical, or clerical errors that can in all 
likelihood be corrected by the SRE once brought to the SRE's attention. 
Suspending or derecognizing SREs for minor technical, mathematical, or 
clerical errors that do not impact the quality of training delivered by 
IRAPs may not be in the best interest of apprentices because it could 
result in an IRAP having to apply to a different SRE for recognition. 
The standard of substantial compliance is not intended to suggest that 
certain provisions in this subpart are less important than others. The 
Department has determined that emphasizing certain standards over 
others in the review, suspension, and derecognition process would be 
unworkable and has determined it to be appropriate to instead focus on 
the underlying violation and its potential impact on apprentices. For 
example, the Administrator would not suspend an SRE for omitting a 
digit in an IRAP's address resulting in a failure to report up-to-date 
contact information. If, however, an SRE chose not to report updated 
contact information as required, the SRE would have failed to fulfill 
the requirements of this subpart in a manner not based on a minor 
technical, mathematical, or clerical error. The standard of substantial 
compliance is carried over from the NPRM and text in Sec.  29.26(a) is 
adopted without changes.
    The Department has similarly decided not to limit the period for 
which an SRE can be substantially compliant. The Department expects 
that full compliance will be achieved by SREs and, as discussed above, 
it has determined that certain minor deficiencies may be more 
appropriately addressed through the procedures provided for in Sec.  
29.23 in the first instance. However, the Department has determined 
that such a timeframe is not susceptible to precise definition and, 
even if it were, such instances can and should be handled on a case-by-
case basis.
    The Department intends ``no longer capable of continuing'' to be 
interpreted to encompass scenarios in which the SRE becomes unable to 
perform most or all required functions. Such scenarios might include an 
SRE no longer being financial solvent or unable to continue as a going 
concern, as well as the SRE's being debarred. The Department has 
included this second standard to minimize the uncertainty for IRAPs and 
apprentices in the limited, sudden situations where circumstances make 
it immediately evident that an SRE is no longer capable of functioning, 
even if a lack of substantial compliance is not immediately evident. 
For example, a natural disaster could irreparably damage SRE's 
resources and infrastructure, and as a result, its leadership announces 
that it is no longer a going concern. This separate basis provides a 
clear basis for derecognition in this situation rather than going 
through the administratively inefficient process of generating a basis 
for derecognition based on a lack of substantial compliance. 
Additionally, it is conceivable that an SRE could have met all 
requirements of this subpart, including its reporting requirements, up 
until a sudden traumatic event and decision to stop operating, which 
could lengthen the derecognition process and create unnecessary 
uncertainty for IRAPs recognized by that SRE.
    The Department declines to make reviews mandatory and ongoing. 
Reviews are intended to be in response to the Department's being made 
aware of an SRE's potential failure to remain substantially compliant. 
Moreover, the Department will also offer compliance assistance reviews 
under Sec.  29.23 to any SREs that request such assistance. No changes 
were made to the text in response to these comments.
    Paragraph (b) of Sec.  29.26 describes the notice of review SREs 
would receive, and procedures the Administrator would follow in 
carrying out such a review. The Administrator would provide the SRE 
written notice of the review by certified mail, with return receipt 
requested. The notice would describe the basis for the Administrator's 
review, including potential areas in which the SRE is not in 
substantial compliance with the subpart and a detailed description of 
the information supporting review. The notice will provide the SRE with 
an opportunity to provide information for the Administrator's review, 
thereby helping to ensure that the Administrator is fully and fairly 
informed as the Administrator seeks to evaluate the SRE in light of 
paragraph (a) of this section. This opportunity also provides the SRE 
with the option of providing information that would show that no 
deficiency exists or that the identified deficiency was cured, making 
suspension unnecessary.
    The Department did not receive any comments on this paragraph, and 
the final rule substantively adopts the paragraph as proposed. However, 
the Department has corrected the language in the proposed rule that 
would have required that the Administrator include potential areas of 
``substantial noncompliance'' with a requirement that the Administrator 
identify potential areas in which the SRE is not in substantial 
compliance. The change is consistent with the Department's intention, 
as noted above, to require that SREs remain in substantial compliance 
with this subpart or risk suspension.

[[Page 14344]]

Referring to the standard as substantial compliance in paragraph (b) 
also serves to align paragraph (b) with paragraph (a).
    Paragraph (c) of Sec.  29.26 in this final rule provides that on 
conclusion of the Administrator's review, the Administrator will give 
written notice of the decision either to take no action or to suspend 
the SRE as provided under Sec.  29.27. The Department did not receive 
any comments on this section. The final rule adopts the provision as 
proposed.
Section 29.27 Suspension and Derecognition of a Standards Recognition 
Entity
    Section 29.27 of this final rule (designated as Sec.  29.28 in the 
NPRM) describes the means by which the Administrator can suspend and, 
if necessary, derecognize an SRE. Such a process is necessary to ensure 
that an Administrator can address an SRE's failure to remain 
substantially compliant with this subpart or its inability to continue 
as an SRE. It also provides the SRE with an additional opportunity to 
work with the Administrator to address failures to remain in 
substantial compliance. Overall, these steps preserve the integrity of 
the recognition process necessary for high-quality IRAPs. To clarify 
and better align this section with the bases for review in Sec.  
29.26(a), the Department has added ``or circumstances that render it no 
longer capable of continuing as an SRE, or both'' to Sec.  29.27(b), 
(c)(1), (c)(1)(i), and (c)(1)(ii) to this final rule. This indicates 
that both bases for review under Sec.  29.26(a) can result in 
suspension or derecognition.
    Paragraph (a) of Sec.  29.27 in this final rule begins by 
explaining that the Administrator may suspend an SRE for 45 calendar 
days based on the Administrator's review and determination that any of 
the situations described in Sec.  29.26(a)(1) (the SRE is not in 
substantial compliance with the subpart) or (a)(2) (the SRE is no 
longer capable of continuing as an SRE) exist.
    If, after the review required by Sec.  29.26, the Administrator has 
determined that suspension is appropriate, (a) requires that the 
Administrator must provide notice of suspension in accordance with 
Sec.  29.21(d)(2) and (3). The notice must state that a request for 
administrative review may be made within 45 calendar days of receipt of 
the notice. No comments were received on this paragraph and the text is 
adopted as proposed.
    Paragraph (b) of Sec.  29.27 in this final rule requires that the 
notice set forth an explanation of the Administrator's decision, 
including identified areas in which the SRE is not in substantial 
compliance and necessary remedial actions. It also requires that the 
notice explain that the Administrator will derecognize the SRE in 45 
calendar days unless remedial action is taken or a request for 
administrative review is made.
    Several commenters stated that the proposed rule lacks criteria by 
which DOL should determine the suspension or derecognition of SREs. In 
addition, a commenter proposed that the final rule ``address the 
situation where a nascent occupation actually evolves along the 
continuum of becoming a bona fide profession, and determine at what 
point the SRE should be suspended or derecognized such that oversight 
can properly transition to an entity more akin to a professional 
association.''
    The Department has provided criteria for suspension or 
derecognition--whether the SRE is not in substantial compliance or 
incapable of continuing to act as an SRE. The Department will notify 
SREs of potential areas in which the SRE is not substantially compliant 
at the outset of a review, as required by Sec.  29.26(b). The 
Department therefore expects that any SRE would know that the 
Department considers a violation of this subpart to be grounds for 
suspension if left uncorrected.
    In response to the comment proposing that an SRE be derecognized if 
a nascent occupation evolves into a bona fide profession, the 
Department does not intend to establish procedures by which an SRE 
would be derecognized as a result of its success in developing a new 
and innovative occupation into a bona fide profession. As discussed 
above, an SRE would be suspended or derecognized only if the 
Administrator determines that the SRE is not in substantial compliance 
with this subpart or is no longer capable of acting as an SRE. The 
Department made one change to paragraph (b), which was to replace the 
reference in the proposed rule to substantial noncompliance with 
substantial compliance to align final Sec.  29.27(b) with final Sec.  
29.26(a).
    Paragraph (c) of Sec.  29.27 in this final rule outlines the 
various outcomes that could follow the notice of suspension. Each 
outcome depends on the SRE's response to the notice. Under Sec.  
29.27(c)(1), if the SRE responds by specifying its proposed remedial 
actions and commits itself to remedying the identified areas in which 
the SRE is not in substantial compliance, the Administrator will extend 
the 45-day period to allow a reasonable time for the SRE to implement 
remedial actions. If at the end of that time the Administrator 
determines that the SRE has remedied the identified deficiencies, the 
Administrator must notify the SRE, and the suspension will end. In the 
alternative, if at the end of that time the Administrator determines 
that the SRE has not remedied the identified deficiencies, the 
Administrator will derecognize the SRE and must notify the SRE in 
writing and specify the reasons for its determination. Such notice must 
comply with Sec.  29.21(d)(2) through (3).
    A commenter suggested that proposed Sec.  29.28(c)(1)(ii) 
(redesignated as Sec.  29.27(c)(1)(ii) in the final rule) should be 
expanded to require that DOL notify not just the SRE, but also the 
IRAPs and associated apprentices under the SRE, of the SRE's 
derecognition. DOL agrees with the suggestion that notice be provided 
to IRAPs, and the final rule incorporates such a requirement. However, 
for reasons of readability and clarity, the Department has added the 
requirement to Sec.  29.28 of this final rule (designated as Sec.  
29.29 in the NPRM), which addresses other impacts of derecognition on 
IRAPs. The Department notes that SREs are not required to collect 
personally identifiable information relating to apprentices or to 
provide such information to DOL, and DOL would thus be unable to 
reliably provide notice of an SRE's derecognition to individual 
apprentices. However, Sec.  29.28 of this final rule has also been 
amended to clarify that the Administrator will work with SREs and IRAPs 
to notify all apprentices in those programs. The Department anticipates 
that the Administrator's notice to IRAPs would request that the IRAPs 
take all actions necessary to notify impacted apprentices. In addition, 
the Department has added a requirement that DOL publish notice of the 
derecognition on the public list described in Sec.  29.24.
    Another commenter suggested that all action pertaining to 
suspension and derecognition be made publicly available, but the 
Department declines to make all actions relating to suspension or 
derecognition publicly available. Notably, the Administrator will 
provide notice to the public of an SRE's suspension pursuant to Sec.  
29.27(d)(2) and an SRE's derecognition pursuant to Sec.  29.28(b), as 
explained above. The Department has determined, however, that providing 
notice of other actions relating to suspension or derecognition, such 
as the initiation of a review, would be of limited benefit to the 
public, as many reviews may not result in suspension or derecognition.
    Under Sec.  29.27(c)(2), if the SRE responds to the notice by 
making a

[[Page 14345]]

request for administrative review within the 45-day period, the 
Administrator must refer the matter to the Office of Administrative Law 
Judges to be addressed in accordance with Sec.  29.29. The Department 
determined that an appeal right is appropriate given the significant 
impact of suspension on SREs under paragraph (d) of Sec.  29.27, which 
bars the SRE from recognizing new programs during suspension and 
requires the Administrator to publish the SRE's suspension publicly as 
described in Sec.  29.24.
    Under Sec.  29.27(c)(3), if the SRE does not act in response to the 
notice under paragraphs (c)(1) or (c)(2) of this section, the 
Administrator will derecognize the SRE, as indicated in the notice 
already given to the SRE under paragraph (b) of this section. Absent 
recognition, an entity is no longer and may not function as an SRE 
under this subpart. This means the former SRE could neither recognize 
apprenticeship programs, nor remain listed as a recognized SRE on the 
Administrator's website under Sec.  29.24. The Department received no 
comments on this paragraph. One grammatical change was made to replace 
``accord'' with ``accordance'' in paragraphs (a) and (c)(2) of Sec.  
29.27.
    Paragraph (d) of Sec.  29.27 in this final rule explains what will 
take place during an SRE's suspension. Paragraph (d)(1) of this section 
explains that an SRE is barred from recognizing new programs during the 
suspension period. Paragraph (d)(2) of Sec.  29.27 explains that the 
suspension will be published on the public list referenced in Sec.  
29.24.
    The Department received one comment on this paragraph, suggesting 
that the Department clarify who will oversee IRAPs recognized by an SRE 
that is subsequently suspended or derecognized. The Department's 
response to this comment was addressed in final Sec.  29.28, as 
discussed below.
    An SRE that is suspended may not recognize or re-recognize IRAPs 
during the suspension period. Unless otherwise noted in the 
Department's notice to an SRE, the Department expects that an SRE would 
continue to perform other functions required by this subpart during any 
suspension period, including, for example, continuing to comply with 
the responsibilities provided for in Sec.  29.22. Paragraph (d)(2) of 
Sec.  29.27 explains that the Administrator will publish notice of the 
SRE's suspension on the public list described in Sec.  29.24. No 
changes were made to the regulatory text in response to this comment.
Section 29.28 Derecognition's Effect on Industry-Recognized 
Apprenticeship Programs
    Section 29.28 of this final rule (designated as Sec.  29.29 in the 
NPRM) explains the effects an SRE's derecognition would have on IRAPs 
that it recognized. Under Sec.  29.28(a), an IRAP would maintain its 
status until 1 year after the Administrator's decision derecognizing 
the IRAP's SRE becomes final, including any appeals. At the end of that 
time, the IRAP would lose its status unless it is already recognized by 
another SRE. A few commenters, including a State government agency and 
an advocacy organization, requested clarification in the final rule 
regarding the impact of SRE derecognition. These requests included: 
What happens if the SRE appeals the derecognition decision; who manages 
the IRAP during the appeal; who monitors the IRAP during this 1-year 
period; and what is the fate of the apprentices if the IRAP loses its 
status. An advocacy organization noted that the proposal ``lacks 
information about how apprentices will be protected'' if an IRAP loses 
its recognition and recommended that DOL ``outline protections for 
learners in derecognized programs and outline DOL's role in protecting 
workers, especially youth and students.'' One of the commenters, an 
industry group, raised additional questions as to why an IRAP retains 
its status for 1 year after its SRE is derecognized, including what the 
basis for a 1-year time allotment is, whether another SRE would be 
available in rural areas or less popular trades, and what happens if 
the IRAP finds another SRE, but that SRE has a competing IRAP already 
in place. Some State government agencies expressed concern that 
allowing programs to receive recognition from multiple SREs could 
result in programs shopping around for approval following denial.
    The Department shares commenters' general concerns regarding SRE 
derecognition and the impact on IRAPs and apprentices due to 
derecognition. In this final rule, the Department has significantly 
strengthened the recognition process and the requirements for 
maintaining recognition, including new operational, reporting, and 
performance requirements contained in Sec. Sec.  29.21, 29.22, and 
29.23. This final rule adds transparency regarding the significant 
responsibilities SREs are undertaking with their recognition, and more 
clearly puts potential SREs on notice regarding the Department's 
expectations for high-quality, high-performing programs. Additionally 
and importantly, along with new Sec.  29.28(b) discussed below, these 
provisions strengthen the Department's role in holding SREs 
accountable. From the outset, the Department believes these changes 
will serve as an increased deterrent against unqualified or subpar 
entities seeking to become recognized SREs.
    With the standards the Department is putting into place in this 
final rule, it is possible that derecognition may need to occur. The 
Department intends to work closely with any SREs that need assistance 
to avoid that outcome. However, should derecognition occur, the 
Department has maintained the 1-year transition period for IRAPs to 
find recognition with another SRE. The Department will, to the extent 
practicable, assist with this process, and notes the commenters' 
concerns that special attention needs to be paid to rural areas. As 
stated in the NPRM, the Department anticipates that the IRAP will 
continue to adhere to the SRE's rules even if the SRE ceases to exist. 
That is, the final rule's requirements to become a recognized SRE, as 
established in Sec.  29.21, and the detailed responsibilities and 
requirements of SREs set forth in Sec.  29.22, mean that SREs will, in 
effect, set up a ``blueprint'' for how IRAPs are built and maintained. 
IRAPs built around such a blueprint are likely to retain their nature 
and structure for some period of time, even if the SRE ceases to exist.
    Lastly, recognizing the concerns raised here and elsewhere, the 
Department strengthened notification requirements after derecognition 
in Sec.  29.22(m) above and Sec.  29.28(b) below. The Department has 
made no changes to this provision and adopts Sec.  29.28(a) as 
proposed.
    In the NPRM, paragraph (b) of proposed Sec.  29.29 provided that if 
an IRAP is also registered under subpart A in the registered 
apprenticeship program, the derecognition of its SRE would not impact 
its registration status.
    Although the Department received no comments on the provision, the 
Department has determined that this provision is not necessary since 
the two programs are clearly distinct. To avoid unnecessary text and 
potential confusion, the final rule does not carry forward this 
provision.
    The final rule instead inserts a new provision in paragraph (b) of 
Sec.  29.28 establishing two new requirements for the Administrator. 
First, the Administrator must update the public list of SREs required 
in Sec.  29.24 to reflect derecognition status for SREs that have been 
derecognized. Second, the Administrator must notify the IRAPs impacted 
by this derecognition. These

[[Page 14346]]

additional notifications, both on the publicly available list of SRE 
status and the individualized notification from the Department, provide 
the impacted IRAP(s) with information that, if it wishes to continue 
operations as an IRAP, it should seek to be recognized by another SRE 
recognized under this subpart if it has not already done so. 
Additionally, the Department intends for the Administrator to work with 
the derecognized SRE and the impacted IRAPs to notify all apprentices 
in those impacted programs.
Section 29.29 Requests for Administrative Review
    Section Sec.  29.29 of this final rule (designated as Sec.  29.30 
in the NPRM) describes procedures and requirements for requests for 
administrative review under this subpart. A prospective SRE may request 
review of the Administrator's denial of recognition as provided under 
Sec.  29.21(d). Likewise, an SRE may appeal the Administrator's 
decisions under Sec.  29.27. The process for requesting administrative 
review exists to ensure that prospective and recognized SREs have an 
adequate opportunity to express their positions and to ensure that 
their rights are protected. The provisions are generally modeled after 
the process outlined in current 29 CFR 29.13(g), which outlines the 
requirement for OA's denial of SAA recognition under subpart A.
    Paragraph (a) of Sec.  29.29 in this final rule provides that, 
within 30 calendar days of the filing of a request for administrative 
review, the Administrator should prepare an administrative record for 
submission to the Administrative Law Judge designated by the Chief 
Administrative Law Judge. Paragraph (b) of Sec.  29.29 in this final 
rule provides that the procedural rules contained in 29 CFR part 18 
apply to the disposition of requests for administrative review, with 
two exceptions. Paragraph (c) of Sec.  29.29 in this final rule 
provides that the Administrative Law Judge should submit proposed 
findings, a recommended decision, and a certified record of the 
proceedings to the Administrative Review Board, SRE, and Administrator 
within 90 calendar days after the close of the record. The Department 
added the term ``calendar'' to Paragraph (d) of Sec.  29.29 in this 
final rule to clarify that that days are calculated as calendars days 
for the provisions where, within 20 calendar days of the receipt of the 
recommended decision, any party may file exceptions to it, and where, 
any party may file a response to the exceptions filed by another party 
within 10 calendar days of receipt of the exceptions. All exceptions 
and responses must be filed with the Administrative Review Board with 
copies served on all parties and amici curiae. Paragraph (e) of Sec.  
29.29 in this final rule provides that after the close of the period 
for filing exceptions and responses, the Administrative Review Board 
may issue a briefing schedule or may decide the matter on the record 
before it. The Department added the term ``calendar'' to Sec.  29.29(e) 
to clarify the relevant timeframe for the requirement for the 
Administrative Review Board to issue a decision in any case it accepts 
for review within 180 calendar days of the close of the record. If the 
Administrative Review Board does not act, the Administrative Law 
Judge's decision constitutes final agency action. The Department 
previously established systems of discretionary secretarial review over 
the decisions of the ARB to ensure that the Secretary has the ability 
to properly supervise and direct the actions of the Department, and 
thereby fulfill his duty to take care that the laws be faithfully 
executed. Under this system, the Secretary would not exercise review 
over ARB cases until after a decision has been rendered. This final 
rule reflects these changes by requiring the ARB to ``issue a 
decision'' and removes the conclusion that such a decision 
``constitutes final agency action.'' Finally, the final rule includes a 
standard of review in a new paragraph (f) to provide procedural clarity 
to Administrative Law Judges and the Administrative Review Board when 
considering appeals. This paragraph states that Administrator's 
decision under this subpart will be upheld ``unless the decision is 
arbitrary, capricious, an abuse of discretion, or otherwise not in 
accordance with the law.'' This standard of review is common under the 
Administrative Procedure Act and other appeals under statutes 
implemented by ETA.
    Two commenters recommended two considerations for proposed Sec.  
29.30, Requests for Administrative Review (redesignated as Sec.  29.29, 
Requests for Administrative Review, in the final rule). First, the 
commenters asserted that Administrator's decisions to find 
noncompliance issues and derecognize an SRE should be subject to 
internal review by the Administrator before the matter is referred to 
an Administrative Law Judge. Second, the commenters recommended time 
limits for such appeals should match those of the 29 CFR part 29 
subpart A.
    The Department notes that the first recommendation--internal review 
before making a decision to suspend and, if warranted, derecognize an 
SRE--appears duplicative of the review procedures in Sec.  29.26, 
Review of a Standards Recognition Entity, and Sec.  29.27, Suspension 
and Derecognition of a Standards Recognition Entity, which allow SREs 
to provide additional information for the Administrator's consideration 
before suspending or derecognizing an SRE. According to these 
procedures, the Administrator would weigh available evidence carefully 
before reaching the determination that an SRE should be suspended or 
derecognized. The Department therefore determined that no additional 
internal review is necessary beyond the procedures provided for in 
Sec. Sec.  29.26 and 29.27.
    Regarding the second recommendation for appeals process timeframes 
in Sec.  29.29, the Department notes that these subpart B provisions 
are generally modeled on Sec.  29.13(g), denial of SAA recognition, and 
include similar time limits.
Section 29.30 Scope of Industry-Recognized Apprenticeship Programs 
Recognition by Standards Recognition Entities
    Section 29.30 of this final rule (designated as Sec.  29.31 and 
titled ``Scope and Deconfliction between Apprenticeship Programs under 
Subpart A of this Part and This Subpart B'' in the NPRM) excludes the 
construction sector from the scope of the final rule. The section 
provides that the Administrator will not recognize as SREs entities 
that intend to recognize as IRAPs programs that seek to train 
apprentices to perform construction activities, consisting of: The 
erecting of buildings and other structures (including additions); heavy 
construction other than buildings; and alterations, reconstruction, 
installation, and maintenance and repairs. It also provides that SREs 
that obtain recognition from the Administrator are prohibited from 
recognizing as IRAPs programs that seek to train apprentices to perform 
construction activities, consisting of the erecting of buildings and 
other structures (including additions); heavy construction other than 
buildings; and alterations, reconstruction, installation, and 
maintenance and repairs.
    This description of construction tracks the short description of 
the sector in the North American Industry Classification System (NAICS) 
Manual. See Executive Office of the President, Office of Management and 
Budget, North American Industry Classification System 16 (2017). As 
discussed below, many commenters asserted that the NAICS Manual's 
description of Sector

[[Page 14347]]

23--Construction best captures construction activities for the purpose 
of this regulation. Accordingly, in interpreting and applying Sec.  
29.30, the Department will use the NAICS Manual to determine whether an 
activity falls within the construction sector. In particular, the 
Department will draw upon the manual's description of Sector 23 as a 
whole as well as its descriptions of its subsectors. See id. at 123-41. 
However, it will do so only to determine whether the activities in 
which programs train apprentices fall within the definition of 
construction in Sec.  29.30. DOL will not rely alone on job titles or 
job classifications referenced in NAICS 23 or be bound strictly by 
O*NET codes in determining whether Sec.  29.30 prohibits recognition of 
an SRE or IRAP; rather, DOL will look holistically at all information 
in the SRE's application to determine whether an SRE seeks to train in 
construction activities.
    This is a change from the proposed rule, which would have excluded 
sectors from the scope of the rule through a formula that was intended 
to capture those sectors that have significant registered 
apprenticeship opportunities. The Department explained in the NPRM that 
it expected that the formula would at least initially prohibit the 
Department from accepting applications from entities seeking to 
recognize apprenticeship programs in the U.S. military or in 
construction. The vast majority of the 326,000 comments received by the 
Department addressed this section of the proposed rule, with many 
calling for an express exclusion of construction from the final rule. 
After reviewing and analyzing the comments on this section, the 
Department has determined that a complete exclusion of construction, 
but no other sector, is most consistent with the goal of encouraging 
more apprenticeships in new industry sectors that lack widespread and 
well-established registered apprenticeship opportunities. The 
Department's use of the NAICS Manual description of construction 
activities is also different than the NPRM's suggestion for how to 
define the construction sector. The Department agrees with commenters 
that adopting the NAICS Manual's description is more consistent with 
the Department's economic analysis of the rule and is likely the 
simplest to apply.
    The remainder of this section is a topic-by-topic review and 
analysis of the comments received on proposed Sec.  29.31 (redesignated 
as Sec.  29.30 in the final rule).
The Deconfliction Formula Proposed in the NPRM
    Commenters--both those opposed to and in support of the exclusion 
of construction--nearly uniformly opposed the proposed deconfliction 
formula. The formula was intended to capture--and exclude--those 
sectors with significant registered apprenticeship opportunities. Under 
the formula, a sector with significant registered apprenticeship 
opportunities was one that has had more than 25 percent of all federal 
registered apprentices per year on average over the prior 5-year 
period, or that has had more than 100,000 federal registered 
apprentices per year on average over the prior 5-year period, or both, 
as reported through the prior fiscal year by the Office of 
Apprenticeship.
    Several commenters argued there were flaws in the NPRM's proposed 
alternative thresholds for determining well-established opportunities 
in registered apprenticeship in a sector. Many commenters argued that 
these figures were too low; many other commenters argued the figures 
were too high. For example, one commenter recommended that, in the 
absence of a blanket exclusion of construction, the Department use a 
threshold of 30,000 apprentices per year on average over the prior 5-
year period to identify sectors where registered apprenticeship 
opportunities are already significant. On the other hand, one commenter 
argued that the exclusion standard unfairly blocks the 
``supermajority'' of nonunion construction training programs from 
participating in IRAPs because of significant union involvement in 
registered apprenticeships. This commenter argued that the Department 
could not assert that registered apprenticeships had adequately 
occupied a sector if the number of apprentices in that sector was fewer 
than 50 percent. Other commenters stated that the formula was illogical 
and unnecessary, and should be eliminated.
    Several commenters stated that it was unclear from the preamble 
what precise method the Department would use in calculating the number 
of registered apprentices in a sector. These commenters questioned why 
the NPRM stated that the Department ``expects'' the exclusion will 
apply ``at least initially'' to construction and military 
apprenticeships. In evaluating the provision creating the formula, one 
commenter said the basis of the formula was ``questionable'' and 
described the provision as a whole as ``nebulous.'' Another commenter 
stated that the NPRM was unclear on how the Department would apply the 
exclusion--including at what time of the year and with what notice to 
the public--and what the scope of the deconfliction provision was. 
Commenters also criticized the implication that the industry sectors 
covered by the exclusion could change, potentially annually.
    Commenters further argued that the Department's deconfliction 
formula was untenable because the data used by the Department is 
incomplete. Commenters contended that because the Department relied on 
data from only the 25 non-SAA States, this data did not provide a 
complete or appropriate description of whether certain sectors have 
adequate opportunities in registered apprenticeship and that the 
Department's methodology effectively dismissed registered 
apprenticeship programs in SAA States. Numerous commenters stated that 
the limited scope of the data available to the Department would result 
in significant undercounting of apprenticeships in construction in 
particular. Some of these commenters relied on their own data 
collections on construction training programs to argue that the 
Department's data is vague, incomplete, or inaccurate. One commenter 
independently secured data from the SAAs in 13 States revealing more 
than 75,000 additional construction industry apprentices in fiscal year 
(FY) 2018 in those States, and the commenter pointed out 
inconsistencies between RAPIDS and the Federal data contained in the 
NPRM.
    Commenters also questioned the NPRM's discussion of the United 
Services Military Apprenticeship Program (USMAP) as support for the 
application of the formula's criteria. These commenters argued that 
there is great variance in how the Department and other agencies track 
participation in military apprenticeships as compared to civilian 
registered apprenticeships. A commenter maintained that USMAP mainly 
documents skills that service members acquire based on their ordinary, 
day-to-day military training and experience, as opposed to civilian 
registered apprenticeships, which provide trainees with skills that 
they may not develop otherwise. Some of the commenters also noted that 
the military is not a sector similar or comparable to construction and 
argued that USMAP programs do not align with the industry-driven focus 
of the IRAP model.
    One commenter proposed a hybrid approach that would include both a 
formula and two express exclusions. The commenter suggested that the 
Department revise its deconfliction

[[Page 14348]]

formula to define ``a sector with significant registered apprenticeship 
opportunities'' as: (1) Construction; (2) the military; and (3) any 
other sector that meets a proportional or numerical threshold.
    After reviewing these comments, the Department has decided to 
eliminate the deconfliction formula. The Department agrees that hard 
numerical thresholds are flawed means to determine the sectors in which 
registered apprenticeships are significantly established. The use of 
strict numerical thresholds suggests a level of precision that is 
currently unattainable with the data available from RAPIDS, which does 
not cover the entire United States. The Department also agrees that 
applying a formula would create significant uncertainty regarding 
whether any given sector would be excluded from year to year. The 
development of IRAPs could be chilled by that uncertainty alone; SREs 
and IRAP sponsors need certainty in investing in this new 
apprenticeship model.
Construction Exclusion
    The vast majority of the over 326,000 comments that the Department 
received expressed opposition to the use of IRAPs in construction. 
These commenters called on the Department to expressly exclude 
construction from the IRAP rule and to make the construction exclusion 
permanent.
    Numerous commenters asserted that the registered apprenticeship 
model was most appropriate for construction and expressed concern that 
new IRAPs would undermine the existing, effective registered 
apprenticeship model in the construction sector, which was described as 
being widespread and supported by substantial existing investment. As 
noted above, commenters in favor of a construction exclusion emphasized 
that registered apprenticeship programs serving the construction sector 
are well-established and that the construction sector boasts by far the 
highest number of apprentices. The registered apprenticeship system in 
the construction sector was described as the ``gold-standard.'' 
Numerous commenters praised the high standards for training, safety, 
and wage progression associated with the registered apprenticeship 
programs these commenters support or use, warning that the introduction 
of IRAPs in construction would reduce these standards and would not 
serve the interests of apprentices. Commenters also contended that 
construction IRAPs would force the erosion of the quality of registered 
programs by introducing a lower-quality alternative.
    Generally, these commenters opposed the deconfliction formula in 
proposed Sec.  29.31 (discussed above) as well as a sunset of an 
exclusion of construction. Many commenters expressed concern that the 
deconfliction formula could allow construction IRAPs in the future. 
Some commenters argued that permanently excluding construction was the 
surest way for the Department to accomplish its goal of expanding 
apprenticeships to sectors where it is underused.
    In contrast, some commenters opposed the exclusion of construction, 
arguing that IRAPs would help fill skilled-training needs in the 
sector. Commenters argued that excluding construction contradicted the 
``expansive purpose'' of the proposal to increase the number and use of 
apprenticeships. Commenters stated that the recognition of alternative 
IRAPs in the construction industry would expand the training pool 
without weakening or detracting from registered apprenticeship 
programs, and that, conversely, exclusion of construction would prolong 
the skills shortage in the construction industry. Commenters argued 
that apprenticeship is underused in the construction sector, stating 
that there are 144,000 apprentices in registered construction programs 
but several million people working in the sector. Another commenter 
argued that the data indicates that registered apprenticeships supply 
only 4 percent of the needed construction workers, demonstrating that 
registered apprenticeship programs alone cannot fill the industry's 
labor needs and skills gap. Others argued that the exclusion, and the 
Department's broad definition of construction, showed the Department's 
lack of understanding of the construction industry and its skilled-
training needs. It was suggested that existing registered programs feed 
workers predominantly to employers on the commercial construction side 
of the sector, but not employers on the residential construction side. 
Other commenters urged the Department to be impartial in considering 
which sectors or industries should be included or excluded from the 
IRAP rule. These commenters stated that IRAPs were a new workforce 
development tool that employers from all industries would be eager to 
use.
    Additionally, many commenters opposed to the exclusion noted, in 
their view, the difficulty in recruiting young people into construction 
trades and argued the construction sector needs an alternative such as 
IRAPs to improve recruitment and retention. Some commenters argued that 
the construction sector needs IRAPs as an alternative in the 
construction industry because registering a program with the Department 
or SAA can be difficult and the requirements of registered 
apprenticeship are too prescriptive and complicated.
    Many commenters opposing the exclusion complained about registered 
apprenticeship programs being sponsored by or involving unions. Several 
commenters in the construction industry stated that they typically do 
not use union apprenticeship programs and asserted these programs are 
ineffective, overly detailed, and overlong, necessitating the need for 
an alternative such as IRAPs. Commenters also discussed segmentation in 
the construction labor market between union and nonunion workers, with 
union workers more likely to work on the commercial side of the sector 
than the residential, and cited BLS data showing that only a fraction 
of construction workers belonged to labor unions. Commenters suggested 
that IRAPs are necessary to prevent monopolization by unions of 
training in certain construction fields, especially those on the 
commercial construction side of the sector. Commenters argued that 
union-dominated registered programs could not address the existing 
labor shortage, especially in residential construction.
    Commenters urged the Department not to exclude the construction 
sector, or (more specifically) not to exclude the residential 
construction sector, or (alternatively) to include a sunset provision 
to eventually allow competition between the registered program and IRAP 
models. Another commenter said union apprenticeships had 
``monopolized'' the elevator trade in its State and urged the 
Department to allow IRAPs in elevator construction.
    The Department has carefully reviewed these comments and has 
decided to expressly exclude the construction sector from the IRAP 
rule.
    As explained in the NPRM, the Department's goal in this rulemaking 
is to expand apprenticeships to new industry sectors and occupations. 
That approach is consistent with the focus of the President's Task 
Force on ``sectors where apprenticeship programs are insufficient.'' 
This rulemaking's purpose is to expand apprenticeship in industries 
where apprenticeships are emerging or underutilized.
    Construction is not a new industry sector when it comes to 
apprenticeships. Although the data available does not allow the 
Department to apply strict numerical thresholds, as discussed above, it 
does clearly

[[Page 14349]]

demonstrate that apprenticeships are more established in the 
construction sector than in any other.\16\ According to RAPIDS data 
from February 2020, a greater proportion of construction workers are 
currently apprentices in registered programs than in any other sector 
and the ratio of current construction apprentices to the construction 
workforce is many times the ratio for the American economy as a 
whole.\17\ Moreover, construction apprenticeship programs are simply 
more widespread and train more apprentices than in other sectors. 
Indeed, the construction sector accounts for over half of all current 
participants in registered apprenticeship programs according to RAPIDS 
data and accounted for nearly half over the five year period preceding 
publication of the NPRM. Notably, commenters opposed to excluding the 
construction sector did not provide persuasive evidence that 
contradicted the Department's conclusion that registered apprenticeship 
programs are more widespread in the construction sector than in other 
sectors.
---------------------------------------------------------------------------

    \16\ Although the Department does not have data from all SAA 
states, no persuasive reason has been given to doubt that the data 
is not broadly representative of the state of registered 
apprenticeship programs across the nation as a whole.
    \17\ According to RAPIDS data, only the utilities sector and the 
educational services sector come at all close to the construction 
sector in terms of the proportion of workers that are currently 
apprentices. However, the utilities and educational services sectors 
combined have less than half the number of apprentices than the 
construction sector. Separately, the NPRM suggested that the U.S. 
military had a large fraction of registered apprentices. As 
discussed elsewhere, commenters pointed out that the military is not 
a sector similar or comparable to construction or other industry 
sectors.
---------------------------------------------------------------------------

    Many commenters raised significant concerns that allowing IRAPs in 
the construction sector would have an adverse impact on registered 
construction programs. Commenters expressed their belief that 
construction IRAPs' introduction would reduce the quality and safety of 
construction jobs.
    As an initial matter, the Department disagrees with commenters who 
contended that IRAPs will be inherently unsafe or inequitable, create a 
lower-skilled lower-paid workforce, or endanger any American by 
constructing less-safe infrastructure. The Department's requirements 
for SRE recognition, standards of high-quality IRAPs, and oversight 
measures, discussed at length above, provide the necessary safeguards, 
protections, and oversight to allay such concerns. The Department also 
has increased its oversight and the requirements of these standards in 
this final rule to better ensure quality and safe apprenticeship 
opportunities that properly instruct apprentices on how to carry out 
skilled work.
    However, the Department acknowledges that it is possible that 
construction IRAPs could compete to some extent with registered 
construction programs. Some employer funding that currently supports 
registered programs might be diverted to new IRAPs or participants who 
otherwise would likely participate in a registered program might 
instead choose an IRAP, perhaps because the registered program is of 
longer duration than an IRAP that trains on similar activities. Because 
the purpose of this rulemaking is to expand the apprenticeship model 
into new frontiers, the Department has concluded that taking the risk, 
whatever its magnitude, of disrupting or displacing registered 
construction programs is not warranted at this time. The Department 
believes it is prudent to exclude the construction sector in light of 
the concerns raised by so many commenters about allowing IRAPs in that 
specific sector and because the construction sector in fact plainly 
stands out as the industry sector with the greatest existing 
utilization of registered apprenticeship programs.
    The Department appreciates the arguments against excluding the 
construction sector, but ultimately disagrees with those commenters' 
conclusions. To begin, that union registered programs might predominate 
over non-union registered programs is not itself a compelling reason 
for or against the exclusion. Employers and employer associations can 
sponsor registered programs, and unions can sponsor IRAPs or become 
SREs. And even assuming it is true that registered programs tend to 
feed workers to commercial builders rather than residential builders, 
the Department believes that the best rule is to exclude the entire 
sector rather than to require the Administrator and SREs to attempt to 
distinguish between commercial and residential programs. Although the 
NAICS Manual includes residential-specific subsectors, it is far from 
clear that the Administrator and SREs would be able to identify 
programs as training in activities and skills that are applicable to 
only residential construction and not other construction subsectors, 
given the overlap in skills necessary for activities in both 
residential and other types of construction, much less make the 
distinction as consistently and fairly as required by Sec.  29.22(d). 
Some commenters further complained that union-backed programs can take 
too long and are overly detailed. These comments are beside the point 
of whether there should be construction IRAPs--registered 
apprenticeships can be union or non-union supported and their program 
design can be long or short, detailed or less-detailed. The Department 
is adopting the construction exclusion because it sees no reason to 
take the risk, whatever the magnitude, of disrupting the registered 
programs in light of the Department's stated purpose to create an 
alternative pathway for developing apprenticeship programs in new 
industry sectors and occupations.
    The Department agrees with commenters opposed to the exclusion that 
the market for apprentices in the construction sector is not saturated 
and even that demand might be much greater than supply. But, as 
discussed above, the Department disagrees that excluding the 
construction sector from the scope of the IRAP rule is inconsistent 
with the purpose of this rulemaking. The Department's goal is to expand 
apprenticeships broadly to new industry sectors and occupations. The 
Department may, and has chosen to, proceed incrementally. The 
Department's focus is on increasing apprenticeship opportunities in 
sectors of the economy which have not seen nearly the same level of 
apprenticeship programs and opportunities as the construction sector.
    The Department also has determined that the exclusion of the 
construction sector from IRAP eligibility should not ``sunset,'' i.e., 
expire after a certain date. The Department agrees that it conceivably 
could be appropriate in the future to reconsider its decision not to 
allow IRAPs in the construction sector. Among other things, that 
reconsideration could be based on new and compelling evidence showing, 
for example, that IRAPs have worked so well in other sectors that 
repealing the exclusion is worth risking disruption or displacement of 
established registered construction programs, or that registered 
construction programs have materially faltered either in terms of 
prevalence or quality. But no compelling argument was made for 
automatically repealing the exclusion after a particular period of 
time. Accordingly, no such time limitation has been added to Sec.  
29.30 of this final rule.
Describing the Construction Sector
    Several commenters requested that the Department clarify its 
definition of ``the construction industry.''
    In particular, it was suggested that the Department's definition--
``to provide labor whereby materials and constituent

[[Page 14350]]

parts may be combined on a building site to form, make, or build a 
structure,'' 84 FR 29981 & n.22--was too narrow. To ensure that the 
proposed construction exclusion fulfills the Department's goal of 
preserving well-established registered apprenticeship programs in 
construction, a commenter urged the Department to use the definition of 
construction sector (NAICS Code 23) activities that is included in the 
2017 version of the NAICS Manual at page 16: ``Activities of this 
sector are erecting buildings and other structures (including 
additions); heavy construction other than buildings; and alterations, 
reconstruction, installation, and maintenance and repair.'' This 
definition, according to the commenter, would more clearly convey the 
industry's breadth. As the commenter points out, the Department 
actually used the NAICS code for construction in estimating the cost 
impact of the proposed rule (see 84 FR at 29999, nn.48-49, and exhibit 
28 (construction) at 30009), and in determining the significant number 
of apprenticeship opportunities provided by the construction sector (84 
FR at 29980--percentage based on NAICS code). The commenter further 
argued that the Department did not need to rely on an applicant-
supplied NAICS code, as the NPRM explained was a concern. See 84 FR 
29981 n.22. The commenter pointed out that the Department (and, 
presumably, SREs) could look at the occupations that apprentices are 
actually trained for.
    Numerous other commenters endorsed using the definition of 
construction sector activities that appears in the NAICS Manual. 
Several commenters said the language from the NAICS Manual was a more 
comprehensive definition encompassing the ``real-world meaning'' of the 
construction industry. A commenter requested that DOL use the NAICS 
Manual's definition of construction because it is the standard used by 
Federal statistical agencies in classifying business establishments.
    Multiple commenters discussed various cases, including the National 
Labor Relations Board's decision in Carpet, Linoleum, and Soft Tile 
Local Union No. 1247 (Indio Paint), 156 NLRB 951 (1966), which grappled 
with broad definitions of the construction industry, and they stated 
that the NAICS Manual's language describing the construction industry 
has been affirmed by industry stakeholders as a comprehensive, 
workable, and accurate definition. Several commenters cited Indio Paint 
as legal precedent to substantiate the claim that ``construction'' 
should encompass additional activities like repairs or the replacement 
of parts in an immovable structure. These commenters suggested that the 
NAICS Manual's definition was an appropriately broad and comprehensive 
definition, and they urged DOL to adopt such a definition. Several 
commenters opined that a broader definition of construction, 
specifically the NAICS Manual's definition, was necessary to protect 
the widespread and effective apprenticeship programs already in place 
in their industries. Several comments requested that the definition be 
amended to ensure coverage for specific industries, activities, or 
occupations. One commenter took issue with the NPRM's invocation of 
case law using the NPRM's proffered definition while interpreting 
section 8(f) of the National Labor Relations Act (NLRA), arguing that 
pre-hire agreements had nothing to do with apprenticeship. This 
commenter said it was inappropriate to resort to NLRA case law to 
define the scope of the construction industry.
    In contrast, multiple commenters defended the definition used in 
the NPRM preamble, arguing that it is consistent with case law applying 
statutes that are administered by the Department, such as the 
Employment Retirement Income Security Act and the Taft-Hartley Act. One 
commenter requested that the Department retain the NPRM's definition of 
construction because it accurately describes the industry. Yet, some of 
these commenters opined the Department would be better served by 
adopting the definition of construction in the Department's regulations 
implementing the Davis-Bacon Act at 29 CFR 5.2(j). These commenters 
said that the definition of the term ``construction'' in the Davis-
Bacon Act regulations offers a more comprehensive description of the 
scope of construction activities, and is a well-established 
definitional framework that the Department already utilizes.
    After considering these comments, the Department has decided to 
adopt a suggestion offered by numerous commenters, and noted in the 
NPRM, to use the NAICS Manual to determine activities in the 
construction sector. The Department agrees that the NAICS Manual 
description--``[a]ctivities of this sector are erecting buildings and 
other structures (including additions); heavy construction other than 
buildings; and alterations, reconstruction, installation, and 
maintenance and repair''--is more comprehensive and more suitable than 
the more limited definition of the sector that appeared in the NPRM (at 
84 FR 29981), which stated that an apprenticeship program would be in 
construction ``if it equips apprentices to provide labor whereby 
materials and constituent parts may be combined on a building site to 
form, make, or build a structure.'' The text of Sec.  29.30 
incorporates the above description from the NAICS Manual. As noted 
above, in considering whether an SRE application falls within the 
construction sector, the Department will draw upon the manual's 
description of Sector 23 as a whole as well as its descriptions of its 
subsectors. However, it will do so only to determine whether the 
activities in which programs train apprentices fall within the 
definition of construction in Sec.  29.30. The focus on activities is 
intended to prevent artificially circumscribing the outer bounds of 
what qualifies as a construction program. Similarly, the Department 
will not rely alone on job titles or job classifications referenced in 
NAICS 23 or be bound strictly by O*NET codes in determining whether 
Sec.  29.30 prohibits recognition of a SRE or IRAP; rather, as 
discussed above, the Department will consider all information in the 
application to determine whether an SRE seeks to train in construction 
activities.
Military Exclusion
    The NPRM stated that, based on the deconfliction formula, SREs 
would not be allowed to recognize apprenticeship programs in the U.S. 
military.
    Commenters noted that the military is not analogous to economic 
sectors, such as construction, manufacturing, or mining, quarrying, and 
oil and gas extraction, and that USMAP does not correspond to training 
in any particular industry or occupation. Thus, excluding 
apprenticeship programs in the U.S. military would not align with the 
Department's stated goal of encouraging more apprenticeships in new 
industry sectors that lack widespread and well-established registered 
apprenticeship opportunities.
    Commenters also contended that USMAP generally documents skills 
that members of the armed forces learn during their ordinary, day-to-
day military training and experience, as opposed to during a distinct 
occupation-focused training program. The raw number of participants in 
USMAP thus likely overstates the number of military apprentices whose 
experiences are comparable to those in civilian programs. Similarly, a 
commenter discussed how it is challenging to retain military 
apprentices in the civilian workforce.
    The Department agrees with the thrust of these comments and has 
decided not to exclude military apprenticeships

[[Page 14351]]

from the scope of the IRAP rule. However, any military apprenticeships 
in construction activities, as defined in the NAICS Manual, are 
prohibited under Sec.  29.30 of the final rule.
Distinguishing Between Recognition of SREs and IRAPs
    Section 29.31 of the proposed rule provided that the Department 
would not recognize SREs that seek to recognize programs in certain 
sectors as IRAPs. Section 29.31 did not expressly prohibit SREs from 
recognizing as IRAPs programs that seek to train apprentices for those 
sectors. The Department has revised Section 29.30 of the final rule to 
clarify that SREs are prohibited from recognizing as IRAPs programs 
that seek to train apprentices to perform construction activities. If 
an SRE does recognize a program that trains apprentices to perform 
construction activities, it would be subject to derecognition.
Section 29.31 Severability
    The Department has decided to include a severability provision as 
part of this final rule. To the extent that any provision of subpart B 
of this final rule is declared invalid by a court of competent 
jurisdiction, the Department intends for all other provisions of 
subpart B that are capable of operating in the absence of the specific 
provision that has been invalidated to remain in effect.
Removal of Proposed Appendix A to Subpart B--IRAP SRE Application Form 
(ETA Form 9183)
    The NPRM included an appendix A to subpart B (Industry-Recognized 
Apprenticeship Program Standards Recognition Entity Application Form) 
containing the proposed form that would be utilized by potential SREs 
in applying for recognition from the Department. In developing this 
final rule, however, the Department determined that the retention of 
this form within the body of the rule could make administration of this 
program challenging. As a practical matter, the Department is concerned 
that embedding the form in the rule would prevent the Department from 
making minor modifications in the future without regulatory action. 
Accordingly, the Department has decided to remove the form from the 
body of the final regulation and has developed an updated version of 
the form to collect relevant information from potential SREs seeking 
recognition from the Department (see Paperwork Reduction Act discussion 
below for additional details).

III. Agency Determinations

A. Executive Orders 12866 (Regulatory Planning and Review) and 13563 
(Improving Regulation and Regulatory Review)

    Under E.O. 12866, OMB's Office of Information and Regulatory 
Affairs determines whether a regulatory action is significant and, 
therefore, subject to the requirements of the E.O. and review by OMB. 
See 58 FR 51735 (Oct. 4, 1993). Section 3(f) of E.O. 12866 defines a 
``significant regulatory action'' as an action that is likely to result 
in a rule that: (1) Has an annual effect on the economy of $100 million 
or more, or adversely affects in a material way a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or communities 
(also referred to as economically significant); (2) creates serious 
inconsistency or otherwise interferes with an action taken or planned 
by another agency; (3) materially alters the budgetary impacts of 
entitlement grants, user fees, or loan programs, or the rights and 
obligations of recipients thereof; or (4) raises novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the E.O. Id. This final rule is an 
economically significant regulatory action, under sec. 3(f) of E.O. 
12866.
    E.O. 13563 directs agencies to propose or adopt a regulation only 
upon a reasoned determination that its benefits justify its costs; the 
regulation is tailored to impose the least burden on society, 
consistent with achieving the regulatory objectives; and in choosing 
among alternative regulatory approaches, the agency has selected those 
approaches that maximize net benefits. E.O. 13563 recognizes that some 
benefits are difficult to quantify and provides that, where appropriate 
and permitted by law, agencies may consider and discuss qualitatively 
values that are difficult or impossible to quantify, including equity, 
human dignity, fairness, and distributive impacts.
    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as a ``major rule,'' as defined by 5 U.S.C. 804(2).
1. Public Comments
    A commenter stated that the proposed rule would help address the 
current shortage of skilled workers in craft and trade industries, as 
well as the costly and lengthy delays in the current apprenticeship 
approval process. The commenter stated that while 90 percent of 
apprenticeship program participants will have a job after their program 
concludes and a $300,000 increase in lifetime earnings without the 
burden of student loan debt, only 0.3 percent of the workforce has 
taken part in registered apprenticeship programs, partly due to the 
lack of flexibility under the registered apprenticeship model.
    The Department concurs that this new program offers many new 
benefits, which will harness industry expertise and encourage private 
industry to determine the skills that workers need to acquire through 
apprenticeship programs. This industry-led, market-driven approach will 
provide employers with flexibility to develop customized programs that 
serve their specialized business requirements.
    A commenter expressed concern that the combination of significant 
and quantifiable costs with broad non-quantified benefits may lead to 
low participation rates among companies in the IRAP program.
    The Department agrees that quantifiable benefits would be ideal to 
include in the economic analysis. However, this is a new program, so 
data do not yet exist on its effectiveness. The Department would need 
to make numerous untested assumptions to attempt to quantify the 
benefits; therefore, the Department has maintained a qualitative 
discussion of the benefits in the final rule.
    A commenter stated that the advantages of IRAPs discussed in the 
proposed rule are actually those of registered apprenticeship programs 
and will not accrue to IRAPs because they avoid many of the 
requirements of registered apprenticeship programs that give rise to 
those benefits to society. Another commenter stated that every dollar 
of public investment in registered apprenticeship programs yields a $27 
return to the economy, while IRAPs are ``unproven'' and ``unneeded.'' 
Multiple commenters cited the substantial return on investment 
associated with registered apprenticeship and expressed concern that 
the registered apprenticeship system is under threat from the proposed 
rule.
    The Department agrees that the Mathematica study citation in the 
proposed rule pertains to the effectiveness of registered 
apprenticeship: Individuals who successfully complete an apprenticeship 
program are estimated to amass career-long earnings (including employee 
benefits) that are greater than the earnings of similarly situated 
individuals who did not enroll in such

[[Page 14352]]

programs.\18\ The IRAP system is a new program, so data do not yet 
exist on its effectiveness. Through the public comment process, the 
Department did not receive recommendations for relevant data, which 
likely reflects the fact that this is a new program, so the Department 
was unable to quantify the benefits in the final rule. In any case, the 
Department does not expect the expansion of apprenticeships under this 
rule to come at the expense of existing registered apprenticeship 
programs. Instead, the Department anticipates that this parallel 
apprenticeship system will encourage the expansion of apprenticeships 
in additional industries and occupations. We agree that the registered 
apprenticeship system works well for its participants--and the 
Department is working to increase their numbers--but historically the 
number of those participants has been limited, especially compared to 
apprenticeship in other countries. This rule is intended to reach new 
and emerging sectors of the economy where apprenticeship has been 
underused.
---------------------------------------------------------------------------

    \18\ Mathematica Policy Research, ``An Effectiveness Assessment 
and Cost-Benefit Analysis of Registered Apprenticeship in 10 States: 
Final Report,'' July 25, 2012, https://www.mathematica.org/our-publications-and-findings/publications/an-effectiveness-assessment-and-costbenefit-analysis-of-registered-apprenticeship-in-10-states.
---------------------------------------------------------------------------

    One commenter asserted that the proposed rule is likely to be 
considered economically significant under E.O. 12866 and, therefore, a 
``major rule'' under the Congressional Review Act because the 
activities the Department quantified represent only a small fraction of 
an IRAP's responsibilities under the rule. The commenter stated that 
the Department based its estimate of the rule's overall costs almost 
entirely on the discrete actions it anticipates the SREs' and IRAPs' 
Training and Development Managers will take, but it declined to 
quantify numerous costs related to the actual development and operation 
of IRAPs. Further, the commenter stated that the Department failed to 
use its experience with registered apprenticeship programs to quantify 
the development, staffing, and operations costs of IRAPs, and asserted 
that the costs and impact on the economy would increase if the 
Department quantified these costs. Specifically, the commenter claimed 
that if the Department attributed a cost-per-apprentice of only $5,000 
(20 percent of the Department of Commerce's lower estimate in its 2016 
study of 13 businesses and intermediaries \19\) for 10 apprentices per 
IRAP, the costs and impact on the economy would increase by more than 
$100 million in the first year. Further, the commenter claimed that if 
the Department assumed each IRAP would hire one full-time employee 
(based on the Department of Commerce's 2016 study in which most of the 
firms dedicated at least one staff member to manage their programs), 
the cost of the rule to IRAPs alone would increase to over $190 million 
per year.
---------------------------------------------------------------------------

    \19\ Susan Helper, Ryan Noonan, Jessica R. Nicholson, and David 
Langdon, ``The Benefits and Costs of Apprenticeship: A Business 
Perspective,'' Nov. 2016, https://files.eric.ed.gov/fulltext/ED572260.pdf.
---------------------------------------------------------------------------

    As the Department explained in the proposed rule, the 2016 study 
published by the Department of Commerce found that apprenticeship 
programs vary significantly in length and cost. The shortest program in 
the study lasted 1 year, while the longest lasted more than 4 years. 
Importantly, the Commerce report was a case study of only 13 programs, 
so it is not a representative sample. Moreover, the variety of 
apprenticeship programs is expected to grow dramatically under this 
rule, with an even greater variety of sizes, durations, occupations, 
and industries. Furthermore, compensation costs for apprentices were 
the major cost of the programs in the Commerce report and compensation 
is typically considered a ``transfer'' rather than a ``cost'' in 
regulatory impact analyses. It is also important to note that many of 
the costs of an apprenticeship program would still be incurred if the 
company filled the job through another method, such as hiring an 
already-trained worker, contracting a temporary worker, or increasing 
the hours of existing staff. For these reasons, the Department 
continues to maintain that the estimated cost-per-apprentice of $25,000 
to $250,000 in the Commerce study is not a reasonable basis for 
estimating IRAP costs, nor is using a share of that study's cost-per-
apprentice as the commenter did.
    Another commenter expressed concern that there were no cost 
estimates for the training component of IRAPs and remarked that these 
estimates could prove to be in the hundreds of millions of dollars. The 
commenter claimed that with the substantial growth of registered 
apprenticeship, there is a large amount of available data from existing 
programs about yearly training costs.
    The Department does not track cost-per-program data nor cost-per-
participant data under the registered apprenticeship program. Although 
program sponsors may track such data, cost per participant and cost per 
program are not required performance measures under the registered 
apprenticeship system, so the Department has no way to capture or track 
such data. Moreover, even if such data did exist, it would not be 
suitable for this analysis because IRAPs are likely to differ 
substantially from registered apprenticeship programs in size, nature, 
scope, duration, industry, and occupational area. In the economic 
analysis, the Department acknowledges the cost of apprenticeship 
programs; however, due to data limitations, the costs are described 
qualitatively in section III.A.7 (Nonquantifiable Costs).
    A commenter stated that, if the Department does not exclude the 
construction industry, the rule is likely to have an economic impact on 
the construction industry of at least $100 million per year because 
IRAPs in the construction industry would displace more than 10 percent 
of the private investment made in registered apprenticeship programs. 
Several commenters stated that the proposed rule failed to take into 
account the devaluing effect that IRAPs would have on registered 
apprenticeship program apprentices' credentials because of lower 
standards associated with the new program versus the registered 
apprenticeship program.
    The Department does not expect the expansion of apprenticeships 
under this rule to come at the expense of existing registered 
apprenticeship programs. Instead, the Department anticipates that this 
parallel apprenticeship system will encourage the expansion of 
apprenticeships beyond those industries where registered 
apprenticeships already are effective and substantially widespread. 
With respect to the construction industry in particular, the 
Administrator will not recognize SREs that recognize IRAPs that seek to 
train apprentices in construction activities as defined in Sec.  29.30, 
mooting these concerns as to the construction sector.
    A commenter stated that deregulation would not decrease the costs 
of purchasing facilities and equipment, developing curriculum, hiring 
instructors and administrators, and other amounts that are required to 
finance first-class programs. Another commenter stated that without the 
ability to reasonably estimate a quantitative value for participating 
in an IRAP, most companies will either use the registered 
apprenticeship system or proceed with an unregistered apprenticeship 
program to avoid the costs associated with IRAPs.

[[Page 14353]]

    The Department anticipates that a wide variety of entities across 
numerous industries and occupations will opt to participate in this new 
program. As such, the Department expects the size, duration, staff 
levels, overhead costs, capital expenditures, and other elements of 
IRAPs to vary widely. Consequently, the Department is unable to 
accurately quantify all of the potential costs IRAPs may incur.
    Several commenters stated that the AAI grant program is not the 
best guidepost for estimating the number of SRE applications because 
the standards for IRAPs are lower than those for registered 
apprenticeship programs and AAI grants are limited to H-1B occupations 
and have more requirements than IRAPs do. Another commenter suggested 
that the Department should consider that millions of dollars were 
awarded to each successful AAI grant application and no similar award 
is forthcoming for designation as an SRE, potentially reducing the 
number of applicants for SRE designation. Another commenter also 
expressed concern with the use of historical projections based on the 
AAI grant program and questioned whether there are significant numbers 
of potential SREs beyond those that already received Federal grants, 
and if so, whether there will be a sustainable 5-percent growth rate 
over 10 years.
    The Department acknowledges that estimating the number of SRE 
applicants using the AAI grant program is subject to data limitations 
and uncertainties. However, in the absence of an alternative data 
source suggested during the public comment process, the Department has 
maintained its methodology and data source for estimating the number of 
SRE applicants. With respect to the 5-percent growth rate, the 
Department maintains that it is a reasonable estimate given that as 
many as 50 occupations are ripe for apprenticeship expansion \20\ and 
that this regulation is intended to expand the apprenticeship model 
broadly--including to employers and workers that might not previously 
have considered participating.
---------------------------------------------------------------------------

    \20\ [thinsp]Joseph B. Fuller and Matthew Sigelman, ``Room to 
Grow: Identifying New Frontiers for Apprenticeships,'' Nov. 2017, 7-
8, https://www.hbs.edu/managing-the-future-of-work/Documents/room-to-grow.pdf.
---------------------------------------------------------------------------

    A commenter stated that the Department is forecasting tepid initial 
demand and rapidly declining future demand for the program, reaching 
only 32 recognized IRAPs per SRE through the first 10 years, and that 
these estimates, if accurate, are likely to deter many organizations 
from pursuing recognition as an SRE.
    To address America's skills gap, the Department welcomes all 
interested entities to submit an application to become a recognized SRE 
and encourages SREs to recognize as many qualified programs as 
feasible. The Department agrees with the commenter that it is difficult 
to accurately forecast future demand for a new program. As such, the 
numbers of SREs in the economic analysis are the Department's best 
estimation of future demand.
    A commenter stated that the 2-hour time estimate for SRE rule 
familiarization is low and lacks the executive decision time to 
undertake this project. Another commenter stated that the 1-hour time 
estimate for IRAP rule familiarization is unrealistic; similarly, a 
commenter stated that an IRAP would likely need more time for rule 
familiarization than an SRE would.
    The Department acknowledges that some entities may take longer than 
2 hours to read the rule and become familiar with its requirements, and 
that some IRAPs may take longer than 1 hour to do so. On the other 
hand, some entities may simply rely on industry-produced fact sheets or 
information on the Department's website to familiarize themselves with 
the rule, which could take less time than the estimates. The time 
burden estimates are assumed to be averages; some entities may take 
more time, while others may take less. Furthermore, the commenters did 
not provide data for the Department to use to improve its estimates. 
Accordingly, the Department has maintained the 2 hours for SRE rule 
familiarization and 1 hour for IRAP rule familiarization in the final 
rule.
    A commenter stated that the time estimate for SREs to complete the 
application process assumes that organizations applying for SRE status 
already possess all of the policies, procedures, and systems required 
in the application form. Another commenter stated that the 2-hour 
estimate for completing Section I of the application form would have to 
assume an existing program with a Federal EIN and a website in place. 
The same commenter contended that the 2-hour estimate for completing 
Section II of the application form fails to recognize that some of the 
tasks would have to be developed for a new program prior to completing 
this section, and that interaction with other departments such as 
finance is not accounted for. With respect to Sections III and IV, the 
same commenter stated that there are at least 20 tasks per section, but 
the estimates do not account for the time to create many of the items 
being reported. The same commenter also contended that 5 minutes is 
inadequate for completing Sections V and VI.
    The final rule's time estimates for completing the SRE application 
differ from the time estimates in the NPRM because the Department has 
made changes to the application form in an effort to improve and 
streamline the process for prospective SREs. The Department anticipates 
that a wide variety of entities across numerous industries and 
occupational areas will opt to participate in this new program. As 
such, the Department expects the nature and experience of applicants to 
vary widely. For example, many prospective SREs may already have an 
EIN, have systems and procedures in place, and plan to recognize only 
one or two small IRAPs; therefore, the Department expects the time 
burden for such entities to be lower than the estimates in the 
analysis. The time burden estimates in the economic analysis are 
assumed to be averages; some entities may take more time to complete 
the application, while others may take less.
    In response to public comments, the Department increased the time 
burden estimates for completing Sections III and IV of the application 
to account for an SRE's development of the policies and procedures 
required under this rule. Specifically, SREs must develop policies and 
procedures related to the following paragraphs: 29.21(b)(6), which 
pertains to mitigating conflicts of interest; 29.22(d), which pertains 
to consistency in assessing prospective IRAPs; 29.22(f)(5), which 
pertains to the suspension or derecognition of an IRAP; 29.22(i), which 
pertains to requiring IRAPs to adhere to applicable Federal, State, and 
local EEO laws; and 29.22(j), which pertains to addressing complaints 
against IRAPs.
    A commenter stated that a 70-percent success rate for initial 
applicants is too high, that half of rejected applicants reapplying is 
too low, and that 1 percent requesting administrative review is too 
low.
    The Department did not receive a specific estimate or a data source 
to substantiate the commenter's statements, so the Department has 
continued to rely on its experience with other workforce development 
programs and has maintained its estimates in the final rule.
    A commenter stated that the 10-percent estimate for the share of 
SREs that will be required to supply data or information to the 
Administrator under Sec.  29.22(a)(3) seems low.

[[Page 14354]]

    The Department acknowledges that the share may be lower or higher 
than 10 percent, but without receiving a specific estimate or data 
source during the public comment process, the Department has maintained 
the 10-percent estimate in the final rule.
    A commenter stated that the 80-hour time estimate for SREs' quality 
control of IRAPs is not only too low, but should be based on the 
estimated number of IRAPs rather than on the estimated number of SREs. 
Likewise, the same commenter stated that the 30-hour time estimate for 
an SRE to make publicly available performance data from each of its 
IRAPs is not only too low, but should be based on the estimated number 
of IRAPs rather than on the estimated number of SREs.
    The Department took these recommendations under advisement and 
revised these two calculations by basing them on the estimated number 
of IRAPs rather than on the estimated number of SREs because the time 
burden will vary by SRE, depending on the number of IRAPs it 
recognizes. Moreover, the estimated time burdens have increased due to 
additional requirements in the final rule: (1) SREs must conduct 
periodic compliance reviews of IRAPs; (2) SREs must not only publicize 
performance data, but also provide performance data to DOL; and (3) 
SREs must provide additional performance data, namely attainment of 
industry-recognized credentials, average earnings of completers, 
training cost per apprentice, and demographic information.
    A commenter stated that the 5-minute estimate for disclosure of 
wages to apprentices is inadequate because IRAPs will first need to 
establish a starting pay structure, and then periodically review and 
update the wage scale. Similarly, the same commenter stated that 
disclosure of ancillary costs to apprentices will take longer than 5 
minutes because IRAPs will have to determine those costs. Moreover, the 
commenter stated that both of these disclosure calculations should 
apply to 100 percent (rather than 10 percent) of IRAPs because this is 
a new program.
    The Department expects the nature and experience of IRAPs to vary 
widely. For example, some IRAPs may already have a pay structure in 
place, have predetermined costs for educational materials, or plan to 
train only one or two apprentices. Accordingly, the Department expects 
the time burdens to vary widely. The time burden estimates in the 
economic analysis are assumed to be averages; some IRAPs may take more 
time, while others may take less. That being said, the Department took 
a different approach in the final rule in light of the new requirement 
at Sec.  29.22(a)(4)(x) for IRAPs to provide a written apprenticeship 
agreement. Given that the written apprenticeship agreement will likely 
include the disclosure of wages and costs, the Department combined the 
three activities into two costs: Develop written apprenticeship 
agreements (8 hours per new IRAP) and sign the written apprenticeship 
agreements (10 minutes per apprentice).
    Several commenters stated that the 1-hour estimate for Step 1 in 
the Department's review of applications (i.e., processing by Program 
Analysts) seems too low. Furthermore, a commenter stated that the time 
estimates for Step 2 (i.e., panel review) and Step 3 (i.e., panel 
meeting) do not include additional supervision of the panelists by the 
Administrator and assume no conflicting opinions or negotiations over 
applications. Commenters also contended that 15 minutes for Step 4 
(i.e., review by the Administrator) is inadequate.
    The Department acknowledges that the time for reviewing 
applications may be higher or lower than the estimates in the economic 
analysis, depending on the complexity of the responses, qualifications 
of the prospective SRE, quality of the application, etc. The time 
burden estimates are assumed to be averages; some applications may take 
more time to review, while others may take less. Furthermore, the 
commenters did not provide data for the Department to use to improve 
its estimates; therefore, the Department maintains that its estimates 
in the proposed rule were reasonable averages.
    A commenter stated that the costs for review by an Administrative 
Law Judge, and all other legal costs, would increase as the number of 
appeals increases, and the costs do not include Administrator time 
needed to facilitate this review.
    The Department agrees that the legal costs would increase as the 
number of appeals increases and accounted for this by multiplying the 
estimated time burdens by the hourly compensation rates and by the 
estimated number of applicants that would request administrative review 
in each year of the 10-year analysis period. The estimates were based 
on the input of an Administrative Law Judge at the Department. With 
respect to the Administrator's time to facilitate this review, that 
cost was captured in the subsection titled ``DOL Preparation of 
Administrative Record When a Denied Entity Requests Review.'' The 
estimated time to prepare an administrative record is 6 hours by a 
Program Analyst.
    A commenter noted that the annualized costs over the 10-year 
analysis period for three activities (i.e., rule familiarization, 
completing Section I of the application form, and completing Section II 
of the application form) were different although the estimated time (2 
hours) and the hourly compensation rate ($113.16) were the same for all 
three activities.
    The reason for the difference is that SREs must undergo the 
Department's process for continued recognition every 5 years; however, 
the Department assumes SREs will only need to familiarize themselves 
with the rule one time. Accordingly, the same number of entities is 
used for both calculations in Years 1-5 (270 in Year 1, 14 in Year 2, 
14 in Year 3, 15 in Year 4, and 16 in Year 5) but the numbers differ in 
Years 6-10. For rule familiarization, the number of entities is 
estimated at 44 in Year 6, 19 in Year 7, 20 in Year 8, 21 in Year 9, 
and 22 in Year 10. For the application form, the number of entities is 
estimated at 226 in Year 6, 28 in Year 7, 29 in Year 8, 31 in Year 9, 
and 32 in Year 10.
    A commenter questioned whether SREs have Title VII Uniform 
Guidelines on Employee Selection Procedures responsibility for written 
test job requirements and, if so, why it is not included the cost 
analysis.
    This rule does not add a burden to employers related to the Uniform 
Guidelines on Employee Selection Procedures under Title VII.
    With respect to the IRAP costs that the Department addressed 
qualitatively in the proposed rule, a commenter stated that the claim 
from the 2016 Department of Commerce study \21\ that many of the costs 
of an apprenticeship program would still be incurred if a company 
filled the job through another method is ``incorrect'' because the 
company would carry none of the training, mentorship, or nonproductive 
paid hours that an apprenticeship must assume.
---------------------------------------------------------------------------

    \21\ Susan Helper, Ryan Noonan, Jessica R. Nicholson, and David 
Langdon, ``The Benefits and Costs of Apprenticeship: A Business 
Perspective,'' Nov. 2016, https://files.eric.ed.gov/fulltext/ED572260.pdf.
---------------------------------------------------------------------------

    The Department acknowledges that apprenticeships include training, 
mentorship, and other costs that hiring an already-trained worker, 
contracting a temp worker, or increasing the hours of existing staff 
would not entail; however, the Department also recognizes that already-
trained workers, temporary workers, and existing staff are likely to be 
paid at a higher rate than

[[Page 14355]]

apprentices, mitigating some of the costs referenced by the commenter. 
Without data to substantiate the commenter's claims or provide reliable 
estimates of IRAP costs, the Department has retained a qualitative 
discussion in the final rule.
    A commenter suggested that rather than calling the IRAP model 
``apprenticeship,'' the Department should achieve the goal of providing 
funding to companies for long-term, on-the-job training through various 
other methods such as expanding WIOA or a separate discretionary 
funding stream. Another commenter suggested that the Department propose 
a policy that leads to higher journeyman wage rates in industries where 
the government wants to encourage apprenticeships. Another commenter 
remarked that the best way to address ``softness'' in the construction 
industry would be a dramatic, 10-year investment in infrastructure. A 
fourth commenter cited the annual cost of administering the proposed 
rule, remarked that OA does not have enough professional staff to carry 
out its mission effectively, and suggested that the Department expand 
the resources devoted to traditional apprenticeship instead.
    The Department is unable to act on these suggestions as they are 
legislative proposals that fall under the purview of the legislative 
branch of government (i.e., Congress).
    A commenter suggested that, given current U.S. Treasury rates, the 
Department should use a 3-percent discount rate rather than a 7-percent 
discount rate.
    As the commenter noted, the Department is constrained in its 
selection of the discount rates by OMB Circular A-4, which instructs 
agencies to ``present annualized benefits and costs using real discount 
rates of 3 and 7 percent.'' \22\ Accordingly, the Department estimated 
the costs of the rule over 10 years at discount rates of both 3 percent 
and 7 percent. The Department narrowed its analysis to the 7-percent 
discount rate only in the Regulatory Flexibility Analysis because 
including two additional columns in each of the 18 industry tables 
would be cumbersome and have little impact on the results. 
Specifically, the first year cost per IRAP is estimated at $17,796 at a 
discount rate of 7 percent, compared to $18,487 at a discount rate of 3 
percent. The annualized cost per IRAP is estimated at $9,379 at a 
discount rate of 7 percent, compared to $9,049 at a discount rate of 3 
percent. Moreover, according to OMB Circular A-4, ``[a]s a default 
position, OMB Circular A-94 states that a real discount rate of 7 
percent should be used as a base-case for regulatory analysis.''
---------------------------------------------------------------------------

    \22\ OMB, ``Circular A-4,'' Sept. 17, 2003, https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf.
---------------------------------------------------------------------------

2. Summary of the Economic Analysis
    The Department anticipates that the final rule will result in 
benefits and costs for SREs, IRAPs, apprentices, and society. The 
benefits of the final rule are described qualitatively in section 
III.A.3 (Benefits). The estimated costs are explained in sections 
III.A.4 (Quantitative Analysis Considerations), III.A.5 (Subject-by-
Subject Analysis), and III.A.6 (Summary of Costs). The nonquantifiable 
costs are described qualitatively in section III.A.7 (Nonquantifiable 
Costs). The nonquantifiable transfer payments are described 
qualitatively in section III.A.8 (Nonquantifiable Transfer Payments). 
Finally, the regulatory alternatives are explained in section III.A.9 
(Regulatory Alternatives).
    The costs of the final rule for SREs include rule familiarization, 
completing the application form, and remaining in an ongoing quality-
control relationship with IRAPs. The costs of the final rule for IRAPs 
include rule familiarization and providing performance information to 
the SRE. The costs of the final rule for the Federal Government are 
associated with development and maintenance of an online SRE 
application form, reviewing applications, and development and 
maintenance of an online list of SREs and IRAPs.
    Exhibit 1 shows the total estimated costs of the final rule over 10 
years (2020-2029) at discount rates of 3 percent and 7 percent. The 
final rule is expected to have first year costs of $42.3 million in 
2018 dollars. Over the 10-year analysis period, the annualized costs 
are estimated at $46.5 million at a discount rate of 7 percent in 2018 
dollars. In total, over the first 10 years, the final rule is estimated 
to result in costs of $326.8 million at a discount rate of 7 percent in 
2018 dollars.
[GRAPHIC] [TIFF OMITTED] TR11MR20.000

    When the Department uses a perpetual time horizon to allow for cost 
comparisons under E.O. 13771, the perpetual annualized cost is 
$38,738,885 at a discount rate of 7 percent in 2016 dollars.\23\
---------------------------------------------------------------------------

    \23\ To comply with E.O. 13771 accounting, the Department 
multiplied the annual cost for Year 10 ($59,248,016) by the GDP 
deflator (0.9582) to convert the cost to 2016 dollars ($56,769,601). 
The Department used this result for a long-term pattern totaling 
$601,417,957 over 20 years with a 7-percent discount rate. The 
Department then calculated the present value ($725,411,079) and 
perpetual annualized cost ($50,778,776) in 2016 dollars. Assuming 
the rule takes effect in 2020, the Department divided $50,778,776 by 
1.07\4\, which equals $38,738,885.
---------------------------------------------------------------------------

3. Benefits
    This section provides a qualitative description of the anticipated 
benefits

[[Page 14356]]

associated with the final rule. The Department expects this regulation 
to have a net benefit overall.
    Through this regulation, and as explained in the rule's Background 
section, above, the Administration seeks to address a persistent and 
serious long-term challenge to American economic leadership in the 
global marketplace: A significant mismatch between the occupational 
competencies that businesses require and the job skills that aspiring 
employees possess. While there were 6.4 million job openings in the 
United States at the end of 2019,\24\ some openings go unfilled because 
there are not enough workers with needed skills.\25\ This pervasive 
skills gap poses a serious impediment to job growth and productivity 
throughout the economy.
---------------------------------------------------------------------------

    \24\ BLS, ``Job Openings and Labor Turnover--December 2019,'' 
Feb. 11, 2020, https://www.bls.gov/news.release/archives/jolts_02112020.pdf.
    \25\ See, e.g., Task Force on Apprenticeship Expansion, ``Final 
Report to the President of the United States,'' May 10, 2018, 16 
(citing 2018 report from National Federation of Independent 
Business); Business Roundtable, ``Closing the Skills Gap,'' https://www.businessroundtable.org/policy-perspectives/education-workforce/closing-the-skills-gap (last visited Dec. 7, 2019).
---------------------------------------------------------------------------

    The promotion and expansion of quality apprenticeships can play a 
key role in alleviating the skills gap by providing individuals 
including young people, women, and other populations with relevant 
workplace skills and a recognized credential. This proven workforce 
development technique not only helps individuals to move into decent, 
family-sustaining jobs, but also assists businesses with finding the 
workers they need to maintain their competitive edge. Individuals who 
successfully complete an apprenticeship program are estimated to amass 
career-long earnings (including employee benefits) that are greater 
than the earnings of similarly situated individuals who did not enroll 
in such programs.\26\
---------------------------------------------------------------------------

    \26\ See, e.g., Mathematica Policy Research, ``An Effectiveness 
Assessment and Cost-Benefit Analysis of Registered Apprenticeship in 
10 States: Final Report,'' July 25, 2012, https://www.mathematica.org/our-publications-and-findings/publications/an-effectiveness-assessment-and-costbenefit-analysis-of-registered-apprenticeship-in-10-states.
---------------------------------------------------------------------------

    The final report of the Task Force noted that ``[w]hile the Federal 
Government can establish the framework for a successful apprenticeship 
program and provide support, substantial change must begin with 
industry-led partnerships playing the pivotal role'' of creating, 
recognizing, and managing apprenticeship programs.\27\ Underlying this 
approach is the conviction that private industry--rather than 
government--is best suited to determine the occupational skills that 
workers need to acquire through apprenticeship programs. Such an 
industry-led approach will provide employers the flexibility they need 
to devise customized programs that serve their specialized business 
requirements.
---------------------------------------------------------------------------

    \27\ Task Force on Apprenticeship Expansion, ``Final Report to 
the President of the United States,'' May 10, 2018, 19.
---------------------------------------------------------------------------

    Accordingly, the Department is issuing this regulation, which will 
supplement the current system of registered apprenticeships with a 
parallel system of IRAPs, thereby enabling the rapid expansion of 
quality apprenticeships across a wide range of industries and 
occupational areas. This regulation requires SREs to recognize and 
maintain recognition of only high-quality IRAPs, which will benefit 
apprentices and encourage the expansion of the apprenticeship model.
4. Quantitative Analysis Considerations
    The Department estimated the costs of the final rule relative to 
the existing baseline (i.e., no IRAPs). In accordance with the 
regulatory analysis guidance articulated in OMB Circular A-4 and 
consistent with the Department's practices in previous rulemakings, 
this regulatory analysis focuses on the likely consequences of the 
final rule (i.e., the costs that are expected to accrue to the affected 
entities). The analysis covers 10 years to ensure it captures the major 
costs that are likely to accrue over time. The Department expresses the 
quantifiable impacts in 2018 dollars and uses discount rates of 3 and 7 
percent, pursuant to Circular A-4.
a. Estimated Number of Applications and SREs
    To calculate the annual costs, the Department first needed to 
estimate the number of applications and SREs over the 10-year analysis 
period. The Department believes a reliable guidepost for estimating the 
number of SRE applications is the number of entities that submitted 
grant applications in FY 2016 under OA's AAI grants program. As noted 
earlier, commenters did not supply alternative data sources for the 
Department to estimate SRE participation.
    Like IRAPs, the AAI grant program was designed to encourage 
innovative approaches to the development of apprenticeship programs by 
a wide cross-section of groups, including private sector employers, 
labor unions, educational institutions, and not-for-profit 
organizations. In the 4 months during which AAI grant applications were 
accepted, OA received 191 applications for grants from the intended 
cross-section of program sponsors and innovators. The 191 AAI 
applicants were diverse in terms of geography, industry sector, and 
apprenticeship-program design. The Department anticipates that the 
diversity in AAI applicants will be replicated in the context of this 
final rule.
    Starting with 191 AAI grantee applicants as a reasonably analogous 
baseline, the Department rounded this figure slightly upwards to 200 to 
provide for ease of estimation. The Department then reduced this number 
by 10 percent to 180 to account for how some entities in industries 
that applied for AAI grants may choose not to seek to participate as 
IRAPs. The Department then adjusted this figure 50 percent higher to 
account for its planned efforts to promote IRAPs in the private sector, 
resulting in an estimate of 270 SRE applications in Year 1 (= 180 x 
1.5). The Department further estimates that it will recognize 
approximately 75 percent of applicants as SREs, either during their 
initial submission or their resubmission as permitted under paragraph 
29.21(d)(1). Accordingly, the Department estimates that there will be 
203 SREs (= 270 x 75%) in Year 1.
    To estimate the number of applications and SREs in Years 2-10, the 
Department began by assuming that the total number of SREs will 
increase by 5 percent per year based on historic growth in the 
registered apprenticeship program. For example, in Year 2 the total 
number of SREs is estimated to be 213 (= 203 SREs in Year 1 x 1.05). 
The last column in Exhibit 2 shows the total number of SREs each year 
based on the Department's 5-percent growth rate assumption.
    Next, the Department calculated the number of new SREs. For Years 
1-5, the estimated number of new SREs is simply the difference between 
the total number of SREs each year. For example, in Year 5 the number 
of new SREs is estimated to be 12 (= 247 total SREs in Year 5--235 
total SREs in Year 4).\28\ But in Year 6, the calculation has an 
additional component because SREs will be recognized for 5 years, so 
SREs that wish to be recognized for another 5 years will need to 
undergo the Department's process for continued recognition. For 
purposes of this analysis, the Department estimates that

[[Page 14357]]

90 percent of SREs will undergo the Department's process for continued 
recognition. Thus, 183 SREs (= 203 new SREs in Year 1 x 90%) will 
submit applications for continued recognition in Year 6. The Department 
estimates that there will be 33 new SREs in Year 6, which reflects the 
5-percent growth between Year 5 and Year 6 (259-247 = 12),\29\ plus new 
SREs that will supplant the 10 percent of Year 1 SREs that do not 
submit applications for continued recognition in Year 6 (203-183 = 
20).\30\ This same calculation was used for Years 7-10.
---------------------------------------------------------------------------

    \28\ Note: 12 / 235 = 5 percent, which is the estimated growth 
rate for total SREs.
    \29\ Note: 12 / 247 = 5 percent, which is the estimated growth 
rate for total SREs.
    \30\ The numbers do not sum to the total due to rounding. After 
calculating the estimated numbers of applications and SREs, the 
Department rounded the numbers to integers to use in the remaining 
calculations in this analysis.
---------------------------------------------------------------------------

    Then, the Department estimated the number of new applications in 
Years 2-10 by dividing the number of new SREs each year by 75 percent 
since 75 percent of applicants are assumed to become recognized as 
SREs. For example, in Year 6, the number of new applications is 
estimated to be 44 (= 33 new SREs / 75%).
    The number of applications for continued recognition was calculated 
by multiplying the number of new SREs 5 years prior by 90 percent since 
the Department assumes that 90 percent of SREs will undergo the 
Department's process for continued recognition. For example, the 
Department estimates that 183 SREs (= 203 new SREs in Year 1 x 90%) 
will submit applications for continued recognition in Year 6, and that 
9 SREs (= 10 new SREs in Year 2 x 90%) will submit applications for 
continued recognition in Year 7.
    Finally, the number of total applications each year was estimated 
by summing the estimated number of new applications and the estimated 
number of applications for continued recognition each year. For 
example, in Year 1 the total number of applications is estimated to be 
270 (= 270 new applications + 0 applications for continued 
recognition), while in Year 6 the total number of applications is 
estimated to be 226 (= 44 new applications + 183 applications for 
continued recognition).\31\
---------------------------------------------------------------------------

    \31\ The numbers do not sum to the total due to rounding.
---------------------------------------------------------------------------

    Exhibit 2 presents the projected number of applications and SREs 
for each year of the analysis period.
[GRAPHIC] [TIFF OMITTED] TR11MR20.001

b. Estimated Number of IRAPs
    To estimate the number of IRAPs, the Department looked at the 
number of programs in the registered apprenticeship system in relevant 
contexts and, based on those data and related considerations, estimated 
that each SRE will recognize approximately 32 IRAPs. The recognition of 
all 32 IRAPs is not likely to occur immediately after an SRE is 
recognized by the Department; rather, an SRE will probably recognize 
additional programs each year so that by the end of its tenth year, the 
SRE will have recognized 32 programs. For purposes of this analysis, 
the Department estimates that an SRE will recognize 10 new IRAPs in its 
1st year as an SRE, 8 new IRAPs in its 2nd year, 5 new IRAPs in its 3rd 
year, 3 new IRAPs in its 4th year, and 1 new IRAP per year in its 5th 
through 10th years.
    Based on these assumptions, the number of new IRAPs in Year 1 is 
estimated to be 2,030 (= 203 new SREs in Year 1 x 10 new IRAPs per 
SRE). The number of new IRAPs in Year 2 is estimated to be 1,724 [= 
(203 new SREs in Year 1 x 8 new IRAPs per SRE) + (10 new SREs in Year 2 
x 10 new IRAPs per SRE)]. As explained above, the Department assumes 
that 90 percent of SREs will undergo the Department's process for 
continued recognition, so in Year 6 the estimated number of new Year 1 
SREs will shrink to 183 (= 203 new SREs in Year 1 x 90%). Accordingly, 
the number of new IRAPs in Year 6 is estimated to be 707 [= (183 Year 1 
SREs with continued recognition x 1 new IRAPs per SRE) + (10 new SREs 
in Year 2 x 1 new IRAPs per SRE) + (11 new SREs in Year 3 x 3 new IRAPs 
per SRE) + (11 new SREs in Year 4 x 5 new IRAPs per SRE) + (12 new SREs 
in Year 5 x 8 new IRAPs per SRE) + (33 new SREs in Year 6 x 10 new 
IRAPs per SRE)].
    The total number of IRAPs per SRE equals the cumulative total of 
new IRAPs per SRE. So, a new SRE in Year 1 is estimated to have 
recognized a total of 18 IRAPs in Year 2 (= 10 new IRAPs in Year 1 + 8 
new IRAPs in Year 2). Therefore, the total number of IRAPs in Year 2 is 
estimated to be 3,754 [= (203 new SREs in Year 1 x 18 total IRAPs per

[[Page 14358]]

SRE) + (10 new SREs in Year 2 x 10 total IRAPs per SRE)]. As explained 
above, the estimated number of new Year 1 SREs is expected to shrink to 
183 in Year 6. Accordingly, the total number of IRAPs in Year 6 is 
estimated to be 6,479 [= (183 Year 1 SREs with continued recognition x 
28 total IRAPs per SRE) + (10 new SREs in Year 2 x 27 total IRAPs per 
SRE) + (11 new SREs in Year 3 x 26 total IRAPs per SRE) + (11 new SREs 
in Year 4 x 23 total IRAPs per SRE) + (12 new SREs in Year 5 x 18 total 
IRAPs per SRE) + (33 new SREs in Year 6 x 10 total IRAPs per SRE)].
    Exhibit 3 presents the projected number of IRAPs over the 10-year 
analysis period.
[GRAPHIC] [TIFF OMITTED] TR11MR20.002

c. Estimated Number of Apprentices
    To estimate the number of apprentices, the Department looked at the 
number of apprentices in the registered apprenticeship system and, 
based on those data and related considerations, estimated that each 
IRAP will have an average of 35 apprentices. Also, given that the 
duration of programs may vary widely (from weeks to years), the 
Department used an average duration of 1 year in its calculations.
    Exhibit 4 presents the projected number of apprentices over the 10-
year analysis period.
[GRAPHIC] [TIFF OMITTED] TR11MR20.003

d. Compensation Rates
    The Department anticipates that the bulk of the workload for 
private sector workers will be performed by employees in occupations 
similar to those associated with the following SOC codes: SOC 11-3131 
(Training and Development Managers) and SOC 43-0000 (Office and 
Administrative Support Occupations).
    According to BLS, the mean hourly wage rate for Training and 
Development Managers in May 2018 was $58.53.\32\ For this analysis, the 
Department used a fringe benefits rate of 46 percent \33\ and an 
overhead rate of 54 percent,\34\

[[Page 14359]]

resulting in a fully loaded hourly compensation rate for Training and 
Development Managers of $117.06 [= $58.53 + ($58.53 x 46%) + ($58.53 x 
54%)].
---------------------------------------------------------------------------

    \32\ BLS, ``Occupational Employment and Wages, May 2018,'' 
https://www.bls.gov/oes/current/oes113131.htm.
    \33\ BLS, ``Employer Costs for Employee Compensation,'' https://www.bls.gov/ncs/data.htm (last visited Dec. 7, 2019). Wages and 
salaries averaged $24.86 per hour worked in 2018, while benefit 
costs averaged $11.52, which is a benefits rate of 46 percent.
    \34\ U.S. Department of Health and Human Services (HHS), 
``Guidelines for Regulatory Impact Analysis,'' 2016, https://aspe.hhs.gov/system/files/pdf/242926/HHS_RIAGuidance.pdf. In its 
guidelines, HHS states, as ``an interim default, while HHS conducts 
more research, analysts should assume overhead costs (including 
benefits) are equal to 100 percent of pre-tax wages.'' HHS explains 
that 100 percent is roughly the midpoint between 46 and 150 percent, 
with 46 percent based on ECEC data that suggest benefits average 46 
percent of wages and salaries, and 150 percent based on the private 
sector ``rule of thumb'' that fringe benefits plus overhead equal 
150 percent of wages. To isolate the overhead costs from HHS's 100-
percent assumption, the Department subtracted the 46-percent 
benefits rate that HHS references, resulting in an overhead rate of 
approximately 54 percent.
---------------------------------------------------------------------------

    According to BLS, the mean hourly wage rate for Office and 
Administrative Support Occupations in May 2018 was $18.75.\35\ The 
Department used a fringe benefits rate of 46 percent and an overhead 
rate of 54 percent, resulting in a fully loaded hourly compensation 
rate for Office and Administrative Support Occupations of $37.50 [= 
$18.75 + ($18.75 x 46%) + ($18.75 x 54%)].
---------------------------------------------------------------------------

    \35\ BLS, ``Occupational Employment and Wages, May 2018,'' 
https://www.bls.gov/oes/current/oes430000.htm.
---------------------------------------------------------------------------

    The compensation rate for the Administrator of OA is based on the 
salary of a Federal employee at Level IV of the Senior Executive 
Service, which is $166,500 per annum;\36\ the corresponding hourly base 
pay for an SES at this level is $80.05 (= $166,500 / 2,080 hours). The 
Department used a fringe benefits rate of 69 percent \37\ and an 
overhead rate of 54 percent, resulting in a fully loaded hourly 
compensation rate for the Administrator of $178.51 [= $80.05 + ($80.05 
x 69%) + ($80.05 x 54%)].
---------------------------------------------------------------------------

    \36\ Office of Personnel Management, ``Rates of Basic Pay for 
the Executive Schedule,'' https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2019/EX.pdf (last visited 
Dec. 7, 2019).
    \37\ Congressional Budget Office, ``Comparing the Compensation 
of Federal and Private-Sector Employees, 2011 to 2015,'' Apr. 25, 
2017, https://www.cbo.gov/publication/52637. The wages of Federal 
workers averaged $38.30 per hour over the study period, while the 
benefits averaged $26.50 per hour, which is a benefits rate of 69 
percent.
---------------------------------------------------------------------------

    The compensation rate for a Program Analyst in OA was estimated 
using the midpoint (Step 5) for Grade 13 of the General Schedule, which 
is $53.85 in the Washington, DC, locality area.\38\ The Department used 
a fringe benefits rate of 69 percent and an overhead rate of 54 
percent, resulting in a fully loaded hourly compensation rate for 
Program Analysts of $120.09 [= $53.85 + ($53.85 x 69%) + ($53.85 x 
54%)].
---------------------------------------------------------------------------

    \38\ Office of Personnel Management, ``General Schedule (GS) 
Locality Pay Tables,'' https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2019/DCB_h.pdf (last 
visited Dec. 7, 2019).
---------------------------------------------------------------------------

    The compensation rate for an Administrative Law Judge is based on 
the salary of a Federal Administrative Law Judge at AL-3 Rate F, which 
is $176,900 per annum; \39\ the corresponding hourly base pay for an 
Administrative Law Judge at this level is $85.05 (= $174,500 / 2,080 
hours). The Department used a fringe benefits rate of 69 percent and an 
overhead rate of 54 percent, resulting in a fully loaded hourly 
compensation rate for an Administrative Law Judge of $189.66 [= $85.05 
+ ($85.05 x 69%) + ($85.05 x 54%)].
---------------------------------------------------------------------------

    \39\ Office of Personnel Management, ``Administrative Law Judges 
Locality Rates of Pay,'' https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2019/ALJ_LOC.pdf (last 
visited Dec. 7, 2019).
---------------------------------------------------------------------------

    The compensation rate for a Staff Attorney in the Department's 
Office of Administrative Law Judges was estimated using the highest 
level (Step 10) for Grade 15 of the General Schedule, which is $79.78 
in the Washington, DC, locality area.\40\ The Department used a fringe 
benefits rate of 69 percent and an overhead rate of 54 percent, 
resulting in a fully loaded hourly compensation rate for Staff 
Attorneys of $177.91 [= $79.78 + ($79.78 x 69%) + ($79.78 x 54%)].
---------------------------------------------------------------------------

    \40\ Office of Personnel Management, ``General Schedule (GS) 
Locality Pay Tables,'' https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2019/DCB_h.pdf (last 
visited Dec. 7, 2019).
---------------------------------------------------------------------------

    The compensation rates for a Legal Assistant and Law Clerk in the 
Department's Office of Administrative Law Judges were estimated using 
the midpoint (Step 5) for Grade 11 of the General Schedule, which is 
$37.79 in the Washington, DC, locality area.\41\ The Department used a 
fringe benefits rate of 69 percent and an overhead rate of 54 percent, 
resulting in a fully loaded hourly compensation rate for Legal 
Assistants and Law Clerks of $84.27 [= $37.79 + ($37.79 x 69%) + 
($37.79 x 54%)].
---------------------------------------------------------------------------

    \41\ Id.
---------------------------------------------------------------------------

    The compensation rate for a Paralegal in the Department's Office of 
Administrative Law Judges was estimated using the midpoint (Step 5) for 
Grade 7 of the General Schedule, which is $25.53 in the Washington, DC, 
locality area.\42\ The Department used a fringe benefits rate of 69 
percent and an overhead rate of 54 percent, resulting in a fully loaded 
hourly compensation rate for Paralegals of $56.93 [= $25.53 + ($25.53 x 
69%) + ($25.53 x 54%)].
---------------------------------------------------------------------------

    \42\ Id.
---------------------------------------------------------------------------

    The Department used the hourly compensation rates presented in 
Exhibit 5 throughout this analysis to estimate the labor costs for each 
provision.
[GRAPHIC] [TIFF OMITTED] TR11MR20.004


[[Page 14360]]


5. Subject-by-Subject Analysis
    The Department's subject-by-subject analysis covers the estimated 
costs of the final rule. The hourly time burdens and other estimates 
used to quantify the costs are largely based on the Department's 
experience with the registered apprenticeship program.
a. Costs
(1) Rule Familiarization
    When the final rule takes effect, prospective SREs will need to 
familiarize themselves with the new regulation, thereby incurring a 
one-time cost. To estimate the cost of rule familiarization for the 10-
year period of this analysis, the Department multiplied the projected 
number of new SRE applications in each year by the estimated time to 
review the rule (2 hours) and by the hourly compensation rate for 
Training and Development Managers ($117.06 per hour). For example, the 
projected number of new SRE applications in Year 1 is 270, so the 
estimated Year 1 cost is $63,212 (= 270 new SRE applications x 2 hours 
x $117.06 per hour). The annualized cost over the 10-year analysis 
period is estimated at $11,413 at a discount rate of 3 percent and 
$12,475 at a discount rate of 7 percent. The total cost over the 10-
year analysis period is estimated at $97,353 at a discount rate of 3 
percent and $87,617 at a discount rate of 7 percent.
    In addition, prospective IRAPs will need to familiarize themselves 
with elements of the new rule. To estimate the cost of rule 
familiarization for IRAPs, the Department multiplied the projected 
number of new IRAPs in each year by the estimated time to review the 
rule (1 hour) and by the hourly compensation rate for Training and 
Development Managers ($117.06 per hour). For example, the projected 
number of new IRAPs in Year 1 is 2,030, so the estimated Year 1 cost is 
$237,632 (= 2,030 new IRAPs x 1 hour x $117.06 per hour). The 
annualized cost over the 10-year analysis period is estimated at 
$117,700 at a discount rate of 3 percent and $123,119 at a discount 
rate of 7 percent. The total cost over the 10-year analysis period is 
estimated at $1,004,009 at a discount rate of 3 percent and $864,738 at 
a discount rate of 7 percent.
(2) SRE Applications
    To become a recognized SRE, an entity will need to submit an 
application to the Department, and then the Administrator will 
determine whether the entity is qualified to be an SRE. The application 
titled ``Industry-Recognized Apprenticeship Program Standards 
Recognition Entity Application'' contains five sections. The estimated 
costs for completing each section are detailed below.
(i) Section I--Standards Recognition Entity Identifying Information
    The estimated average response time for a prospective SRE to 
provide the identifying information requested in Section I is 
approximately 2 hours, which includes the time to gather and attach the 
documentation for this section. To estimate the costs for completing 
Section I over the 10-year analysis period, the Department multiplied 
the projected number of SRE applications in each year by the estimated 
time to complete Section I (2 hours) and by the hourly compensation 
rate for Training and Development Managers ($117.06 per hour). For 
example, the projected number of SRE applications in Year 1 is 270, so 
the estimated Year 1 cost is $63,212 (= 270 SRE applications x 2 hours 
x $117.06 per hour). The annualized cost over the 10-year analysis 
period is estimated at $16,407 at a discount rate of 3 percent and 
$17,229 at a discount rate of 7 percent. The total cost over the 10-
year analysis period is estimated at $139,951 at a discount rate of 3 
percent and $121,012 at a discount rate of 7 percent.
(ii) Section II--Capabilities and Experience of the Standards 
Recognition Entity
    The estimated average response time for a prospective SRE to 
describe its operations, capabilities, experience, and qualifications 
to be an SRE is approximately 5 hours, including the time to gather the 
necessary documentation. To estimate the costs for completing Section 
II over the 10-year analysis period, the Department multiplied the 
projected number of SRE applications in each year by the estimated time 
to complete Section II (5 hours) and by the hourly compensation rate 
for Training and Development Managers ($117.06 per hour). For example, 
the projected number of SRE applications in Year 1 is 270, so the 
estimated Year 1 cost is $158,031 (= 270 SRE applications x 5 hours x 
$117.06 per hour). The annualized cost over the 10-year analysis period 
is estimated at $41,016 at a discount rate of 3 percent and $43,074 at 
a discount rate of 7 percent. The total cost over the 10-year analysis 
period is estimated at $349,877 at a discount rate of 3 percent and 
$302,531 at a discount rate of 7 percent.
(iii) Section III--Evaluating and Monitoring Elements of a High-Quality 
Apprenticeship Program
    The estimated average response time for a new SRE applicant to 
provide information regarding the elements of the IRAPs it will 
recognize is 60 hours, including the time to develop the pertinent 
policies and procedures. Because an SRE applying for continued 
recognition will already have policies and procedures in place, the 
estimated average response time for an SRE applying for continued 
recognition in Years 6-10 is 6 hours. To estimate the costs for 
completing Section III over the 10-year analysis period, the Department 
multiplied the projected number of new SRE applications in each year by 
the estimated time to complete Section III (60 hours) and by the hourly 
compensation rate for Training and Development Managers ($117.06 per 
hour). Then, the Department added the product of the projected number 
of SRE applications for continued recognition in each year and the 
estimated time to complete Section III (6 hours) and the hourly 
compensation rate for Training and Development Managers ($117.06 per 
hour). For example, the projected number of new SRE applications in 
Year 6 is 44 and the projected number of SRE applications for continued 
recognition is 183, so the estimated Year 6 cost is $437,570 [= (44 new 
SRE applications x 60 hours x $117.06 per hour) + (183 SRE applications 
for continued recognition x 6 hours x $117.06 per hour)]. The 
annualized cost over the 10-year analysis period is estimated at 
$357,558 at a discount rate of 3 percent and $388,682 at a discount 
rate of 7 percent. The total cost over the 10-year analysis period is 
estimated at $3,050,043 at a discount rate of 3 percent and $2,729,943 
at a discount rate of 7 percent.
(iv) Section IV--Policies and Procedures
    The estimated average response time for a new SRE applicant to 
provide information concerning its proposed policies and procedures for 
recognizing and quality control of IRAPs is 40 hours, including the 
time to develop the pertinent policies and procedures. Because an SRE 
applying for continued recognition will already have policies and 
procedures in place, the estimated average response time for an SRE 
applying for continued recognition in Years 6-10 is 4 hours. To 
estimate the costs for completing Section IV over the 10-year analysis 
period, the Department multiplied the projected number of new SRE 
applications in each year by the estimated time to complete Section IV

[[Page 14361]]

(40 hours) and by the hourly compensation rate for Training and 
Development Managers ($117.06 per hour). Then, the Department added the 
product of the projected number of SRE applications for continued 
recognition in each year and the estimated time to complete Section IV 
(4 hours) and the hourly compensation rate for Training and Development 
Managers ($117.06 per hour). For example, the projected number of new 
SRE applications in Year 6 is 44 and the projected number of SRE 
applications for continued recognition is 183, so the estimated Year 6 
cost is $291,714 [(= 44 new SRE applications x 40 hours x $117.06 per 
hour) + (183 SRE applications for continued recognition x 4 hours x 
$117.06 per hour)]. The annualized cost over the 10-year analysis 
period is estimated at $238,372 at a discount rate of 3 percent and 
$259,122 at a discount rate of 7 percent. The total cost over the 10-
year analysis period is estimated at $2,033,362 at a discount rate of 3 
percent and $1,819,962 at a discount rate of 7 percent.
(v) Section V--Attestation
    The Department estimates that it will take 10 minutes for each 
prospective SRE to review the application for completeness and to sign 
it. To estimate the costs for completing Section V over the 10-year 
analysis period, the Department multiplied the projected number of SRE 
applications in each year by the estimated time to complete Section V 
(10 minutes) and by the hourly compensation rate for Training and 
Development Managers ($117.06 per hour). For example, the projected 
number of SRE applications in Year 1 is 270, so the estimated Year 1 
cost is $5,373 (= 270 SRE applications x 10 minutes x $117.06 per 
hour). The annualized cost over the 10-year analysis period is 
estimated at $1,395 at a discount rate of 3 percent and $1,465 at a 
discount rate of 7 percent. The total cost over the 10-year analysis 
period is estimated at $11,896 at a discount rate of 3 percent and 
$10,286 at a discount rate of 7 percent.
(3) Resubmitting an Application
    If a prospective SRE is denied recognition, it may resubmit its 
application after remedying any deficiencies. For purposes of this 
analysis, the Department estimates that approximately 30 percent of 
applications will be denied on the first attempt, and that 50 percent 
of the denied applications will be resubmitted after the deficiencies 
have been addressed, which means 15 percent of all applications will be 
resubmitted. The Department estimates that remedying the deficiencies 
and resubmitting the application will take approximately 16 hours. To 
estimate these costs over the 10-year analysis period, the Department 
multiplied the projected number of SRE applications in each year by 15 
percent, and then multiplied that product by the estimated time to 
resubmit the application (16 hours) and by the hourly compensation rate 
for Training and Development Managers ($117.06 per hour). For example, 
the projected number of SRE applications in Year 1 is 270, so the 
estimated Year 1 cost is $75,855 (= 270 SRE applications x 15% x 16 
hours x $117.06 per hour). The annualized cost over the 10-year 
analysis period is estimated at $19,688 at a discount rate of 3 percent 
and $20,675 at a discount rate of 7 percent. The total cost over the 
10-year analysis period is estimated at $167,941 at a discount rate of 
3 percent and $145,215 at a discount rate of 7 percent.
(4) Request for Administrative Review of Denial
    If a prospective SRE is denied recognition, it may request 
administrative review by the Department's Office of Administrative Law 
Judges. For purposes of this analysis, the Department estimates that 
approximately 1 percent of all applications will request administrative 
review and that filing a request for administrative review will take 
approximately 60 hours. To estimate these costs over the 10-year 
analysis period, the Department multiplied the projected number of SRE 
applications in each year by 1 percent, and then multiplied that 
product by the estimated time to file a request for administrative 
review (60 hours) and by the hourly compensation rate for Training and 
Development Managers ($117.06 per hour). For example, the projected 
number of SRE applications in Year 1 is 270, so the estimated Year 1 
cost is $18,964 (= 270 SRE applications x 1% x 60 hours x $117.06 per 
hour). The annualized cost over the 10-year analysis period is 
estimated at $3,717 at a discount rate of 3 percent and $4,029 at a 
discount rate of 7 percent. The total cost over the 10-year analysis 
period is estimated at $31,705 at a discount rate of 3 percent and 
$28,300 at a discount rate of 7 percent.
(5) Notification of Right To File Complaint Against IRAP
    Pursuant to Sec.  29.22(k), an SRE must notify the public about the 
right of an apprentice, a prospective apprentice, the apprentice's 
authorized representative, a personnel certification body, or an 
employer, to file a complaint with the SRE against an IRAP and the 
requirements for filing a complaint. For example, the SRE could provide 
the information online, on a poster, or in a handbook. The Department 
estimates that it will take 1 hour for a Training and Development 
Manager to comply with this provision. To estimate the costs over the 
10-year analysis period, the Department multiplied the projected number 
of new SREs in each year by the estimated time to notify the public (1 
hour) and by the hourly compensation rate for Training and Development 
Managers ($117.06 per hour). For example, the projected number of new 
SREs in Year 1 is 203, so the estimated Year 1 cost is $23,763 (= 203 
new SREs x 1 hour x $117.06 per hour). The annualized cost over the 10-
year analysis period is estimated at $4,267 at a discount rate of 3 
percent and $4,669 at a discount rate of 7 percent. The total cost over 
the 10-year analysis period is estimated at $36,402 at a discount rate 
of 3 percent and $32,790 at a discount rate of 7 percent.
(6) Notification of Right To File Complaint Against SRE
    Pursuant to Sec.  29.22(l), an SRE must notify the public about the 
right to file a complaint against it with the Administrator. For 
example, the SRE could provide the information online, on a poster, or 
in a handbook. The Department estimates that it will take 1 hour for a 
Training and Development Manager to comply with this provision. To 
estimate the costs over the 10-year analysis period, the Department 
multiplied the projected number of new SREs in each year by the 
estimated time to notify the public (1 hour) and by the hourly 
compensation rate for Training and Development Managers ($117.06 per 
hour). For example, the projected number of new SREs in Year 1 is 203, 
so the estimated Year 1 cost is $23,763 (= 203 new SREs x 1 hour x 
$117.06 per hour). The annualized cost over the 10-year analysis period 
is estimated at $4,267 at a discount rate of 3 percent and $4,669 at a 
discount rate of 7 percent. The total cost over the 10-year analysis 
period is estimated at $36,402 at a discount rate of 3 percent and 
$32,790 at a discount rate of 7 percent.
(7) Notification of Substantive Changes by SRE
    In accordance with Sec.  29.21(c)(2), an SRE will need to notify 
the Administrator and provide all related material if it makes a 
substantive change to its processes or seeks to recognize IRAPs in 
additional industries, occupational areas, or geographical

[[Page 14362]]

areas. The Department estimates that approximately 50 percent of SREs 
will make a substantive change each year and that complying with this 
provision will take approximately 10 hours. To estimate these costs 
over the 10-year analysis period, the Department multiplied the 
projected number of SREs in each year by 50 percent, and then 
multiplied that product by the estimated time to comply with this 
provision (10 hours) and by the hourly compensation rate for Training 
and Development Managers ($117.06 per hour). For example, the projected 
number of SREs in Year 1 is 203, so the estimated Year 1 cost is 
$118,816 (= 203 SREs x 50% x 10 hours x $117.06 per hour). The 
annualized cost over the 10-year analysis period is estimated at 
$147,719 at a discount rate of 3 percent and $145,478 at a discount 
rate of 7 percent. The total cost over the 10-year analysis period is 
estimated at $1,260,072 at a discount rate of 3 percent and $1,021,779 
at a discount rate of 7 percent.
(8) Recognition or Rejection of Apprenticeship Programs Seeking 
Recognition
    In accordance with paragraph 29.22(a)(1), an SRE will need to 
recognize or reject a prospective IRAP in a timely manner. Moreover, in 
accordance with Sec.  29.22(b), an SRE will need to validate its IRAPs' 
compliance with the requirements listed in Sec.  29.22(a)(4) when the 
SRE provides the Administrator with notice of recognition of an IRAP. 
The Department estimates that complying with these two provisions will 
take approximately 12 hours per program seeking recognition per year. 
The Department used the estimated number of new IRAPs as a proxy for 
this calculation, anticipating that the vast majority of programs 
seeking recognition will be recognized. To estimate these costs over 
the 10-year analysis period, the Department multiplied the projected 
number of new IRAPs in each year by the estimated time to comply with 
this provision (12 hours) and by the hourly compensation rate for 
Training and Development Managers ($117.06 per hour). For example, the 
projected number of new IRAPs in Year 1 is 2,030, so the estimated Year 
1 cost is $2,851,582 (= 2,030 IRAPs x 12 hours x $117.06 per hour). The 
annualized cost over the 10-year analysis period is estimated at 
$1,412,406 at a discount rate of 3 percent and $1,477,430 at a discount 
rate of 7 percent. The total cost over the 10-year analysis period is 
estimated at $12,048,109 at a discount rate of 3 percent and 
$10,376,853 at a discount rate of 7 percent.
(9) Inform Administrator of IRAP Recognition, Suspension, or 
Derecognition
    In accordance with Sec.  29.22(a)(2), an SRE will need to inform 
the Administrator when it has recognized, suspended, or derecognized an 
IRAP. The Department estimates that complying with this provision will 
take approximately 30 minutes per year. To estimate these costs over 
the 10-year analysis period, the Department multiplied the projected 
number of SREs in each year by the estimated time to comply with this 
provision (30 minutes) and by the hourly compensation rate for Training 
and Development Managers ($117.06 per hour). For example, the projected 
number of SREs in Year 1 is 203, so the estimated Year 1 cost is 
$11,882 (= 203 SREs x 30 minutes x $117.06 per hour). The annualized 
cost over the 10-year analysis period is estimated at $14,772 at a 
discount rate of 3 percent and $14,548 at a discount rate of 7 percent. 
The total cost over the 10-year analysis period is estimated at 
$126,007 at a discount rate of 3 percent and $102,178 at a discount 
rate of 7 percent.
(10) Provision of Data or Information to the Administrator
    In accordance with Sec.  29.22(a)(3), an SRE will need to provide 
to the Administrator any data or information the Administrator is 
expressly authorized to collect. The Department estimates that 
approximately 10 percent of SREs will need to provide additional data 
or information each year and that complying with this provision will 
take approximately 2 hours per year. To estimate these costs over the 
10-year analysis period, the Department multiplied the projected number 
of SREs in each year by 10 percent, and then multiplied that product by 
the estimated time to comply with this provision (2 hours) and by the 
hourly compensation rate for Training and Development Managers ($117.06 
per hour). For example, the projected number of SREs in Year 1 is 203, 
so the estimated Year 1 cost is $4,753 (= 203 SREs x 10% x 2 hours x 
$117.06 per hour). The annualized cost over the 10-year analysis period 
is estimated at $5,909 at a discount rate of 3 percent and $5,819 at a 
discount rate of 7 percent. The total cost over the 10-year analysis 
period is estimated at $50,403 at a discount rate of 3 percent and 
$40,871 at a discount rate of 7 percent.
(11) Provision of Written Attestation to the Administrator
    In accordance with Sec.  29.22(b), an SRE must provide the 
Administrator an annual written attestation that its IRAPs meet the 
requirements of Sec.  29.22(a)(4) and any other requirements of the 
SRE. The Department estimates that complying with this provision will 
take SREs approximately 10 minutes per IRAP. To estimate these costs 
over the 10-year analysis period, the Department multiplied the 
projected number of IRAPs in each year by 10 minutes and by the hourly 
compensation rate for Training and Development Managers ($117.06 per 
hour). For example, the projected number of IRAPs in Year 1 is 2,030, 
so the estimated Year 1 cost is $40,397 (= 2,030 IRAPs x 10 minutes x 
$117.06 per hour). The annualized cost over the 10-year analysis period 
is estimated at $119,607 at a discount rate of 3 percent and $115,230 
at a discount rate of 7 percent. The total cost over the 10-year 
analysis period is estimated at $1,020,268 at a discount rate of 3 
percent and $809,325 at a discount rate of 7 percent.
(12) SREs' Disclosure of Credentials That Apprentices Will Earn
    In accordance with Sec.  29.22(c), an SRE will need to disclose the 
credential(s) that apprentices will earn during their successful 
participation in or upon completion of an IRAP. An SRE could disclose 
these credentials on its website, for example. The Department estimates 
that complying with this provision will take approximately 30 minutes 
per year. To estimate these costs over the 10-year analysis period, the 
Department multiplied the projected number of SREs in each year by the 
estimated time to comply with this provision (30 minutes) and by the 
hourly compensation rate for Training and Development Managers ($117.06 
per hour). For example, the projected number of SREs in Year 1 is 203, 
so the estimated Year 1 cost is $11,882 (= 203 SREs x 30 minutes x 
$117.06 per hour). The annualized cost over the 10-year analysis period 
is estimated at $14,772 at a discount rate of 3 percent and $14,548 at 
a discount rate of 7 percent. The total cost over the 10-year analysis 
period is estimated at $126,007 at a discount rate of 3 percent and 
$102,178 at a discount rate of 7 percent.
(13) SREs' Quality Control of IRAPs
    In accordance with Sec.  29.22(f), an SRE will need to remain in an 
ongoing quality-control relationship with the IRAPs it has recognized, 
including periodic compliance reviews of its

[[Page 14363]]

IRAPs. The Department estimates that complying with this provision will 
take an SRE approximately 4 hours per IRAP. To estimate these costs 
over the 10-year analysis period, the Department multiplied the 
projected number of IRAPs in each year by the estimated time to comply 
with this provision (4 hours) and by the hourly compensation rate for 
Training and Development Managers ($117.06 per hour). For example, the 
projected number of IRAPs in Year 1 is 2,030, so the estimated Year 1 
cost is $950,527 (= 2,030 IRAPs x 4 hours x $117.06 per hour). The 
annualized cost over the 10-year analysis period is estimated at 
$2,814,272 at a discount rate of 3 percent and $2,711,287 at a discount 
rate of 7 percent. The total cost over the 10-year analysis period is 
estimated at $24,006,312 at a discount rate of 3 percent and 
$19,042,948 at a discount rate of 7 percent.
(14) Performance Data Reporting
    In accordance with Sec.  29.22(h), an SRE must report to the 
Administrator performance data for each IRAP it recognizes. Assuming 
the SRE will submit the information via the online portal that will be 
developed by OA, the Department estimates that complying with this 
provision will take an SRE approximately 4 hours per IRAP. To estimate 
these costs over the 10-year analysis period, the Department multiplied 
the projected number of IRAPs in each year by the estimated time to 
comply with this provision (4 hours) and by the hourly compensation 
rate for Training and Development Managers ($117.06 per hour). For 
example, the projected number of IRAPs in Year 1 is 2,030, so the 
estimated Year 1 cost is $950,527 (= 2,030 IRAPs x 4 hours x $117.06 
per hour). The annualized cost over the 10-year analysis period is 
estimated at $2,814,272 at a discount rate of 3 percent and $2,711,287 
at a discount rate of 7 percent. The total cost over the 10-year 
analysis period is estimated at $24,006,312 at a discount rate of 3 
percent and $19,042,948 at a discount rate of 7 percent.
    In accordance with Sec.  29.22(h), an SRE must also make publicly 
available performance data for each IRAP it recognizes. The Department 
estimates that complying with this provision will take an SRE 
approximately 2 hours per IRAP. To estimate these costs over the 10-
year analysis period, the Department multiplied the projected number of 
IRAPs in each year by the estimated time to comply with this provision 
(2 hours) and by the hourly compensation rate for Training and 
Development Managers ($117.06 per hour). For example, the projected 
number of IRAPs in Year 1 is 2,030, so the estimated Year 1 cost is 
$475,264 (= 2,030 IRAPs x 2 hours x $117.06 per hour). The annualized 
cost over the 10-year analysis period is estimated at $1,407,136 at a 
discount rate of 3 percent and $1,355,644 at a discount rate of 7 
percent. The total cost over the 10-year analysis period is estimated 
at $12,003,156 at a discount rate of 3 percent and $9,521,474 at a 
discount rate of 7 percent.
    In order for an SRE to comply with these provisions, the IRAPs it 
recognizes will need to provide the pertinent performance data. The 
Department estimates that it will take IRAPs approximately 25 hours per 
year to collect and provide the relevant data. To estimate these costs 
over the 10-year analysis period, the Department multiplied the 
projected number of IRAPs in each year by 25 hours and by the hourly 
compensation rate for Training and Development Managers ($117.06 per 
hour). For example, the projected number of IRAPs in Year 1 is 2,030, 
so the estimated Year 1 cost is $5,940,795 (= 2,030 IRAPs x 25 hours x 
$117.06 per hour). The annualized cost over the 10-year analysis period 
is estimated at $17,589,201 at a discount rate of 3 percent and 
$16,945,546 at a discount rate of 7 percent. The total cost over the 
10-year analysis period is estimated at $150,039,452 at a discount rate 
of 3 percent and $119,018,422 at a discount rate of 7 percent.
(15) SREs' Public Notification of Fees
    Pursuant to Sec.  29.22(n), an SRE must publicly disclose any fees 
it charges to IRAPs. An SRE could disclose its fees on its website, for 
example. The Department estimates that complying with this provision 
will take approximately 1 hour per year. To estimate these costs over 
the 10-year analysis period, the Department multiplied the projected 
number of SREs in each year by the estimated time to comply with this 
provision (1 hour) and by the hourly compensation rate for Training and 
Development Managers ($117.06 per hour). For example, the projected 
number of SREs in Year 1 is 203, so the estimated Year 1 cost is 
$23,763 (= 203 SREs x 1 hour x $117.06 per hour). The annualized cost 
over the 10-year analysis period is estimated at $29,544 at a discount 
rate of 3 percent and $29,096 at a discount rate of 7 percent. The 
total cost over the 10-year analysis period is estimated at $252,014 at 
a discount rate of 3 percent and $204,356 at a discount rate of 7 
percent.
(16) SREs' Recordkeeping
    Pursuant to Sec.  29.22(o), an SRE must ensure that its records 
regarding each IRAP that the SRE recognized are maintained for a 
minimum of 5 years. The Department estimates that complying with this 
provision will take an SRE approximately 20 hours per IRAP. To estimate 
these costs over the 10-year analysis period, the Department multiplied 
the projected number of IRAPs in each year by the estimated time to 
comply with this provision (20 hours) and by the hourly compensation 
rate for Office and Administrative Support Occupations ($37.50 per 
hour). For example, the projected number of IRAPs in Year 1 is 2,030, 
so the estimated Year 1 cost is $1,522,500 (= 2,030 IRAPs x 20 hours x 
$37.50 per hour). The annualized cost over the 10-year analysis period 
is estimated at $4,507,740 at a discount rate of 3 percent and 
$4,342,785 at a discount rate of 7 percent. The total cost over the 10-
year analysis period is estimated at $38,451,935 at a discount rate of 
3 percent and $30,501,902 at a discount rate of 7 percent.
(17) IRAPs' Development of Written Training Plan
    In accordance with Sec.  29.22(a)(4)(ii), an IRAP must have a 
written training plan that details the structured work experiences and 
appropriate related instruction, is designed so that apprentices 
demonstrate competency and earn credential(s), and provides apprentices 
progressively advancing industry-essential skills. The Department 
estimates that it will take IRAPs approximately 80 hours per year to 
comply with this provision. To estimate these costs over the 10-year 
analysis period, the Department multiplied the projected number of new 
IRAPs in each year by the estimated time to comply with these 
provisions (80 hours) and by the hourly compensation rate for Training 
and Development Managers ($117.06 per hour). For example, the projected 
number of new IRAPs in Year 1 is 2,030, so the estimated Year 1 cost is 
$19,010,544 (= 2,030 new IRAPs x 80 hours x $117.06 per hour). The 
annualized cost over the 10-year analysis period is estimated at 
$9,416,040 at a discount rate of 3 percent and $9,849,537 at a discount 
rate of 7 percent. The total cost over the 10-year analysis period is 
estimated at $80,320,727 at a discount rate of 3 percent and 
$69,179,023 at a discount rate of 7 percent.

[[Page 14364]]

(18) IRAPs' Development of Written Apprenticeship Agreement
    In accordance with Sec.  29.22(a)(4)(x), an IRAP must include a 
written apprenticeship agreement outlining the terms and conditions of 
the employment and training with each apprentice. For purposes of this 
analysis, the Department assumes the written apprenticeship agreement 
will disclose the wages apprentices will receive and under what 
circumstances apprentices' wages will increase pursuant to Sec.  
29.22(a)(4)(vii), as well as any costs or expenses that will be charged 
to apprentices pursuant to Sec.  29.22(a)(4)(ix). The Department 
estimates that it will take IRAPs approximately 8 hours per year to 
comply with these three provisions. To estimate these costs over the 
10-year analysis period, the Department multiplied the projected number 
of new IRAPs in each year by the estimated time to comply with these 
provisions (8 hours) and by the hourly compensation rate for Training 
and Development Managers ($117.06 per hour). For example, the projected 
number of new IRAPs in Year 1 is 2,030, so the estimated Year 1 cost is 
$1,901,054 (= 2,030 new IRAPs x 8 hours x $117.06 per hour). The 
annualized cost over the 10-year analysis period is estimated at 
$941,604 at a discount rate of 3 percent and $984,954 at a discount 
rate of 7 percent. The total cost over the 10-year analysis period is 
estimated at $8,032,073 at a discount rate of 3 percent and $6,917,902 
at a discount rate of 7 percent.
(19) IRAPs' Preparation and Signing of Written Apprenticeship Agreement
    In addition to developing a written apprenticeship agreement, which 
may be applicable to multiple apprentices, an IRAP must prepare and 
sign an apprenticeship agreement with each individual apprentice. The 
Department estimates that it will take IRAPs approximately 10 minutes 
per apprentice to prepare and sign a written apprenticeship agreement. 
To estimate these costs over the 10-year analysis period, the 
Department multiplied the projected number of apprentices in each year 
by the estimated time to comply with these provisions (10 minutes) and 
by the hourly compensation rate for Training and Development Managers 
($117.06 per hour). For example, the projected number of apprentices in 
Year 1 is 71,050, so the estimated Year 1 cost is $1,413,909 (= 71,050 
apprentices x 10 minutes x $117.06 per hour). The annualized cost over 
the 10-year analysis period is estimated at $4,186,230 at a discount 
rate of 3 percent and $4,033,040 at a discount rate of 7 percent. The 
total cost over the 10-year analysis period is estimated at $35,709,390 
at a discount rate of 3 percent and $28,326,384 at a discount rate of 7 
percent.
(20) DOL Development of Online Application Form and Internal Review 
System
    Before an entity could submit an application to become a recognized 
SRE, the Department will first need to develop an online application 
form and a system for managing the internal review process. In addition 
to the first-year software and labor costs, the Department will also 
incur annual maintenance costs.
    The Department estimates that the first-year software and labor 
costs to develop the online system will total $546,462. Contractor 
labor for developing the program and the application form will account 
for 20 percent of the total cost, contractor labor for developing a 
public website that will accept the applications and a private system 
for managing the internal review of the applications will account for 
77 percent of the total cost, and material costs for software hosting 
and licensing will account for 3 percent of the total cost. The 
annualized cost over the 10-year analysis period is estimated at 
$62,196 at a discount rate of 3 percent and $72,714 at a discount rate 
of 7 percent. The total cost over the 10-year analysis period is 
estimated at $530,546 at a discount rate of 3 percent and $510,712 at a 
discount rate of 7 percent.
    With respect to annual maintenance, the Department estimates that 
the total for software and labor will be $125,000. Contractor labor to 
support maintenance of the online application form and case management 
system will account for 68 percent of the total cost, while material 
costs for software hosting and licensing fees will account for 32 
percent of the total cost. The total cost over the 10-year analysis 
period is estimated at $1,066,275 at a discount rate of 3 percent and 
$877,948 at a discount rate of 7 percent.
(21) DOL Development of Online Resource for Performance Measures
    Another online tool that will need to be developed by the 
Department will be an online resource for receiving performance data 
from SREs. In addition to the first-year software and labor costs, the 
Department will also incur annual maintenance costs.
    The Department estimates that the first-year software and labor 
costs to develop the online system will total $1,163,085. Contractor 
labor for developing the online system will account for 20 percent of 
the total cost, contractor labor for developing a public website that 
will accept the performance data and a private system for managing the 
internal review of the performance data will account for 77 percent of 
the total cost, and material costs for software hosting and licensing 
will account for 3 percent of the total cost. The annualized cost over 
the 10-year analysis period is estimated at $132,378 at a discount rate 
of 3 percent and $154,764 at a discount rate of 7 percent. The total 
cost over the 10-year analysis period is estimated at $1,129,209 at a 
discount rate of 3 percent and $1,086,995 at a discount rate of 7 
percent.
    With respect to annual maintenance, the Department estimates that 
the total for software and labor will be $245,909. Contractor labor to 
support maintenance of the online performance system will account for 
68 percent of the total cost, while material costs for software hosting 
and licensing fees will account for 32 percent of the total cost. The 
total cost over the 10-year analysis period is estimated at $2,097,654 
at a discount rate of 3 percent and $1,727,162 at a discount rate of 7 
percent.
(22) DOL Development of Online Resource for List of SREs and IRAPs
    Another online tool that will need to be developed by the 
Department will be an online resource for the list of SREs and IRAPs. 
In addition to the first-year software and labor costs, the Department 
will also incur annual maintenance costs.
    The Department estimates that the first-year software and labor 
costs to develop the online system will total $92,000. Contractor labor 
for developing the online resource will account for 98 percent of the 
total cost, while material costs for software hosting and licensing 
will account for 2 percent of the total cost. The annualized cost over 
the 10-year analysis period is estimated at $10,471 at a discount rate 
of 3 percent and $12,242 at a discount rate of 7 percent. The total 
cost over the 10-year analysis period is estimated at $89,320 at a 
discount rate of 3 percent and $85,981 at a discount rate of 7 percent.
    With respect to annual maintenance, the Department estimates that 
the total for software and labor will be $18,000. Contractor labor to 
support maintenance of the online list of SREs and IRAPs will account 
for 68 percent of the total cost, while material costs for software 
hosting and licensing fees will account for 32 percent of the total 
cost. The total cost over the 10-year analysis period is

[[Page 14365]]

estimated at $153,544 at a discount rate of 3 percent and $126,424 at a 
discount rate of 7 percent.
(23) DOL Review of SRE Applications
    The following steps summarize the estimated costs that will be 
borne by OA in connection with processing and reviewing the application 
information provided by prospective SREs.
(i) Step 1: Processing by Program Analysts
    The Department anticipates that the initial intake, review, and 
analysis of the information in the application form will be conducted 
by a Program Analyst in OA. The Department estimates that a Program 
Analyst will take an average of 1 hour to review and analyze the 
information. To estimate these costs over the 10-year analysis period, 
the Department multiplied the projected number of total SRE 
applications each year by the estimated time to process each 
application (1 hour) and by the hourly compensation rate for Program 
Analysts ($120.09 per hour). For example, the projected number of total 
SRE applications in Year 1 is 270, so the estimated Year 1 cost is 
$32,424 (= 270 SRE applications x 1 hour x $120.09 per hour). The 
annualized cost over the 10-year analysis period is estimated at $8,416 
at a discount rate of 3 percent and $8,838 at a discount rate of 7 
percent. The total cost over the 10-year analysis period is estimated 
at $71,787 at a discount rate of 3 percent and $62,072 at a discount 
rate of 7 percent.
(ii) Step 2: Panel Review
    Applications that pass the initial review process by a Program 
Analyst will then be forwarded to a review panel. For purposes of this 
analysis, the Department estimated the labor costs for a panel 
consisting of one Program Analyst and two Federal contractors who are 
Training and Development Managers. The three panelists will review each 
application and make a recommendation for recognition or denial to the 
Administrator. For purposes of this analysis, the Department estimates 
that 90 percent of applications will pass the initial review process by 
a Program Analyst and will be forwarded to the review panel.
    The Department estimates that the Program Analyst on the review 
panel will take 8 hours to conduct a complete review of each 
application. To estimate these costs over the 10-year analysis period, 
the Department multiplied the projected number of total SRE 
applications each year by 90 percent, and then multiplied this product 
by the estimated time to review each application (8 hours) and by the 
hourly compensation rate for Program Analysts ($120.09 per hour). For 
example, the projected number of total SRE applications in Year 1 is 
270, so the estimated Year 1 cost is $233,455 (= 270 SRE applications x 
90% x 8 hours x $120.09 per hour). The annualized cost over the 10-year 
analysis period is estimated at $60,592 at a discount rate of 3 percent 
and $63,631 at a discount rate of 7 percent. The total cost over the 
10-year analysis period is estimated at $516,864 at a discount rate of 
3 percent and $446,921 at a discount rate of 7 percent.
    The Department estimates that the Training and Development Managers 
on the review panel will take 8 hours each to conduct a complete review 
of each application. To estimate these costs over the 10-year analysis 
period, the Department multiplied the projected number of total SRE 
applications each year by 90 percent, and then multiplied this product 
by the estimated time to review each application (8 hours) and by the 
hourly compensation rate for Training and Development Managers ($117.06 
per hour) and by 2 to account for both Training and Development 
Managers on the review panel. For example, the projected number of 
total SRE applications in Year 1 is 270, so the estimated Year 1 cost 
is $455,129 (= 270 SRE applications x 90% x 8 hours x $117.06 per hour 
x 2 Training and Development Managers). The annualized cost over the 
10-year analysis period is estimated at $118,127 at a discount rate of 
3 percent and $124,052 at a discount rate of 7 percent. The total cost 
over the 10-year analysis period is estimated at $1,007,646 at a 
discount rate of 3 percent and $871,289 at a discount rate of 7 
percent.
(iii) Step 3: Panel Meeting
    The Department expects that the panel members will meet on a 
consistent basis to discuss their review findings for each application. 
The Department estimates that the Program Analyst on the review panel 
will spend 1 hour per application in meetings with the other panelists. 
To estimate these costs over the 10-year analysis period, the 
Department multiplied the projected number of total SRE applications 
each year by 90 percent, and then multiplied this product by the 
estimated time for meetings (1 hour) and by the hourly compensation 
rate for Program Analysts ($120.09 per hour). For example, the 
projected number of total SRE applications in Year 1 is 270, so the 
estimated Year 1 cost is $29,182 (= 270 SRE applications x 90% x 1 hour 
x $120.09 per hour). The annualized cost over the 10-year analysis 
period is estimated at $7,574 at a discount rate of 3 percent and 
$7,954 at a discount rate of 7 percent. The total cost over the 10-year 
analysis period is estimated at $64,608 at a discount rate of 3 percent 
and $55,865 at a discount rate of 7 percent.
    The Department estimates that the two Training and Development 
Managers on the review panel will each spend 1 hour per application in 
meetings with the other panelists. To estimate these costs over the 10-
year analysis period, the Department multiplied the projected number of 
total SRE applications each year by 90 percent, and then multiplied 
this product by the estimated time for meetings (1 hour) and by the 
hourly compensation rate for Training and Development Managers ($117.06 
per hour) and by 2 to account for both Training and Development 
Managers on the panel. For example, the projected number of total SRE 
applications in Year 1 is 270, so the estimated Year 1 cost is $56,891 
(= 270 SRE applications x 90% x 1 hour x $117.06 per hour x 2 Training 
and Development Managers). The annualized cost over the 10-year 
analysis period is estimated at $14,766 at a discount rate of 3 percent 
and $15,506 at a discount rate of 7 percent. The total cost over the 
10-year analysis period is estimated at $125,956 at a discount rate of 
3 percent and $108,911 at a discount rate of 7 percent.
(iv) Step 4: Review by the Administrator
    After the three panelists review the applications, the satisfactory 
applications will be forwarded to the Administrator for final review 
and approval. The Administrator will reach a final determination as to 
whether the entities should be recognized as SREs. The Department 
estimates that 70 percent of applications will be forwarded to the 
Administrator and that the Administrator will spend 15 minutes per 
application making a final decision. To estimate these costs over the 
10-year analysis period, the Department multiplied the projected number 
of total SRE applications each year by 70 percent, and then multiplied 
this product by the estimated time for review by the Administrator (15 
minutes) and by the hourly compensation rate for the Administrator 
($178.51 per hour). For example, the projected number of total SRE 
applications in Year 1 is 270, so the estimated Year 1 cost is $8,435 
(= 270 SRE applications x 70% x 15 minutes x $178.51 per hour). The 
annualized cost over the 10-year analysis period is estimated at $2,189 
at a discount rate of

[[Page 14366]]

3 percent and $2,299 at a discount rate of 7 percent. The total cost 
over the 10-year analysis period is estimated at $18,674 at a discount 
rate of 3 percent and $16,147 at a discount rate of 7 percent.
(v) Notification of Recognition or Denial of Recognition
    Finally, OA will notify each applicant of the results of the review 
process. Each applicant will either be recognized as an SRE or be 
denied recognition. The Department estimates that a Program Analyst 
will spend an average of 1 hour notifying each applicant. To estimate 
these costs over the 10-year analysis period, the Department multiplied 
the projected number of total SRE applications each year by the 
estimated time for notification (1 hour) and by the hourly compensation 
rate for Program Analysts ($120.09 per hour). For example, the 
projected number of total SRE applications in Year 1 is 270, so the 
estimated Year 1 cost is $32,424 (= 270 SRE applications x 1 hour x 
$120.09 per hour). The annualized cost over the 10-year analysis period 
is estimated at $8,416 at a discount rate of 3 percent and $8,838 at a 
discount rate of 7 percent. The total cost over the 10-year analysis 
period is estimated at $71,787 at a discount rate of 3 percent and 
$62,072 at a discount rate of 7 percent.
(24) DOL Review of Resubmitted SRE Applications
    For purposes of this analysis, the Department estimates that 
approximately 30 percent of applications will be denied on the first 
attempt, and that 50 percent of the denied applications will be 
resubmitted after the deficiencies have been addressed, which means 15 
percent of all applications will be resubmitted. The Department will 
then follow the same five steps for reviewing the resubmitted 
applications.
(i) Resubmission Step 1: Processing by Program Analysts
    The Department estimates that a Program Analyst will take 1 hour to 
process the information in a resubmitted application. To estimate the 
costs over the 10-year analysis period for Step 1 of the resubmission 
review process, the Department multiplied the projected number of total 
SRE applications each year by 15 percent, and then multiplied this 
product by the estimated time to process each application (1 hour) and 
by the hourly compensation rate for Program Analysts ($120.09 per 
hour). For example, the projected number of total SRE applications in 
Year 1 is 270, so the estimated Year 1 cost is $4,864 (= 270 SRE 
applications x 15% x 1 hour x $120.09 per hour). The annualized cost 
over the 10-year analysis period is estimated at $1,262 at a discount 
rate of 3 percent and $1,326 at a discount rate of 7 percent. The total 
cost over the 10-year analysis period is estimated at $10,768 at a 
discount rate of 3 percent and $9,311 at a discount rate of 7 percent.
(ii) Resubmission Step 2: Panel Review
    The Department estimates that the Program Analyst on the review 
panel will take 8 hours to conduct a complete review of each 
resubmitted application. To estimate these costs over the 10-year 
analysis period, the Department multiplied the projected number of 
total SRE applications each year by 15 percent, and then multiplied 
this product by the estimated time to review each application (8 hours) 
and by the hourly compensation rate for Program Analysts ($120.09 per 
hour). For example, the projected number of total SRE applications in 
Year 1 is 270, so the estimated Year 1 cost is $38,909 (= 270 SRE 
applications x 15% x 8 hours x $120.09 per hour). The annualized cost 
over the 10-year analysis period is estimated at $10,099 at a discount 
rate of 3 percent and $10,605 at a discount rate of 7 percent. The 
total cost over the 10-year analysis period is estimated at $86,144 at 
a discount rate of 3 percent and $74,487 at a discount rate of 7 
percent.
    The Department estimates that the two Training and Development 
Managers on the review panel will take 8 hours each to conduct a 
complete review of each resubmitted application. To estimate these 
costs over the 10-year analysis period, the Department multiplied the 
projected number of total SRE applications each year by 15 percent, and 
then multiplied this product by the estimated time to review each 
application (8 hours) and by the hourly compensation rate for Training 
and Development Managers ($117.06 per hour) and by 2 to account for 
both Training and Development Managers on the panel. For example, the 
projected number of total SRE applications in Year 1 is 270, so the 
estimated Year 1 cost is $75,855 (= 270 SRE applications x 15% x 8 
hours x $117.06 per hour x 2 Training and Development Managers). The 
annualized cost over the 10-year analysis period is estimated at 
$19,688 at a discount rate of 3 percent and $20,675 at a discount rate 
of 7 percent. The total cost over the 10-year analysis period is 
estimated at $167,941 at a discount rate of 3 percent and $145,215 at a 
discount rate of 7 percent.
(iii) Resubmission Step 3: Panel Meeting
    The Department estimates that the Program Analyst on the review 
panel will spend 1 hour per resubmitted application in meetings with 
the other panelists. To estimate these costs over the 10-year analysis 
period, the Department multiplied the projected number of total SRE 
applications each year by 15 percent, and then multiplied this product 
by the estimated time for meetings (1 hour) and by the hourly 
compensation rate for Program Analysts ($120.09 per hour). For example, 
the projected number of total SRE applications in Year 1 is 270, so the 
estimated Year 1 cost is $4,864 (= 270 SRE applications x 15% x 1 hour 
x $120.09 per hour). The annualized cost over the 10-year analysis 
period is estimated at $1,262 at a discount rate of 3 percent and 
$1,326 at a discount rate of 7 percent. The total cost over the 10-year 
analysis period is estimated at $10,768 at a discount rate of 3 percent 
and $9,311 at a discount rate of 7 percent.
    The Department estimates that the two Training and Development 
Managers on the review panel will each spend 1 hour per resubmitted 
application in meetings with the other panelists. To estimate these 
costs over the 10-year analysis period, the Department multiplied the 
projected number of total SRE applications each year by 15 percent, and 
then multiplied this product by the estimated time for meetings (1 
hour) and by the hourly compensation rate for Training and Development 
Managers ($117.06 per hour) and by 2 to account for both Training and 
Development Managers on the panel. For example, the projected number of 
total SRE applications in Year 1 is 270, so the estimated Year 1 cost 
is $9,482 (= 270 SRE applications x 15% x 1 hour x $117.06 per hour x 2 
Training and Development Managers). The annualized cost over the 10-
year analysis period is estimated at $2,461 at a discount rate of 3 
percent and $2,584 at a discount rate of 7 percent. The total cost over 
the 10-year analysis period is estimated at $20,993 at a discount rate 
of 3 percent and $18,152 at a discount rate of 7 percent.
(iv) Resubmission Step 4: Review by the Administrator
    For purposes of this analysis, the Department estimates that one-
third of resubmitted applications will be forwarded to the 
Administrator, which equates to 5 percent of the total number of 
applications (= 15% of all applications x \1/3\ forwarded to the 
Administrator). The Department further

[[Page 14367]]

estimates that the Administrator will spend 15 minutes per resubmitted 
application making a final decision. To estimate these costs over the 
10-year analysis period, the Department multiplied the projected number 
of total SRE applications each year by 5 percent, and then multiplied 
this product by the estimated time for review by the Administrator (15 
minutes) and by the hourly compensation rate for the Administrator 
($178.51 per hour). For example, the projected number of total SRE 
applications in Year 1 is 270, so the estimated Year 1 cost is $602 (= 
270 SRE applications x 5% x 15 minutes x $178.51 per hour). The 
annualized cost over the 10-year analysis period is estimated at $156 
at a discount rate of 3 percent and $164 at a discount rate of 7 
percent. The total cost over the 10-year analysis period is estimated 
at $1,334 at a discount rate of 3 percent and $1,153 at a discount rate 
of 7 percent.
(v) Notification of Recognition or Denial of Recognition for 
Resubmitted Applications
    The Department estimates that a Program Analyst will spend an 
average of 1 hour notifying each entity that resubmitted an 
application. To estimate these costs over the 10-year analysis period, 
the Department multiplied the projected number of total SRE 
applications each year by 15 percent, and then multiplied this product 
by the estimated time for notification (1 hour) and by the hourly 
compensation rate for Program Analysts ($120.09 per hour). For example, 
the projected number of total SRE applications in Year 1 is 270, so the 
estimated Year 1 cost is $4,864 (= 270 SRE applications x 15% x 1 hour 
x $120.09 per hour). The annualized cost over the 10-year analysis 
period is estimated at $1,262 at a discount rate of 3 percent and 
$1,326 at a discount rate of 7 percent. The total cost over the 10-year 
analysis period is estimated at $10,768 at a discount rate of 3 percent 
and $9,311 at a discount rate of 7 percent.
(25) DOL Preparation of Administrative Record When a Denied Entity 
Requests Review
    As explained earlier in this section, the Department estimates that 
approximately 1 percent of all applications will request administrative 
review of a denial. Within 30 calendar days of the filing of the 
request for administrative review, the Administrator will have to 
prepare an administrative record for submission to the Office of 
Administrative Law Judges. Based on its program experience, the 
Department estimates that preparing an administrative record will take 
a Program Analyst approximately 6 hours. To estimate these costs over 
the 10-year analysis period, the Department multiplied the projected 
number of SRE applications in each year by 1 percent, and then 
multiplied that product by the estimated time to prepare an 
administrative record (6 hours) and by the hourly compensation rate for 
Program Analysts ($120.09 per hour). For example, the projected number 
of SRE applications in Year 1 is 270, so the estimated Year 1 cost is 
$1,945 (= 270 SRE applications x 1% x 6 hours x $120.09 per hour). The 
annualized cost over the 10-year analysis period is estimated at $381 
at a discount rate of 3 percent and $413 at a discount rate of 7 
percent. The total cost over the 10-year analysis period is estimated 
at $3,253 at a discount rate of 3 percent and $2,903 at a discount rate 
of 7 percent.
(26) Review of Administrator's Denial by Office of Administrative Law 
Judges
    In accordance with Sec.  29.29, a prospective SRE that is denied 
recognition may file a request for administrative review by an 
Administrative Law Judge. The Department estimates that it will take 8 
hours for an Administrative Law Judge to review the administrative 
record submitted by OA and conduct a hearing. To estimate these costs 
over the 10-year analysis period, the Department multiplied the 
projected number of SRE applications in each year by 1 percent, and 
then multiplied that product by the estimated time for an 
Administrative Law Judge to conduct a review (8 hours) and by the 
hourly compensation rate for Administrative Law Judges ($189.66 per 
hour). For example, the projected number of SRE applications in Year 1 
is 270, so the estimated Year 1 cost is $4,097 (= 270 SRE applications 
x 1% x 8 hours x $189.66 per hour). The annualized cost over the 10-
year analysis period is estimated at $803 at a discount rate of 3 
percent and $870 at a discount rate of 7 percent. The total cost over 
the 10-year analysis period is estimated at $6,849 at a discount rate 
of 3 percent and $6,114 at a discount rate of 7 percent.
    Next, a Law Clerk in the Office of Administrative Law Judges will 
draft the proposed findings and the recommended decision based on the 
hearing. The Department estimates that this step of the process will 
take approximately 2 hours. To estimate these costs over the 10-year 
analysis period, the Department multiplied the projected number of SRE 
applications in each year by 1 percent, and then multiplied that 
product by the estimated time for a Law Clerk to draft the proposed 
findings and the recommended decision (2 hours) and by the hourly 
compensation rate for Law Clerks ($84.27 per hour). For example, the 
projected number of SRE applications in Year 1 is 270, so the estimated 
Year 1 cost is $455 (= 270 SRE applications x 1% x 2 hours x $84.27 per 
hour). The annualized cost over the 10-year analysis period is 
estimated at $89 at a discount rate of 3 percent and $97 at a discount 
rate of 7 percent. The total cost over the 10-year analysis period is 
estimated at $761 at a discount rate of 3 percent and $679 at a 
discount rate of 7 percent.
    In addition, a Paralegal in the Office of Administrative Law Judges 
will handle the tasks related to placing the matter on the docket of 
cases. The Department estimates that this step of the process will take 
approximately 2 hours. To estimate these costs over the 10-year 
analysis period, the Department multiplied the projected number of SRE 
applications in each year by 1 percent, and then multiplied that 
product by the estimated time for a Paralegal to place the matter on 
the docket (2 hours) and by the hourly compensation rate for Paralegals 
($56.93 per hour). For example, the projected number of SRE 
applications in Year 1 is 270, so the estimated Year 1 cost is $307 (= 
270 SRE applications x 1% x 2 hours x $56.93 per hour). The annualized 
cost over the 10-year analysis period is estimated at $60 at a discount 
rate of 3 percent and $65 at a discount rate of 7 percent. The total 
cost over the 10-year analysis period is estimated at $514 at a 
discount rate of 3 percent and $459 at a discount rate of 7 percent.
(27) Review of Administrator's Denial by Administrative Review Board
    In accordance with Sec.  29.29, any party may file exceptions to 
the Administrative Law Judge's recommended decision in the prior step. 
If the Administrative Review Board accepts a case for review, the 
three-judge panel of Administrative Law Judges will review the proposed 
findings and the recommended decision provided by the Administrative 
Law Judge in the prior step, and then render a decision on the record. 
The Department estimates that the review and decision will take 
approximately 2 hours per Administrative Law Judge. To estimate these 
costs over the 10-year analysis period, the Department multiplied the 
projected number of SRE applications in each year by 1 percent, and 
then multiplied that product by the

[[Page 14368]]

estimated time for each Administrative Law Judge to conduct the review 
(2 hours) and by the hourly compensation rate for Administrative Law 
Judges ($189.66 per hour) and by 3 Administrative Law Judges. For 
example, the projected number of SRE applications in Year 1 is 270, so 
the estimated Year 1 cost is $3,073 (= 270 SRE applications x 1% x 2 
hours x $189.66 per hour x 3 Administrative Law Judges). The annualized 
cost over the 10-year analysis period is estimated at $602 at a 
discount rate of 3 percent and $653 at a discount rate of 7 percent. 
The total cost over the 10-year analysis period is estimated at $5,137 
at a discount rate of 3 percent and $4,585 at a discount rate of 7 
percent.
    Next, a Staff Attorney for the Administrative Review Board will 
draft a decision for the Board. The Department estimates that this step 
of the process will take approximately 6 hours. To estimate these costs 
over the 10-year analysis period, the Department multiplied the 
projected number of SRE applications in each year by 1 percent, and 
then multiplied that product by the estimated time for a Staff Attorney 
to draft a decision (6 hours) and by the hourly compensation rate for 
Staff Attorneys ($177.91 per hour). For example, the projected number 
of SRE applications in Year 1 is 270, so the estimated Year 1 cost is 
$2,882 (= 270 SRE applications x 1% x 6 hours x $177.91 per hour). The 
annualized cost over the 10-year analysis period is estimated at $565 
at a discount rate of 3 percent and $612 at a discount rate of 7 
percent. The total cost over the 10-year analysis period is estimated 
at $4,819 at a discount rate of 3 percent and $4,301 at a discount rate 
of 7 percent.
    In addition, a Legal Assistant will perform docket filing and other 
administrative tasks associated with the issuance of the Administrative 
Review Board's decision. The Department estimates that this step of the 
process will take approximately 2 hours. To estimate these costs over 
the 10-year analysis period, the Department multiplied the projected 
number of SRE applications in each year by 1 percent, and then 
multiplied that product by the estimated time for a Legal Assistant to 
perform administrative duties (2 hours) and by the hourly compensation 
rate for Legal Assistant ($84.27 per hour). For example, the projected 
number of SRE applications in Year 1 is 270, so the estimated Year 1 
cost is $455 (= 270 SRE applications x 1% x 2 hours x $84.27 per hour). 
The annualized cost over the 10-year analysis period is estimated at 
$89 at a discount rate of 3 percent and $97 at a discount rate of 7 
percent. The total cost over the 10-year analysis period is estimated 
at $761 at a discount rate of 3 percent and $679 at a discount rate of 
7 percent.
(28) Administrator's Compliance Assistance Reviews
    Pursuant to Sec.  29.23(a), the Administrator may conduct periodic 
compliance assistance reviews of SREs to assist with their conformity 
to the requirements of this rule. For purposes of this analysis, the 
Department estimates that OA will perform a compliance assistance 
review of 5 percent of SREs per year, and that such a review will take 
approximately 10 hours per SRE. To estimate these costs over the 10-
year analysis period, the Department multiplied the projected number of 
SREs in each year by 5 percent, and then multiplied this product by the 
estimated time to comply with this provision (10 hours) and by the 
hourly compensation rate for Program Analysts ($120.09 per hour). For 
example, the projected number of SREs in Year 1 is 203, so the 
estimated Year 1 cost is $12,189 (= 203 SREs x 5% x 10 hours x $120.09 
per hour). The annualized cost over the 10-year analysis period is 
estimated at $15,154 at a discount rate of 3 percent and $14,924 at a 
discount rate of 7 percent. The total cost over the 10-year analysis 
period is estimated at $129,269 at a discount rate of 3 percent and 
$104,823 at a discount rate of 7 percent.
b. Payments From IRAPs to SREs
    The Department anticipates that SREs may charge a fee to the IRAPs 
that they recognize, though such a fee is neither required nor 
prohibited under this final rule. Such a fee will help SREs offset the 
costs described earlier in this section.
    SREs' fees will likely vary widely, so the Department explored 
different ways to estimate those fees. The Department began by looking 
at the application and annual fees charged by entities that focus 
primarily on setting standards, thinking it would make sense to base 
its estimate on the fees currently charged by such entities. However, 
after further reflection, the Department decided that such entities are 
not representative of the full range of potential SREs, which may 
include but are not limited to trade, industry, and employer groups or 
associations; educational institutions; State and local government 
agencies or entities; non-profit organizations; unions; joint labor-
management organizations; and partnerships of multiple entities. 
Entities that focus primarily or exclusively on standards-setting are 
not representative of the variety of entities likely to apply to become 
recognized SREs, so the fees charged by such entities would not be 
representative of the fees that may (or may not) be charged by other 
types of entities.
    Therefore, the Department decided that a better approach to 
estimating SRE fees would be to develop an estimate based on the 
quantified costs in this analysis. To approximate a break-even point 
between SRE costs and SRE fees under this final rule, the Department 
estimates an average initial application fee of $3,000 and an average 
annual fee of $2,000. The remaining difference between SRE costs and 
SRE fees reflects the unquantified costs under this final rule.
    Since the payment of SRE fees by IRAPs will help SREs recoup their 
costs under this final rule, and since those costs have already been 
quantified in the economic analysis above, the potential payments from 
IRAPs to SREs are not included in Exhibits 1 or 6.
6. Summary of Costs
    Exhibit 6 presents a summary of the quantifiable costs associated 
with this final rule.

[[Page 14369]]

[GRAPHIC] [TIFF OMITTED] TR11MR20.005

7. Nonquantifiable Costs
    This section addresses the nonquantifiable costs of the final rule.
a. SRE Costs
    Under Sec.  29.22(j), an SRE must make publicly available the 
aggregated number of complaints pertaining to each IRAP. This is a new 
program, and in the absence of useful comparable data or other readily 
applicable information, the Department does not have a reasonable way 
to estimate the number of complaints that will be filed against each 
IRAP. Consequently, there is insufficient information to quantify the 
potential costs of this provision.
    Further, under Sec.  29.26, the Administrator may initiate a review 
of an SRE after receiving a complaint about the SRE or information 
indicating that the SRE is no longer capable of continuing in its role. 
If a review is initiated, the SRE will have an opportunity to provide 
information to the Department. Since this is a new program, the 
Department does not have a reasonable way to estimate the number of 
complaints it may receive or reviews it may initiate. Consequently, 
there is insufficient information to quantify the potential costs of 
this provision.
    Additionally, Sec.  29.27 explains the process through which the 
Administrator may suspend or derecognize an SRE. A suspended SRE will 
have an opportunity to implement remedial action or request 
administrative review. If an SRE does not implement remedial action or 
request administrative review and is derecognized by the Administrator, 
the SRE must inform its IRAPs and the public of its derecognition in 
accordance with Sec.  29.22(m). Since this is a new program, the 
Department does not have a reasonable way to estimate the number of 
SREs that will be suspended, nor the percentage of suspended SREs that 
will implement remedial action or make a request for administrative 
review, nor the share that will be derecognized. For these reasons, the 
Department is unable to quantity the potential costs of these 
provisions.
b. IRAP Costs
    A 2016 study published by the Department of Commerce found that 
apprenticeship programs vary significantly in length and cost. The 
shortest program in the study lasted 1 year, while the longest lasted 
more than 4 years. The costs of the programs in the study ranged from 
$25,000 to $250,000 per apprentice. Importantly, compensation costs for 
apprentices were the major cost of the programs. Other costs included 
program start-up, educational materials, mentors' time, and overhead. 
The authors noted that the ultimate goal of an apprenticeship program 
is for companies to fill skilled jobs, and apprenticeships are only one 
way to do so. Many of the costs of an apprenticeship program would 
still be incurred if the company filled the job through another method, 
such as hiring an already-trained worker, contracting a temporary 
worker, or increasing the hours of existing staff.\43\ In analyzing the 
costs of an apprenticeship program, it is essential to consider how an 
employer would fill the position in the absence of apprentices. The 
costs of an apprenticeship program should be assessed within the 
context of the employer's alternative hiring options. The Department 
notes that such options may be limited given the skills gap that this 
regulation seeks to help address. Yet, data are not available for the 
Department to conduct such an analysis. Consequently, the Department 
was unable to quantify the potential costs of apprenticeship programs 
that will be established under this final rule.
---------------------------------------------------------------------------

    \43\ Susan Helper, Ryan Noonan, Jessica R. Nicholson, and David 
Langdon, ``The Benefits and Costs of Apprenticeship: A Business 
Perspective,'' Nov. 2016, https://files.eric.ed.gov/fulltext/ED572260.pdf.
---------------------------------------------------------------------------

c. Government Costs
    In addition to the SRE and IRAP costs that cannot be quantified, 
the final rule is also expected to incur costs to the Department. To 
begin with, Sec.  29.26 requires the Administrator to follow specific 
steps if the Administrator decides to initiate a review of an SRE after 
receiving a complaint or information indicating that the SRE is no 
longer capable of continuing in its

[[Page 14370]]

role. Those steps include notifying the SRE of the review, conducting 
the review, and notifying the SRE of the decision to either take no 
action against the SRE or suspend the SRE. Since this is a new program, 
the Department does not have a reasonable way to estimate the number of 
complaints it may receive or reviews it may initiate. Hence, there is 
insufficient information to quantify the potential costs of this 
section.
    Similarly, Sec.  29.27 requires the Administrator to take certain 
actions if the Administrator decides to suspend an SRE. For example, 
the Administrator must publish the SRE's suspension on the Department's 
publicly available list of SREs and IRAPs. If the SRE commits itself to 
remedial actions, the Administrator must determine whether the SRE has 
remedied the identified areas of nonconformity. If the SRE makes a 
request for administrative review, the Administrator must prepare an 
administrative record for submission to the Office of Administrative 
Law Judges. Finally, if the SRE does not commit itself to remedial 
action or request administrative review, the Administrator will 
derecognize the SRE. Since this is a new program, the Department does 
not have a reasonable way to estimate the proportion of SREs that will 
be suspended by the Administrator. Consequently, there is insufficient 
information to quantify the potential costs of this provision.
    Under Sec.  29.29(a), the Administrator must prepare an 
administrative record for submission to the Administrative Law Judge 
after receiving a suspended SRE's request for administrative review. 
Without a reasonable way to estimate the number of suspended SREs or 
the share of suspended SREs that will request administrative review, 
the Department is unable to quantify this cost.
    In addition to the costs borne by OA, costs will also be borne by 
the Office of Administrative Law Judges and the Administrative Review 
Board. The Chief Administrative Law Judge must designate an 
Administrative Law Judge to review a suspended SRE's request for 
administrative review. Within 20 calendar days of the receipt of the 
Administrative Law Judge's recommended decision, any party may file 
exceptions with the Administrative Review Board, which must issue a 
decision in any case it accepts within 180 calendar days of the close 
of the record. The Department does not have a reasonable way to 
estimate the number of suspended SREs nor the share that will request 
administrative review; therefore, the Department is unable to quantify 
this cost.
8. Nonquantifiable Transfer Payments
    As mentioned above, a major cost of apprenticeship programs is the 
compensation costs of apprentices.\44\ For the purposes of a Regulatory 
Impact Analysis, an increase in wages is not considered a cost; rather, 
an increase in wages is considered a ``transfer payment.'' According to 
OMB Circular A-4, transfers occur when wealth or income is 
redistributed without any direct change in aggregate social 
welfare.\45\ Therefore, an increase in wages is categorized as a 
transfer payment from the employer to the worker rather than a cost to 
the employer or a benefit to the worker.
---------------------------------------------------------------------------

    \44\ Susan Helper, Ryan Noonan, Jessica R. Nicholson, and David 
Langdon, ``The Benefits and Costs of Apprenticeship: A Business 
Perspective,'' Nov. 2016, https://files.eric.ed.gov/fulltext/ED572260.pdf.
    \45\ OMB, ``Circular A-4,'' Sept. 17, 2003.
---------------------------------------------------------------------------

    Data are not available for the Department to quantify the transfer 
payment from employers to apprentices. Some jobs filled by apprentices 
would likely be filled by non-apprentices in the absence of an IRAP. 
The transfer payment may be more than $100 million per year; therefore, 
this rule has been designated as an economically significant regulatory 
action under section 3(f) of E.O. 12866.
9. Regulatory Alternatives
    OMB Circular A-4, which outlines best practices in regulatory 
analysis, directs agencies to analyze alternatives if such alternatives 
best satisfy the philosophy and principles of E.O. 12866. Accordingly, 
the Department considered two regulatory alternatives related to 
paragraph 29.22(h). Under the first alternative, SREs would be required 
to make performance data publicly available every 5 years rather than 
annually. Under the second alternative, SREs would be required to make 
performance data publicly available every quarter rather than annually. 
Both alternatives are discussed in more detail below.
    For the first alternative, the Department considered requiring SREs 
to report to the Administrator and make publicly available the 
performance data for each IRAP it recognizes on a 5-year reporting 
cycle rather than on an annual reporting cycle as proposed in paragraph 
29.22(h). To estimate the reduction in costs under this alternative, 
the Department adjusted three of the calculations described in the 
Subject-by-Subject Analysis. First, the Department decreased from 4 
hours to 48 minutes (= 4 hours / 5 years) the time burden for an SRE to 
report to the Administrator the performance information for each IRAP 
it recognizes. Second, the Department decreased from 2 hours to 24 
minutes (= 2 hours / 5 years) the time burden for an SRE to make 
publicly available the performance information for each IRAP it 
recognizes. Third, the Department decreased from 25 hours to 5 hours (= 
25 hours / 5 years) the time burden for an IRAP to provide performance 
information to its SRE since the information would only need to be 
provided once every 5 years under this alternative. Exhibit 7 shows the 
estimated costs of the proposed rule under this alternative. Over the 
10-year analysis period, the annualized costs are estimated at $29.7 
million at a discount rate of 7 percent. In total, this alternative is 
estimated to result in costs of $208.7 million at a discount rate of 7 
percent.

[[Page 14371]]

[GRAPHIC] [TIFF OMITTED] TR11MR20.006

    The Department decided not to pursue this alternative because a 
longer reporting cycle would be inconsistent with the annual reporting 
cycles for other workforce investment programs, such as those 
authorized by WIOA. Furthermore, a longer reporting cycle would be less 
transparent and provide less accountability to the public.
    The second alternative considered by the Department would require 
SREs to report to the Administrator and make performance data publicly 
available on a quarterly reporting cycle rather than on an annual 
reporting cycle. To estimate the growth in costs under this 
alternative, the Department adjusted three of the calculations 
described in the Subject-by-Subject Analysis. First, the Department 
increased from 4 hours to 16 hours (= 4 hours x 4 quarters) the time 
burden for an SRE to report to the Administrator the performance 
information for each IRAP it recognizes. Second, the Department 
increased from 2 hours to 8 hours (= 2 hours x 4 quarters) the time 
burden for an SRE to make publicly available the performance 
information for each IRAP it recognizes. Third, the Department 
increased from 25 hours to 100 hours (= 25 hours x 4 quarters) the time 
burden for an IRAP to provide performance information to its SRE. 
Exhibit 8 shows the estimated costs of the proposed rule under this 
alternative. Over the 10-year analysis period, the annualized costs are 
estimated at $109.6 million at a discount rate of 7 percent. In total, 
this alternative is estimated to result in costs of $769.6 million at a 
discount rate of 7 percent.
[GRAPHIC] [TIFF OMITTED] TR11MR20.007

    The Department decided not to pursue this alternative because it 
would be unduly burdensome for SREs and IRAPs. Moreover, the additional 
data that would be collected would not justify the onerousness of the 
quarterly reporting requirement.
    The Department considered these two regulatory alternatives in 
accordance with the provisions of E.O. 12866 and chose to balance 
flexibility and opportunity for innovation by SREs and IRAPs, while 
providing for reasonable reporting cycles that demonstrate transparency 
and accountability.
B. Regulatory Flexibility Act, Small Business Regulatory Enforcement 
Fairness Act of 1996, and Executive Order 13272 (Proper Consideration 
of Small Entities in Agency Rulemaking)
    The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA) imposes 
certain requirements on Federal agency rules that are subject to the 
notice-and-comment requirements of APA, 5 U.S.C. 553(b),\46\ and that 
are likely to have a significant economic impact on a substantial 
number of small entities. The RFA requires agencies promulgating final 
rules to prepare a Final Regulatory Flexibility Analysis, and to 
develop alternatives whenever possible, when drafting regulations that 
will have a significant economic impact on a substantial number of 
small entities. The RFA requires the consideration of the impact of a 
final regulation on a wide range of small entities, including small 
businesses, not-for-profit organizations, and small governmental 
jurisdictions.
---------------------------------------------------------------------------

    \46\ The RFA, as amended, governs ``any rule for which [a 
Federal] agency publishes a general [NPRM] pursuant to section 
553(b) of [APA], or any other law.'' 5 U.S.C. 601(2) (defining 
``rule'' for purposes of RFA).
---------------------------------------------------------------------------

    The Department believes that this final rule will have a 
significant economic impact on a substantial number of small entities 
and is therefore publishing this Final Regulatory

[[Page 14372]]

Flexibility Analysis as required. It should be noted, however, that 
this initiative is voluntary; therefore, only small entities that 
choose to participate will experience an economic impact--significant 
or otherwise. The Department anticipates that small businesses will 
participate only if they believe it is cost effective to do so.
1. Statement of the Need for and Objectives of the Final Rule
    The Department is issuing this final rule to establish IRAPs, a new 
form of apprenticeships intended to harness industry expertise and 
leadership in order to address the national shortage of skilled 
workers. The objective of this final rule is to facilitate the 
establishment of SREs and IRAPs in order to address the ongoing skills 
gap that faces our nation.
    Congress enacted NAA, 29 U.S.C. 50, in 1937, authorizing the 
Secretary of Labor ``to formulate and promote the furtherance of labor 
standards necessary to safeguard the welfare of apprentices,'' as well 
as ``to bring together employers and labor for the formulation of 
programs of apprenticeship.'' In June 2017, President Trump issued E.O. 
13801, ``Expanding Apprenticeships in America,'' directing the 
Secretary of Labor, in consultation with the Secretaries of Education 
and Commerce, to consider regulations to promote the establishment of 
apprenticeships developed by trade and industry groups, companies, non-
profit organizations, unions, and joint labor-management organizations, 
and to provide the framework under which these entities could recognize 
high-quality apprenticeship programs.
    Consistent with NAA and E.O. 13801, the Department considers it 
imperative to move forward with implementing regulations that will 
assist and complement the rapid scaling of high-quality apprenticeships 
in the United States. Also, this final rule will facilitate the 
efficient and effective operation of SREs and IRAPs. Such regulations 
will provide stakeholders with information necessary to evaluate the 
outcomes of this new initiative.
2. Public Comments
    A commenter stated that the significant costs incurred by joint 
programs required to establish, administer, and sponsor open-shop 
program training can prove to be especially difficult for smaller 
employers. Several commenters expressed concern that including the 
construction industry in the proposed rule would threaten small 
businesses.
    This is a voluntary program. The Department anticipates that small 
businesses will participate only if they think it is cost effective to 
do so. With respect to the construction industry in particular, the 
Administrator will not recognize SREs that seek to train apprentices in 
construction activities as defined in Sec.  29.30.
    Several commenters stated that, in their view, IRAP costs were 
understated in the proposed rule because SREs will require a higher 
annual fee to adequately monitor and enforce quality, performance, and 
compliance of IRAPs.
    A wide variety of entities may become recognized SREs and they will 
incur a wide variation in costs, which will affect any fees they may 
charge. The Department's estimates for the application fee and annual 
fee are intended to approximate a break-even point between SRE costs 
and SRE fees. Some SREs will incur higher costs, while others will 
incur lower costs, and any fees they charge may reflect these 
differences. The commenters did not specify how much higher the 
Department's estimates should be nor did they provide data for the 
Department to use to improve its estimates. In the final rule, the 
Department maintained its approach of estimating SRE fees by 
approximating a break-even point between SRE costs and SRE fees.
3. Comments From the Chief Counsel for the U.S. Small Business 
Administration
    The Department did not receive comments from the U.S. Small 
Business Administration during the public comment period.
4. Description and Estimate of the Small Entities Affected by the Final 
Rule
    This final rule will primarily affect two types of entities: SREs 
and IRAPs. SREs may include industry associations, employer groups, 
labor-management organizations, educational organizations, and 
consortia of these or other organizations. IRAPs may be developed by 
entities such as trade and industry groups, companies, non-profit 
organizations, unions, and joint labor-management organizations.
    As explained in the ``Payments from IRAPs to SREs'' subsection 
above, the Department anticipates that SREs may charge an application 
fee, an annual fee, or both to the IRAPs they recognize. Such a fee 
would help SREs recoup their expenses. Therefore, the Department did 
not include SREs in this Final Regulatory Flexibility Analysis.
    Instead, this analysis focuses on the small entities that choose to 
develop IRAPs. As explained in the E.O. 12866 analysis above, the 
Department anticipates that each SRE will recognize approximately 32 
IRAPs, beginning with 10 new IRAPs in its 1st year as an SRE, and then 
8 new IRAPs in its 2nd year, 5 new IRAPs in its 3rd year, 3 new IRAPs 
in its 4th year, and 1 in its 5th through 10th years. Based on this 
assumption, the number of new IRAPs in Year 1 is estimated to be 2,030 
(= 203 new SREs in Year 1 x 10 new IRAPs per SRE). The number of new 
IRAPs in Year 2 is estimated to be 1,724 [= (203 new SREs in Year 1 x 8 
new IRAPs per SRE) + (10 new SREs in Year 2 x 10 new IRAPs per SRE)]. 
As explained in the E.O. 12866 analysis above, the Department estimates 
that 90 percent of SREs will undergo the Department's process for 
continued recognition, so in Year 6 the estimated number of new Year 1 
SREs will shrink to 183 (= 203 new SREs in Year 1 x 90%). Accordingly, 
the number of new IRAPs in Year 6 is estimated to be 707 [= (183 Year 1 
SREs with continued recognition x 1 new IRAPs per SRE) + (10 new SREs 
in Year 2 x 1 new IRAPs per SRE) + (11 new SREs in Year 3 x 3 new IRAPs 
per SRE) + (11 new SREs in Year 4 x 5 new IRAPs per SRE) + (12 new SREs 
in Year 5 x 8 new IRAPs per SRE) + (33 new SREs in Year 6 x 10 new 
IRAPs per SRE)].
    To estimate the total number of IRAPs in each year of the analysis 
period, the Department first calculated the cumulative total of new 
IRAPs per SRE. For example, a new SRE in Year 1 is estimated to have 
recognized a total of 18 IRAPs in Year 2 (= 10 new IRAPs in Year 1 + 8 
new IRAPs in Year 2). So, the total number of IRAPs in Year 2 is 
estimated to be 3,754 [= (203 new SREs in Year 1 x 18 total IRAPs per 
SRE) + (10 new SREs in Year 2 x 10 total IRAPs per SRE)]. As explained 
above, the estimated number of new Year 1 SREs is expected to shrink to 
183 in Year 6. Accordingly, the total number of IRAPs in Year 6 is 
estimated to be 6,479 [= (183 Year 1 SREs with continued recognition x 
28 total IRAPs per SRE) + (10 new SREs in Year 2 x 27 total IRAPs per 
SRE) + (11 new SREs in Year 3 x 26 total IRAPs per SRE) + (11 new SREs 
in Year 4 x 23 total IRAPs per SRE) + (12 new SREs in Year 5 x 18 total 
IRAPs per SRE) + (33 new SREs in Year 6 x 10 total IRAPs per SRE)].

[[Page 14373]]

    Exhibit 9 presents the projected number of new and total IRAPs over 
the 10-year analysis period.\47\
---------------------------------------------------------------------------

    \47\ These numbers are identical to the numbers in Exhibit 3.
    [GRAPHIC] [TIFF OMITTED] TR11MR20.008
    
    Given that this is a new initiative, the Department has no way of 
knowing what size these IRAPs will be. Therefore, the Department 
assumes that the IRAPs will have the same size distribution as the 
firms in each of the 18 major industry sectors.\48\ This assumption 
allows the Department to conduct a robust analysis using data from the 
Census Bureau's Statistics of U.S. Businesses,\49\ which include the 
number of firms, number of employees, and annual revenue by industry 
and firm size. Using these data allows the Department to estimate the 
per-program costs of the final rule as a percent of revenue by industry 
and firm size.
---------------------------------------------------------------------------

    \48\ Construction is the 19th major industry sector; it is not 
included in this analysis pursuant to Sec.  29.30.
    \49\ See U.S. Census Bureau, ``Statistics of U.S. Businesses,'' 
http://www.census.gov/programs-surveys/susb/data.html (last visited 
Dec. 7, 2019).
---------------------------------------------------------------------------

5. Compliance Requirements of the Final Rule
    The E.O. 12866 analysis above quantifies several types of labor 
costs that will be borne by IRAPs: (1) Rule familiarization, (2) 
submission of performance data to the SRE, (3) development of written 
training plan; and (4) development and signing of written 
apprenticeship agreement. Additional costs that may be incurred but 
could not be quantified due to a lack of data include program start-up 
expenses, educational materials, and mentors' time. In addition, the 
final rule will result in transfer payments from IRAPs to apprentices 
in the form of compensation, but the Department does not expect a 
measurable transfer payment on aggregate because, in the absence of an 
IRAP, the jobs filled by apprentices will likely be filled by non-
apprentices paid a similar rate or will be addressed by other means.
    The final rule may also result in payments from IRAPs to SREs in 
the form of an application fee, an annual fee, or both charged by SREs. 
Such fees, which are neither required nor prohibited under this final 
rule, will help SREs offset their costs. For the Regulatory Flexibility 
Analysis, these types of fees are considered costs to IRAPs because the 
analysis estimates the impact on small entities, not on society at 
large. Accordingly, the SRE's fees are categorized as costs in this 
analysis.
    The Department anticipates that the bulk of the workload for the 
labor costs in this analysis will be performed by employees in 
occupations similar to the occupation titled ``Training and Development 
Managers'' in the SOC system. As with the E.O. 12866 analysis, the 
Department used a fully loaded hourly compensation rate for Training 
and Development Managers of $117.06.\50\
---------------------------------------------------------------------------

    \50\ The mean hourly wage rate for Training and Development 
Managers in May 2018 was $58.53. (See BLS, ``Occupational Employment 
and Wages, May 2018,'' https://www.bls.gov/oes/current/oes113131.htm.) For this analysis, the Department used a fringe 
benefits rate of 46 percent and an overhead rate of 54 percent, 
resulting in a fully loaded hourly compensation rate for Training 
and Development Managers of $117.06 (= $58.53 + ($58.53 x 46%) + 
($58.53 x 54%)).
---------------------------------------------------------------------------

    In addition to the number of IRAPs and the hourly compensation rate 
of Training and Development Managers, the following estimates were used 
to calculate the quantified costs:
     Rule familiarization (one-time cost): 1 hour.
     Provision of performance data to the SRE (annual 
cost): 25 hours.
     Development of Written Training Plan (one-time 
cost): 80 hours.
     Development of Written Apprenticeship Agreement 
(one-time cost): 8 hours.
     Preparation and Signing of Written 
Apprenticeship Agreement (annual cost): 10 minutes.
     SRE's application fee (one-time cost): $3,000.
     SRE's annual fee (annual cost): $2,000.
    Exhibit 10 shows the estimated cost per IRAP for each year of the 
analysis period. The first year cost per IRAP is estimated at $17,796 
at a discount rate of 7 percent. The annualized cost per IRAP is 
estimated at $9,379 at a discount rate of 7 percent. The estimated cost 
per IRAP is highest in the first year because all IRAPs will be new, so 
the Department's first-year estimate includes both a $3,000 application 
fee and $2,000 annual fee for all IRAPs; in later years, ongoing IRAPs 
will only be charged a $2,000 annual fee under this analysis. These 
estimates are average costs, meaning that some IRAPs will have higher 
costs while other IRAPs will have lower costs, regardless of firm size.

[[Page 14374]]

[GRAPHIC] [TIFF OMITTED] TR11MR20.009

6. Estimated Impact of the Final Rule on Small Entities
    The Department used the following steps to estimate the cost of the 
final rule per IRAP as a percentage of annual receipts. First, the 
Department used the Small Business Administration's Table of Small 
Business Size Standards to determine the size thresholds for small 
entities within each major industry.\51\ Next, the Department obtained 
data on the number of firms, number of employees, and annual revenue by 
industry and firm size category from the Census Bureau's Statistics of 
U.S. Businesses.\52\ Then, the Department divided the estimated first 
year cost and the annualized cost per IRAP (discounted at a 7-percent 
rate) by the average annual receipts per firm to determine whether the 
final rule will have a significant economic impact on IRAPs in each 
size category.\53\ Finally, the Department divided the number of firms 
in each size category by the total number of small firms in the 
industry to determine whether the final rule will have a significant 
economic impact on a substantial number of small entities.\54\ The 
results are presented in the following 18 tables. In short, the first 
year cost or annualized cost per IRAP could have a significant economic 
impact on a substantial number of small entities in 15 out of 18 
industries. It should be noted, however, that this initiative is 
voluntary; therefore, only small entities that choose to participate 
will experience an economic impact--significant or otherwise.
---------------------------------------------------------------------------

    \51\ U.S. Small Business Administration, ``Table of Small 
Business Size Standards,'' Aug. 19, 2019, http://www.sba.gov/content/small-business-size-standards. The size standards, which are 
expressed either in average annual receipts or number of employees, 
indicate the maximum allowed for a business in each subsector to be 
considered small.
    \52\ U.S. Census Bureau, ``Statistics of U.S. Businesses,'' 
http://www.census.gov/programs-surveys/susb/data.html (last visited 
Dec. 7, 2019).
    \53\ For purposes of this analysis, the Department used a 3-
percent threshold for ``significant economic impact.'' The 
Department has used a 3-percent threshold in prior rulemakings. See, 
e.g., 79 FR 60633 (Oct. 7, 2014) (Establishing a Minimum Wage for 
Contractors).
    \54\ For purposes of this analysis, the Department used a 15-
percent threshold for ``substantial number of small entities.'' The 
Department has used a 15-percent threshold in prior rulemakings. 
See, e.g. 79 FR 60633 (Oct. 7, 2014) (Establishing a Minimum Wage 
for Contractors).
---------------------------------------------------------------------------

    As shown in Exhibit 11, the first year and annualized costs for 
IRAPs in the agriculture, forestry, fishing, and hunting industry are 
estimated to have a significant economic impact (3 percent or more) on 
small entities with receipts under $500,000, and those firms constitute 
a substantial number of small entities in the agriculture, forestry, 
fishing, and hunting industry (58.1 percent). The first year costs are 
estimated to be 35.4 percent of the average receipts per firm and the 
annualized costs are estimated to be 18.6 percent of the average 
receipts per firm for firms with revenue below $100,000. The first year 
costs are estimated to be 7.1 percent of the average receipts per firm 
and the annualized costs are estimated to be 3.7 percent of the average 
receipts per firm for firms with revenue from $100,000 to $499,999.

[[Page 14375]]

[GRAPHIC] [TIFF OMITTED] TR11MR20.010

    As shown in Exhibit 12, the first year and annualized costs for 
IRAPs in the mining industry are not expected to have a significant 
economic impact (3 percent or more) on small entities of any size.
[GRAPHIC] [TIFF OMITTED] TR11MR20.011

    As shown in Exhibit 13, the first year and annualized costs for 
IRAPs in the utilities industry are not expected to have a significant 
economic impact (3 percent or more) on small entities of any size.

[[Page 14376]]

[GRAPHIC] [TIFF OMITTED] TR11MR20.012

    As shown in Exhibit 14, the first year costs for IRAPs in the 
manufacturing industry are expected to have a significant economic 
impact (3 percent or more) on small entities with 4 or fewer employees, 
and those firms constitute a substantial number of small entities in 
the manufacturing industry (41.7 percent). The first year costs are 
estimated to be 4.1 percent of the average receipts per firm with 0-4 
employees.
[GRAPHIC] [TIFF OMITTED] TR11MR20.013

    As shown in Exhibit 15, the first year and annualized costs for 
IRAPs in the wholesale trade industry are not expected to have a 
significant economic impact (3 percent or more) on small entities of 
any size.
[GRAPHIC] [TIFF OMITTED] TR11MR20.014

    As shown in Exhibit 16, the first year and annualized costs for 
IRAPs in the retail trade industry are estimated to have a significant 
economic impact (3 percent or more) on small entities with receipts 
under $500,000, and those firms constitute a substantial number of 
small entities in the retail trade industry (47.7 percent). The first 
year costs are estimated to be 34.1 percent of the average receipts per 
firm and the annualized costs are estimated to be

[[Page 14377]]

18.0 percent of the average receipts per firm for firms with revenue 
below $100,000. The first year costs are estimated to be 6.6 percent of 
the average receipts per firm and the annualized costs are estimated to 
be 3.5 percent of the average receipts per firm for firms with revenue 
from $100,000 to $499,999.
[GRAPHIC] [TIFF OMITTED] TR11MR20.015

    As shown in Exhibit 17, the first year and annualized costs for 
IRAPs in the transportation and warehousing industry are estimated to 
have a significant economic impact (3 percent or more) on small 
entities with receipts under $500,000, and those firms constitute a 
substantial number of small entities in the transportation and 
warehousing industry (61.2 percent). The first year costs are estimated 
to be 36.7 percent of the average receipts per firm and the annualized 
costs are estimated to be 19.4 percent of the average receipts per firm 
for firms with revenue below $100,000. The first year costs are 
estimated to be 7.3 percent of the average receipts per firm and the 
annualized costs are estimated to be 3.8 percent of the average 
receipts per firm for firms with revenue from $100,000 to $499,999.

[[Page 14378]]

[GRAPHIC] [TIFF OMITTED] TR11MR20.016

    As shown in Exhibit 18, the first year and annualized costs for 
IRAPs in the information industry are estimated to have a significant 
economic impact (3 percent or more) on small entities with receipts 
under $500,000, and those firms constitute a substantial number of 
small entities in the information industry (57.7 percent). The first 
year costs are estimated to be 36.7 percent of the average receipts per 
firm and the annualized costs are estimated to be 19.4 percent of the 
average receipts per firm for firms with revenue below $100,000. The 
first year costs are estimated to be 7.2 percent of the average 
receipts per firm and the annualized costs are estimated to be 3.8 
percent of the average receipts per firm for firms with revenue below 
from $100,000 to $499,999.
[GRAPHIC] [TIFF OMITTED] TR11MR20.017

    As shown in Exhibit 19, the first year and annualized costs for 
IRAPs in the finance and insurance industry are estimated to have a 
significant economic impact (3 percent or more) on small entities with 
receipts under $500,000, and those firms constitute a substantial 
number of small entities in the finance and insurance industry (68.5 
percent).

[[Page 14379]]

The first year costs are estimated to be 36.1 percent of the average 
receipts per firm and the annualized costs are estimated to be 19.0 
percent of the average receipts per firm for firms with revenue below 
$100,000. The first year costs are estimated to be 7.1 percent of the 
average receipts per firm and the annualized costs are estimated to be 
3.7 percent of the average receipts per firm for firms with revenue 
from $100,000 to $499,999.
[GRAPHIC] [TIFF OMITTED] TR11MR20.018

    As shown in Exhibit 20, the first year and annualized costs for 
IRAPs in the real estate and rental and leasing industry are estimated 
to have a significant economic impact (3 percent or more) on small 
entities with receipts under $500,000, and those firms constitute a 
substantial number of small entities in the real estate and rental and 
leasing industry (69.2 percent). The first year costs are estimated to 
be 35.3 percent of the average receipts per firm and the annualized 
costs are estimated to be 18.6 percent of the average receipts per firm 
for firms with revenue below $100,000. The first year costs are 
estimated to be 7.3 percent of the average receipts per firm and the 
annualized costs are estimated to be 3.8 percent of the average 
receipts per firm for firms with revenue from $100,000 to $499,999.

[[Page 14380]]

[GRAPHIC] [TIFF OMITTED] TR11MR20.019

    As shown in Exhibit 21, the first year and annualized costs for 
IRAPs in the professional, scientific, and technical services industry 
are estimated to have a significant economic impact (3 percent or more) 
on small entities with receipts under $500,000, and those firms 
constitute a substantial number of small entities in the professional, 
scientific, and technical services industry (69.5 percent). The first 
year costs are estimated to be 36.0 percent of the average receipts per 
firm and the annualized costs are estimated to be 19.0 percent of the 
average receipts per firm for firms with revenue below $100,000. The 
first year costs are estimated to be 7.4 percent of the average 
receipts per firm and the annualized costs are estimated to be 3.9 
percent of the average receipts per firm for firms with revenue from 
$100,000 to $499,999.
[GRAPHIC] [TIFF OMITTED] TR11MR20.020

    As shown in Exhibit 22, the first year and annualized costs for 
IRAPs in the management of companies and enterprises industry are 
estimated to have a significant economic impact (3 percent or more) on 
small entities with

[[Page 14381]]

receipts under $2.5 million, and those firms constitute a substantial 
number of small entities in the management of companies and enterprises 
industry (33.5 percent). The first year costs are estimated to be 58.2 
percent of the average receipts per firm and the annualized costs are 
estimated to be 30.7 percent of the average receipts per firm for firms 
with revenue below $100,000. The first year costs are estimated to be 
8.6 percent of the average receipts per firm and the annualized costs 
are estimated to be 4.5 percent of the average receipts per firm for 
firms with revenue from $100,000 to $499,999. The first year costs are 
estimated to be 4.6 percent of the average receipts per firm for firms 
with revenue from $500,000 to $999,999. The first year costs are 
estimated to be 3.8 percent of the average receipts per firm for firms 
with revenue from $1,000,000 to $2,499,999.
[GRAPHIC] [TIFF OMITTED] TR11MR20.021

    As shown in Exhibit 23, the first year and annualized costs for 
IRAPs in the administrative and support, waste management and 
remediation services industry are estimated to have a significant 
economic impact (3 percent or more) on small entities with receipts 
under $500,000, and those firms constitute a substantial number of 
small entities in the administrative and support, waste management and 
remediation services industry (69.8 percent). The first year costs are 
estimated to be 37.9 percent of the average receipts per firm and the 
annualized costs are estimated to be 20.0 percent of the average 
receipts per firm for firms with revenue below $100,000. The first year 
costs are estimated to be 7.3 percent of the average receipts per firm 
and the annualized costs are estimated to be 3.9 percent of the average 
receipts per firm for firms with revenue from $100,000 to $499,999.
[GRAPHIC] [TIFF OMITTED] TR11MR20.022


[[Page 14382]]


    As shown in Exhibit 24, the first year and annualized costs for 
IRAPs in the educational services industry are estimated to have a 
significant economic impact (3 percent or more) on small entities with 
receipts under $500,000, and those firms constitute a substantial 
number of small entities in the educational services industry (65.3 
percent). The first year costs are estimated to be 37.9 percent of the 
average receipts per firm and the annualized costs are estimated to be 
20.0 percent of the average receipts per firm for firms with revenue 
below $100,000. The first year costs are estimated to be 7.3 percent of 
the average receipts per firm and the annualized costs are estimated to 
be 3.8 percent of the average receipts per firm for firms with revenue 
from $100,000 to $499,999.
[GRAPHIC] [TIFF OMITTED] TR11MR20.023

    As shown in Exhibit 25, the first year and annualized costs for 
IRAPs in the health care and social assistance industry are estimated 
to have a significant economic impact (3 percent or more) on small 
entities with receipts under $500,000, and those firms constitute a 
substantial number of small entities in the health care and social 
assistance industry (56.4 percent). The first year costs are estimated 
to be 37.3 percent of the average receipts per firm and the annualized 
costs are estimated to be 19.7 percent of the average receipts per firm 
for firms with revenue below $100,000. The first year costs are 
estimated to be 6.6 percent of the average receipts per firm and the 
annualized costs are estimated to be 3.5 percent of the average 
receipts per firm for firms with revenue from $100,000 to $499,999.

[[Page 14383]]

[GRAPHIC] [TIFF OMITTED] TR11MR20.024

    As shown in Exhibit 26, the first year and annualized costs for 
IRAPs in the arts, entertainment, and recreation industry are estimated 
to have a significant economic impact (3 percent or more) on small 
entities with receipts under $500,000, and those firms constitute a 
substantial number of small entities in the arts, entertainment, and 
recreation industry (66.6 percent). The first year costs are estimated 
to be 37.0 percent of the average receipts per firm and the annualized 
costs are estimated to be 19.5 percent of the average receipts per firm 
for firms with revenue below $100,000. The first year costs are 
estimated to be 7.2 percent of the average receipts per firm and the 
annualized costs are estimated to be 3.8 percent of the average 
receipts per firm for firms with revenue from $100,000 to $499,999.
[GRAPHIC] [TIFF OMITTED] TR11MR20.025

    As shown in Exhibit 27, the first year and annualized costs for 
IRAPs in the accommodation and food services industry are estimated to 
have a significant economic impact (3 percent or more) on small 
entities with receipts under $500,000, and those firms constitute a 
substantial number of small entities in the accommodation and food 
services industry (61.3 percent). The first year costs are estimated to 
be 35.6 percent of the average receipts per firm and the annualized 
costs are estimated to be 18.8 percent of the average receipts per firm 
for firms with revenue below

[[Page 14384]]

$100,000. The first year costs are estimated to be 6.8 percent of the 
average receipts per firm and the annualized costs are estimated to be 
3.6 percent of the average receipts per firm for firms with revenue 
from $100,000 to $499,999.
[GRAPHIC] [TIFF OMITTED] TR11MR20.026

    As shown in Exhibit 28, the first year and annualized costs for 
IRAPs in the other services industry are estimated to have a 
significant economic impact (3 percent or more) on small entities with 
receipts under $500,000, and those firms constitute a substantial 
number of small entities in the other services industry (73.5 percent). 
The first year costs are estimated to be 35.8 percent of the average 
receipts per firm and the annualized costs are estimated to be 18.9 
percent of the average receipts per firm for firms with revenue below 
$100,000. The first year costs are estimated to be 7.3 percent of the 
average receipts per firm and the annualized costs are estimated to be 
3.8 percent of the average receipts per firm for firms with revenue 
from $100,000 to $499,999.
[GRAPHIC] [TIFF OMITTED] TR11MR20.027


[[Page 14385]]


7. Alternatives to the Final Rule
    The RFA directs agencies to assess the impacts that various 
regulatory alternatives would have on small entities and to consider 
ways to minimize those impacts. Accordingly, the Department considered 
a regulatory alternative related to the second cost component: 
Provision of performance data to the SRE. Under this alternative, IRAPs 
would need to provide performance data once every 5 years rather than 
annually. To estimate the reduction in costs under this alternative, 
the Department decreased from 25 hours to 5 hours (= 25 hours / 5 
years) the time burden for IRAPs to provide performance information to 
their SREs.
    Exhibit 29 shows the estimated cost per IRAP for each year of the 
analysis period. The first year cost per IRAP is estimated at $15,608 
at a discount rate of 7 percent. The annualized cost per IRAP is 
estimated at $7,038 at a discount rate of 7 percent.
[GRAPHIC] [TIFF OMITTED] TR11MR20.028

    The Department decided not to pursue this alternative because a 
longer reporting cycle would be inconsistent with the annual reporting 
cycles for other workforce investment programs, and would provide less 
useful information to the public. Transparency is vital to the success 
of IRAPs. An annual reporting cycle will provide stakeholders with the 
uniform information necessary to evaluate the outcomes of this new 
initiative. Moreover, an annual reporting cycle will provide IRAPs and 
SREs with valuable information that will enable them to assess the 
effectiveness of their programs and make improvements.

C. 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 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.
    In accordance with the requirements of PRA the proposed regulation 
solicited comments on the information collections included therein. The 
Department also submitted an ICR to OMB in accordance with 44 U.S.C. 
3507(d), contemporaneously with the publication of the proposed 
regulation, for OMB's review. OMB issued a notice of action asking the 
Departments to resubmit the ICR after considering public comments, at 
the final rule stage.
    Although no public comments were received that specifically 
addressed the paperwork burden analysis of the information collections, 
the comments that were submitted, and which are described earlier in 
this preamble, contained information relevant to the costs and 
administrative burdens attendant to the proposals. As discussed 
throughout this final rule, the Department took into account such 
public comments in connection with making changes to the final rule, 
especially when analyzing the economic impact of the rule and 
developing the revised paperwork burden analysis summarized below.
Industry-Recognized Apprenticeship Program Standards Recognition Entity 
Regulation and Application
    As discussed above, E.O. 13801 directed the Department to determine 
how qualified entities may provide recognition to ``industry-recognized 
apprenticeship programs,'' and to ``establish guidelines or 
requirements that qualified third parties should or must follow to 
ensure that the apprenticeship programs they recognize meet quality 
standards.''
    To obtain the information necessary for the Department to determine 
whether a prospective SRE has satisfied the criteria outlined in the 
final rule, the Department proposed the information collection titled 
``Industry-Recognized Apprenticeship Program Standards Recognition 
Entity Regulation and Application.''
    Agency: DOL-ETA.
    Title of Collection: Industry-Recognized Apprenticeship Program 
Standards Recognition Entity Regulation and Application.
    OMB Control Number: 1205-0536.
    Affected Public: State and Local Governments; Private Sector--
businesses or other for-profits and not-for-profit institutions.
    Total Estimated Number of Respondents: 3,794.
    Total Estimated Number of Responses: 141,819.
    Total Estimated Annual Time Burden: 285,310 hours.
    Total Estimated Annual Other Costs Burden: $0.

[[Page 14386]]

    Regulations Sections: 29 CFR 29.21(a), 29.21(b)(6), 29.21(c)(2), 
29.22(a)(1), 29.22(a)(2), 29.22(a)(4)(ii), 29.22(a)(4)(vii), 
29.22(a)(4)(ix), 29.22(a)(4)(x), 29.22(b), 29.22(c), 29.22(d), 
29.22(f)(5), 29.22(h), 29.22(i), 29.22(j), 29.22(k), 29.22(l), 
29.22(m), 29.22(n), and 29.22(o).
    The PRA provides that a Federal agency generally cannot conduct or 
sponsor a collection of information, and the public is generally not 
required to respond to an information collection, unless it is approved 
by OMB under PRA and displays a currently valid OMB Control Number. In 
addition, notwithstanding any other provisions of law, no person shall 
generally be subject to penalty for failing to comply with a collection 
of information that does not display a valid Control Number. See 5 CFR 
1320.5 and 1320.6(a).
    Section 29.22(h) provides that SREs must annually report to the 
Administrator and make publicly available certain information the 
Department considers important for providing employers and prospective 
apprentices the details necessary to make informed decisions about 
IRAPs. Affected parties do not have to comply with the information 
collection requirements in Sec.  29.22(h) until the Department 
publishes in the Federal Register the control numbers assigned by the 
OMB to these information collection requirements. Publication of the 
control numbers notifies the public that OMB has approved these 
information collection requirements under PRA. The Department will 
publish a Federal Register notice requesting public comment on the 
collections required by Sec.  29.22(h) and submit an ICR to the OMB for 
review and approval in accordance with PRA prior to requiring or 
accepting any data collections. A copy of that ICR, with applicable 
supporting documentation--including a description of the likely 
respondents, proposed format and frequency of responses, and estimated 
total burden--will be available on the RegInfo.gov website.
    Interested parties may obtain a copy free of charge of the current 
and future ICRs submitted to the OMB on the reginfo.gov website at 
http://www.reginfo.gov/public/do/PRAMain. From the Information 
Collection Review tab, select Information Collection Review. Then 
select Department of Labor from the Currently Under Review dropdown 
menu and look up the Control Number. You may also request a free copy 
of an ICR by contacting the person named in the ADDRESSES section of 
this preamble.

D. Executive Order 13132: Federalism

    As with the NPRM, the Department reviewed the final rule in 
accordance with E.O. 13132, Federalism, and has determined that it has 
does not have federalism implications because it has does not have 
substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government.
    Two commenters questioned the Department's conclusion in the NPRM 
that the rule does not have federalism implications. One commenter 
cited a lack of clarity for how State prevailing wage laws would apply 
to apprentices in IRAPs as grounds for questioning the Department's 
conclusion on federalism. As discussed above in the section-by-section 
analysis for Sec.  29.22(a)(4)(vii), the Department acknowledges the 
concerns raised by commenters and is confident, however, that the text 
of the Federal prevailing wage regulations at issue, 29 CFR 
5.5(a)(4)(i), is sufficiently clear. These Federal prevailing wage 
regulations only apply to registered apprenticeship programs that are 
either registered by OA or an SAA. Additionally, the Department 
declines to opine on the applicability of State prevailing wage laws to 
IRAP apprentices because whether an IRAP apprentice would qualify as an 
apprentice under a State prevailing wage law depends on the specific 
State law at issue and the extent to which such laws track the Federal 
Davis-Bacon Act varies.
    The other commenter asserted concerns about the Department's 
adherence to ``due process'' under NAA, interpreting the statute's 
requirement for the Secretary of Labor to ``cooperate with State 
agencies engaged in the formulation and promotion of standards of 
apprenticeship'' as requiring specific consultation with State Agencies 
to during the development of the NPRM. As discussed above in the Legal 
Authority section, NAA does not dictate the terms of how the Department 
consults with States, and it does not require that DOL consult or 
operate its apprenticeship initiatives through States. Therefore, 
Department maintains its conclusion that the rulemaking has no 
federalism implications, and no further agency action or analysis are 
required under E.O. 13132.

E. Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (see 2 
U.S.C. 1532), requires each Federal agency to prepare a written 
statement assessing the effects of any Federal mandate in a proposed 
agency rule that may result in $100 million or more in expenditures 
(adjusted annually for inflation) in any 1 year by State, local, and 
tribal governments, in the aggregate, or by the private sector.
    This final rule does not exceed the $100 million expenditure in any 
1 year when adjusted for inflation, and this rulemaking does not 
contain such a mandate. The requirements of title II of UMRA, 
therefore, do not apply, and the Department has not prepared a 
statement under UMRA.

F. Executive Order 13175 (Indian Tribal Governments)

    The Department has reviewed this final rule in accordance with E.O. 
13175 and has determined that it does not have tribal implications. The 
final rule does not have substantial direct effects on one or more 
Indian tribes, on the relationship between the Federal Government and 
Indian tribes, or on the distribution of power and responsibilities 
between the Federal Government and Indian tribes.

List of Subjects in 29 CFR Part 29

    Apprenticeship programs, Apprentice agreements and complaints, 
Apprenticeability criteria, Program standards, Registration and 
deregistration, Sponsor eligibility, State apprenticeship agency 
recognition and derecognition.

    For the reasons stated in the preamble, the Department amends 29 
CFR part 29 as follows:

PART 29--LABOR STANDARDS FOR THE REGISTRATION OF APPRENTICESHIP 
PROGRAMS; STANDARDS RECOGNITION ENTITIES OF INDUSTRY-RECOGNIZED 
APPRENTICESHIP PROGRAMS

0
1. The authority citation for part 29 continues to read as follows:

    Authority: Section 1, 50 Stat. 664, as amended (29 U.S.C. 50; 40 
U.S.C. 276c; 5 U.S.C. 301) Reorganization Plan No. 14 of 1950, 64 
Stat. 1267 (5 U.S.C. App. P. 534).


Sec.  Sec.  29.1 through 29.14  [Designated as Subpart A]

0
2. Designate Sec. Sec.  29.1 through 29.14 as Subpart A and add a 
subpart heading to read as follows:

Subpart A--Registered Apprenticeship Programs

0
3. Amend Sec.  29.1 by revising the section heading and paragraph (b) 
to read as follows:

[[Page 14387]]

Sec.  29.1  Purpose and scope for the Registered Apprenticeship 
Program.

* * * * *
    (b) The purpose of this subpart is to set forth labor standards to 
safeguard the welfare of apprentices, promote apprenticeship 
opportunity, and to extend the application of such standards by 
prescribing policies and procedures concerning the registration, for 
certain Federal purposes, of acceptable apprenticeship programs with 
the U.S. Department of Labor, Employment and Training Administration, 
Office of Apprenticeship. These labor standards, policies and 
procedures cover the registration, cancellation and deregistration of 
apprenticeship programs and of apprenticeship agreements; the 
recognition of a State agency as an authorized agency for registering 
apprenticeship programs for certain Federal purposes; and matters 
relating thereto.

0
4. Amend Sec.  29.2 by adding introductory text and revising the 
definitions of ``Apprenticeship program,'' ``Registration agency,'' and 
``Technical assistance'' to read as follows:


Sec.  29.2  Definitions.

    For the purpose of this subpart:
* * * * *
    Apprenticeship program means a plan containing all terms and 
conditions for the qualification, recruitment, selection, employment 
and training of apprentices, as required under 29 CFR part 29 subpart 
A, and part 30, including such matters as the requirement for a written 
apprenticeship agreement.
* * * * *
    Registration agency means the Office of Apprenticeship or a 
recognized State Apprenticeship Agency that has responsibility for 
registering apprenticeship programs and apprentices; providing 
technical assistance; conducting reviews for compliance with 29 CFR 
part 29 subpart A, and part 30; and quality assurance assessments.
* * * * *
    Technical assistance means guidance provided by Registration Agency 
staff in the development, revision, amendment, or processing of a 
potential or current program sponsor's Standards of Apprenticeship, 
Apprenticeship Agreements, or advice or consultation with a program 
sponsor to further compliance with this subpart or guidance from the 
Office of Apprenticeship to a State Apprenticeship Agency on how to 
remedy nonconformity with this subpart.
* * * * *

0
5. Amend Sec.  29.3 by revising paragraph (b)(1), paragraph (g) 
introductory text, and paragraph (h) to read as follows:


Sec.  29.3  Eligibility and procedure for registration of an 
apprenticeship program.

* * * * *
    (b) * * *
    (1) It is in conformity with the requirements of this subpart and 
the training is in an apprenticeable occupation having the 
characteristics set forth in Sec.  29.4; and
* * * * *
    (g) Applications for new programs that the Registration Agency 
determines meet the required standards for program registration must be 
given provisional approval for a period of 1 year. The Registration 
Agency must review all new programs for quality and for conformity with 
the requirements of this subpart at the end of the first year after 
registration. At that time:
* * * * *
    (h) The Registration Agency must review all programs for quality 
and for conformity with the requirements of this subpart at the end of 
the first full training cycle. A satisfactory review of a provisionally 
approved program will result in conversion of provisional approval to 
permanent registration. Subsequent reviews must be conducted no less 
frequently than every 5 years. Programs not in operation or not 
conforming to the regulations must be recommended for deregistration 
procedures.
* * * * *

0
6. Amend Sec.  29.6 by revising paragraph (b)(2) to read as follows:


Sec.  29.6  Program performance standards.

* * * * *
    (b) * * *
    (2) Any additional tools and factors used by the Registration 
Agency in evaluating program performance must adhere to the goals and 
policies of the Department articulated in this subpart and in guidance 
issued by the Office of Apprenticeship.
* * * * *

0
7. Amend Sec.  29.10 by revising paragraph (a)(2) to read as follows:


Sec.  29.10  Hearings for deregistration.

    (a) * * *
    (2) A statement of the provisions of this subpart pursuant to which 
the hearing is to be held; and
* * * * *

0
8. Amend Sec.  29.11 by revising the introductory text to read as 
follows:


Sec.  29.11  Limitations.

    Nothing in this subpart or in any apprenticeship agreement will 
operate to invalidate:
* * * * *

0
9. Amend Sec.  29.13 by revising paragraphs (a)(1), (b)(1), (c), (e) 
introductory text, and (e)(4) to read as follows:


Sec.  29.13  Recognition of State Apprenticeship Agencies.

    (a) * * *
    (1) The State Apprenticeship Agency must submit a State 
apprenticeship law, whether instituted through statute, Executive 
Order, regulation, or other means, that conforms to the requirements of 
29 CFR part 29 subpart A, and part 30;
* * * * *
    (b) * * *
    (1) Establish and maintain an administrative entity (the State 
Apprenticeship Agency) that is capable of performing the functions of a 
Registration Agency under 29 CFR part 29 subpart A;
* * * * *
    (c) Application for recognition. A State Apprenticeship Agency 
desiring new or continued recognition as a Registration Agency must 
submit to the Administrator of the Office of Apprenticeship the 
documentation specified in paragraph (a) of this section. A currently 
recognized State desiring continued recognition by the Office of 
Apprenticeship must submit to the Administrator of the Office of 
Apprenticeship the documentation specified in paragraph (a) of this 
section within 2 years of the effective date of the final rule. The 
recognition of a currently recognized State shall continue for up to 2 
years from the effective date of this regulation and during any 
extension period granted by the Administrator. An extension of time 
within which to comply with the requirements of this subpart may be 
granted by the Administrator for good cause upon written request by the 
State, but the Administrator shall not extend the time for submission 
of the documentation required by paragraph (a) of this section. Upon 
approval of the State Apprenticeship Agency's application for 
recognition and any subsequent modifications to this application as 
required under paragraph (b)(9) of this section, the Administrator 
shall so notify the State Apprenticeship Agency in writing.
* * * * *
    (e) Compliance. The Office of Apprenticeship will monitor a State 
Registration Agency for compliance

[[Page 14388]]

with the recognition requirements of this subpart through:
* * * * *
    (4) Determination whether, based on the review performed under 
paragraphs (e)(1), (2), and (3) of this section, the State Registration 
Agency is in compliance with part 29 subpart A. Notice to the State 
Registration Agency of the determination will be given within 45 days 
of receipt of proposed modifications to legislation, regulations, 
policies, and/or operational procedures required to be submitted under 
paragraphs (a)(1), (a)(5) and (b)(9) of this section.
* * * * *

0
10. Amend Sec.  29.14 by revising the introductory text and paragraphs 
(e)(1) and (i) to read as follows:


Sec.  29.14  Derecognition of State Apprenticeship Agencies.

    The recognition for Federal purposes of a State Apprenticeship 
Agency may be withdrawn for the failure to fulfill, or operate in 
conformity with, the requirements of part 29 subpart A, and part 30. 
Derecognition proceedings for reasonable cause will be instituted in 
accordance with the following:
* * * * *
    (e) * * *
    (1) The Office of Apprenticeship may grant the request for 
registration on an interim basis. Continued recognition will be 
contingent upon its finding that the State apprenticeship program is 
operating in accordance with the requirements of this subpart and of 29 
CFR part 30.
* * * * *
    (i) A State Apprenticeship Agency whose recognition has been 
withdrawn under this subpart may have its recognition reinstated upon 
presentation of adequate evidence that it has fulfilled the 
requirements established in Sec. Sec.  29.13(i) and 29.14(g) and (h) 
and is operating in conformity with the requirements of this subpart.

0
 11. Add Subpart B, Standards Recognition Entities of Industry-
Recognized Apprenticeship Programs, to read as follows:

Subpart B--Standards Recognition Entities of Industry-Recognized 
Apprenticeship Programs

Sec.
29.20 Standards Recognition Entities, Industry-Recognized 
Apprenticeship Programs, Administrator, and Apprentices.
29.21 Becoming a Standards Recognition Entity.
29.22 Responsibilities and requirements of Standard Recognition 
Entities.
29.23 Quality assurance.
29.24 Publication of Standards Recognition Entities and Industry-
Recognized Apprenticeship Programs.
29.25 Complaints against Standards Recognition Entities.
29.26 Review of a Standards Recognition Entity.
29.27 Suspension and derecognition of a Standards Recognition 
Entity.
29.28 Derecognition's effect on Industry-Recognized Apprenticeship 
Programs.
29.29 Requests for administrative review.
29.30 Scope of Industry-Recognized Apprenticeship Programs 
Recognition by Standards Recognition Entities.
29.31 Severability.


Sec.  29.20  Standards Recognition Entities, Industry-Recognized 
Apprenticeship Programs, Administrator, and Apprentices.

    For the purpose of this subpart, which establishes a new 
apprenticeship pathway distinct from the registered apprenticeship 
programs described in subpart A:
    (a) A Standards Recognition Entity (SRE) of Industry-Recognized 
Apprenticeship Programs (IRAPs) is an entity that is qualified to 
recognize apprenticeship programs as IRAPs under Sec.  29.21 and that 
has been recognized by the Department of Labor. The types of entities 
that can become SREs include:
    (1) Trade, industry, and employer groups or associations;
    (2) Corporations and other organized entities;
    (3) Educational institutions, such as universities or community 
colleges;
    (4) State and local government agencies or entities;
    (5) Non-profit organizations;
    (6) Unions;
    (7) Joint labor-management organizations;
    (8) Certification and accreditation bodies or entities for a 
profession or industry; or
    (9) A consortium or partnership of entities such as those above.
    (b) IRAPs are high-quality apprenticeship programs, wherein an 
individual obtains workplace-relevant knowledge and progressively 
advancing skills, that include a paid-work component and an educational 
or instructional component, and that result in an industry-recognized 
credential. An IRAP is developed or delivered by entities such as trade 
and industry groups, corporations, non-profit organizations, 
educational institutions, unions, and joint labor-management 
organizations. An IRAP is an apprenticeship program that has been 
recognized as a high-quality program by an SRE pursuant to Sec.  
29.22(a)(4)(i) through (x).
    (c) The Administrator is the Administrator of the Department of 
Labor's Office of Apprenticeship, or any person specifically designated 
by the Administrator.
    (d) An apprentice is an individual training in an IRAP under an 
apprenticeship agreement.


Sec.  29.21  Becoming a Standards Recognition Entity.

    (a) To apply to be recognized as an SRE, an entity (or consortium 
or partnership of entities) must complete and submit an application to 
the Administrator for recognition as an IRAP SRE. Such application must 
be in a form prescribed by the Administrator, which will require the 
applicant's written attestation that the information and documentation 
provided is true and correct. This application must include all 
policies and procedures required by this subpart or addressing 
requirements in this subpart, which will be reviewed by the 
Administrator when making a recognition determination.
    (b) An entity is qualified to be recognized as an SRE if it 
demonstrates:
    (1) It has the expertise to set competency-based standards, through 
a consensus-based process involving industry experts, for the requisite 
training, structure, and curricula for apprenticeship programs in the 
industry(ies) or occupational area(s) in which it seeks to be an SRE.
    (i) The requirements in paragraph (b)(1) of this section may be met 
through an SRE's past or current standard-setting activities and need 
only engender new activity if necessary to comply with this rule.
    (ii) [Reserved]
    (2) It has the capacity and quality assurance processes and 
procedures sufficient to comply with Sec.  29.22(a)(4), given the scope 
of the IRAPs to be recognized.
    (3) It has the resources to operate as an SRE for a 5-year period. 
As part of its application, an entity must report any bankruptcies from 
the past 5 years.
    (4) Its disclosure of any confirmed or potential partner who will 
be engaged in the recognition activities and describes their roles, 
including relationships with subsidiaries or other related entities 
that could reasonably impact its impartiality.
    (5) It is not suspended or debarred from conducting business with 
the U.S. Federal Government.
    (6) It mitigates--via any specific policies, processes, procedures, 
or structures--any actual or potential conflicts of interest, 
including, but not limited to, conflicts that may arise from the entity 
recognizing its own apprenticeship program(s) and conflicts relating to 
the entity's provision of services to actual or prospective IRAPs.

[[Page 14389]]

    (7) It has the appropriate knowledge and resources to recognize 
IRAPs in the industry(ies) or occupational areas in the intended 
geographical area, that may be nationwide or limited to a region, 
State, or local area.
    (8) It meets any other applicable requirements of this subpart.
    (c) The Administrator will recognize an entity as an SRE if it is 
qualified under paragraph (b) of this section.
    (1) An SRE will be recognized for 5 years, and must reapply at 
least 6 months before the date that its current recognition is set to 
expire if it seeks re-recognition.
    (i) To reapply to continue serving as an SRE, an entity must 
complete and submit an updated application to the Administrator for re-
recognition as an IRAP SRE that is in a form prescribed by the 
Administrator.
    (ii) To determine whether re-recognition should be granted, the 
Administrator will evaluate the information provided by the SRE in the 
updated application and the data provided pursuant to Sec.  29.22(h), 
to verify that the SRE's quality assurance processes and procedures 
were and continue to be sufficient to effect compliance with Sec.  
29.22(a)(4).
    (2) An SRE must notify the Administrator and must provide all 
related material information if:
    (i) It makes any major change that could affect the operations of 
the program, such as involvement in lawsuits that materially affect the 
SRE, changes in legal status, or any other change that materially 
affects the SRE's ability to function in its recognition capacity; or
    (ii) It seeks to recognize apprenticeship programs in additional 
industries, occupational areas, or geographical areas.
    (3) An SRE must submit changes as described in paragraph (c)(2)(ii) 
of this section to the Administrator for evaluation prior to the SRE 
implementing the changes. In light of the information received, the 
Administrator will evaluate whether the SRE remains qualified for 
recognition under paragraph (b) of this section, including its 
qualification to recognize programs in the new industries, occupational 
areas, or geographical areas identified under paragraph (c)(2)(ii) of 
this section.
    (d) The requirements for denials of recognition are as follows:
    (1) A denial of recognition must be in writing and must state the 
reason(s) for denial. The notice must tell the applicant what it needs 
to do differently before resubmitting its application.
    (2) The notice must state that a request for administrative review 
may be made within 30 calendar days of receipt of the notice.
    (3) The notice must explain that a request for administrative 
review must comply with the service requirements contained in 29 CFR 
part 18. The Administrator will refer any requests for administrative 
review to the Office of Administrative Law Judges to be addressed in 
accordance with Sec.  29.29.


Sec.  29.22  Responsibilities and requirements of Standards Recognition 
Entities.

    (a) An SRE must:
    (1) Recognize or reject an apprenticeship program seeking 
recognition as an IRAP in a timely manner;
    (2) Inform the Administrator within 30 calendar days when it has 
recognized, suspended, or derecognized an IRAP, and include the name 
and contact information of the program;
    (3) Provide the Administrator any data or information the 
Administrator is expressly authorized to collect under this subpart; 
and
    (4) Only recognize as IRAPs and maintain such recognition of 
apprenticeship programs that meet the following requirements:
    (i) The program must train apprentices for employment in jobs that 
require specialized knowledge and experience and involve the 
performance of complex tasks.
    (ii) The program has a written training plan, consistent with its 
SRE's requirements and standards as developed pursuant to the process 
set forth in Sec.  29.21(b)(1). The written training plan, which must 
be provided to an apprentice prior to beginning an IRAP, must detail 
the program's structured work experiences and appropriate related 
instruction, be designed so that apprentices demonstrate competency and 
earn credential(s), and provide apprentices progressively advancing 
industry-essential skills.
    (iii) The program ensures that, where appropriate, apprentices 
receive credit for prior knowledge and experience relevant to the 
instruction of the program.
    (iv) The program provides apprentices industry-recognized 
credential(s) during participation in or upon completion of the 
program.
    (v) The program provides a working environment for apprentices that 
adheres to all applicable Federal, State, and local safety laws and 
regulations and complies with any additional safety requirements of its 
SRE.
    (vi) The program provides apprentices structured mentorship 
opportunities throughout the duration of the apprenticeship that 
involve ongoing, focused supervision and training by experienced 
instructors and employees, to ensure apprentices have additional 
guidance on the progress of their training and their employability.
    (vii) The program ensures apprentices are paid at least the 
applicable Federal, State, or local minimum wage. The program must 
provide a written notice to apprentices of what wages apprentices will 
receive and under what circumstances apprentices' wages will increase. 
The program's charging of costs or expenses to apprentices must comply 
with all applicable Federal, State, or local wage laws and regulations, 
including but not limited to the Fair Labor Standards Act and its 
regulations. This rule does not purport to alter or supersede an 
employer's obligations under any such laws and regulations.
    (viii) The program affirms its adherence to all applicable Federal, 
State, and local laws pertaining to Equal Employment Opportunity (EEO).
    (ix) The program discloses to apprentices, before they agree to 
participate in the program, any costs or expenses that will be charged 
to them (such as costs related to tools or educational materials).
    (x) The program maintains a written apprenticeship agreement for 
each apprentice that outlines the terms and conditions of the 
apprentice's employment and training. The apprenticeship agreement must 
be consistent with its SRE's requirements.
    (b) An SRE must validate its IRAPs' compliance with paragraph 
(a)(4) of this section when it provides the Administrator with notice 
of recognition under paragraph (a)(2) of this section, and on an annual 
basis thereafter, and must at that time provide the Administrator a 
written attestation that its IRAPs meet the requirements of paragraph 
(a)(4) of this section and any other requirements of the SRE.
    (c) An SRE must publicly disclose the credential(s) that 
apprentices will earn during their participation in or upon completion 
of an IRAP.
    (d) An SRE must establish policies and procedures for recognizing, 
and validating compliance of, programs that ensure that SRE decisions 
are impartial, consistent, and based on objective and merit-based 
criteria; ensure that SRE decisions are confidential except as required 
or permitted by this subpart, or otherwise required by law; and are 
written in sufficient detail to reasonably achieve the foregoing 
criteria. An SRE must submit these policies and

[[Page 14390]]

procedures to the Administrator with its application.
    (e) An SRE's recognition of an IRAP may last no longer than 5 
years. An SRE may not re-recognize an IRAP without the IRAP seeking re-
recognition.
    (f) An SRE must remain in an ongoing quality-control relationship 
with the IRAPs it has recognized. The specific means and nature of the 
relationship between the IRAP and SRE will be defined by the SRE, 
provided the relationship:
    (1) Does in fact result in reasonable and effective quality control 
that includes, as appropriate, consideration of apprentices' credential 
attainment, program completion, retention rates, and earnings;
    (2) Does not prevent the IRAP from receiving recognition from 
another SRE;
    (3) Does not conflict with this subpart or violate any applicable 
Federal, State, or local law;
    (4) Involves periodic compliance reviews by the SRE of its IRAP to 
ensure compliance with the requirements of paragraph (a)(4) of this 
section and the SRE's requirements; and
    (5) Includes policies and procedures for the suspension or 
derecognition of an IRAP that fails to comply with the requirements of 
paragraph (a)(4) of this section and its SRE's requirements.
    (g) Participating as an SRE under this subpart does not make the 
SRE a joint employer with entities that develop or deliver IRAPs.
    (h) Each year, an SRE must report to the Administrator, in a format 
prescribed by the Administrator, and make publicly available the 
following information on each IRAP it recognizes:
    (1) Up-to-date contact information for each IRAP;
    (2) The total number of new and continuing apprentices annually 
training in each IRAP under an apprenticeship agreement;
    (3) The total number of apprentices who successfully completed the 
IRAP annually;
    (4) The annual completion rate for apprentices. Annual completion 
rate must be calculated by comparing the number of apprentices in a 
designated apprenticeship cohort who successfully completed the IRAP 
requirements and attained an industry-recognized credential with the 
number of apprentices in that cohort who initially began training in 
the IRAP;
    (5) The median length of time for IRAP completion;
    (6) The post-apprenticeship employment retention rate, calculated 6 
and 12 months after program completion;
    (7) The industry-recognized credentials attained by apprentices in 
an IRAP, and the annual number of such credentials attained;
    (8) The annualized average earnings of an IRAP's former 
apprentices, calculated over the 6 month period after IRAP completion;
    (9) Training cost per apprentice; and
    (10) Basic demographic information on participants.
    (i) An SRE must have policies and procedures that require IRAPs' 
adherence to applicable Federal, State, and local laws pertaining to 
EEO, and must facilitate such adherence through the SRE's policies and 
procedures regarding potential harassment, intimidation, and 
retaliation (such as the provision of anti-harassment training, and a 
process for handling EEO and harassment complaints from apprentices); 
must have policies and procedures that reflect comprehensive outreach 
strategies to reach diverse populations that may participate in IRAPs; 
and must assign responsibility to an individual to assist IRAPs with 
matters relating to this paragraph.
    (j) An SRE must have policies and procedures for addressing 
complaints filed by apprentices, prospective apprentices, an 
apprentice's authorized representative, a personnel certification body, 
or an employer against each IRAP the SRE recognizes. An SRE must make 
publicly available the aggregated number of complaints pertaining to 
each IRAP in a format and frequency prescribed by the Administrator.
    (k) An SRE must notify the public about the right of an apprentice, 
a prospective apprentice, the apprentice's authorized representative, a 
personnel certification body, or an employer, to file a complaint with 
the SRE against an IRAP the complainant is associated with, and the 
requirements for filing a complaint.
    (l) An SRE must notify the public about the right to file a 
complaint against it with the Administrator as set forth in Sec.  
29.25.
    (m) If an SRE has received notice of derecognition pursuant to 
Sec.  29.27(c)(1)(ii) or (c)(3), the SRE must inform each IRAP it has 
recognized and the public of its derecognition.
    (n) An SRE must publicly disclose any fees it charges to IRAPs.
    (o) An SRE must ensure that records regarding each IRAP recognized, 
including whether the IRAP has met all applicable requirements of this 
subpart, are maintained for a minimum of 5 years.
    (p) An SRE must follow any policy or procedure submitted to the 
Administrator or otherwise required by this subpart, and an SRE must 
notify the Administrator when it makes significant changes to its 
policies or procedures.


Sec.  29.23  Quality assurance.

    (a) The Administrator may request and review materials from SREs, 
and may conduct periodic compliance assistance reviews of SREs to 
ascertain their conformity with the requirements of this subpart.
    (b) SREs must provide requested materials to the Administrator, 
consistent with Sec.  29.22(a)(3).
    (c) The information that is described in this subpart may be 
utilized by the Administrator to discharge the recognition, review, 
suspension, and derecognition duties outlined in Sec. Sec.  
29.21(c)(1), 29.26, and 29.27.


Sec.  29.24  Publication of Standards Recognition Entities and 
Industry-Recognized Apprenticeship Programs.

    The Administrator will make publicly available a list of 
recognized, suspended, and derecognized SREs and IRAPs.


Sec.  29.25  Complaints against Standards Recognition Entities.

    (a) A complaint arising from an SRE's compliance with this subpart 
may be submitted by an apprentice, the apprentice's authorized 
representative, a personnel certification body, an employer, or an IRAP 
to the Administrator for review.
    (b) The complaint must be in writing and must be submitted within 
180 calendar days from the complainant's actual or constructive 
knowledge of the circumstances giving rise to the complaint. It must 
set forth the specific matter(s) complained of, together with relevant 
facts and circumstances.
    (c) Complaints under this section are addressed exclusively through 
the review process outlined in Sec.  29.26.
    (d) Nothing in this section precludes a complainant from pursuing 
any remedy authorized under Federal, State, or local law.


Sec.  29.26  Review of a Standards Recognition Entity.

    (a) The Administrator may initiate review of an SRE if it receives 
information indicating that:
    (1) The SRE is not in substantial compliance with this subpart; or
    (2) The SRE is no longer capable of continuing as an SRE.
    (b) As part of the review, the Administrator must provide the SRE 
written notice of the review and an opportunity to provide information 
for the review. Such notice must include a statement of the basis for 
review, including potential areas in which the SRE is not in 
substantial compliance or

[[Page 14391]]

why the SRE may no longer be capable of continuing as an SRE and a 
detailed description of the information supporting review under 
paragraphs (a)(1) or (2) of this section, or both.
    (c) Upon conclusion of the Administrator's review, the 
Administrator will give written notice to the SRE of its decision to 
either take no action against the SRE, or to suspend the SRE as 
provided under Sec.  29.27.


Sec.  29.27  Suspension and derecognition of a Standards Recognition 
Entity.

    The Administrator may suspend an SRE for 45 calendar days based on 
the Administrator's review and determination that any of the situations 
described in Sec.  29.26(a)(1) or (2) exist.
    (a) The Administrator must provide notice in writing and state that 
a request for administrative review may be made within 45 calendar days 
of receipt of the notice.
    (b) The notice must set forth an explanation of the Administrator's 
decision, including identified areas in which the SRE is not in 
substantial compliance or an explanation why the SRE is no longer 
capable of continuing as an SRE, or both, and necessary remedial 
actions, and must explain that the Administrator will derecognize the 
SRE in 45 calendar days unless remedial action is taken or a request 
for administrative review is made.
    (c) If, within the 45-day period, the SRE:
    (1) Specifies its proposed remedial actions and commits itself to 
remedying the identified areas in which the SRE is not in substantial 
compliance or the circumstances that render is no longer capable of 
continuing as an SRE, or both, the Administrator will extend the 45-day 
period to allow a reasonable time for the SRE to implement remedial 
actions.
    (i) If the Administrator subsequently determines that the SRE has 
remedied the identified areas in which the SRE is not in substantial 
compliance or the circumstances that render is no longer capable of 
continuing as an SRE, or both, the Administrator must notify the SRE, 
and the suspension will end.
    (ii) If the Administrator subsequently determines that the SRE has 
not remedied the identified areas in which the SRE is not in 
substantial compliance or the circumstances that render is no longer 
capable of continuing as an SRE, or both, after the close of the 45-day 
period and any extensions previously allowed by the Administrator, the 
Administrator will derecognize the SRE and must notify the SRE in 
writing and specify the reasons for its determination. The 
Administrator must state that a request for administrative review may 
be made within 45 calendar days of receipt of the notice.
    (2) Makes a request for administrative review, then the 
Administrator will refer the matter to the Office of Administrative Law 
Judges to be addressed in accordance with Sec.  29.29.
    (3) Does not act under paragraph (c)(1) or (2) of this section, the 
Administrator will derecognize the SRE.
    (d) During the suspension:
    (1) The SRE is barred from recognizing new programs.
    (2) The Administrator will publish the SRE's suspension on the 
public list described in Sec.  29.24.


Sec.  29.28  Derecognition's effect on Industry-Recognized 
Apprenticeship Programs.

    (a) Following its SRE's derecognition, an IRAP will maintain its 
status until 1 year after the Administrator's decision derecognizing 
the IRAP's SRE becomes final, including any appeals. At the end of 1 
year, the IRAP will lose its status unless it is already recognized by 
another SRE recognized under this subpart.
    (b) Upon derecognizing an SRE, the Administrator will update the 
public list described in Sec.  29.24 to reflect the derecognition, and 
the Administrator will notify the SRE's IRAP(s) of the derecognition.


Sec.  29.29  Requests for administrative review.

    (a) Within 30 calendar days of the filing of a request for 
administrative review, the Administrator must prepare an administrative 
record for submission to the Administrative Law Judge designated by the 
Chief Administrative Law Judge.
    (b) The procedures contained in 29 CFR part 18 will apply to the 
disposition of the request for review except that:
    (1) The Administrative Law Judge will receive, and make part of the 
record, documentary evidence offered by any party and accepted at the 
hearing. Copies thereof will be made available by the party submitting 
the documentary evidence to any party to the hearing upon request.
    (2) Technical rules of evidence will not apply to hearings 
conducted under this subpart, but rules or principles designed to 
assure production of the most credible evidence available and to 
subject testimony to test by cross-examination will be applied, where 
reasonably necessary, by the Administrative Law Judge conducting the 
hearing. The Administrative Law Judge may exclude irrelevant, 
immaterial, or unduly repetitious evidence.
    (c) The Administrative Law Judge should submit proposed findings, a 
recommended decision, and a certified record of the proceedings to the 
Administrative Review Board, SRE, and Administrator within 90 calendar 
days after the close of the record.
    (d) Within 20 calendar days of the receipt of the recommended 
decision, any party may file exceptions. Any party may file a response 
to the exceptions filed by another party within 10 calendar days of 
receipt of the exceptions. All exceptions and responses must be filed 
with the Administrative Review Board with copies served on all parties 
and amici curiae.
    (e) After the close of the period for filing exceptions and 
responses, the Administrative Review Board may issue a briefing 
schedule or may decide the matter on the record before it. The 
Administrative Review Board must issue a decision in any case it 
accepts for review within 180 calendar days of the close of the record. 
If a decision is not so issued, the Administrative Law Judge's decision 
constitutes final agency action.
    (f) The Administrator's decision must be upheld unless the decision 
is arbitrary, capricious, an abuse of discretion, or otherwise not in 
accordance with the law.


Sec.  29.30  Scope of Industry-Recognized Apprenticeship Programs 
Recognition by Standards Recognition Entities.

    (a) The Administrator will not recognize as SREs entities that 
intend to recognize as IRAPs programs that seek to train apprentices to 
perform construction activities, consisting of: The erecting of 
buildings and other structures (including additions); heavy 
construction other than buildings; and alterations, reconstruction, 
installation, and maintenance and repairs.
    (b) SREs that obtain recognition from the Administrator are 
prohibited from recognizing as IRAPs programs that seek to train 
apprentices to perform construction activities, consisting of: The 
erecting of buildings and other structures (including additions); heavy 
construction other than buildings; and alterations, reconstruction, 
installation, and maintenance and repairs.


Sec.  29.31  Severability.

    Should a court of competent jurisdiction hold any provision(s) of 
this subpart to be invalid, such action will

[[Page 14392]]

not affect any other provision of this subpart.

John Pallasch,
Assistant Secretary for Employment and Training.
[FR Doc. 2020-03605 Filed 3-10-20; 8:45 am]
 BILLING CODE 4510-FR-P